BILLS;Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017;Second Reading – 15 Aug 2017

I’m pleased that I was given some time today to talk on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. It’s good that, having seen levels of abuse of workers’ rights that not even this government could ignore, we are finally presented with the bill. Over the last couple of years, just some of the high-profile cases of exploitation of workers we’ve heard about include 7-Eleven shop assistants, Myer cleaners and Pizza Hut delivery drivers. But what we need to remember is that not all cases have been high profile. There has been consistent evidence of the exploitation of workers taking place over quite some time.

It is utterly despicable that in 2017 we’re still hearing of exploitation of workers on such a large scale. Labor senators welcome the provisions of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, which will reduce the exploitation of some vulnerable workers in Australia. However, Labor senators consider that in some aspects the bill as currently drafted falls well short of addressing the range of ways workers are exploited. It falls significantly short on the suite of legislative measures required to properly address the breadth of worker exploitation.

For those who said that the bill has gone too far, I would suggest that they possibly don’t like accountability, because the bill does nothing in relation to sham contracting, phoenixing to avoid wage liabilities or reforms to the Fair Work Act to strengthen protections for workers, and it does nothing to make it easier for workers to recover unpaid wages. As such, Labor senators believe that a number of amendments are required in order to provide a more comprehensive solution to the very deliberate and systematic exploitation of workers in Australian workplaces. It could be a better bill, and if the Senate accepts our amendments, it will be, but I do acknowledge that it is a start.

I shouldn’t have to say it, especially here in the Australian Senate, but throughout the country employees shouldn’t be ripped off by their employer, ever—full stop. Employees should be fairly paid in line with their agreements and the law. Employers shouldn’t deliberately rob their workers to boost their own profits. We should be a better nation than that. However, we’ve seen in the last couple of years gross, systemic and wilful exploitation of workers, in particular, by some very large national franchises. This is completely unacceptable. It’s unacceptable to the employees and to the employers who are placed at a competitive disadvantage by doing the right thing and paying award wages or over award wages, and who aren’t exploiting their workers. It’s unacceptable to the union movement and it’s unacceptable to our sense as a nation of the fair go.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 amends the Fair Work Act to increase penalties for serious contraventions defined as conduct which is:

(a) deliberate; and

(b) part of a systematic pattern of conduct relating to one or more other persons—

of prescribed workplace laws. Also:

Increasing penalties for record-keeping failures.

Making franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew or ought reasonably to have known of the contraventions and failed to take reasonable steps to prevent them. The new responsibilities will only apply where franchisors and holding companies have a significant degree of influence or control over their business networks.

And the franchisor or holding company may raise a defence of taking reasonable steps to prevent a contravention, and:

Expressly prohibiting employers from unreasonably requiring their employees to make payments (e.g. demanding a proportion of their wages be paid back in cash)—

giving the Fair Work Ombudsman and employees at SES level the power to compulsorily question persons as part of an investigation in to the breaches of the Fair Work Act where failure to answer questions gives rise to a civil liability.

As I said, those measures are a start, but they don’t go far enough. But there’s a policy that does properly protect workers’ rights. Labor’s rights at work policy released at the start of 2016 committed a Labor government to put in place a suite of reforms to protect rights at work by cracking down on unscrupulous employers who are willing to exploit employees.

Labor’s Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 is a far more comprehensive suite of measures to protect vulnerable workers. As an example, our bill contains amendments to the Fair Work Act 2009, which make it clear that the Fair Work Act applies to all employees, irrespective of their immigration status; require the Fair Work Ombudsman to publish information for employees about the relationship between workplace and immigration laws and the right of overseas workers to seek redress for contraventions of workplace laws; provide additional protection from adverse action taken against an employee who questions whether a workplace right exists or whether they’re an employee and not an independent contractor; introduce a reasonable person test in determining whether an employer has engaged in sham contracting; give the court the power to make orders requiring directors of phoenix companies to pay unpaid wages and other employee entitlements when a company of which they’re a director is phoenixed; increase threefold the maximum penalty for employers, other than small businesses, who deliberately and systematically deny workers the wages they are due; give the courts the power to disqualify directors involved in companies that are found to have deliberately engaged in serious contraventions of workplace relations laws; and introduce new criminal offences for conduct that involves the use of coercion or threat within the meaning of slavery or slavery conditions of the Criminal Code where employers commit serious contraventions of the Fair Work Act in relation to temporary overseas workers.

Labor’s bill is significantly better than the one presented today. I would like to take a moment to talk about the importance of ensuring that franchisors ensure franchisees are in compliance with the Fair Work Act. The Fair Work Ombudsman in the report into 7-Eleven found:

It is our opinion that 7-Eleven had a reasonable basis on which to inquire and to act. To the extent that 7-Eleven contends that issues were limited to the few rather than the many, the Fair Work Ombudsman provided evidence of widespread compliance risks across the network in October 2014 at the commencement of the inquiry and again in May 2015 when presented with the preliminary findings of the 20 stores audited in September 2014.

So, in other words, 7-Eleven knew of the behaviour that had been going on across its franchisees for many years, yet they did nothing to protect the workers. This is utterly shameful. In addition, the Fair Work Ombudsman’s 7-Eleven report said:

While 7-Eleven is not legally responsible for entitlements payable to employees of franchisees, it has a moral and ethical responsibility for what has occurred within its network and is capable of preventing it occurring again.

On this same issue, Labor senators, in their additional comments to the Senate Education and Employment Legislation Committee’s report into this bill, noted:

… the concerns raised by submitters such as WEstjustice that the bill as currently drafted does not make it clear that responsible franchisor entities and holding companies will be liable for the breaches of the franchisee entity or subsidiary.

Labor senators also consider that the bill does not go far enough in its amendments to expand accessorial liability. As the Franchise Council of Australia argued:

No evidence provided makes the case for singling out franchising when Fair Work compliance concerns are an economy-wide issue.

Labor senators contend that this evidence supports the need for liability to be extended so that franchisors cannot avoid responsibility by merely rearranging their affairs. Employers shouldn’t be able to wash their hands by shifting employees to labour hire firms. This is one of the reasons that the bill, as originally drafted, doesn’t go far enough.

However, just protecting workers from exploitation is not enough. We also have to work to protect their take-home pay. Of course, we all know that penalty rates are of vital importance to low-paid workers, and on this the government has failed those workers again. I often wonder if those on the other side of the chamber have ever had to rely on penalty rates—not just getting them from working a part-time job while living with mum and dad and all the comforts of home but actually relying on them. We’re not just talking about students and young people; we’re talking about 700,000 people: mothers and fathers, carers, primary bread winners for families. If those opposite really understood, they would side with our lowest paid workers and make their lives a little easier. But those opposite are not the ones negatively impacted by penalty rate cuts.

Labor does not accept the failed, flawed, sterile view of this country that says you reward those at the very top and hope that something trickles down to everyone else. It’s clear to see that this government’s priorities are utterly wrong. The last thing Australia needs is a cut to household budgets, which are already stretched to the last dollar. When corporate profits are at record highs and wages growth is at a record low, it is not the time to give multinationals a tax cut and workers a pay cut. Australians facing a cut to their penalty rates just want someone to fight for them. Well, guess what? That’s exactly what Labor is doing.

Those opposite say we should just accept the decision of the umpire. We respect the Fair Work Commission—absolutely we do—but they’ve made the wrong decision in cutting Sunday penalty rates, and we will not stand idly by while Australia’s lowest paid workers pay the price. A new Labor government will reverse this penalty rate cut and protect vulnerable workers from exploitation. I call upon the government and the crossbench to work with Labor, pass our amendments and leave this place with a significantly better bill. Our lowest paid and most vulnerable workers need legal protection from unscrupulous operators who are getting away with exploitation and theft. We should be making laws that protect the most vulnerable, not allowing these injustices to continue.