Migration Council chair attacks new labour hire rules

Migration Council chair Innes Willox continues his extraordinary campaign against migrant worker rights today, at the AFR:

Why the current economically reckless war on labour hire? It makes no sense. The labour hire industry employs hundreds of thousands of Australians (about 2 per cent of the workforce), and hundreds of thousands more obtain their jobs with other businesses through a labour hire firm.

Over the past few years, one constant has been the ongoing attempts by Labor and the unions to portray the labour hire industry as full of shonky operators who underpay their staff. Of course, there is a small number of employers and employees who do the wrong thing in every industry. However, there is no evidence that the incidence of wrongdoing in the labour hire industry is greater than any other industry or to anything like the extent its detractors would like you to believe.

Isn’t there? Here what the parliamentary inquiry into establishing a modern slavery act said:

Labour hire licensing

9.122 As noted above, submitters highlighted that exploitation is particularly prevalent in the labour hire sector.

Support for a national labour hire licensing regime

9.132 A number of submitters recommended introducing a sector-specific scheme for the labour hire industry to minimise the exploitation of workers.

9.133 The ACTU suggested that a licensing and regulation scheme would ‘compel labour hire agencies to stop exploiting workers and create the threat of losing their right to operate if they do’.
9.134 Submitters emphasised the importance of establishing a national scheme, rather than individual state-based schemes. Mr Peter Crisp MLC, the local member for the Mildura region, provided the Committee with his submission to the Victorian Inquiry into the Labour Hire Industry and Insecure Work that recommended the establishment of national labour hire licensing scheme. Mr Crisp noted that:
… a response from Victoria will only apply in Victoria and for those horticultural regions like Sunraysia which are on a state border a single state solution may well only encourage border hopping.
For the measures recommended in the Victoria report to be effective there really needs to be a Commonwealth response to this issue.
9.135 Similarly, Mr Dixon from the GLAA warned about the ‘displacement effect where exploitation drifts towards where there is little and a lot lower oversight’. In a state-based system, Mr Dixon noted:
What you might then have is a situation where a company provides workers into the Victorian state area from a less regulated area where the Victorian state government might not be able to regulate it in precisely the same way. There would be what we call differential enforcement and, consequently, there’ll be a greater exploitation of workers in those areas where there is less regulation. It creates an uneven playing field for business.
9.136 The NFF recommended supporting industry-led certification schemes, rather than a state-based licensing scheme. Mr Ben Rogers from the NFF told the Committee that they are encouraging the introduction of a voluntary certification scheme called StaffSure administered by the Recruitment and Consulting Services Association Australia & New Zealand (RCSA):
It is a voluntary certification scheme which audits the whole range of practices and systems which these labour hire agencies have to use to make sure they’re using best practice—that they are not taking advantage of anyone and they’re not breaking any laws. It provides them with certification which farmers then look for to ensure that they are engaging with the people who are doing the right thing rather than these dodgy operators. They will then only use those people who can demonstrate that they have these best practices and that they’re not going to be engaging in those sorts of behaviours and conduct you just described there.
9.137 Mr Rogers also highlighted the example of the Fair Farms Initiative (as discussed in Chapter 5), an industry-led scheme to educate employers and growers about their responsibilities and provide third-party certification of labour systems.
9.138 Some witnesses expressed concerns about the efficacy of a labour hire scheme. Mr John George, who owns and operates two backpacker hostels in Mildura and assists backpackers in finding work, told the Committee that the key problem is that existing laws against exploitation are not being adequately enforced:
We would say increased regulation of labour hire contractors, as is being talked about, if implemented will lead to increased regulation of labour hire contractors and, using the British example, presumably increased cost for labour hire contractors to operate, which obviously will be passed on to prospective host employers. We say all the regulation there needs to be to fix almost 100 per cent of problems already exists; it is just not complied with or can’t be policed adequately.
9.139 Submitters and witnesses also warned that a labour hire licensing scheme is only one part of the broader response, as outlined in this report, and should not be seen as a ‘silver bullet’. Ms Germano from the VFF noted that a survey of its growers by the VFF found that ‘only 50 per cent of them are actually using labour hire contractors’. Ms Germano explained:
… a licence doesn’t stop someone from speeding when they’re driving down a highway. There has to be a cultural change. The licence, in itself, is a good step because it’s saying that we’re going to address this part of the supply chain or the labour chain, but it is certainly not going to be the silver bullet that I think many people claim it will be.

Investigatory powers

9.140 Submitters and witnesses highlighted the need to ensure that a national licensing scheme be coupled with improved resources for the FWO and other relevant agencies to investigate and prosecute cases of exploitation. For example, Focus on Labour Exploitation (FLEX) recommended that the Australian Government:
… review and strengthen the operation of the Fairwork Ombudsman, including adequately empowering and resourcing the Ombudsman to carry out proactive investigations and referrals to the Australian Federal Police.

Previous inquiries

9.141 Submitters highlighted that the role of a labour hire licensing scheme in Australia, similar to the GLAA, has been considered by a number of recent Commonwealth and state or territory inquiries. The Committee also heard that the Migrant Workers’ Taskforce is currently is currently considering the regulation of labour hire arrangements.
9.142 Table 9.1 outlines these inquiries and recommendations.
Table 9.1:  Inquiries into labour hire licensing
Committee / agency
Recommendation number
Parliamentary Joint Committee on Law Enforcement
Inquiry into human trafficking, slavery and slavery-like practices
No. 12: The Federal Government establish a labour hire licensing regime.
Senate Education and Employment References Committee
Corporate Avoidance of the Fair Work Act
No. 2: Federal and state governments work together to establish labour hire licensing authorities in each state.
Joint Standing Committee on Migration
Seasonal change: Inquiry into the Seasonal Worker Program
No. 9: Implement recommendation 32 of the EERC report (see below).
Senate Education and Employment References Committee
A National Disgrace: The Exploitation of Temporary Work Visa Holders
No. 32: Establish a national licensing regime for labour hire contractors.
Professor Anthony Forsyth, for the Victorian Government
Inquiry into the Labour Hire Industry and Insecure Work
No. 13: That Victoria advocate for a national, sector-specific, labour hire licensing scheme.
Finance and Administration Committee
Inquiry into the practices of the labour hire industry
Unable to reach agreement on whether to introduce a labour hire licensing scheme.
Economic and Finance Committee
Inquiry into the labour hire industry
No. 1: That SA assist the Commonwealth to introduce a labour hire licensing scheme.
9.143 The Committee notes that, in the absence of a national scheme, the Victorian Government,131 the Queensland Government132 and the South Australian Government133 have announced plans to introduce state-based labour hire licensing schemes. In October 2017, the NSW Legislative Council Select Committee on human trafficking recommended that the NSW Government advocate through the Council of Australia Governments (COAG) to establish a national labour hire licensing scheme.134
9.144 The PJCLE recommended the establishment of a national labour hire licensing regime consistent with recommendation 32 of the Senate Education and Employment References Committee, which outlined the proposed scope for the scheme:
The committee recommends that a licensing regime for labour hire contractors be established with a requirement that a business can only use a licensed labour hire contractor to procure labour. There should be a public register of all labour hire contractors. Labour hire contractors must meet and be able to demonstrate compliance with all workplace, employment, tax, and superannuation laws in order to gain a license. In addition, labour hire contractors that use other labour hire contractors, including those located overseas, should be obliged to ensure that those subcontractors also hold a license.135
9.145 The Committee notes that the government’s response to the Senate Education and Employment References Committee’s report is not yet publicly available.

Committee view

9.146 The Committee recognises that recent Commonwealth, state and territory inquiries have highlighted the role that unscrupulous labour hire companies play in contributing to the exploitation of migrant workers.
9.147 The Committee recognises that these inquiries have supported the establishment of a national labour hire licensing scheme. The Committee also recognises that the agricultural industry has taken initiatives to introduce voluntary compliance schemes for labour hire.
9.148 The Committee shares the concerns of submitters that the introduction of individual state-based schemes will create a fragmented system. The Committee considers that a consistent, national scheme would be the best mechanism to reduce exploitation.
9.149 The Committee recognises that the UK GLAA provides a useful model for Australia to consider in developing its national scheme. The Committee recognises evidence to this inquiry that indicates that the GLAA scheme, coupled with its new investigative powers, is working effectively. The Committee is of the view that the Australian Government should consider some of the measures undertaken by the GLAA in the UK, including monitoring remittances and utility usage, to identify possible cases of exploitation.
9.150 While the Committee acknowledges that a labour licensing scheme is no ‘silver bullet’ to stopping exploitation and modern slavery, it considers that taken together with the Australian Government’s existing measures and the recommendations of this report, it will assist to improve protections for migrant workers.
9.151 The Committee considers that it is vital that the FWO be adequately resourced to investigate allegations of exploitation, as well as to provide migrant workers with information on employment rights and responsibilities.

Recommendation 48

9.152 The Committee recommends that the Australian Government establish a uniform national labour hire licensing scheme, consistent with recommendations by the Parliamentary Joint Committee on Law Enforcement, the Joint Standing Committee on Migration and the Senate Education and Employment References Committee. This licensing scheme should incorporate random audits and unannounced inspections of labour hire firms to ensure compliance.

Recommendation 49

9.153 The Committee recommends that the Australian Government ensure that the Fair Work Ombudsman is further resourced to investigate allegations of modern slavery and exploitation and to provide all migrant workers with information on employment rights and responsibilities.

That looks like evidence to me, surely enough to condemn Willox’s piece. Not least because this is not his first dance.

Previously, Willox on QLD wage protections:

The Australian Industry Group said criminalising underpayments “would represent a major unnecessary and unwarranted change to the industrial relations system”.

“The term ‘wage theft’ is inappropriate,” the AIG submission says. “It risks inappropriately branding employers who mistakenly underpay their employees as criminals.

Willox on VIC:

Anti-business rhetoric in Victoria has reached fever-pitch, risking jobs and investment.

By parroting overly emotive unions terms such as “wage theft”, the State Government is supporting a divisive agenda that will only serve to drive employers away.

Running businesses is risky, complex and tough. The populist race to the bottom with the unions to describe wage underpayments by a tiny minority of businesses as “wage theft”, effectively labels all employers, large and small, as potential “thieves”.

The Migration Council is supposedly migrant-friendly:

The Migration Council Australia (MCA) is an independent, non-partisan, not-for-profit body established to enhance the productive benefits of Australia’s migration and humanitarian programs.

MCA brings together corporate Australia and the community sector to provide a national voice to advocate for effective settlement and migration programs.

We believe that the success of the migration program is critical to Australia’s future prosperity. Assisting new migrants and refugees to settle is an investment in the future of the Australian community, our economy and our prospective workforce.

Why is the Migration Council chair repeatedly aiming to derail lawmaker’s efforts to prevent migrant exploitation? Is the Migration Council misrepresenting itself as a lobby for migrants when in reality it is front for cheap foreign labour? Or has Innes Willox gone rogue?

It’s time the media, which so loves to quote Mr Willox, asked him.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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  1. What? Unions actually doing something about rights and conditions of workers? Sounds like a blast from the past… funnily it’s Chinese citizens so not even Aussies. What a sad state of affairs.

  2. Have jail for wage theft already.

    If Dan wins the state election, it might mark a turning point in the sense that voters do not necessarily do what the Murdoch newspapers tell them to. David Marr said on The Drum, when ScoMo knifed Turnbull, “the Murdoch press has less influence than before – they are trying to demonise Dan Andrews but Dan is still on track to win the election”.