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Ombudsman backs Vulnerable Workers Bill

Fair Work Ombudsman Natalie James said the bill would ensure inspectors were taken seriously. Image: SMH

The Fair Work Ombudsman has spoken out against exploitative practices against vulnerable workers, in an address to a Senate inquiry.

Natalie James gave evidence before the Senate Education and Employment Legislation Committee Inquiry in support of the Protecting Vulnerable Workers Bill, which would increase penalties for business operators found to have engaged in exploitative practices.

Highlighting the Ombudman’s previous inquiry into worker exploitation in the 7-Eleven franchise network, Ms James said the actions of unscrupulous employers who paid “black market wages” reflected badly on Australia, and on the majority of employers who “do the right thing”.

“The Fair Work Ombudsman has had many successes in taking action to address this conduct; pursuing unscrupulous operators to the full extent of the law; pushing the boundaries of the law; and often securing close to the maximum penalties available under the current framework,” Ms James said.

“However, the 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.”

Ms James said the new bill contained a package of measures that would increase the powers of the Fair Work Ombudsman by providing “tools to combat the most serious worker exploitation”.

“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,” she said.

“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.

“Our submission contains examples where the Court-imposed penalty has clearly been far less than the likely value of underpayments to workers.”

In 2016 reports surfaced of 7-Eleven franchisees that, having already been fined for underpayments and forced to repay workers, were forcing workers to give up their repayments or face losing their jobs.

Earlier this year a group of Caltex franchisees made an official complaint to the ACCC accusing the fuel franchisor of unfair contractual terms and underlying motives for conducting underpayment audits, following a protest to highlight the issue.

More recently United Petroleum came under the spotlight, following the discovery that five out of 12 United stores investigated had underpaid staff in the past, with employees (half of whom were visa holders) underpaid close to $30,000.

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