BILLS;Migration Amendment (Reform of Employer Sanctions) Bill 2012;Second Reading – 27 Feb 2013

I rise to speak in regard to the Migration Amendment (Reform of Employers Sanctions) Bill 2012. The problem of people working illegally in Australia is one that this government intends to curb as much as it possibly can. Clamping down on illegal work practices is important not only for the protection of our immigration regime but for the protection of workers themselves.

Noncitizens engaged in paid employment where their visa conditions do not allow them to do so has a number of consequences. Working without permission takes away work that could be available to people, citizens and noncitizens, who are legitimately entitled to it. We need to maintain the integrity of our migration system and ensure that the economic opportunities available to workers in Australia go to those who are entitled. Large numbers of noncitizens working illegally can distort the labour market; undermine the pay and conditions of legitimate workers, including health and safety conditions; and give employers an unfair competitive advantage over those who are doing the right thing.

Finally, the practice of working illegally in Australia can have consequences for the illegal workers themselves. The Department of Immigration and Citizenship has found in its investigations that the deliberate and systematic use of illegal workers in significant numbers is often associated with the abuse of these workers, including sexual exploitation, unsafe work practices and underpayment. It is also associated with crimes such as taxation and welfare fraud. At the extreme end of the scale, some of the practices are very disturbing.

In the other place, the member for Wills, Mr Kelvin Thomson, included in his contribution to the debate on this bill a detailed explanation of some of the tactics used by criminal organisations to bring women into Australia on student visas for exploitation in the sex industry. I will not go into the detail on that matter as deeply as he did, but I would certainly encourage senators to read his contribution or look at some of the work undertaken by the Victorian parliament’s Drugs and Crime Prevention Committee in its investigations into this issue. I have also spoken on the issue of trafficking and sexual exploitation of workers—just this week, for example, in my contribution on the Crimes Legislation Amendment (Slavery, Slavery-like Conditions and People Trafficking) Bill 2012.

It is important that we, the Australian government, do all we can to stop the exploitation of workers. The integrity of our industrial relations system and the benefits this provides for Australian workers relies on having an orderly process for providing work for noncitizens when we authorise it and when it is in Australia’s national interests. Of course, where noncitizens are needed to fill skill shortages that cannot be filled by Australian citizens, there are a range of visa subclasses available to employers and employees under the skilled migration program. In addition, limited work rights are given to some visa holders to allow them to support themselves financially during their stay in Australia.

The number of people in Australia on a valid visa who either have no permission to work or have limited permission was around 960,000 as of 31 December 2009. These temporary migrants include students, tourists, business visa holders and working holiday-makers. Among those people are three groups of noncitizens who work in Australia without permission: noncitizens who have a current visa that does not permit work and have taken a job and commenced work; noncitizens who have remained in Australia after the expiry of their visa and have taken a job and commenced work; and noncitizens whose visa permits work, subject to certain conditions, but who are working in breach of these conditions. An example in this last category are noncitizens on student visas who are limited to 20 hours per week but who work in excess of those hours.

It is impossible to know how many of these noncitizens are violating the work conditions of their visas, although recent estimates have put the figure at around 100,000. What we can quantify is the number of noncitizens who overstay their visas, which in the past decade or so has fluctuated between around 40,000 and 60,000 every year. The problem may appear relatively small compared with our overall labour market of 10 million workers. However, 100,000 people working without permission is not an insubstantial number.

Australia’s lifestyle and living standards are the envy of the world. Noncitizens working in Australia without permission threaten this lifestyle by taking away employment opportunities and undermining hard-won working conditions. The previous government, in recognising this problem, introduced the Migration Amendment (Employer Sanctions) Act in 2007 to provide criminal sanctions for employers and labour suppliers who knowingly employ or refer for work noncitizens who do not have permission to work in Australia. The act quite rightly put some of the onus on employers to check that the workers they were hiring actually had permission to work. It also provided a mechanism to punish those employers and labour hire organisations actively involved in the recruitment and exploitation of illegal workers. The introduction of this act was coupled with an education campaign and administrative warning notices.

In 2010, barrister Mr Stephen Howells was engaged by the government to conduct a review of the act. Mr Howells’s review was wide-ranging, examining the effectiveness of the current sanctions, the impact of the regulation on business, and the effectiveness of the systems verifying a person’s right to work based on their visa entitlement or Australian citizenship. Mr Howells found that the criminal sanctions contained in the 2007 act had been ineffective as a deterrent to illegal work hire practices.

I will paraphrase a few sections of Mr Howells’s report, which goes some way towards explaining why these sanctions have been ineffective. Since the commencement of the Migration Amendment (Employer Sanctions) Act 2007, departmental officers have considered more than 100 instances of possible breach. They have thoroughly investigated at least 10 matters involving what appears to have been the deliberate and systematic use of these workers in significant numbers at identified workplaces. There have been no successfully contested prosecutions under section 245AA to 245AK of the Migration Act 1958 resulting in a recorded conviction and sentencing.

In December 2010, one offender was convicted and sentenced after entering a plea of guilty and acknowledging a prior criminal record. The principal reason for the failure of the Migration Amendment (Employer Sanctions) Act provisions is that the best evidence of breach would almost always come from the workers themselves, but their evidence is affected by their complicity or independent culpability under section 235 of the Migration Act. They would normally be removed from Australia as soon as reasonably practicable, as required by section 198 of the Migration Act. The cost and the administrative inconvenience of detaining them pending a trial would be prohibitive.

In his report, Mr Howells noted that similar patterns of illegal work practices appeared in the United States, Britain and New Zealand and that the successful responses appeared to be those that included other enforcement mechanisms, such as civil penalties and infringement notices. The compliance regime recommended by Mr Howells is contained in the bill currently before the Senate: the Migration Amendment (Reform of Employer Sanctions) Bill 2012.

What the government is proposing through this bill is a tiered enforcement approach. The scheme is designed to encourage voluntary compliance by business, through education and deterrence, and provide effective sanctions where this does not occur. This is achieved through graduated tiers of education, warnings, infringement notices, non-fault civil penalties and criminal penalties. The legislation’s key amendments include amending the criminal offences and creating new non-fault civil penalty provisions and an infringement notice scheme for people who allow or refer an unlawful noncitizen to work, or allow or refer a lawful noncitizen to work in breach of a work related condition; creating statutory defences where reasonable attempts are taken at reasonable times to verify a foreign national worker’s entitlement to work; broadening the application of criminal offences and civil penalty provisions to hold a person liable for participating in an arrangement, or series of arrangements, that result in a foreign national working without lawful entitlement; extending both criminal and civil liability in certain circumstances to executive officers of bodies corporate, partners in a partnership and members of an unincorporated association’s committee of management; and creating search-warrant and notice-to-produce powers specifically to facilitate the investigation of suspected breaches of these offences and civil penalties.

So, I will explain the tiered enforcement model. Firstly, businesses are informed and educated on the requirement that only noncitizens with a visa that allows work are entitled to work. This will be achieved through a revamped education and information campaign. Then, where departmental officers identify a business or employer who is not complying with the legislation, they will usually issue an illegal-worker-warning notice. Subsequent infringement notices may be issues where repeated noncompliance with the legislation is detected. Finally, proceedings for a civil penalty order or prosecutions for criminal offences may be pursued where persistent noncompliance occurs and/or where serious breaches of the legislation are detected.

Where departmental officers identify an employer who is not complying with the legislation they will usually issue an illegal-worker-warning notice. These notices are available under the current act. Where repeated noncompliance with the legislation is detected, the department can then issue an infringement notice. Proceedings for a civil penalty order or prosecutions for criminal offences may be pursued in cases where the department finds persistent noncompliance or serious breaches of the legislation.

There has been extensive consultation on the measures contained in this bill. Mr Howells undertook consultation with key stakeholders, including employer groups, before releasing his report and recommendations. The government conducted further consultations on the recommendations in Mr Howells’s report before releasing an exposure draft of the legislation. And of course there was then consultation on the exposure draft.

In drafting the bill, we have given careful consideration to the submissions made by employer and employee groups, government agencies including the Department Immigration and Citizenship and a range of other key stakeholders. Contained within this bill is a comprehensive package of measures, which, I am certain, based on international evidence, will be effective in significantly clamping down on illegal work hire practices. I would like to congratulate the former Minister for Immigration and Citizenship, Chris Bowen, for his carriage of this legislation.

Now I would like to comment on one of the objections that has been typically raised to sanctioning employers for illegal work hire practices. Some employers say they cannot reasonably be expected to know the work entitlement of prospective employees. The department has overcome this problem with the visa entitlement verification online, or VEVO, system. Through VEVO, employers are able to check whether a named person has a current visa and whether they are permitted to work. Employers without internet access can use the department’s toll free visa entitlement verification faxback service.

Mr Howells took into account the concerns of business when he recommended the creation of statutory defences where a business took reasonable steps to check that a worker or prospective worker had permission to work. These defences are now contained within the bill and define what a reasonable step is. It can include checking a computer system as prescribed by regulations or viewing original documentation such as a visa label in the noncitizen’s passport which demonstrates that they have permission to work. Another defence recognises that an employer or a referee should not be expected to know whether a non-citizen worker is also working elsewhere. In other words, when a noncitizen has a limited entitlement to work, their employer can only be penalised if that worker exceeds their entitlement through the hours worked with that employer. None of these defences, unfortunately, have satisfied the opposition.

I note that in their contribution to this bill in the other place, the opposition criticised this legislation for introducing new obligations on employers and for imposing red tape and compliance costs. This, as the former Minister for Immigration pointed out in reply, is a furphy. There has not been one additional requirement added to what was already required under the 2007 legislation introduced by the previous government. With this bill, the opposition’s usual negativity appears to have reached new heights. They are now opposing a bill on the basis of something that is not even in the bill. These mythical extra obligations to which those opposite refer do not exist. In fact, as Mr Howells pointed out in his review and as I mentioned earlier, the implementation of the VEVO system means that there is less of a compliance burden on business when it comes to verifying whether a visa holder has an entitlement to work in Australia. VEVO makes it easy for employers to conduct a check, and this is not an onerous requirement.

The suite of measures contained in the current bill, the measures which Mr Howells recommended, are not much different to the recommendations handed to the Howard government by their own 1999 review. The coalition rejected them back then too. Those opposite still refuse to accept this advice. They refuse to provide the Department of Immigration and Citizenship with the tools necessary to stop employers engaging in illegal work hire practices and to deal with them under the law.

Those opposite are just not serious about more jobs for Australians. They opposed the economic stimulus plan, putting 200,000 thousand jobs at risk; they opposed assistance for the auto industry, putting a further 46,000 jobs at risk. Now they oppose effective action to prevent 100,000 or so noncitizens working without permission in Australia, taking jobs that could be going to Australians. I am proud to be part of a government that, by contrast, has created over 800,000 jobs since 2007 election during great global turmoil when jobs were being lost in the millions in other advanced economies. We created 800,000 jobs and kept the unemployment rate steady. We kept it lower than the average unemployment rate during the 12 years of the Howard government, despite the doom and gloom of the coalition when they predicted that the mineral resources rent tax, the Fair Work legislation and the carbon price would result in wholesale job losses. They peddled their doom-and-gloom scenarios and what happened? We did not see wholesale job losses throughout the economy. No, productivity tripled because of the economic reforms put in place by this Gillard Labor government and over 800,000 additional jobs were created.

This just goes to show that the Labor Party is the party of jobs. It demonstrates that we are the only party in this place which is serious about creating jobs for Australians and protecting the employment rights and conditions of Australian workers.

Debate interrupted.