Impact of the Working Holiday Maker (417 and 462) visa program on the
employment opportunities and entitlements of Australian workers
The Working Holiday Maker (WHM) (417 and 462) visa program (and the
international student visa program) differs markedly from the 457 visa program.
These differences have impacts on the labour markets in which the WHM (and
international student) visa holder works and on the visa holder themselves. In
particular, WHM visa holders and international students:
do not need to be paid market wages;
are not limited to employment in specified industries with labour
their employers are not required to demonstrate that they have
attempted to fill the position with Australian workers.
Concerns about these differences between the WHM visa program and the
457 visa program were expressed by a number of submitters and witnesses. The
key issues raised were:
the critical dependence of Australian agriculture on the WHM visa
the impact of the WHM visa program on the opportunities for
locals to secure jobs;
the lack of data about the WHM visa program;
the impact of the WHM visa program on the opportunities for
locals to get training and up-skilling (see chapter 5); and
the exploitation of WHM visa holders (see chapter 7).
The committee received little evidence on the impact of the
international student visa program on employment opportunities for Australians
(although it received a large body of evidence on the exploitation of
international student visa holders in the workforce—see chapter 8). However,
the committee did receive some evidence relating to the Seasonal Worker program,
and that is considered in this chapter.
The chapter begins by exploring the nature of the WHM visa program,
including general concerns about the scale and growth of the program, the lack
of accurate data about the program, its overall purpose, and the actual uses to
which it is being put. This is followed by a brief consideration of issues
raised in relation to the Seasonal Worker Program.
The rest of the chapter considers two vital industries located in rural
and regional Australia: horticulture and meat processing. The first part
explores the critical importance of the WHM program to the horticulture and
orchard sectors. The second part examines labour agreements, enterprise
agreements, and the role of WHM visa holders in the meat processing sector,
including the impact of 417 visa holders on enterprise agreements, and evidence
that 417 visa holders are reducing the opportunities for Australian workers to
get work in the meat processing industry.
The nature of the Working Holiday Maker program
As noted in chapter 2, the Working Holiday Maker (WHM) (417 and 462)
visa program allows young adults (18 to 30) from eligible partner countries to
work in Australia while having an extended holiday. Although the Department of
Immigration and Border Protection (DIBP) states that 'work in Australia must
not be the main purpose of the visa holder's visit', the visa allows work for
the full 12 months of the visa, with the sole restriction being that a WHM visa
holder cannot work for the same employer for more than six months.
In sum, the WHM visa program is a lightly regulated program with the ostensible
aim of facilitating cultural exchange.
However, the rapid expansion of the WHM program and changes to the work
rights associated with the program, including the incentives to work in
regional Australia to secure a second year visa (see chapter 2), have
fundamentally changed the nature of the WHM visa. Indeed, Dr Joanna Howe and
Professor Alexander Reilly pointed out that the WHM program is no longer merely
a cultural program, but is better understood as 'a labour market program, used
to fill perceived labour shortages in specified industries'.
A similar view was put forward by Ms Carla Wilshire, Chief Executive
Officer of the Migration Council of Australia. She emphasised the need to
address, in holistic policy terms, the labour market needs of regional
Australia, and also pointed to the dangers of relying on a poorly regulated
program to address those needs:
The original intention of the working holiday program was
very much around cultural exchange. One of the things that has started to
happen is that it is increasingly being used as a mainstay, particularly within
regional areas. What that actually points to—and it is something which I think
would be very beneficial for the committee to look at—is that in a sense we
have not properly looked at a migration program that meets the needs of
regional Australia; it has been done on an ad hoc policy basis. We think this
is something that desperately needs attention. You need to look in a systematic
policy way at the increasing needs of regional Australia around labour. How do
you resolve that? It is either through the movement of domestic labour
internally within the country or through migration solutions. If you look at it
in a very comprehensive systematic policy way you will find that, increasingly,
regional Australia will need to turn to aspects such as the working
holiday-maker program, which does not have the proper regulatory supports in
The views put forward by academics and the Migration Council on the
changing use of the WHM visa reflect the bulk of the evidence received during
the inquiry, namely that the WHM visa is now being used primarily as a working
The substantial growth in the WHM visa program was of great concern to
several unions, particularly given the significant levels of domestic youth
unemployment in Australia. The ACTU pointed out that the total number of WHM
visa holders in Australia is now equivalent to around 7.7 per cent of the total
Australian labour force aged 15–24 years.
These concerns are covered in greater depth in the section on the meat
In addition, several unions expressed concern about the way in which the
WHM visa program was being abused by labour hire agencies. In particular, unions
noted that labour hire companies in Australia used their links to labour hire
agencies in overseas countries to line up full-time work for overseas nationals
before those nationals even entered Australia.
The ACTU made several recommendations regarding the WHM visa program
including that the DIBP conduct an assessment of the WHM program with oversight
from the Ministerial Advisory Council on Skilled Migration (MACSM).
The ACTU further proposed the working rights attached to the WHM visa be
'reviewed and remodelled so that it operates as [a] genuine holiday visa with
some work rights attached, rather than a visa which in practice allows visa
holders to work for the entire duration of their stay in Australia'.
The ACTU also argued that labour market conditions in Australia should
be the factor that determines that determines the quantity of WHM visas made
available in any given year. Noting that Canada currently sets a cap on the
number of WHM visas it grants,
the ACTU recommended the Australian government have the ability to cap numbers
for the WHM visa program.
The ACTU was highly critical of the scant data on the WHM visa program
and requested that the DIBP publish the following:
the number of working holiday visa holders that do exercise their
the duration of their employment;
the number of employers they work for; and
their rates of pay, and the locations, industries, and
occupations they work in.
With regard to data collection, Mr David Wilden, acting deputy secretary
at the DIBP, noted that the WHM visa program is created by the Department of
Foreign Affairs and Trade under a Memorandum of Understanding with respective
partner countries. He pointed out that, unlike the sponsorship process in the
457 visa program, the DIBP has no control points to collect the data proposed
by the ACTU. Establishing the requisite control points would require changing
the WHM visa conditions. This would in turn require changing the nature of the
WHM visa program which would require renegotiating all the memorandums of
The Australian Chamber of Commerce and Industry (ACCI) emphasised both
the economic benefits to Australia of the WHM scheme, in particular the money
spent by Working Holiday Makers (WHMs) on accommodation, transport and education,
as well as the reciprocal cultural exchange between Australia and partner
ACCI quoted the following statement from the Joint Standing Committee on
Migration inquiry into WHMs, arguing that the sentiments remain true today:
The working holiday program provides a range of cultural,
social and economic benefits for participants and the broader community. Those
benefits show that the program is of considerable value to Australia and should
continue to be supported.
Young people from overseas benefit from a working holiday by
experiencing the Australian lifestyle and interacting with Australian people in
a way that is likely to leave them with a much better understanding and
appreciation of Australia than would occur if they travelled here on visitor
visas. This contributes to their personal development and can lead to longer
term benefits for the Australian community.
In terms of reciprocal arrangements between countries party to the WHM
program, the committee notes the Fair Work Ombudsman (FWO) reported that 31 Australians
were granted a Taiwanese WHM visa in 2013 compared to 15 704 Taiwanese
granted an Australian WHM visa for the same period.
The Seasonal Worker program
The Migration Institute of Australia pointed out that the Seasonal
Worker program is a strictly regulated program that provides benefits to both
Pacific Island workers and farmers (the employers):
In contrast the Seasonal Worker visa programme for Pacific
Islanders, a seven month temporary worker visa, successfully protects their
working terms and conditions of employment and safety through the strict
regulation of sponsoring employers and labour hire companies and the banning of
those that do not abide by the required conditions of the programme. These
temporary visa holders are paid award wages and are provided with suitable
accommodation, health care and transport to and from their homelands.
This programme has been successful in providing both a steady
temporary workforce for farmers at harvesting times when an Australians labour
force has been either unavailable or unwilling, and jobs and income that do not
exist on their home islands. Many Australian growers now employ the same
workers year after year, having successfully trained and ‘acclimatised’ them to
the Australian working environment.
Ms Sarah McKinnon, Manager of Workplace Relations and Legal Affairs at the
National Farmers' Federation (NFF) stated that the NFF were 'huge supporters'
of the Seasonal Worker program and 'have been seeking to have it expanded to
the broader agriculture sector for some time'.
The NFF was also of the view that the changes to the Seasonal Worker
program announced in the Northern Australia White Paper (see chapter 2) would
particularly benefit the dairy industry and the wool industry and would enable
the greater attraction and retention of reliable seasonal workers.
While Ms Donna Mogg from Growcom, had a positive view of the Seasonal Worker
program, she noted that it was an expensive program to begin with.
The cost of the program was confirmed by Ms McKinnon who noted that, aside from
the regular wages and conditions, it cost approximately $2000 to bring a worker
to Australia and support them under the Seasonal Worker program.
However, Ms Mogg stated that there were clear benefits for growers who were
involved with the Seasonal Worker program for a few years:
We had one citrus grower from Gayndah reporting savings of
around 22 per cent to her total wage bill. That has nothing to do with
underpaying people; these people were being paid very well. This has to do with
the efficiencies of a well-trained, returning workforce. So we have actually
heard very good things.
Despite the benefits the program offers to both growers and workers, the
World Bank has drawn attention to the slow uptake of places in the Seasonal
Worker program, noting that, on average, only 65 per cent of the available
places had been filled.
The World Bank attributed the low uptake of the program to 'the
prevalence of illegal workers and backpackers in the horticulture industry' and
that this remained 'the key constraint on employer demand for the Seasonal
Worker program '
Agricultural labour markets and the role of WHM visa workers
As noted in chapter 2, the committee heard evidence from a range of
farmers and their industry organisations that despite high rates of
unemployment in general, and youth unemployment in particular, the agricultural
sector experienced ongoing difficulties in recruiting willing and able local
workers. The difficulties in finding suitable local labour were particularly
apparent where growers were seeking casual short-term employees for intensive
periods during the picking season.
Growers and their representative associations warned that without the
additional labour supplied by the WHM visa program, many rural industries were
at risk of a contraction in production, and some businesses simply could not
continue to operate. The following section presents evidence on the labour
force dynamics of the horticulture and fruit picking sectors.
However, the committee notes evidence it received that seasonal labour
shortages extend far beyond the horticulture sector in other regional and rural
areas. The NT government noted that many NT employers relied heavily on the WHM
visa program to meet customer demand in peak season:
In the Northern Territory's hospitality, primary and
construction sectors, these visa holders, in peak season, can account for more
than 50% of some employers' workforces. Without access to this workforce
source, particularly in high demand seasons, many Northern Territory employers
would struggle to meet customer needs and maintain their operations.
The importance of WHM visa worker
to the horticulture industry
The committee heard evidence about the labour market requirements in the
horticulture industry from Ms Mogg of Growcom. Growcom is the peak industry
body for fruit and vegetable growers in Queensland. The committee also heard
from strawberry growers on the Sunshine Coast in Queensland, Mr David
Fairweather and Mrs Laura Wells from Tastensee Farms.
Ms Mogg noted that the Queensland horticulture sector contributes around
$2.7 billion per annum to the state's economy and that the horticulture
industry in Queensland is larger than cotton, dairy and grains. She outlined
the number of businesses and the seasonal nature of employment in the
Queensland horticulture industry:
We estimate that there are some 2 700 farms in Queensland and
probably—although it is hard to estimate because statistics are not good—around
25 000 workers in this industry. The majority of them would be seasonal,
casual, transient and/or backpackers. Production in horticulture is the most
labour intensive of all the agricultural industries, often requiring large
numbers of employees for relatively short periods of time. Labour costs
represent up to 60 per cent of overall operating costs for many businesses.
Ms Mogg observed that there was intense competition within and amongst
horticulture production regions, and that growers are price takers rather than
price makers because of the dominance over the retail trade for horticulture
produce exerted by Australia's two major supermarkets.
Ms Mogg also explained the challenges in attracting local labour to
remote rural locations for short intensive periods, as well as the competition
for labour posed by the resource sector:
Horticulture businesses are usually located in regional
and/or remote regions, where demand for labour is high during peak seasons, but
this kind of temporary labour, and the volume and availability of this
temporary labour source, is limited. The seasonal nature of the industry poses
significant constraints in terms of attraction, career development and
continuity of skilled labour. Increasing competition for labour from the higher
paying LNG and coal seam gas sectors, and previously the mining sector,
particularly machinery operators, continues to be a drain on our industry and a
high concern to our producers.
The committee notes certain similarities between the challenges faced by
producers in the pork industry and those in the horticulture industry. However,
there are key differences, in particular the nature of the employment
requirements. The pork industry requires permanent long-term employees, while
the horticulture industry relies on casual short-term employees (who may return
on an annual basis).
These differences manifest in the type of visa workers that the two
industries seek to attract. As noted earlier, the pork industry relies heavily
on the 457 visa program. By contrast, the horticulture sector has a heavy
reliance on the WHM (417 visa) program.
Similar to the pork industry, growers and their industry associations in
the horticulture sector asserted that the industry was utterly reliant on
temporary visa labour to harvest the produce:
Working holiday makers, 417 visa holders, are the lifeblood
of our industry. We would like to make that really clear. Without those workers
this industry would be in dire straits indeed. The large, flexible labour force
ensures that the harvest gets in and that the product is in fact sold. Without
them, much product would be left to rot or perish, to the clear detriment of
growers, communities, consumers and the Australian economy.
Once again, the committee was keen to understand why the horticulture
industry experienced difficulties in attracting local workers. Mr Fairweather
stated that their strawberry farm required up to 140 people over a six month
Ms Mogg emphasised that the nature of the supplementary labour force required
in the industry was unattractive to most Australians:
I think the point has to do with the large numbers of
short-term employees. If you are operating out of Caboolture, for example, and
you need 250 or 300 workers for a period of six to eight weeks, that workforce
is not easy to recruit within the local area. We need to accept that what we
have is an ongoing need for supplementary labour. That is important. The
anecdotal evidence that we get a lot of is that Australian workers do not want
to do this job.
Mr Fairweather stated that, as manager at Tastensee Farms, they 'always
give preference to Australian workers, but we do not always get Australian
Ms Mogg stated that despite Growcom working with local employment providers,
Australians were simply unwilling to do the work:
As I said, one of our programs is focused on workforce
planning and working with business owners to talk to them about how they better
plan their workforce. That includes working with particularly local employment
coordinators and local job providers around getting these guys on. What we
consistently hear is: 'You'll get 10 who turn up and three days later you'll
have one left.' They do it because they have a requirement to comply with
Centrelink reporting obligations or, in truth, this is hard yakka, this is hard
work, and not a lot of people are prepared to spend six or seven hours outside
bending, lifting, pulling, tugging, pushing et cetera. It can be difficult
work. I consistently hear from our growers that they will employ local workers
and they would prefer to employ Australian workers, but the source of that
labour is not there.
Mrs Wells agreed with the position put by Ms Mogg. She noted that while
they always preference Australian workers, the combination of hard labour, and
unstructured, insecure part-time work through the planting period followed by
long hours of intense work during the two month picking season, was unappealing
to most Australians:
We always give preference to Australian workers. We do all
our hiring through our Facebook page. I look for them, I search for them.
Essentially last year we had 10 people, out of 200, that were Australian. One,
Andrew, ended up staying for the entire season. I trained every single one of
them, but one out of that 10 stayed.
Mrs Wells did, however, point out that Tastensee Farms had a few veteran
Australian workers that had returned to work on their farm over a twenty year
We have a lot of returning Australians who work for us in
that period. They wait for the season to commence. They work for us and a lot
of them have for 20-plus years, but finding new recruitment of Australian
people has been difficult, essentially because there is no structured time of
employment and that kind of thing.
Given the nature of the work, the 417 visa workers were both a good fit
for Tastensee Farms and essential to the business continuing:
I guess that is why the 417s for us in the strawberry
industry are vital, because they do not have families here. They do not have
lifestyle; they have the idea to work hard for a short period of time, earn
some good money, travel and spend it in our country. For us it has worked. It
came about five years ago and it was a godsend, really. It was a lifeline to
The South Australian Wine Industry Association (SAWIA) noted that
temporary work visa holders 'are not used on a regular basis in the wine
industry'. However, WHM visa holders have been used in situations where an
insufficient number of local applicants apply for casual vineyard or crushing
work during the vintage (harvest) period.
SAWIA pointed out that WHM visa workers were well-rewarded for short
intensive bursts of work:
Casual vintage workers performing largely unskilled work who
are prepared to work long shifts during a condensed period of time (3-10 weeks)
can expect to earn an income of approximately $1600-$1700 per week taking,
shift loadings, weekend and overtime penalties under the Wine Industry Award
2010 into account.
The committee received similar evidence about the problem of getting
workers for short intensive periods from New South Wales (NSW) orchardist, Mr
Guy Gaeta, who stated that despite workers on his farm being able to earn
between $200 and $600 a day during the fruit picking season, there simply were
not enough local workers willing to do the work:
We have been orcharding since 1986. To tell you the truth, we
had never used any backpackers till the year 2000. We always had enough
travelling people around the countryside. But, since 2000, they have either got
too old or they have died. If we did need anybody, we used to go to the
unemployment service, when it was run by the government, and we used to get
people. But now we cannot get any. We desperately need the backpackers,
because, out of about 40 people during our cherry harvest, which only goes for
a maximum of five weeks—that is maximum—we employ four Australian citizens.
Nobody else wants to come and pick cherries. I would never turn away an
Australian for a backpacker, but we cannot do without them. They are a vital
part of our business now. We still employ Australians but, like I said, it is
four out 40.
The difficulties in obtaining seasonal labour were corroborated by Mr
Justin Roach, a cattle and poultry farmer from Tamworth NSW. He stated that his
business did employ three permanent Australian workers in key positions on the
farm, and they had been there for five years.
However, the business also needed a lot of casual staff to do two to three
weeks work on a two month cycle. After experiencing significant difficulties in
recruiting local labour, Mr Roach had used 417 visa workers and this had 'been
a really positive experience'.
The committee heard similar evidence about labour recruitment from Mrs
Roma Britnell, a dairy farmer from south-west Victoria and chair of the
markets, trade and value chain policy advisory group with Australian Dairy
Farmers Ltd. Mrs Britnell recounted that their business employed permanent
staff, and that while they could retain staff in higher level jobs, they were
unable to retain local staff for milking and feeding the cows. They have
therefore resorted to training and employing a 417 visa worker for a period of
a year at a time to assist with milking and feeding.
Meat processing labour markets and the role of WHM visa workers
At hearings in Brisbane, Sydney and Adelaide, the Australasian Meat
Industry Employees' Union (AMIEU) painted a picture of the sweeping changes in
the meat processing sector in terms of the growth in the hiring of WHM visa
workers and the consequent declining employment prospects for local workers.
Mr Grant Courtney, Branch Secretary, Australasian Meat Industry
Employees' Union (Newcastle and Northern NSW) noted that when Steggles owned
the chicken processing plant in Beresfield (Newcastle), the workforce of 700
was 'predominantly Australian citizens'. Since Baiada took over, the plant has
increased in production by about 30 per cent. Yet while the permanent local
workforce is about 600, there are now about 700 visa workers on site.
At the Thomas Foods International sheep processing facility in Tamworth,
in the New England region of NSW, the AMIEU estimated that about 70 per cent of
the workforce was temporary visa workers.
Miss Sharra Anderson, Branch Secretary of the AMIEU (South and Western
Australia) described what had occurred at Thomas Foods International site at
Murray Bridge, a regional centre about 70 kilometres from Adelaide. The Thomas
Foods site is one of the largest processing companies in the industry,
employing between 1000 and 1100 workers. Miss Anderson stated that between 500
and 600 WHM visa holders were employed by five different labour hire companies
at the Thomas Foods site.
Mr Courtney did not accept that there was currently a genuine need to
access workers on temporary visas to fill the less skilled positions, mainly
because the unemployment rate is so high in the regional centres where
abattoirs are located. Furthermore, Mr Courtney pointed out that the less
skilled entry level jobs provide a career path to the higher skilled
occupations, and the increasing reliance on temporary migrant workers has
reduced the opportunities for local employment.
As an example of the potential for the employment of local workers in
meatworks, Mr Courtney told the committee that the Northern Co-operative Meat
Company in Casino NSW directly employed about 1200 workers, employed no more
than 20 backpackers on 417 visas, and had training programs in place to engage
most of the local school leavers through career paths. He said that the loyalty
between workers and the business could be measured by the longevity of the
workforce, with over 250 people with 25 years or more of service to the company
and the union.
The committee received conflicting evidence from unions and employers
over the need to employ temporary visa workers in skilled operations such as
boning, and the actual qualifications or skills that temporary visa workers require
in order to perform that work. This is a key point of contention, and it
intersects with both the labour agreements and the enterprise agreements in the
industry. In particular, the AMIEU drew attention to the negative impact that
the extensive hiring of WHM visa workers was having on the operation of
union-negotiated enterprise agreements with major industry employers.
The next section therefore looks at labour agreements in the meat
processing sector and the history around the use of 457 visa workers in the
industry. This is followed by a look at the labour procurement arrangements of
two chicken processing companies, Hazeldene's and Baiada.
The final section presents two case studies from Queensland where the
extensive hiring of WHM visa holders has diminished the employment prospects of
Labour agreements and enterprise
agreements in the meat processing industry
Mr Courtney noted that a registered labour agreement for the meat
industry was negotiated in 1998 and that the AMIEU was part of the process that
implemented the 457 visa program. He stated that the AMIEU had 'no problem with
accessing international labour when there is a genuine need for it' and that in
2001–02, many larger employers accessed skilled boners, slicers and
slaughtermen from South America.
Mr Matthew Journeaux, Assistant Branch Secretary of the AMIEU
(Queensland) noted that around 2005, many meat processing companies started
sponsoring 457 visa workers from Brazil, China, the Philippines, the United
Kingdom and Vietnam to perform the skilled roles.
He acknowledged there was a need for 457 visa workers in 2005 when the
resources boom was in full swing. However, he also pointed out that the AMIEU
was active in instigating, and supportive of, the meat industry labour
agreement, under which, an employer is required to reduce its reliance on 457
visa workers, and therefore has to prioritise upskilling local workers.
Mr Journeaux also noted the AMIEU had enterprise agreements at most of
the meat processing sites in Queensland. The agreements had both similarities
There are different systems of work within meat processing,
whether it is paid by a piecework type of arrangement, whether it is kilos or
bodies or units, but there are some that are time based arrangements as well,
with quantums of work and that attached.
Under the enterprise agreement, Mr Journeaux noted that a skilled worker
such as a boner or slicer would typically earn $32 an hour, while the award
rate is $19 an hour. This represents a rate of pay approximately 30 per
cent higher than the award. A labourer such as a packer would typically earn
$24 or $25 an hour under the agreement while the award rate is $17.20 an hour.
This represents a rate of pay approximately 20 to 30 per cent higher than the
The differential for skilled meatworkers in South and Western Australia
is comparable to the Queensland figures, but the differential for labourers is
much less with labourers under the agreement receiving just over $19 an hour
compared to the award rate of $17.20 an hour.
The significant difference in wage rates between union-negotiated
enterprise agreements and the award, particularly for the skilled operations
such as boning, provides a strong incentive for employers to source contract
labour to perform the skilled operations.
The committee was therefore keen to understand the proportion of
temporary visa workers employed in skilled operations such as boning, the
skills that the visa workers in the boning rooms had, and the difficulties that
employers experienced in getting suitably skilled local labour.
Hazeldene's Chicken Farm
The committee heard evidence from Hazeldene's Chicken Farm Pty Ltd
(Hazeldene's) about its business model, and in particular, its employment
practices in terms of direct employment versus labour contractor arrangements.
Hazeldene's is a family owned and operated poultry business located in
Lockwood, 14 kilometres from Bendigo in Victoria. Incorporated in 1957, the business
began as a hatching and egg-producing operation. In 1972 the family business
started slaughtering chickens for the growing chicken meat market at the rate
of 400 chickens per week. By 1984 the business was processing 20 000
chickens per week. The business currently processes 550 000 chickens per
week, holds around six per cent of the national poultry market, and has
contracts with Coles, Aldi and Woolworths.
Hazeldene's has an enterprise agreement and directly employs 720 people
across farming, processing and administration. Direct employment is up from 480
five years ago, an increase of 50 per cent. Of the 720 direct employees, four are
457 visa holders from South Africa employed in highly technical farming roles
in the business. There are no 417 visa holders in direct employment.
Hazeldene's noted that, as a family business, it has close contact with its
employees and prefers to employ directly rather than use labour hire
Mrs Ann Conway, People and Performance Manager at Hazeldene's advised
that Hazeldene's also uses a labour hire company, Drake International, to
supply some of its process workers. The process workers are on the enterprise
Two labour hire contractors, ENB Enterprises and Stanley Corporation
supply boners to Hazeldene's. While many of the approximately 130 boners are
permanent residents, about one third is 457 and 417 visa workers. Hazeldene's
outsourced the boning work about 15 years ago due to both a shortage in skilled
boners at that time and the growth in the company business.
All the boners are paid according to a services agreement based on the
Poultry Processing Award 2010. Boners are classified as Level 5 under the
Poultry Award ($18.66 an hour as at 30 June 2015). Hazeldene's does not
directly employ boners, but under the Enterprise Agreement, a Level 5 employee
would get $21.79 an hour. In answer to a question on notice, Hazeldene's
advised that the boners were paid an above award entitlement that includes
piece rates, but did not specify what that entitlement was.
One of the key issues that arose during this inquiry was the
accountability mechanisms that lead firms had in place to ensure that the
workers being supplied to the lead firm by labour hire contractors were
receiving the correct rates of pay. Many witnesses (including the regulator)
identified cash payments and the failure to maintain accurate employment
records as a major problem. These matters are covered further in chapters 7, 8,
Hazeldene's advised that one of the boning contractors paid their
employees by electronic funds transfer and the other paid by cash, but that the
second boning contractor would also be paying by electronic funds transfer by
the end of July 2015. In terms of checking that contracted employees were paid
correctly, Hazeldene's advised that prior to 9 June 2015, it had conducted ad
hoc payslip checks. After 9 June 2015 Hazeldene's advised it would conduct
sample checks on a quarterly basis.
The committee received evidence from the Baiada Group (including both Baiada
Poultry Pty Ltd and Bartter Enterprises Pty Ltd) about its business model, and
in particular, its employment practices in terms of direct employment versus
labour contractor arrangements. The majority of this evidence is contained in
chapter 7 as it pertains to the employment conditions of temporary visa workers
employed at Baiada.
Mr Grant Onley, Human Resources Manager at Baiada, provided the
committee with some information relevant to the employment of workers in the
boning rooms. Mr Onley stated that of the 6000 workers employed by Baiada,
about 13 to 14 per cent were contract workers, and that nearly all the contract
workers were employed in the boning rooms.
According to Mr Onley, Baiada did not have within its permanent
directly-employed workforce, people with the necessary skills to perform boning
Over 90 per cent of the employees in the boning rooms were contract
labour on a piece rate under the award.
Under the Poultry Processing Award, Mr Onley advised there is:
Level 1: induction;
Level 3: processing functions like packing of chickens, packing
of tray packs; and
Level 5: boning and filleting.
In this regard, the committee notes the FWO has stated that where a
modern award or enterprise agreement provides for piece rates, 'there remains a
requirement to ensure workers receive wages that equate to award minimums'.
Impact of WHM visa holders on local
employment opportunities in Queensland
This section presents evidence from the AMIEU at the Brisbane hearing
into the impact of WHM visa workers on the employment opportunities for local
workers in meat processing plants in regional and rural Queensland.
Mr McLauchlan, Branch Organiser for the AMIEU (Queensland) recounted his
experience from Wallangarra Meats, a small plant owned by Thomas Foods on the NSW-Queensland
border. The plant employs between 180 and 200 employees, and 220 at peak times
of the year.
In 2013–14, the AMIEU received complaints from workers that the sons and
neighbours of existing workers could not get a job at the plant at the same time
the union observed an increase in the number of 417 visa workers being employed
At a meeting with the company on 12 February 2015, the production
manager and the works manager told Mr McLauchlan that the company could not
find 'suitable locals'. On 19 February, Mr McLauchlan visited three employment
service providers, Campbell Page and Mission Australia in Stanthorpe and BEST
Employment in Tenterfield. Every provider stated in very similar terms that
they had local workers ready and willing to start work immediately:
I could send 12 suitable employees down there now, and eight
of them have had Q fever needles and are right to start.
We do have suitable people for the meat industry. We supply
labour to Canterbury Meats at Warwick, so we know what is suitable for your
Thank God someone is going to do something to help our
locals. It takes the union.
On 4 March 2015, Mr McLauchlan organised a meeting at Stanthorpe RSL
with Campbell Page, Mission Australia, the AMIEU, management from Wallangarra
Meats, and 15 jobseekers. While the 15 jobseekers were told at the meeting that
they would be offered a job, Mr McLauchlan was only aware of three jobseekers that
were subsequently taken on at the meatworks.
Mr McLauchlan organised a similar meeting on 18 March 2015 at
Tenterfield Bowls club with BEST Employment and 30 jobseekers, of whom 26 to 28
were suitable to be employed at the meatworks. On 24 March 2015, Mr McLauchlan visited
the plant again and saw numerous 417 visa workers. He estimated that 417 visa
workers make up about 70 per cent of the workforce at Wallangarra Meats. Concerned
that there did not appear to have been any action on employing local people, Mr
McLauchlan invited the media and the employment service providers to tour the
plant. Subsequently, Mr McLauchlan estimated that between eight and 12 local people
Mr Brunjes, a Shed Secretary with the AMIEU (Queensland), relayed a very
similar story from Mareeba on the Atherton Tableland. He had worked at the same
poultry processing plant for almost 21 years. The plant was previously owned by
Australian Poultry and then Bartter brothers. Mr Brunjes told the committee
that the plant 'ran for probably 15 years on a totally local workforce'. Following
its acquisition by Baiada Poultry, in the last five years, he suggested that
there were only about 86 locals in a total workforce of about 200. The
rest were overseas workers.
Following efforts by the AMIEU in collaboration with various employment
agencies, Mr Brunjes told the committee that 12 to 15 locals have been employed
in the last six to eight months at the Baiada plant in Mareeba. However, he
submitted that Baiada 'is very reluctant to change' and that the labour hire
company that Baiada use, AP Global, 'just deals with visa holders'. By
contrast, the previous labour hire company used by Baiada, QITE, dealt 'totally
with locals'. In terms of the labouring jobs at the meatworks, Mr Brunjes
stated that the temporary visa workers are recruited in Asia and have already
been allocated jobs before they arrive in Australia. Meanwhile, school-leavers
in a regional area are unable to get work at the plant.
Mr Brunjes outlined for the committee how the labour hire subcontractors
supplying workers to the Baiada site had also replaced long-term skilled
Australian workers with temporary visa workers. The plant previously employed
16 to 18 Australian boners over a period of 15 years, but Mr Brunjes stated
that since AP Global had taken on the contract to supply labour, there
were now four local boners and 28 overseas boners. Furthermore, the overseas
boners did not have the requisite skills, and had to be trained on-site.
Evidence to the inquiry indicated that regional and rural Australia has
particular labour market needs that have not been properly addressed, either
through internal migration, or through adequate training. The committee
received a large amount of evidence that the nature of the employment
requirements in the horticulture and orchard sectors meant that growers were
unable to source sufficient casual short-term labour, particularly during the
picking season, from the local labour market. Growers and their representative
associations warned that without the additional labour supplied by the WHM visa
program, many rural industries were at risk of a contraction in production, and
some businesses simply could not continue to operate. To be clear, the
committee did not receive any evidence that indicated that the reliance of the
horticulture sector on the WHM visa program was having a negative impact on
employment opportunities for Australian workers in that sector.
The committee notes that the changes to the Seasonal Worker program
announced in the White Paper to reduce costs to business, increase worker
numbers and allow more countries and industries to participate should encourage
the growth of the program. Although there was no direct evidence to the inquiry
about a negative impact from the program on employment opportunities for local
workers, the ACTU was critical about the lack of consultation over the
government's decision to expand the Seasonal Worker program. The ACTU also
cautioned that the use of labour hire companies and similar intermediaries in
the Seasonal Worker program could increase the risks of workers under the
program being exploited.
With the above caveats in mind, evidence to the inquiry therefore supports
the view that the Seasonal Worker program is an adequately regulated program
that offers benefits to employers and to the workers in the program.
Nevertheless, the committee is of the view that a more prudent approach would
be to include the Seasonal Worker program within the remit for review of a
However, the committee also notes the heavy reliance of the horticulture
industry on the WHM visa program to address supply gaps in the rural labour
market. The committee is disturbed by reports that the Seasonal Worker program
is under-subscribed and is being undercut by the WHM visa program. The WHM visa
program is a poorly-regulated program, and the bulk of the evidence to the
inquiry showed that the WHM visa program has been abused by unscrupulous labour
hire companies in Australia with close links to labour hire agencies in certain
south-east Asian countries.
The ostensible basis of the WHM visa program is to provide a cultural
exchange and to allow visa holders the opportunity to work during their holiday
in Australia. The committee is therefore concerned that the rhetoric of the
previous Abbott government in the White Paper on Northern Australia flies in
the face of the supposed aims of the program by blatantly stating that potential
changes would allow a WHM visa holder to work an entire year for the one
employer and to work for the entire two years of their visa. In effect, the
government clearly views the WHM visa as a de-facto working visa to bring
low-skilled labour into the country.
It is clear from the evidence received by the committee that labour hire
companies and certain employers already view the WHM visa program in these
terms and are in fact not only using the program to fill potential shortfalls
in labour, but also to gain access to cheaper labour.
The committee acknowledges, as did the meatworkers union, the AMIEU,
that there may have been instances in the early 2000s when there was a shortage
of skilled labour. However, that is no longer the case, particularly if appropriate
training and upskilling was occurring within meat processing sites.
The boning room in a chicken processing site is staffed by skilled
labour paid at a higher rate, either under an enterprise agreement, or under
the award. The committee received evidence from one chicken processor that the
majority of the labour in their boning rooms was in fact permanent residents
(employed under contract), and that about a third was made up of visa workers.
On the other hand, the committee received evidence from another company that
suggested that while almost all of the labour in the boning room was on
contract, very little of it was local labour.
The large-scale hiring of temporary visa workers in skilled positions points
to a lack of commitment by employers to upskilling suitable local workers from
within the pool of lower-skilled labourers, particularly given evidence that
local workers have had to train visa workers to perform skilled tasks. In this
regard, the committee is concerned about evidence suggesting some employers are
hiring unskilled 417 visa workers to perform skilled tasks. The lack of
commitment to training local workers contrasts markedly with what the committee
understands to be the historical method of recruiting skilled boners, slicers
and slaughterers, namely upskilling local workers from within the existing pool
of labourers (this matter is covered in greater detail in chapter 5).
In addition to the impacts on training and upskilling, the committee is
concerned that the use of labour hire companies to provide contract labour to
fill skilled positions within meat processing plants puts downward pressure on
wages. In a situation where all the labour in a skilled area such as a boning
room is on contract and paid according to the award, then if the remainder of
the workforce is on an enterprise agreement, the use of contract labour undercuts
the enterprise agreement and the wages of Australian workers in what is already
a comparatively low-paid industry.
In light of the issues discussed above, the committee can understand
that a business would want to have the agility to respond to either upturns or
downturns in demand by having a certain amount of flexibility in its labour
hire arrangements. However, it is not clear to the committee why two-thirds of
the skilled labour force could not be employed permanently with flexibility
being provided by sourcing the remaining third on contract as required, unless
the overall intent is to lower labour costs even further.
In this regard, the committee concludes that the use of labour hire
companies to supply contract workers to a meat processing site is a deliberate
strategy to cut labour costs above and beyond any legitimate need for a certain
degree of flexibility in the numbers of meatworkers employed at any one time.
The committee acknowledges that this strategy may be pursued in response
to business pressures brought to bear either by cost-cutting by competitors or
the pressures brought to bear by the purchaser, including the major supermarket
chains. The committee is therefore of the view that workers supplied to a
workplace by a labour hire company should be bound by the enterprise agreement
at the site and not by the award.
Furthermore, as evidence to the committee has demonstrated, the large
scale and widespread hiring of 417 visa workers severely curtails the
employment prospects of local workers in rural and regional areas of Australia,
areas that are already suffering from higher than average levels of
unemployment and youth unemployment in particular.
In terms of labouring positions within meatworks, one of the questions
that arose for the committee was whether it was possible for meatworks located
in rural and regional Australia to fill all or most of their labouring positions
with local workers. Of course, these questions cannot be answered definitively,
but the committee heard from the AMIEU that most meat processing plants used to
employ their labour directly. The committee also heard that a farmers'
cooperative in northern NSW continues to employ about 1200 workers directly,
employs no more than 20 WHM visa holders, and has training programs to provide
local school leavers with a career entry path into the meatworks.
In contrast to the evidence from the horticulture sector, the committee therefore
finds it difficult to believe that there is a genuine shortage of unskilled
labour in the vicinity of most of the meat processing plants in regional
Australia. The committee has received numerous examples of local workers being
willing and able to work but unable to obtain employment. Further, the
committee has heard that when an existing business is sold, the new owners use
labour hire companies that source most of their labour internationally through
the 417 visa program. Evidence to the committee has demonstrated that this was
the dominant business model in the sector.
The committee recommends that the reconstituted MACSM review the Working
Holiday Maker (417 and 462) visa program. The review should include, but not be
limited to, an examination of the costs and benefits of the continued operation
of the optional second year extension to the visa, and the costs and benefits
of providing government with the ability to set a cap on the numbers of Working
Holiday Maker program visas issued in any given year.
The committee recommends that the Department of Immigration and
Border Protection be sufficiently resourced to allow it to pursue inter-agency
collaboration that would enable it to collect and publish the following data on
the Working Holiday Maker visa program:
the number of working holiday visa holders that do exercise
their work rights;
the duration of their employment;
the number of employers they work for; and
their rates of pay, and the locations, industries, and
occupations they work in.
The committee recommends that the reconstituted Ministerial
Advisory Council on Skilled Migration (MACSM) review the Seasonal Worker
program to ensure the program is meeting its stated aims.
Navigation: Previous Page | Contents | Next Page