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Thursday, 22 March 2012
Page: 3971


Mr SHORTEN (MaribyrnongMinister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (11:26): I present the explanatory memorandum to this bill and move:

That this bill be now read a second time.

I am privileged to be introducing this legislation into the House of Representatives today.

In public debates here in Canberra, and elsewhere, we tend to hear and talk a lot about mining workers and construction workers, smelter workers or nurses and teachers, community workers, and that is a good thing. But rarely do we hear the stories of those who work in the textile, clothing and footwear sector.

They are amongst some of the most productive, hardworking and vulnerable Australians.

They are predominantly female. They perform insecure work, sometimes with poor English language skills and no great understanding of the laws and practices that should apply in Australian workplaces. Yet they raise their families and they are generating children who grow into adults and become marvellous Australians.

Often, however, they are not represented at work.

I believe firmly that governments should be focussed on helping those who need it the most.

It is hard to think of another group of workers who require the support of our national parliament more than our outworkers do.

In a previous occupation I worked proudly as a union representative in workplaces where the workers all came together in one place to perform their labour, with one employer, and even in those circumstances it can be difficult to ensure that there are proper terms and conditions and a safe workplace.

I cannot imagine how a textile, clothing and footwear outworker, with little grasp of their second language, English, and little awareness of their rights at work, can follow up on nonpayment for her work, given the multiple hands her work passes through. That is why this government has introduced this legislation.

The Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 will provide overdue and enhanced workplace protection for Australia's most vulnerable and productive workers—in particular, outworkers.

Who is a TCF outworker?

When I talk about a TCF outworker, a textile, clothing, footwear outworker, I am talking about someone who works in the textile, clothing and footwear manufacturing industry—covering all stages of production of TCF products, from the processing of raw materials through to the production of the final goods that we wear.

Clothing and footwear manufacture, in particular, are labour intensive, with limited scope for mechanisation or automation of significant parts of these processes. That is why outworkers are used to perform so much of this work.

Existing protections

The government's Fair Work Act already contains a number of important protections for TCF outworkers—including scope for awards to include targeted 'outworker' terms, and enhanced right of entry arrangements.

Additional entitlements and protections for outworkers are contained in the modern award known as the Textile, Clothing, Footwear and Associated Industries Award.

Where outworkers are entitled to fair minimum conditions, they can have difficulty accessing them.

Even our Fair Work Ombudsman faces difficulties in identifying and assisting outworkers because outwork is, by definition, not performed in traditional workplaces and it can be difficult to identify for whom the work is being performed.

What is the issue the b ill is designed to address?

There have been any number of reviews over the past 15 years that have raised concerns about the situation of outworkers in the TCF industry.

Recently, a report by the Brotherhood of St Laurence found that outworkers experience poor working conditions and are frequently underpaid, sometimes as little as $2 or $3 an hour.

These reviews have found, and the government accepts, that outworkers in the TCF industry suffer from unique vulnerabilities as a result of their engagement or employment in non-business premises.

It is because of those vulnerabilities that the government recognises that the TCF outworkers require specific regulatory protection in order to control the proven exploitative conditions under which too many find themselves engaged.

I acknowledge that governments of all persuasions and at all levels have recognised the importance of this issue.

Most states have legislation that protects TCF outworkers; however, there are differences in the approaches that they take. For example:

in New South Wales, Queensland, South Australia and Tasmania, legislation deems contract outworkers to be employees, while more limited deeming applies in Victoria;

there is provision for the recovery of unpaid amounts up the supply chain in most but not all states; and

there is a mandatory code of practice in place in New South Wales, Queensland and South Australia.

Key features of this b ill

Although most jurisdictions have recognised that special measures for outworkers are required, there is no single uniform approach to regulation across our nation.

That means that outworkers have inconsistent levels of protection across Australia.

That is why our Gillard government is committed to developing arrangements to ensure all TCF outworkers are engaged under secure, safe and fair systems of work.

The government's intention is to achieve this by implementing nationally consistent rights to legal redress and protection.

This bill implements that commitment by:

ending the artificial distinction by deeming contract outworkers in the TCF industry to be employees, by extending the operation of most provisions of the Fair Work Act;

providing an effective mechanism to enable TCF outworkers to recover unpaid amounts up the supply chain;

addressing a limitation that currently exists in relation to right of entry into premises provisions in the TCF industry operating under 'sweatshop' conditions; and

allowing for a TCF outworker code to be issued.

In relation to the extension of the specific right of entry rules to premises in the TCF industry operating under 'sweatshop' conditions, there will be an exception for the principal place of business of a person with appropriate accreditation.

In such cases, the standard right of entry rules will continue to apply.

The existing power of Fair Work Australia to include outworker terms in awards will not be limited. Additional protection for outworker terms will be provided by ensuring that these important industry wide standards cannot be undercut by the use of flexibility terms in enterprise agreements.

These changes will promote fairness and ensure a consistent approach to the workplace entitlements and protections for a class of workers that are widely recognised as being uniquely vulnerable to exploitation.

Extending the operation of the Fair Work Act

This bill extends the operation of most aspects of the Fair Work Act to TCF contract outworkers.

This ensures that outworkers in the TCF industry have the same terms and conditions, as well as other rights and entitlements, as other workers regardless of their status as employees or contractors. This approach is consistent with the approach that has been taken in many states.

Under the changes proposed in this bill the person who directly engages a TCF contract outworker will be treated as their employer.

The objective of these amendments—clearly stated in the bill—is to ensure that contract outworkers are taken to have the same rights and responsibilities as employees in the same position.

The bill recognises that there may be instances where technical modifications or clarifications are required and allows regulations to be made to ensure the effective application of particular provisions to contract outworkers.

However, the bill makes clear that such regulations can only be made to ensure the effectiveness of, and not to undercut, the extension of the act to contract outworkers.

Recovery of unpaid amounts

The bill provides a mechanism to enable outworkers to recover unpaid amounts up the supply chain.

The Productivity Commission's Review of TCF Assistance (in 2003) reported the findings that outworkers are often not paid for the work they do and that, because the supply chain consists of numerous subcontractors, outworkers may often find it difficult to pursue any unpaid moneys or entitlements.

Provision for the recovery of unpaid amounts up the supply chain is a feature already of outworker protection legislation in Victoria, New South Wales, Queensland and South Australia, and recognises the fact that TCF outworkers are engaged at the end of a sometimes long and confusing supply chain.

Under the government's bill:

an outworker may recover an unpaid amount from another entity in the supply chain for whom work is done indirectly;

the amounts that may be recovered under these provisions include wages or commission as well as other amounts owing in relation to particular work;

where an outworker reasonably believes an entity to be indirectly liable for an unpaid amount, the outworker can initiate a claim for payment against that entity;

the entity will then be liable for that payment unless the entity has proved that it is not liable under the provisions to pay the amount claimed, or the amount unpaid is less than that alleged to be owing; and

if an entity pays an unpaid amount in reliance on the outworker's claim, the entity will be able to recover the payment from the person who was responsible for the payment, plus interest, or offset it against other amounts that they, in turn, may be owed.

These arrangements are designed to supplement existing arrangements—these new provisions do not limit any action that an outworker might otherwise have in relation to unpaid money, including remedies available under state law.

I also want to make the point that this provision does not extend to include retailers who sell goods produced by, or of a kind often produced by, outworkers, where the retailer does not have a right to supervise or otherwise control the performance of the work.

Code of p ractice

This bill allows an outwork code of practice to be issued dealing with standards of conduct and practice in the TCF industry.

The code may impose reporting or other requirements on employers or other persons engaged in the TCF industry to enhance the transparency of supply chains that result in outwork being performed.

An outwork code will enable arrangements for the performance of TCF work through the supply chain to be monitored.

Provision for a code will assist in ensuring that no economic advantage can be gained by the avoidance of responsibility for a worker's entitlements.

Right of entry

The Fair Work Act already recognises the importance of right of entry to workplaces in securing fair working arrangements, and provides enhanced entry rights in relation to outworkers.

This bill seeks to ensure that protection applies not only to outworker arrangements, but also other exploitative practices in the industry, and in particular sweatshops.

At present, entry to such premises generally requires 24 hours notice of intention to enter. The nature of sweatshop operations, and the ease with which they can relocate, mean that the current requirements can be easily circumvented.

This bill will extend specific right of entry rules that apply to suspected breaches affecting outworkers (which allow entry without 24 hours notice) to the industry more generally, with an exception for the principal place of business of a person with appropriate ethical standards accreditation.

This proposal recognises that poor practices in the TCF industry are not confined to work conducted in people's homes but also take place in conventional workplaces operating under sweatshop conditions.

The Gillard government believes that strong action on this issue is required, as reports continue of people working in sweatshops in the TCF industry.

Members of the House may have seen reports following a film crew visiting a Melbourne TCF sweatshop in November 2011 and discovering squalid working conditions unimaginable to the ordinary person, unimaginable to exist in our nation.

Members of the House may have read reports in major newspapers last year about sweatshops and outworkers producing school uniforms for as little as $7 an hour (less than half the award rate).

Enhanced right of entry will assist in locating, identifying, remedying and stamping out these exploitative practices.

I note that this element of the bill does not apply to the principal place of business of a person with an appropriate accreditation. In such cases, the standard right of entry rules will continue to apply.

Linking right of entry to accreditation is smart. It is intended to increase the level of scrutiny given to supply chains and encourage improvement in standards in those corners of the TCF industry that do not currently operate appropriately, for the benefit of both workers and businesses in the industry.

Impact of the changes

These changes will go a long way to ensuring that vulnerable workers in the TCF industry receive fair and decent working conditions.

These changes will make it easier for the Fair Work Ombudsman to identify businesses that engage outworkers and investigate and enforce breaches of the Fair Work Act and the TCF award.

These changes will improve the ability of the union to identify sweatshops and assist workers working in unacceptable conditions to receive what is justly theirs.

The government recognises that some businesses in the TCF industry may be concerned about these changes, but if a business already complies with the outworker provisions in the TCF award and relevant state legislation then the bill will have a very limited impact on them.

It is only those that flout existing laws—by exploiting outworkers, by forcing them to work in sweatshop conditions, and by taking advantage of the vulnerable position of migrant workers—that should be concerned. It is those with something to hide that should be concerned.

This bill reflects the government's commitment to make life a little easier for some of Australia's most productive yet most vulnerable workers—to make it easier for outworkers to receive their minimum entitlements.

It is also clear that the demand for clothing and footwear that is made ethically and sustainably is growing all the time.

As consumers we are increasingly made aware that the decision to buy is a decision that comes with responsibility.

This bill reflects the future of the Australian sector where consumers are confident that goods are produced ethically, with hardworking workers receiving fair and modest wages and decent conditions.

By improving compliance with the existing provisions across the board and by introducing consistent provisions for outworkers, large retailers and clothing brands will have additional assurance that the garments they sell have been manufactured in an ethical way and that the values of the brand they promote are being upheld throughout the whole supply chain.

Finally, let me make this one important commitment—the Gillard government will continue to work on ways to ensure all those who need the protections outlined in this legislation receive it.

I understand there are outworkers forced to incorporate in attempts to avoid these and other important protections. This is unacceptable. I understand there are supply chains so complex and long that even with the patience of Job no-one could be expected to easily undo it. That is unacceptable. There are a number of ways these challenges can be approached and the Gillard government will work through them. We will persevere to ensure that this the best possible protections for some of Australia's most hardworking, productive yet vulnerable workers are enshrined in law.

I thank the members who have indicated they will support this bill and I encourage all members who are concerned about some of Australia's most hardworking, productive and vulnerable workers to support this important legislation.

Leave granted for second reading debate to continue immediately.