Exploitation of workers cannot be stamped out if the settings remain the same, warns Fair Work Ombudsman Natalie James.
In her opening address to give evidence before the Senate Education and Employment Legislation Committee Inquiry into the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, James said that despite the successes the Ombudsman has had, “stories continue to emerge”.
“For every one we take to court, there are others we cannot take action against and still others we do not even know about because people are too scared to report them to us,” James said.
“These cases reflect badly on our country and on the majority of employers who are trying to do the right thing.”
The Protecting Vulnerable Workers Bill introduces new civil penalties for ‘serious contraventions’ which are ten times higher than those currently set out in the Act.
This Bill contains a number of measures that would adjust the settings in the Fair Work Act. The measures draw on the References Committee’s report on Australia’s temporary work visa programs, as well as the Fair Work Ombudsman’s work in this area, especially its inquiry into worker exploitation throughout the 7-Eleven network.
James said operators that exploit migrant workers engage in a range of tactics calculated to evade the Ombudsman’s action including liquidating their companies, not keeping records or falsifying records, engaging in ‘cash back’ schemes, targeting vulnerable workers or threatening workers with their visa or their job.
In December last year, the Ombudsman told INCLEAN its Cleaning Accountability Framework (CAF) pilot program will continue throughout 2017, as compliance within the cleaning industry remains a priority for the Ombudsman in 2017.
Throughout 2016, the Fair Work Ombudsman (FWO) worked with a number of stakeholders in the cleaning industry to develop the CAF which aims to help create a culture of compliance and reduce underpayments in the cleaning industry.
“Despite our enforcement outcomes, we have been limited in our capacity to disrupt the most deliberate and systemic conduct, or to reverse the apparent culture of non-compliance in high risk industries and sectors,” James said in her address this week.
“While the system is fit-for-purpose to address accidental or negligent non-compliance, it has proven not to be fit-for-purpose when it comes to addressing the deliberate and systemic unlawfulness that some unscrupulous operators adopt as a business model.”
“These operators set up their business model on the basis that a successful investigation or a court imposed penalty is simply a calculated risk or the cost of doing business. They consider the likelihood of being caught or the quantum of the penalties to be so low, that it is worth exploiting their workforce.”
James said it is not all or even most employees, but a “pernicious and persistent minority”.
“A minority that is distorting our labour markets and tarnishing our reputation as a fair and decent place to work.
“To put it simply, exploitation cannot be stamped out if the settings remain the same. If something doesn’t change, the script will not change and we will continue to see these stories on the front page of our newspapers.”