The underpayment and exploitation of a substantial number of temporary migrant workers in Australian workplaces is an unacceptable practice. It has been a feature of the Australian labour market for too long. In 2016, the Coalition government announced measures, all subsequently implemented: introduction of a vulnerable workers law making franchisors liable for breaches by their franchisees in certain circumstances; measures to strengthen law enforcement under the Fair Work Act 2009 (Fair Work Act), and the establishment of the Migrant Workers’ Taskforce (Taskforce) to undertake a whole of government review of the problem.
Wage exploitation is of great concern to the Australian community. It is damaging to Australia’s reputation and may lead to negative flow-on effects to the proper functioning of the labour market and the economy. It is unfair not only to migrant workers, but also to other employees who are undercut on wages and job opportunities, and law abiding employers trying to compete on price. Australia prides itself on being a country where the principle of fairness underpins our economic and social relationships. However, migrant worker exploitation is a direct repudiation of this.
Migrant worker exploitation is a complex and multi-faceted issue where employment, migration, corporations, taxation and other laws intersect. Employers, including labour hire companies, that underpay overseas workers may also engage in other undesirable practices such as avoidance of tax obligations, sham contracting, or phoenixing to avoid employee entitlement obligations. More can be done about this — government must use a variety of tools across numerous portfolios to prevent, detect and punish rogue employers.
Migrant workers who are in Australia on a temporary basis may have poor knowledge of their workplace rights, are young and inexperienced, may have low English language proficiency and try to fit in with cultural norms and expectations of other people from their home countries. These factors combine to make them particularly vulnerable to unscrupulous practices at work.
Survey evidence suggests that many migrant workers are well aware that they are being paid less than they should be. Many factors may explain why they allow this situation to continue. The need to obtain and retain employment in a competitive labour market is one. People are often inclined to take what is available because they need the income or maybe feel that employment is necessary for them to achieve their ultimate goal of ongoing residency in Australia. Not knowing what to do about their underpayment or who to go to for help are other influences. Fears about the consequences of approaching government agencies are common among migrants from less democratic countries than our own. These fears will be more real in the unknown number of cases where there has not been full compliance with visa work restrictions. Also in an unknown number of cases, migrant workers may feel that they benefit from underpayment arrangements by not declaring their income to the Australian Taxation Office (ATO).
The underpayment of temporary migrant workers has become more visible in recent years as the number of temporary visa holders in Australia has grown substantially over that time. As at 30 June 2018, there were over 878,912 people in Australia on a temporary visa with a work right (excluding New Zealand citizens), an increase of over 300,000 people since 2008. The number of temporary visa holders arriving in Australia each year is substantially larger than the permanent migration program, which is currently capped at 190,000 places. Some temporary visa holders will only stay a short time in Australia, while others may stay for years or end up permanently migrating.
In establishing this Taskforce, the government wanted it to consider whether current enforcement and compliance strategies are actually working and whether a stronger enforcement approach should be taken to send a clear message to significant high risk sectors that this is an unacceptable practice.