Education and Employment References Committee

The Senate

Education and Employment References Committee

A National Disgrace: The Exploitation of Temporary Work Visa Holders

March 2016

© Commonwealth of Australia 2016 ISBN: 978-1-76010-397-2

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License.

The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/.

This document was produced by the Senate Standing Committee on Education and Employment and printed by the Senate Printing Unit, Parliament House, Canberra.

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MEMBERSHIP OF THE COMMITTEE

Members

Senator Sue Lines, Chair, ALP, WA

Senator Bridget McKenzie, Deputy Chair, Nats, VIC

Senate the Hon David Johnston, LP, WA (from 23 February 2016) Senator Deborah O'Neill, ALP, NSW

Senator Nova Peris OAM, ALP, NT

Senator Linda Reynolds, LP, WA (form 12 October 2015 to 23 February 2016)

Senator Lee Rhiannon, AG, NSW (from 5 July 2011 to 14 October 2015) Senator Robert Simms, AG, SA (from 14 October 2015)

Senator the Hon Arthur Sinodinos AO, LP, NSW (from 3 March 2015 until 12 October 2015)

Substitute Members

Senator Janet Rice, AG, VIC

Secretariat

Ms Julia Agostino, Secretary

Dr Patrick Hodder, Principal Research Officer

Dr Joel Bateman, Acting Principal Research Officer Mr Abraham Williamson, Administration Officer

PO Box 6100 Ph: 02 6277 3521

Parliament House Fax: [phone]

Canberra ACT 2600 E-mail: [e-mail]

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TABLE OF CONTENTS

MEMBERSHIP OF THE COMMITTEE iii

RECOMMENDATIONS ix

ABBREVIATIONS xv

Chapter 1 1

Introduction 1

Inquiry terms of reference 1

Conduct of the inquiry 2

Extension to the inquiry 3

Scope and structure of the report 4

Acknowledgements 6

Note on references 6

PART I: Overview 7

CHAPTER 2 9

Overview of temporary visa programs 9

Background 9

Reviews and reforms of temporary visa programs 21

Interactions between the various visa programs 29

Committee view 32

PART II: Employment opportunities 35

CHAPTER 3 37

Impact of the 457 visa program on employment opportunities 37

Introduction 37

The balance between permanent and temporary migration 40

The responsiveness of the 457 visa program to changes in domestic labour supply and skills demand 43

Regulations and obligations under the 457 visa program, Designated Area Migration Agreements (DAMAs) and Labour Agreements 57

Committee view 93

CHAPTER 4 101

Impact of the Working Holiday Maker (417 and 462) visa program on the employment opportunities and entitlements of Australian workers 101

Introduction 101

The nature of the Working Holiday Maker program 102

The Seasonal Worker program 105

Agricultural labour markets and the role of WHM visa workers 106

Meat processing labour markets and the role of WHM visa workers 111

Committee view 118

PART III: Training opportunities 123

CHAPTER 5 125

Impact of temporary visas on training and skills development 125

Introduction 125

Impact of 457 visas on training and skills development, graduate employment programs, and future workforce capacity 125

Impact of 417 visas on training in the meat processing sector 128

The effectiveness of the current training obligations 129

Proposals to replace the current training arrangements 132

Committee view 137

PART IV: Vulnerability and exploitation 141

CHAPTER 6 143

Wages, conditions, safety and entitlements of 457 visa holders 143

Introduction 143

Vulnerability of temporary migrant workers 143

Access to justice 150

Exploitation of 457 visa workers 152

Committee view 159

CHAPTER 7 163

Wages, conditions, safety and entitlements of Working Holiday Maker (417 and 462) visa holders 163

Introduction 163

Working Holiday Maker visa program 163

Exploitation of Working Holiday Maker visa workers by labour hire companies in the horticulture industry 166

Exploitation of Working Holiday Maker visa workers by labour hire companies in the meat processing industry 170

The Fair Work Ombudsman investigation into the labour hire arrangements of the Baiada Group 183

Committee view 196

CHAPTER 8 201

Wages, conditions, safety and entitlements of international student visa holders

................................................................................................................................201

Introduction 201

International student visa program 201

Undocumented migrant labour 204

Coercion of temporary visa workers into breaching their visa 211

The exploitation of international student visa workers at 7-Eleven 216

Franchising Code of Conduct 250

Committee view 257

PART V: Information, education, regulation and compliance 267

CHAPTER 9 269

Information, education, regulation and compliance 269

Introduction 269

Background to the role and activities of the government agencies 269

Provision of information and education 272

Building a culture of compliance with workplace law 276

Enforcement actions 290

Resourcing of the FWO 297

Proposed changes to the powers of the regulator and regulatory regimes 298

International Convention on Protection of the Rights of All Migrant Workers and their Families 316

Committee view 317

Coalition Senators' Additional Comments 331

Australian Greens' Additional Comments 337

APPENDIX 1 341

Submissions and additional information received by the Committee 341

Submissions 341

Additional information 343

Answers to Questions taken on Notice 343

Tabled documents 345

APPENDIX 2 349

Public Hearings 349

Appendix 3 355

Review of the Fair Work Ombudsman and the penalty regime under the Fair Work Act 2009 355

Objectives 355

Terms of reference 355

Resourcing 355

Tabling in Parliament 355

Recommendation 1

RECOMMENDATIONS

111. 
     The committee recommends that the Department of Immigration and Border Protection routinely publish data on the number of temporary migrants resident in Australia by length of stay. This data should account for transitions between temporary visa categories. The committee also recommends that brief periods of time spent outside Australia during a transition between visas should not restart the clock on calculating the total length of time spent in Australia on temporary visas.
     

Recommendation 2

111. 
     The committee recommends that the Department of Immigration and Border Protection conduct a review of proposals to give greater weight to time spent living in Australia in consideration of applications for permanent residency. The review should also consider the merits of setting a limit on the period of time after which it would be considered reasonable for a temporary visa holder to qualify for permanent residency.
     

Recommendation 3

259. 
     The committee recommends that the Department of Immigration and Border Protection be required to maintain an online public register of current labour agreements in operation, as well as any future Designated Area Migration Agreements. The committee also recommends that the register note any exemptions provided under a labour agreement.
     

Recommendation 4

259. 
     The committee recommends that the Department of Immigration and Border Protection be required to advise all stakeholders that were consulted as to the outcome of the labour agreement application.
     

Recommendation 5

3.266 The committee recommends that the Temporary Skilled Migration Income Threshold (TSMIT) be indexed to average fulltime weekly ordinary time earnings (AWOTE) as at 1 July 2015 and that indexation occur each financial year.

Recommendation 6

3.286 The committee recommends that the Ministerial Advisory Council on Skilled Migration (MACSM) be re-constituted as a genuinely tripartite, independent, and transparent body with responsibility and commensurate funding to provide objective evidence-based advice to government on matters pertaining to skills shortages, training needs, workforce capacity and planning, and labour migration (including Designated Area Migration Agreements and the full range of temporary visa programs with associated work rights). The
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committee further recommends that the reports produced by MACSM be made publicly available.

Recommendation 7

302. 
     The committee recommends that the replacement of local workers by 457 visa workers be specifically prohibited.
     

Recommendation 8

302. 
     The committee recommends that the current exemptions on labour market testing for ANZSCO skill levels 1 and 2 be removed.
     

Recommendation 9

302. 
     The committee recommends that the Migration Regulations be amended to specify that labour market testing applies to all positions nominated by approved sponsors under labour agreements and Designated Area Migration Agreements.
     

Recommendation 10

100. 
     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.
     

Recommendation 11

100. 
     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.
       

Recommendation 12

100. 
     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.
     

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Recommendation 13

78. 
    The committee recommends that employer sponsors of a 457 visa worker (professional) be required to also employ an Australian tertiary graduate in the same enterprise on a one-for-one basis.
    

Recommendation 14

78. 
    The committee recommends that employer sponsors of a 457 visa worker (trade) be required to demonstrate that apprentices represent 25 per cent of the sponsor's total trade workforce (with the threshold for this requirement being the employment of four or more tradespersons).
    

Recommendation 15

78. 
    The committee recommends that the current training benchmarks be replaced with a training levy paid per 457 visa holder employed in the business. The committee recommends that the levy be set at up to $4000 per 457 visa worker and that the levy be paid into existing government programs that specifically support sectors experiencing labour shortages as well as apprenticeships and training programs. The committee notes that this levy would need to be closely monitored to ensure it is paid by the sponsor and not passed on to the visa holder.
    

Recommendation 16

78. 
    The committee recommends a short review be conducted into the costs to employers of running graduate employment programs, and the desirability and feasibility of directing funds collected from the training levy to assist employers implement and administer graduate programs, such that Australian tertiary graduates are afforded ready access to graduate employment positions.
    

Recommendation 17

78. 
    The committee recommends that the following data be collected and made publicly available on an annual basis (either by the relevant statutory agency, or the relevant government department):
    
    • 
      all new registrations of nurses and midwives on temporary work visas;
      
    • 
      the number of employers currently sponsoring skilled tradespersons (ANZSCO level 3) on 457 visas;
      
    • 
      the number of apprentices and trainees employed directly by these 457 sponsors, in total and by sponsor industry and state/territory;
      
    • 
      the trades in which those apprentices are being trained, including the number of apprentices in the same trade classifications in which the 457 visa workers are employed; and
      
    • 
      whether the apprentice and trainee numbers in each category have increased, decreased, or have not changed since approval of the employer as a sponsor.
      

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Recommendation 18

95. 
    The committee recommends that the Fair Entitlements Guarantee Act 2012 be amended to make temporary visa holders eligible for entitlements under the Fair Entitlements Guarantee.
    

Recommendation 19

95. 
    The committee recommends that the immigration program be reviewed and, if necessary, amended to provide adequate bridging arrangements for all temporary visa holders to pursue meritorious claims under workplace and occupational health and safety legislation.
    

Recommendation 20

95. 
    The committee recommends an audit of all workers rehabilitation and compensation schemes to determine whether temporary migrant workers who suffer a debilitating, life-long disability as the result of a workplace accident would be treated equally with Australian citizens or permanent residents in similar circumstances. The audit should also determine if a temporary migrant worker's entitlements would be diminished or restricted in any way if that worker were no longer to reside in Australia. Subject to the outcome of the audit, the committee recommends the government consider taking proposals to the Council of Australian Governments (COAG) for discussion.
    

Recommendation 21

95. 
    The committee recommends that universal free vaccination be extended to the babies and children of all temporary migrants living in Australia, irrespective of their visa status.
    

Recommendation 22

8.253 The committee recommends that the Department of Immigration and Border Protection review the procedures used in cases involving severe worker exploitation to ensure that a victim-centred approach exists in practice such that the potential victims of people trafficking and slavery-like conditions are afforded an adequate opportunity in a safe and secure environment to report any offences committed against them.

Recommendation 23

8.263 The committee recommends that the Migration Act 1958 and the Fair Work Act 2009 be amended to state that a visa breach does not necessarily void a contract of employment and that the standards under the Fair Work Act 2009 apply even when a person has breached their visa conditions or has performed work in the absence of a visa consistent with any other visa requirements.

Recommendation 24

8.269 The committee recommends that Section 116 of the Migration Act 1954 be reviewed with a view to amendment such that visa cancellation based on noncompliance with a visa condition amounts to serious noncompliance. The
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committee further recommends that Section 235 of the Migration Act 1954 be reviewed with a view to amendment such that a contravention of a visa condition amounts to a serious contravention before a non-citizen commits an offence against the section.

Recommendation 25

8.272 The committee recommends that any new visa class or extension to a visa issued under changes arising from the Northern Australia White Paper, and any visa issued pursuant to a Free Trade Agreement, explicitly provide that any temporary worker is afforded the same rights and protections under the Fair Work Act 2009 as an Australian worker. The committee further recommends that any work performed in breach of a condition under any new visa class or extension to a visa arising from the Northern Australia White Paper, or any visa issued pursuant to a Free Trade Agreement, does not necessarily void a contract of employment and that the standards under the Fair Work Act 2009 apply even when a person has breached their visa conditions.

Recommendation 26

285. 
     The committee recommends that Treasury and the ACCC review the Franchising Code of Conduct (and if necessary competition law) with a view to assessing the respective responsibilities of franchisors and franchisees regarding compliance with workplace law and whether there is scope to impose some degree of responsibility on a franchisor and the merits or otherwise of so doing.
     
286. 
     The committee further recommends that Treasury and the ACCC review the Franchising Code of Conduct with a view to clarifying whether the franchisor can terminate the franchise agreement without notice where there are reasonable grounds for believing that serious contraventions of the Fair Work Act 2009 have occurred.
     
287. 
     The committee further recommends that consideration be given to the merits or otherwise of any amendment that would allow the franchisor to terminate the franchise agreement without notice where there are reasonable grounds for believing that serious contraventions of the Fair Work Act 2009 have occurred.
     

Recommendation 27

9.228 The committee recommends that universities consider how best they might develop proactive information campaigns for temporary visa workers around workplace rights.

Recommendation 28

9.231 The committee recommends that the Department of Immigration and Border Protection provide funding on a submission basis for non-governmental organisations, registered employer organisations, trade unions, and advocates to provide information and education aimed specifically at improving the protection of the workplace rights of temporary migrant workers.
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Recommendation 29

9.239 The committee recommends that the identities of migrant workers who report instances of exploitation to the Fair Work Ombudsman or to any other body should not be provided to the Department of Immigration and Border Protection. The committee further recommends that this prohibition should be written into the Memorandum of Understanding between the Fair Work Ombudsman and the Department of Immigration and Border Protection.

Recommendation 30

9.295 The Committee recommends that the 'recklessness' defence in section 357(2) of the Fair Work Act 2009 be replaced with a 'reasonableness' defence.

Recommendation 31

299. 
     The committee recommends that the government commit to undertake an independent review of the resources and powers of the Fair Work Ombudsman, and the penalty, accessory liability, and sham contracting provisions under the Fair Work Act 2009. The government should appoint, by 30 June 2016, an independent tripartite panel to conduct the review.
     
300. 
     The review should make recommendations on the adequacy of the resources of the Fair Work Ombudsman; the appropriateness of the powers of the Fair Work Ombudsman; the appropriateness of the penalty provisions under the Fair Work Act 2009; the utility of the accessory liability provisions under the Fair Work Act 2009; and the utility of the sham contracting provisions under the Fair Work Act 2009.
     
301. 
     The committee further recommends that the review report be provided to the Minister of Employment by 30 October 2016, and that the report be tabled in both Houses of Parliament by 30 November 2016. The committee provides Terms of Reference for the review in Appendix 3.
     

Recommendation 32

9.309 The committee recommends that a licensing regime for labour hire contractors be established with a requirement that a business can only use a licensed labour hire contractor to procure labour. There should be a public register of all labour hire contractors. Labour hire contractors must meet and be able to demonstrate compliance with all workplace, employment, tax, and superannuation laws in order to gain a license. In addition, labour hire contractors that use other labour hire contractors, including those located overseas, should be obliged to ensure that those subcontractors also hold a license.

Recommendation 33

9.320 The committee recommends that Australia ratify the International Convention on Protection of the Rights of All Migrant Workers and their Families.

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