Coalition Senators' Dissenting Report

Coalition members of the Committee cannot agree with the recommendations of the majority report, which represent significant overreach based on the evidence presented and contrary evidence to the operation of the current legal and institutional framework of workplace law.
Coalition Senators have no tolerance for any employers failing to meet their obligations to employees under workplace laws. All employers should do the right thing and ensure their employees receive their full entitlements.
As evidence made clear, the Fair Work Act 2009 (the Fair Work Act) contains serious offences with heavy penalties that outlaw underpayment and other breaches of workplace laws. All national system employers must act in accordance with the requirements of the Fair Work Act.
Australia has the most comprehensive safety net of employee protections and one of the highest minimum wage rates in the world.
All employers covered by the Fair Work Act must the meet the requirements of that safety net, including providing pay and benefits to employees in accordance with the minimum wage, the National Employment Standards and modern awards. Further, employers must meet the requirements of any relevant Enterprise Agreement.
The vast majority of employers do the right thing and pay their employees in accordance with workplace laws. However, a minority of employers do not provide employees with their full entitlements. In some instances this is due to lack of knowledge or administrative error on the part of the employer. However, in some cases breaches are a result of deliberate attempts to underpay or exploit workers.
The Fair Work Ombudsman (FWO) has a key role to play as the appropriate regulator responsible for investigating breaches of the Fair Work Act, recovering underpayments, ensuring breaches do not persist and initiating action against employers who do the wrong thing, where appropriate.
It is on this basis that the FWO initiated its investigation into the treatment of cleaners engaged at Woolworths, Coles and IGA sites in Tasmania. That investigation and subsequent February 2018 report titled ‘An inquiry into the procurement of cleaners in Tasmanian Supermarkets’ identified underpayment of cleaners and other breaches of workplace laws at a significant proportion of Woolworths sites.
As evidence to the inquiry demonstrated, the FWO has taken appropriate steps to initiate recovery of entitlements and has subsequently had Woolworths enter a Deed under which they will be required to take responsibility for any outstanding entitlements and ensure their cleaning contractors adopt appropriate employment practices into the future.
Coalition Senators note successive ministers have expressed that the Government has no tolerance for underpayment of workers or exploitation of any kind and acknowledge that underpayment of vulnerable workers in industries such as cleaning has been a problem over a significant period of time, under successive governments.
Coalition Senators note that it was on the basis of these concerns that the Coalition Government has already taken comprehensive action to address exploitation of vulnerable workers, in particular through the introduction of the Protection of Vulnerable Workers legislation in 2017.
That legislation fulfilled an election promise to introduce a comprehensive package to improve protections for vulnerable workers.
That package included:
an increase in penalties up to ten fold for series breaches of workplace laws;
an increase in investigative powers for the FWO, including the ability to compel witnesses to provide evidence; and
new obligations for franchisors to take accountability for entitlements of the employees of their franchisees.1
The full benefit of these measures in combatting exploitation of vulnerable workers is now starting to take effect. The first decisions under the new penalty regime are expected to be handed down by the courts shortly.
Further, the Government has provided an additional $20.1 million in funding for the FWO to dedicate to protecting and supporting vulnerable workers.2
The FWO has also developed tools and strategies to assist migrant workers, particularly those with low levels of English, including providing information in 40 different languages to assist vulnerable workers.3
The FWO has undertaken significant compliance work in the cleaning industry, including filing 15 litigations between July 2013 and June 2018, resulting in the ordering of over $1.6 million in penalties.4
In addition, the Government established the Migrant Workers' Taskforce, chaired by Professor Allan Fels AO, to make further recommendations on how protections for vulnerable workers can be strengthened. Coalition Senators note the taskforce is due to report to the Government in November.
There is no disagreement about the need for compliance. This is a serious issue that warrants a determined and substantial response. It is not an issue that anyone should be playing politics with.
It is therefore disappointing that the Labor Senators constituted this inquiry as a political exercise.
Labor Senators arranged hearings to be convened in the electorates of Longman and Braddon, just ahead of by-elections in those seats.
There was no legitimate explanation for hearings being held in Caboolture on 19 July 2018 or in Devonport on 25 July 2018. The hearings demonstrate this underlying motivation for the inquiry.
The FWO had already completed an extensive investigation into the issues raised and determined the action required to address the matter.
Labor seems determined to undermine the work of the FWO. Last time they were in government, Labor cut funding and resources to the FWO. They seemingly believe that the powers that are rightly vested with the balanced and objective regulator, the FWO, should be transferred to the union movement.
It has therefore fallen to the Coalition Government to take action to protect vulnerable workers by adopting the comprehensive measures outlined above, including boosting the resources and powers of independent regulators. This stands in stark contrast to the inaction of the last Labor Government.
Reference has been made during the inquiry to arrangements entered into by Commonwealth Government departments with Broadspectrum for the provision of cleaning services in departmental buildings. The deed under which the services are provided makes clear that Broadspectrum is responsible for due diligence in relation to its subcontractors and ensuring that they comply with all laws, including the Fair Work Act. As was stated in evidence by relevant departments and Broadspectrum during the inquiry, cleaners performing work in departmental buildings are receiving their full entitlements under the relevant modern award and are paid at rates higher than that prescribed in the award.5
Coalition Senators uphold the right of all organisations to contract for services. The ability to enter into contractual arrangements with other companies is an essential and enduring part of our economy. A significant body of law and precedent exists around the importance of contractual arrangements. Freedom to contract, whilst not unfettered, is an essential characteristic of our economic system that should be preserved. The provision of specialist services on a contracted basis is integral to growth and the creation of jobs in the contemporary Australian economy.
Coalition Senators believe that the Government has taken proactive and comprehensive action to strengthen protections for vulnerable workers and that the recommendations of the Migrant Workers' Taskforce should be considered when determining any further reforms to enhance these protections.
It is on this basis that Coalition Senators cannot support the majority report.
Senator Slade BrockmanSenator Jim Molan
Deputy ChairSubstitute Member

  • 1
    Department of Jobs and Small Business, Submission 7, p. 6.
  • 2
    Department of Jobs and Small Business, Submission 7, p. 5.
  • 3
    Fair Work Ombudsman, Annual Report 2017-18, (accessed 13 November 2018).
  • 4
    Fair Work Ombudsman, Submission 14, p. 2.
  • 5
    See for example Ms Marianne Suchanek, Group Risk and Compliance Counsel, Legal and Governance Group, Broadspectrum, Proof Committee Hansard, 18 October 2018, p. 4; Mr Andrew Jaggers, Acting Deputy Secretary, Department of Finance, Proof Committee Hansard, 18 October 2018, p. 8.

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