Chapter 4 - Practicalities of a seasonal contract labour scheme
We have observed that, when things change, they tend to change
very rapidly and, if you do not have a second option or an emergency plan, you
can be left flat-footed.[1]
4.1
It was not apparent to the committee that proponents of a seasonal
labour scheme using foreign workers had done much hard thinking on the
practicalities of such a scheme. There were casual references to using labour
hire contractors to undertake all the necessary arrangements, and an assumption
that they would put in an order for labour which would arrive just when the
harvest was ready.
4.2
Such casual assumptions can be juxtaposed with commentary from the
Department of Immigration and Multicultural Affairs (DIMA) and the Department of
Employment and Workplace Relations (DEWR) which stressed, though in no
particular detail, the administrative and compliance problems that such a
scheme would present. The committee is confident that if these agencies were
required to run such a scheme they would quickly address these problems and
overcome them. Growers indicated enthusiasm for a trial program, and a number
nominated their own districts as 'ideal' locations for such a trial. But there
was little in the way of advice or suggestion on how an institutionalised
foreign labour contact scheme would work. Government departments were
understandably reluctant to give hypothetical consideration to practical
details on the record. The committee is of the view that if such a scheme were
to be organised it would place more demanding conditions on growers than they
might now anticipate, and require of government agencies a more direct
regulatory function than now exists for any of their employment programs.
4.3
In this chapter the committee states some principles which should
underpin a seasonal contract labour scheme, and reports on some administrative
and practical matters which were raised during the inquiry.
4.4
A number of issues arise:
- the level of formal agreement that would be required with
Pacific nation governments;
- the level and extent of government regulation that would
need to be imposed, from where this authority should emanate, and how
regulations and guidelines in relation to the labour scheme would be
agreed on;
- how the processes of recruitment, contracting and
applications for labour and related matters would be managed;
- how pay and working conditions would be determined;
- how transport and accommodation would be arranged, and who
will pay for this; and
- how responsibility for the welfare of workers, including
their social needs and their links with local communities, would be
shared.
Serving national and regional interests
4.5
The committee's view on the management of a Pacific island contract
labour scheme rests on the premise that the national interest, in regard to
labour supply security, and the social and economic interests of south Pacific
nations are complementary. At stake is the protection of investment in the
horticultural industry and the assurance of its capacity to service its
markets. Also at stake is the economic future and social stability of Pacific
island states. As stated in the previous chapter, harvest labour sourced from
the Pacific would be as much a matter of foreign policy as labour market
policy. For Pacific states it is likely that the management of a labour
contract program would require a higher level of formality than a normal
commercial labour contract arrangement. Although the committee was not able to
explore such matters with Pacific island governments, it is more than likely
that they would want to be consulted on the management plan for the scheme.
4.6
It would appear desirable to follow the Canadian model for seasonal
labour contracting which is done on the basis of agreements between
governments. As stakeholders, Pacific nations would be concerned for the
welfare of their citizens and the return to their countries of remittance
revenue. They would have close involvement in the movement of their citizens to
Australia and in ensuring their return home.
4.7
It is likely that any contract labour scheme would require regulations
and guidelines agreed to following consultation between governments and other
interested parties. The committee would not envisage any one labour hire
organisation being given a monopoly on administering recruitment and supply of
labour. It may be more appropriate that management would be tendered for on the
basis of appointing agencies which would specialise in providing for a
particular industry niche or for a particular region. Individual agencies would
need to liaise closely with local growers on such matters as training and
continuity of engagement so as to achieve efficiencies. Nonetheless, the tasks
of recruitment and allocation of labour would need to be carried out according
to agreed guidelines and be subject to supervision by an agency within DEWR.
4.8
While the numbers of workers required initially may not be large, it
would be expedient to ensure that all South Pacific Forum nations were involved
in an agreement if that was their wish, and that they should have the
opportunity to participate in proportion to their population, subject to
negotiation over 'special case' considerations. It has been suggested that
demand for jobs would be likely to exceed the capability of growers to manage
them, and so an agreement would need to be negotiated about quotas of workers
from each country.[2]
Regulation of a seasonal labour scheme
4.9
The committee takes the view that the social, economic and foreign
relations dimensions to a Pacific Island seasonal labour scheme necessitate a
higher level of regulation and supervision than that imposed, for instance, on
the Job Network agencies. There will be community expectations for such
arrangements in view of continuing concerns about employment prospects for
unskilled Australian workers in the horticulture industry. There will be
continued concerns that current assurances by employers that Pacific Island
labour is not to be seen as a cheap source of labour may be disproved over
time. This would be more likely to occur if the success of the scheme resulted
in further investment and increased demand for labour.
Recruitment and labour management
4.10
The committee believes that the success of any Pacific contract labour
scheme will depend as much on the capability of labour management firms as on
the quality and capability of the workforce.
4.11
This is a matter of crucial importance, given recent experiences of
holders of 457 visas and their relationships with their employers. In any trial
of this scheme there would be advantage in seeing its application to
large-scale producers, mainly because of their more demanding and longer term
labour requirements, and their capacity to meet training and accommodation
requirements. Such large scale horticultural operations would be able to
guarantee an extended period of work, and would have the management resources
and work variety to make training efforts worthwhile. It is likely that foreign
workers, operating as fairly large workgroups, would be less flexible in their
mobility and their capacity to be split into smaller groups, than would local
and backpacker workers who are usually hired and contracted independently. The
committee suggests that any trial program would most usefully begin with large
producers because the benefits are more likely to be realised by both growers
and workers. This view is representative of the advice given by horticultural
specialist in labour supply in the Goulburn Valley, who told the committee:
We have found the best people to do business with are those who
have invested the most money, because they take a business approach to their
labour requirements. They realise that labour is a valuable part of it and
needs to be nourished and looked after, as distinct from some of the older
style orchardists, who think labour is just something that turns up magically
in the harvest season and you do not have to worry too much because there is
plenty more where they came from.[3]
4.12
An important concern will be to ensure that recruitment is based on work
fitness and aptitude, rather than 'irregular' and 'extraneous' influences that
in so many cases bear on recruitment processes, and which will quickly lead to
an acceptance of corrupt practices. During its inquiry, the committee has heard
casual references to ready sources of available labour in Asian countries which
would be 'ideal' for working in particular areas of cultivation. The committee
is concerned that regulations need to be instituted which would eliminate the
possibility of third and fourth parties to recruitment siphoning off fees or
commissions which would add to costs and impose financial obligations on work
applicants.
4.13
Recruitment and contracting must be transparent processes, even though
they may be guided by the legitimate policy considerations of Pacific island
governments. This would allow the targeting of particular categories of people
to meet social and economic needs of the source nation, provided that the
criteria of fitness and aptitude are met. The committee is concerned that under
current ad hoc arrangements which operate for 457 visa holders working
in so-called semi-skilled jobs in abattoirs, working and living conditions are
unregulated. A consequence is that contractor margins may result in the
exploitation of workers, and there is little or no social benefit flowing from
such arrangements.
4.14
In a harvest labour scheme, contract arrangements would need to be
subject to regulatory guidelines, while maintaining the flexibility that is
required to suit the diversity of the horticulture labour market. Growers have
greatly differing needs. For instance, designated job agencies might recruit
workers to the specifications of large operators with dedicated human resource
management structures, and hand the responsibility of employment over to those
firms which believe they can offer their workers better deals under direct
employment. Alternatively, a job agency may take full responsibility for
employment formalities, including pay, and charge growers accordingly.
Regardless of the contractual arrangements, the wages and conditions of workers
would need to be closely supervised by the regulatory agency within DEWR.
Pay and working conditions
4.15
All the evidence presented to the committee from proponents of a
contract labour scheme suggests that assurance of a timely labour supply was of
paramount importance. Growers repeatedly assured the committee that they were
prepared to pay current award rates to anyone who turns up for work and they
pay higher wages by way of piece rates. The question of pay increases to
attract pickers was regarded as problematic. Doubt was expressed that more pay
would attract more pickers. Some growers said that they could not afford it.
4.16
The committee accepts these assurances are representative of grower
attitudes. It notes, however, that a small proportion of growers, presumably
those in marginal operations, exploit illegal labour. Such exploitation
probably occurs in horticulture to a lesser extent than in abattoirs and in
hotels, cafes and restaurants.
4.17
However, the committee notes that the relevant award rate of pay is very
low. As discussed in chapter 2, only a relatively small number of highly
experienced picker in the current workforce are able to make $1000 a week or
more for a ten hour day, six day week, from horticultural work. Pay
rates ought to be commensurate with wages paid in comparable industries. There
should be an unequivocal agreement that a Pacific contract labour arrangement
will never become a 'cheap labour' option for growers, and that it will be
regulated to ensure that whatever local labour is available will be soaked up
by the industry.
4.18
The committee notes that recent cases involving foreign workers admitted
under 457 visas have highlighted the need for regulatory vigilance in the
matter of wages. Deals done by some employers with some labour hire contractors
are always likely to contain provisions which deprive workers of their full
entitlements. It is for this reason that the committee sees the need for much
more stringent supervision of contractors and employers.
4.19
The committee notes that on the basis of informal conversations with
growers and proprietors that some proponents of a foreign harvest worker scheme
anticipate being able to pay much lower than current wage rates. In the
Sunraysia district a number of members held informal discussions with grower
organisations associated with large investment companies having links with
labour contractors in China. There is strong advocacy of the use of Chinese
labour in some areas, and the committee is aware of the potential for labour hire
companies in that country to introduce workers who are paid far below minimum
rates, and who in other respects as well, would be the victims of exploitation.
These potential problems would be well understood by DIMA. It is for this
reason that the committee believes that should a harvest labour scheme be
seriously considered it should be restricted to South Pacific Forum nations and
be conducted with high levels of formality and regulation.
Visa compliance
4.20
The committee notes the information provided by DIMA on the high
overstay rate for Pacific nation passport holders. The committee presumes that
this information is intended to indicate the likelihood that Pacific workers on
any future seasonal work scheme would be at risk of absconding when their contracts
had finished. That takes no account of any new visa entry formalities that DIMA
has the power to enforce, and work supervision arrangements which would be
included in the contracts to be administered. Violations of visa conditions are
far less likely to occur if the sanction exists of a forfeiture of future work
entitlements.
4.21
To begin with, workers from Pacific states could be contracted for
specific work in a particular district by a responsible agency. The recruitment
process should ensure a large measure of compliance with the work visa –
through preference given to those with dependent families at home, for instance
– and through group supervision processes on the job. Pacific island workers
should preferably arrive in teams or distinct work groups. It would always be
possible for a determined contract worker to abscond at any time during the
contract period, but the desertion rate would, in the committee's view, be
minimal.
4.22
As discussed previously, however, the strongest reason for visa
compliance is economic. A small proportion of wages should be held in trust and
available only on return home. A major advantage of such a scheme would be to
encourage regular return of workers to farms and the accumulation of experience
in a range of horticultural skills. It would be in the financial interest of
Pacific workers to return regularly. The practicality of such an arrangement,
and the anticipated high compliance with visa conditions, has been borne out by
experience in Canada. No reason has been advanced as to why this should not
also apply in Australia.
Accommodation
4.23
The committee was particularly interested in the standard of
accommodation for current harvest workers, mainly as a pointer to what would be
needed for a harvest labour scheme. It noted that in the more remote areas in
the Northern Territory some growers and producers provided accommodation on
site. The standard of accommodation is probably adequate, in most cases, for
the young backpackers on the harvest trail whose expectations of comfort are
likely to be lower than workers who are not on a holiday adventure. It is to be
noted that on-site accommodation is usually offered at either very nominal
cost, or no cost. Hotels with cheap accommodation annexes and backpacker
hostels may offer slightly higher standards, but at a price.
4.24
Growers in south eastern Australia do not generally assist with
accommodation, except perhaps with advice. There has been no need for them to
do so as long as they rely on the current mix of labour which sees a high preponderance
of young backpackers living in cheap local accommodation. The committee
observed that some larger growers in the Goulburn Valley and in some other
areas provide caravan sites for 'grey nomads'. The advent of a dedicated
seasonal workforce from the Pacific islands will require an investment in
worker accommodation hitherto considered unnecessary, which large-scale
producers would be best able to afford.
4.25
The committee found general acceptance from witnesses before them of the
need to provide worker accommodation even though it appeared in many cases that
this had not previously occurred to them. Some indicated that labour costs were
already very high and were unprepared to concede that assured labour would come
at a cost over and above that of wages which are currently paid. As indicated
already, the committee believes that a Pacific contract labour scheme is more
suited to the needs and capacities of large enterprises rather than small
growers. It agrees with the view expressed by a labour hire contractor in
Shepparton who told the committee:
...it [is] essential in the early stages of the pilot to work with
a smaller number of larger growers so it is better controlled and then being
able to move from there. Our records show that probably better than 80 per cent
of the people we place are with about 20 per cent of the growers—in volume, I
mean, the number of growers. It would not be very difficult to put a reasonable
number of people in there and have it well managed, well controlled and the
welfare and all those sorts of things looked after. Basically that takes the
pressure off the rest because the numbers are available for them. It would work
very well.[4]
4.26
The committee agrees that the advantage of the scheme for small growers
is the overall growth of the labour supply, and easier access to current labour
sources.
4.27
The committee does not have in mind any particular specifications for
appropriate accommodation. There are, presumably, standards which already apply
for workers living away from home at mining and construction sites in remote
locations. Such standards should also apply to accommodation for foreign
workers. The standards for accommodation should be specified in the Pacific
labour scheme guidelines, and they should be applicable in all areas. Growers
and producers employing workers under the scheme should be obliged to
contribute to establishment and maintenance cost of accommodation where this is
subject to shared cost arrangements. The committee notes that housing is
currently a state responsibility. States may see it as in their interest to
contribute to investment in worker accommodation through their regional
assistance programs. Local governments may also see themselves as stakeholders.
The management of accommodation by local community organisations is another
possibility.
4.28
The committee notes that the proposal to upgrade the standards of
accommodation for foreign workers may raise the question of why such facilities
should not also be an entitlement for local itinerant harvest workers. This is
a fair question. It raises the issue of whether by improving the working
conditions for local and itinerant workers the labour shortage problem may be
at least partly relieved. The provision of decent accommodation for foreign
workers would soon test the demand by domestic harvest labour for more jobs in
the industry.
Transport, insurance and other matters
4.29
The airfare costs for workers from Pacific islands to Australia may
initially be paid by contracting organisations, but they may be recouped in
part by the contractors, as could the land component of transport from the port
of entry to the work centre.
4.30
The committee also raises the possibility of improving mobility through
the use of charter flights direct to regions where this is technically feasible
and cost effective. Bundaberg and Mildura would appear to be two places where
these arrangements might be possible. However, the committee is aware of the
additional costs that would result from the need to provide immigration and
quarantine services at these airports, and the advantages of this would need to
be assessed.
4.31
Quarantine deserved particular consideration in view of the work
involved. The committee expects that the carriage of work clothing and tools in
and out of the country by regularly returning harvest workers would be
prohibited. It would be necessary for growers to supply and store theses items,
either on their own properties or through some co-operative arrangements.
4.32
There appears to be an efficient local minibus service operating in
several horticultural districts visited by the committee, usually operated by
backpacker hostels. The committee has no particular view on how local transport
should operate, except to note that private vehicle access for contract workers
should not be encouraged, and that growers may need to organise a cooperative
transport system on a shared cost basis.
4.33
Another issue which needs to be addressed concerns health care and
medical insurance. The committee asked about the quality of health care and
medical facilities in some of the regions it visited. There was no informed
view of their adequacy. However, the committee presumes that recruitment of
suitable harvest labour would largely take care of concerns about the physical
condition of workers: their degree of fitness and general health. The vetting
of job applicants should exclude those with pre-existing medical conditions
that would require treatment in Australia. For those who are selected to work,
medical insurance should be required, and included as an administrative cost.
The issue of appropriate workers' compensation arrangements would need to be
clarified, in consultation with state authorities.
Community relations
4.34
The committee was aware when framing its terms of reference of the
importance of maintaining harmony and acceptance of Pacific workers in local
communities. The community must regard such a scheme as a benefit rather than a
threat. As discussed in an earlier chapter there are sensitivities about the
use of foreign labour as part of the Australian workforce. Such matters are
difficult to regulate, and, as one witness told the committee:
... [they] are a bit hard to put down as part of the commercial
package. They really revolve around doing the right thing. I believe that, if
it were to be done properly, the only people to have access to the labour would
be people who were exemplars of best practice in all their
facilities—accommodation, working conditions and those sorts of the things. I
think it is politically of concern that we would bring in people from overseas
and the worst thing would be to see them being exploited. It would be a tragedy
to try to get something like this off the ground and then to see them just
abandoned to some shabby accommodation and not brought into the community for
the brief time they are here.[5]
4.35
The committee had heard of incidences of community conflict in
Robinvale, between Tongans and others, over housing shortages. There are close
to 1000 Tongans living in the district and this number greatly increases at
harvest times when relatives of locally settled Tongans move in assist with the
additional work. An important social issue considered by the committee was the
likely effect of an influx of Pacific islander workers into an area where
resentment of outsiders might result, as a consequence of the depressed state
of that community and the absence of adequate physical and social
infrastructure.
4.36
In Robinvale, the committee was told that while racial groups were not
the cause of social problems, it was reflected in the competition for space and
the tensions over missing out on opportunities. These tensions arise from 'a
sense that "they" are taking our jobs and our space and that we
cannot get room or accommodation and have waited forever for housing'.[6]
Friction between the Koori and islander communities was also reported. The
committee is concerned about perceptions of favoured treatment to foreign
contracted labour at the expense of the unemployed, even though it readily
acknowledges that fruit picking and related horticultural work is unattractive
to the vast majority of the unemployed, for various reasons, and to most
indigenous people. The committee was not able to find evidence of any success
in attracting able-bodied unemployed people to the work of harvest labour,
apart from those who worked odd days to comply with the conditions of
job-seeking.
4.37
The committee considers that the influx of foreign workers is much more
likely to have unfortunate social consequences in small and vulnerable
communities rather than in larger towns and provincial centres. Such problems
are unlikely to be encountered in and around centres like Shepparton, Mildura,
Bundaberg or Griffith. The committee found no evidence in horticultural
districts of perceptions of favoured treatment given to foreign workers, and
local government authorities regarded them favourably. The committee notes
authoritative evidence taken from the experience of rural communities in Ontario
of harmony and prosperity prevailing in rural areas of Canada as a consequence
of the success of its Caribbean and Mexican agricultural workforce
arrangements.
Conclusion
4.38
Recent experience of importing labour for work in abattoirs and
construction sites by way of 457 visas provides a salutary lesson in the
pitfalls of organising a seasonal harvest labour scheme using labour from the
Pacific. While there is no Hansard record of any grower advocating such a
scheme on the basis of reducing labour costs, the committee gained a general
impression that this was in many cases the unspoken assumption. Such growers
are deluded. Good outcomes for both the industry and the workers will not come
cheaply because regulatory compliance measures, transport and accommodation
costs and administrative costs will be considerable. Some of these costs can be
recouped, but the committee considers it unlikely that growers have given the
costs of overcoming labour shortages much detailed consideration. If, on the
other hand, growers truly value a skilled, reliable and available labour force
for its potential to increase the value of production, as they claim to do,
these additional costs may be easily borne.
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