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Education and Employment References Committee
14/07/2015
Australia's temporary work visa programs

CAMPBELL, Mr Michael, Deputy Fair Work Ombudsman, Operations, Fair Work Ombudsman

JAMES, Ms Natalie, Fair Work Ombudsman, Fair Work Ombudsman

O'SHEA, Mr Tom, Executive Director, Policy, Media and Communications, Fair Work Ombudsman

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. The committee has received the omnibus submission. I now invite you to make a short opening statement and at the conclusion of your remarks I will invite members of the committee to put questions to you. I thank you for coming along today for your second appearance at our inquiry.

Ms James : I made a fairly lengthy opening statement last time so I will not avail myself of that opportunity this time. I am happy to take your questions.

CHAIR: A couple of weeks ago, you published a report—and I think Mr Campbell did media on it—in relation to Baiada and its labour hire companies. How long did it take you to get to the bottom of what is a very thorough report? How many hours did it take?

Ms James : The inquiry that we carried out into the labour hire arrangements at Baiada was a lengthy one. It was an inquiry that we worked on for a number of months—I think it was over 18 months.

Mr Campbell : Yes. We commenced our inquiry in late 2013 and published in May. A lot of operational activity went into informing that report; hence its lengthy content. I do not have the number of hours that we invested into it, but it is fair to say that a fair bit of energy and manpower went into it.

CHAIR: In coming up with that phoenix structure of labour hire companies, did you have to do online research and visits to the company? How compliant was Baiada in assisting you to compile that report?

Ms James : That is a very broad question. I suppose what I would say—

CHAIR: Let me ask it another way. Did Baiada assist you? Did they give you a list of the labour hire companies they are using?

Ms James : I do not want to comment too much more broadly than what the report itself says. We had a varying degree of engagement and cooperation over the course of the inquiry. We would say it was not a satisfactory level of engagement, bearing in mind that there were some 39 or 40 entities involved in this complex web of companies that assist this company produce the chicken that ends up on the supermarket shelves and on our plates. There was a variety—a spectrum, if you like. I would say that there were a number of cases that you would describe as failure to engage or, indeed, avoidance. For example, we had some companies who failed to disclose information or records. We had one company, J&L Poultry, who operate out of Tamworth, who took some seven months to provide documents under a formal notice to produce. We would not describe that as a satisfactory result. The director was not known when we went to visit on site, and there were not satisfactory record-keeping arrangements in place and no pay slips.

CHAIR: You go to that in your report. I do not really want to go to the report; I have read it and it is a very good report. How did you get the list of labour hire companies? Did Baiada give that list to you?

Mr Campbell : It was a combination of serving notices on the company itself but also through—

CHAIR: On Baiada?

Mr Campbell : On Baiada—and also through information gathered through employees who sought our assistance or provided us with information during the course of our inquiry.

CHAIR: It took you 18 months. How many staff were engaged in putting a report like that together?

Mr Campbell : That is a good question because it had input from lots of different parts of our business, but the field work was largely conducted by our overseas workers team, with support from other inspectors within the network.

CHAIR: So it was a significant undertaking?

Ms James : It was. There was a field work aspect to this, but, before that, we wanted to better understand the context surrounding the company and the labour hire companies that work there but also the regional communities in which the businesses are operated. We took our time in this circumstance to try and get that intelligence before we then went in, if you like, with the operational side of our inquiry.

CHAIR: Coles just told the inquiry that they have engaged PricewaterhouseCoopers to do a similar exercise at Baiada and that they expect them to have a report at the end of July. They could not tell us whether PwC are aware of your report, but is it possible in that short period of time to uncover all of the labour hire companies Baiada are using?

Ms James : I guess it is not really for us to comment on any endeavour that Coles might have commenced in order to satisfy itself of the arrangements in place with its supplier. I guess what I would say is that I am pleased to see that there is a response from a company like Coles after our report. I would also say that, after the release of the Baiada report, I wrote to a number of companies, including Coles—the managing director of Coles—inviting them to engage with us on follow-up after the report, and we received very responsive and positive feedback from Coles and will be meeting with them very soon. So I think it is good that they are doing something. We cannot comment on the details. I would also add that they do have our report to start with, so if they are doing follow-up work then there is a pretty good piece of work there that they can start with. They are not starting from nothing the way we were.

CHAIR: It is a shame they did not tell us this morning that you had written to them. Perhaps it is not high on their priority list.

Senator McKENZIE: Just to follow up on that, you said you got a positive response from Coles. Did you get a similar positive response from other major retailers such as Woolworths, Aldi and anyone else in retail?

Ms James : We had a quite prompt and positive response from Aldi, and we have met with representatives from Aldi. We are yet to receive a response from Woolworths or KFC, I think. I might just check that.

Mr O'Shea : That is correct.

CHAIR: Could you just give us a list of everyone that you wrote to and whose attention you drew to the report.

Ms James : Yes, I can.

CHAIR: Mr Campbell, in order to come up with your report on Baiada and its labour hire structures, did you have to employ any forensic experts, or do you have those staff available?

Mr Campbell : No, we did not employ any forensic experts. We drew upon the various skill sets within the organisation to, I suppose, put the structure around the report but also find different ways of finding information about the various contractors and subcontractors that were working in the labour hire chain.

CHAIR: Do you employ experts? What sorts of experts do you have in the FWO?

Mr Campbell : We do. It is not just the skills that we have employed them for. They are not like lawyers. We have employed lawyers, but we also have people that have come from the finance sector or have run businesses themselves or are from commerce backgrounds. So we have been able to draw on the various skill sets within the organisation.

CHAIR: People who understand a range of business models.

Mr Campbell : That is correct. To help us conduct the inquiry, we used not only the personnel of the organisation but, as the report points out, our powers to compel the production of evidence from a range of sources, not just Baiada and its contractors. We went to financial institutions to follow the money, if you like.

CHAIR: You said 'compel'. Did you have to formally compel people to cooperate?

Mr Campbell : People voluntarily assisted us, but also we used our formal powers under the Fair Work Act to compel, say, a financial institution to release information about bank accounts. We would not expect them to do that without—

CHAIR: Yes, but Coles obviously do not have those powers. They can only ask.

Mr Campbell : No, I suppose they do not have legislative powers, but I suppose they have the commercial influence over Baiada to—

Senator McKENZIE: We tried to put that to them, but, to be fair, I think they are going through a process.

CHAIR: A secret one. Are you aware of a finding of the Fair Work Commission in relation to Royal Bay, where a worker was sacked from a Baiada factory by text? He thought he was employed by Baiada and subsequently found out he was apparently an independent contractor, and the NUW took an unfair dismissal case and the commission found in the worker's favour.

Ms James : I am not personally aware of that matter.

CHAIR: This is within your own club, if you like—the Fair Work Commission. How did you, like Coles, miss that finding against Royal Bay, which is one of the phoenix companies?

Ms James : What I would say is that we monitor a range of sources, but I am not sure that that matter in particular is entirely central to what we were focused on. There are a number of transactions going on in workplaces of interest to us every day. They are not all central to the work we are doing.

CHAIR: How is this not central when the Fair Work Commission found that this person was employed as a sham contractor? They ordered reinstatement and significant back pay. That is the very issue.

Ms James : It sounds to me like this worker was well represented. There are a number of remedies available in the Fair Work system. One of them is to go to the Fair Work Commission, and it sounds like they pursued that remedy.

CHAIR: It is not about whether the worker was well represented. Of course the worker was well represented. The issue is that it adds to the toolbox of information around Baiada and its subcontractors. Here we have the Fair Work Commission making a finding on the employment arrangements for this guy that he was employed in a sham relationship.

Mr Campbell : I think our report points to the fact that we have concerns that there are sham contracts occurring within the supply chain. While that case you have referred to is a useful reference point for us, the commission's view around an unfair dismissal in those circumstances does not change what we found or the comments we have made about the goings on in the labour supply chain.

CHAIR: No, but it confirms what you thought, though.

Mr Campbell : Yes, it possibly does.

CHAIR: So you missed it?

Mr Campbell : I do not know. I am not even sure if it is the commission's jurisdiction to make calls about sham contracting. I think that they can make a call about whether or not they think something is an unfair dismissal. They can offer a commentary around whether or not they thought there was the existence of an employment relationship. But I am not sure it gives us something to act on. If there was an audit, we could have followed up and ensured it was complied with. Perhaps it raises a missed opportunity for us, but I am not sure it is there.

Ms James : It may well be that people within our organisation are aware of all that. Mr Campbell and I are not personally aware of it. I would also say that there is a lot of information coming to light all the time in relation to overseas workers in Australia at the moment. We monitor the media. We monitor these reports. We do not necessarily follow up on every single one of them. We take account of it. It is all intelligence that we add to the mix of our work. The Baiada report is a substantial body of work, as you have noted. It has given us a basis on which to commence discussions with the company around the recommendations in that report and to hopefully bring about better work practices.

CHAIR: Sure, but I am making the point that here we have a finding of the Fair Work Commission, which is part of the umbrella group that you operate. I will just quote to you the finding:

Fair Work Commission Senior Deputy President O’Callaghan noted in the decision—

this is in the published decision—

that “Royal Bay misrepresented the very nature of the relationship it had with Mr Vannea”, highlighting the deliberate attempt by the business to treat workers unfairly. SDP O’Callaghan also stated that this decision could have further implications for Baiada.

Other officers may know about it, but the fact that you did not when you are investigating a company says to me that you are not turning over every stone. Here we have a finding by the Fair Work Commission that goes to the very heart of the matter you are investigating. That is my point. How did you miss it?

Mr Campbell : I think we will have to take that one as an offering. I am happy to reflect on the case as the company is known to us. If they continue to provide services to Baiada, either in its current form or under the same directors with a different name, they will be targets of interest for us going forward. Particularly if there are issues of sham contracting, we would expect Baiada and any subcontractors to think very carefully about engagement going forward.

CHAIR: That is the point. They are not changing their practices. Over the course of this inquiry we have had evidence after evidence given, particularly in relation to Baiada—not only in relation to them but they do feature strongly in the evidence that has been presented to us. Last week in Sydney we had 417 visa workers in front of us who confirmed a number of the issues that you have written about. We had one worker who gave up a fraudulent time sheet which was filled in by the company. If you just looked at it you would say, 'Yes, they worked within the conditions and obligations of the award.' Then there was a second time sheet which showed a 17-hour shift at $14 an hour. That was the real time sheet. This was just last week. You have published a damning report about Baiada and its labour hire practices. When does Baiada stop doing this? Are you having ongoing discussions? Where are you up to? I am very frustrated that we keep hearing from workers who are simply being ripped off.

Ms James : Chair, I think it is fair to say that many of my staff have also been very frustrated with what they have encountered as they have pursued Baiada inquiry. What I can tell the committee is that, after we released our report, we had a number of engagements with Baiada; they were keen to discuss the report and the findings with us. We have had discussions with them. I would describe those discussions as ongoing and, up to this point, productive.

CHAIR: But what does that mean? When can the committee and the Australian community have confidence that Baiada is treating its workforce fairly and paying them properly. Yesterday I met with around 25 backpackers at the National Union of Workers, some of whom work for Baiada, and only three workers in the room were being paid properly—on rates of pay that would not surprise you, but certainly shocked me, from $10 up to $17, all below the award.

Ms James : That is consistent with what we found in our report. We are actively engaging with Baiada and, as I said, those discussions are productive and ongoing. What we are hoping is that there will be positive outcomes soon. You can see the recommendations we made from the inquiry. We made a number of general recommendations about how we operate with other organisations, such as the Department of Immigration and Border Protection and ASIC, and about ongoing lines of inquiry for the Fair Work Ombudsman. We also made a number of recommendations specifically on Baiada and the way it goes about its business and the way it monitors and regulates its workforce; that is what we are discussing with Baiada at the moment. What I would hope is that they would adopt those recommendations and look to rectifying what we have identified in the report.

CHAIR: How much time do you give them? Here we have a company that does not pay superannuation, rips workers off, uses illegal workers, falsifies time records. I have asked you before why you do not prosecute employers and I understand with some employers that you want to get to the settlement stage. I put it to you that Baiada is long past being an employer who has shown willingness to cooperate. They have stymied you, they stymie the union, they rip their workers off and they continue these abhorrent practices before our eyes. How long do you give them to stop doing what they are doing?

Ms James : To that I would say two things. Firstly, I would say that Baiada is not the direct employer of many of these workers and so—

CHAIR: Come on, Ms James, let's not hoodwink ourselves here. They are using, by your own report, a phoenix labour-hire structure, they own a lot of the services up and down the food chain. They ultimately are responsible for those workers in their workplace. In Adelaide there are 500 workers and only 130 of them are directly employed. Let's not give Baiada any more slack to continue these practices. It is employing these labour-hire companies.

Ms James : It is engaging the labour-hire companies, that is true. But the law has boundaries; the law says you are directly responsible for the employees that you employ. The law also has some mechanisms for extending that responsibility where an employer is knowingly involved in breaches of the act, and that is one of the lines of inquiry that we are continuing. But it is not as simple as saying that Baiada is legally responsible, because there are boundaries to the law in the Fair Work Act and those boundaries may be reached here. The other point that I would make is that you have asked about litigation. As we said last time, we are very active with our enforcement in the space involving visa holders. For example, I can update you that 21 of the 50 matters were put into court this financial year; that is, almost half involved visa holders. It is not right to say that the Fair Work Ombudsman is not actively initiating legal action in this area. We are actively initiating legal action in this area.

CHAIR: Let's stick to Baiada because that is what I am interested in. I might ask you about Benara Nurseries in WA, another recidivist—although not as bad as Baiada—a little later. I know it is not just the Fair Work Ombudsman who has engaged with Baiada. Their National Union of Workers has as well, and it has drawn the same issues to their attention. When do we get to the point where somebody in authority, someone with some power, concedes that Baiada are knowingly involved in the fraudulent practices with these labour hire companies? You have told them. You have got a public report that is out there. You have had discussions with Baiada about it, so presumably they now know. So if they do not reform their practices, what happens next?

Mr Campbell : I think you and I covered some of this ground at the last inquiry.

CHAIR: We have heard a lot more since then.

Mr Campbell : I am not trying to say that I am the most exciting person you have heard from at this inquiry.

CHAIR: No, I mean we have heard are lot more of Baiada's avoiding of its obligations.

Mr Campbell : I think you have actually summarised what we are trying to do here. We have had some concerns for a long time about what is occurring within the labour supply chains at the Baiada sites around the country. We now have a very detailed report pointing out where we think those failures have occurred. We are now putting that to the company and saying, 'You can no longer turn a blind eye to what is happening on your sites.' I do not want to use the 'line in the sand' metaphor here, but they would struggle from now on to be able to say to me with any legitimacy that they had no idea this was occurring.

CHAIR: When do you go back and check, because the 417 visa workers I met with yesterday were still being underpaid?

Mr Campbell : I suppose I will take that comment at face value. I am not giving them a clean sheet, and we do not intend to. The conversations that we are having with the company now are trying to, I suppose, flesh out that level of responsibility that we think they have for what has occurred and how they might change their practices going forward. Ms James has been clear that we are trying to nurture those conversations, so we are not going into the details of them just yet. But ultimately what we are trying to achieve is a sustainable compliance outcome here with this company at all of its sites where, going forward, it is actively involved in ensuring that the subcontractors and subsubsubcontractors that work on those sites are paying those employees appropriately and treating them appropriately. That is what we are trying to achieve, so—

CHAIR: By when?

Mr Campbell : I cannot give you a date just yet, but the conversations that we are having at the moment with Baiada are progressing well, and I am hopeful that we can bring them to a conclusion in the near future.

CHAIR: You published a report that sets out for anyone to read and clearly establishes that there are I think five or six labour hire companies involved in this structure, with the top company not even supplying any labour, just making sure the other companies are in the loop. We have got massive amounts of moneys—I think to the tune of more than a million dollars—being paid to those labour hire companies, and yet we still have Baiada workers on $14 an hour, not getting superannuation, not getting penalty rates and working 17-, 18- or 19-hour shifts. Shouldn't it have stopped now, two weeks down the track?

Mr Campbell : Part of the challenge—and I am not looking to be difficult—is that Baiada does pour a lot of money into their supply chain. Where we have seen supply chains that are particularly rotten in other sectors is where the lead company pours very, very little money into a supply chain, which then leads to outcomes like the ones you have just referred to. In this case, Baiada is pouring large sums of money into that supply chain. It was then being filtered off and creamed off by principal contractors, and their subcontractors as well, during the inquiry period.

CHAIR: And still is.

Mr Campbell : I will take that—

CHAIR: We have still got workers being underpaid, so something has gone wrong. How long do we give them, and are you satisfied, for example, that money is not going back to Baiada? How do you rule that out?

Mr Campbell : What I would say is that I will give the company a reasonable time to engage with this, at which point, where we think that they perhaps have not engaged with us the way we think they should—

CHAIR: What is 'a reasonable time'? Is it two months, three months, a year?

Mr Campbell : I suppose it depends on what they commit to. But what we have done is tell the company that, having supply chains like this that they are responsible for causing these types of contraventions, they will at some point be held accountable for them. They have got a chance to get in front of that right now and fix the problem and work with us or they can roll the dice and let it continue to happen, and we will test how far the law can go.

CHAIR: We have had a Four Corners program that did not change their behaviour. We have had the NUW as the union out there saying to Baiada, 'You've got to stop your practices.' It has not changed their behaviour, despite the NUW taking actions against the company and so on and so forth. We have had a couple of reports, with a most damning one more recently from the Fair Work Ombudsman, and as of yesterday they had not changed their practices. I really think the public is entitled to know how long the government agency charged with ensuring workers get the right money have to wait.

Ms James : We would hope that we would have a final response out of Baiada very soon. We are actively—

CHAIR: What is 'very soon'? 'Very soon' to me is Friday.

Ms James : Well, not tomorrow. But I think you said, 'Would it be a year?' That would not be acceptable to us. What we look for is the sort of engagement that we get now. It is clear that during the inquiry we were not getting a satisfactory level of engagement. We would say that at the moment we are actively having conversations with them. We are going back and forth negotiating the sorts of arrangements that Baiada are prepared to put in place to implement the recommendations in the report. This is something that they are actively responding to.

CHAIR: I am just trying to get from you, Ms James, a reasonable time.

Ms James : And we want to get it right. We want to get a sustainable outcome here. We are certainly not dragging our feet on it, and neither are they. I would certainly suggest that we would have an outcome within two months. I would say that would be the outer limits of what it would take. There are two parties involved in this discussion. If we thought that we were not getting a positive response or a genuine response out of the company, then I would tell you that and we would be taking a different approach. We think and we are hopeful that we will get a good outcome, an outcome where Baiada does take responsibility for its supply chain, an outcome where Baiada does not tolerate contractors that deliberately exploit 417 visa workers. That is what we are hopeful for, and we are working very hard to achieve that. We hope we will be able to deliver that in a reasonable time.

CHAIR: So, for all of the underpayments that have occurred for however long they have been occurring, for all of the unpaid super, for all of those workers who have been ripped off, are you also going to enter into an enforceable undertaking with Baiada that those moneys get directed to those workers?

Ms James : It would be our hope that we would be able to rectify underpayments with respect to workers. There are challenges, as we have identified, with overseas workers. One of them is their transience, whether they are still in the country, whether they are able to be identified and the like. But certainly I would like Baiada to take responsibility for identifying workers who were underpaid on its sites and to rectify those underpayments.

CHAIR: How long do you think these underpayments have been going on?

Ms James : We can only comment on our report. In the inquiry we focused on a particular period of time.

CHAIR: Which is what? Is it the 18 months?

Ms James : It was over a period of about 18 months, but in particular we looked to sample documents over a very specific period, and that was to give us an indication of what was going on. An approach that we often take with companies is that we ask them, where we identify a period of time where there have been underpayments, to take responsibility for auditing their own activities. We ask them to engage an independent third party—

CHAIR: Have you asked Baiada to do that?

Ms James : We are looking to implement the recommendations in the report.

CHAIR: And have they agreed to them?

Mr Campbell : Senator, we are sort of traversing around the conversations we are having with the company at the moment. The recommendations in the report give a signal of where we are trying to take those conversations at the moment. But to give the company an opportunity to engage properly, I probably was not going to open those discussions up in this forum.

CHAIR: Well, someone has to hold the company to account. It seems unable to hold itself to account.

Mr Campbell : We will.

CHAIR: Do you expect then that Baiada will be able to give you a list, over the last 18 months, of every 417 visa worker that it has underpaid?

Mr Campbell : Just to be a stickler again, we say the underpayments were made by the contractors and subcontractors. Given the lack of documentation that some of those subcontractors have about their workforces, that will be difficult, but it is a subject that—

CHAIR: For the ones who have gone out of business.

Mr Campbell : Yes, that is true, but it is a subject we want to cover off as part of our discussions with Baiada.

CHAIR: In the hearing in Sydney last week, we had again evidence from 417 visa workers, one of whom has been terminated by one of Baiada's labour hire companies for speaking up on behalf of another worker. Nevertheless, they gave us falsified records. One of them had a couple of envelopes full of scratchings on envelopes that were pay slips, none of which will come as a surprise to you. Are you also aware that one of the contractors Baiada is using is setting itself up as a training company and the workers have to undergo training? They get paid a wage for that training, which they have to immediately pay back to the labour hire company. And we have the documents and all of that has been presented as evidence to this inquiry.

Ms James : We would be happy to look at that material. I did review the transcript from Sydney and my recollection is that there were representatives from Baiada but also representatives who were working for a company called AWX, which was a different company. I thought the training allegations were made with respect to that other company not Baiada

CHAIR: They were. It is one of the companies Baiada uses.

Ms James : We are certainly aware of those suggestions. One of the things we see with visa holders is unlawful deductions. In fact, you referred to a matter on which we put out a media release recently, which was also a case of unlawful deductions. So we do see conduct that involves a labour hire company, for example, telling visa holders that they need to pay for training or, more commonly, to pay for accommodation with a particular service provider or to pay for transport. Often these are unlawful deductions and that is something we take very seriously. Where it is found to breach the Fair Work Act, we act on it.

CHAIR: So for these 417 visa holders, unlike other visa holders, this class of visa is completely unregulated and they can work across any sector of the Australian community. Is that correct?

Ms James : I do not know that I would describe it as 'unregulated'. I would also suggest that the details of that regulation and questions about that should be put to the department of immigration. There are requirements with respect to the visa holders' work. For example, I think they are not allowed to work for more than six months with one employer.

CHAIR: Yes, there are some parameters but, for example, for a 457 visa worker you and the immigration department have to be satisfied that there is a contractual arrangement which sets out the wage and the hours of work et cetera. Is that a requirement for a 417 visa are worker?

Ms James : The requirements with respect to 417 visa workers from a workplace relations point of view are the same as for any other worker in Australia.

CHAIR: But they do not have the added layer of there being a contractual arrangement from a sponsoring employer, which you can pick up and look at.

Ms James : There are not additional workplace obligations in the fair work—

CHAIR: No. So they have the same entitlements, not exactly the same, in terms of wages and conditions, like an Australian worker.

Ms James : That is right.

CHAIR: But unlike a 457 worker where there is a sponsor who has to undertake certain responsibilities, that is not the case with 417 visa workers?

Ms James : That is right.

Mr O'Shea : I would like to add that the department of immigration may indeed have some sort of sponsorship requirements for 417 which we are not aware of.

CHAIR: Well no-one has told us to date. There are none. I want to go to 457s because we have also heard— if you have been reviewing the evidence, you might have seen the Melbourne evidence in relation to registered nurses. It seems underpayments are occurring here. Nurses told us they were owed around $59,000 each. Have you been able to look at the Melbourne evidence?

Mr Campbell : I have not, Senator, no.

Ms James : I have not personally reviewed that.

CHAIR: Two registered nurses came. They were from the Philippines. They worked in aged care facility. There were a couple of other 457 visa workers and only the 457 visa workers in the establishment were underpaid. The Australian Nursing Federation was there and told us that they had claims for $59,000. So given that this is an area that is supposedly being monitored, whose job is it to make sure that registered nurses are not ripped off?

Ms James : We are responsible for ensuring that people are paid what they are entitled to be paid under the Fair Work Act.

CHAIR: So you do not monitor the sponsor.

Ms James : With respect to 457 visas we do have additional responsibilities that we carry out on behalf of the department of immigration.

CHAIR: What are they? How did these nurses get ripped off?

Ms James : The responsibilities we carry out for the department of immigration involve checking that they are being paid the agreed market rate that has been agreed to by the sponsor with the department of immigration and that they are in the job that they are supposed to be.

CHAIR: How did the nurses fall through the cracks then?

Ms James : I am not going to comment on that case specifically, but I will say that it is part of our role to carry out monitoring on behalf of the department of immigration with respect to those obligations. I can give you some data—I think I did last time, and at estimates as well—

CHAIR: But obviously you cannot monitor every 457 worker.

Ms James : We do not purport to monitor every 457 worker, that is correct.

CHAIR: You might also be aware that at the Perth hearing the Employment Law Centre gave us case after case of 457 workers who were not receiving their contracts, who had unlawful payments and so on. In their opening statement there is a whole body of evidence. We have asked them to go back and tell us, on notice, what the outcome of those cases was. But again in Perth there were 457 visa workers at all professional levels who had been ripped off.

Ms James : I am sure that the department of immigration would be very pleased to hear about and consider that material.

CHAIR: But it is your responsibility, you said, to make sure that workers are getting the correct pay.

Ms James : It is our responsibility to monitor on behalf of the department of immigration with respect to that market rate.

Mr Campbell : We support their work in the field, Senator. We covered this at some length at estimates, you might recall—the most recent hearing.

CHAIR: But we did not have this evidence then.

Ms James : We had the opportunity to talk about the supporting role we provide to the Department of Immigration and Border Protection. We do not have an enforcement role. If we see something while we are conducting our field activities we have an MOU in place and we have a legislative instrument that we can activate to share information with the Department of Immigration and Border Protection, and they then act on that.

CHAIR: So in this case the Employment Law Centre in Western Australia told us that they referred these matters to the Fair Work Ombudsman. Do you then give them to Immigration?

Mr Campbell : If the workplace relations entitlement or instrument was satisfied, then our jurisdiction ends there.

CHAIR: It was not satisfied. These are cases put together by the Employment Law Centre.

Mr Campbell : What I am trying to say is that their entitlement under migration law might have been higher, or probably is higher, than the award that would otherwise apply to that work. So the entitlement is derived from an instrument that we cannot enforce, being migration law. So we want to make sure that those workers get what they are entitled to under migration law, because the intention is that that generally is higher than what is otherwise provided from the workforce.

CHAIR: So these are workers who have had their wages and conditions set out in a contract, which is required of the sponsor, and those entitlements were not being met. Whose responsibility is it to ensure that those entitlements set out in the sponsor documents contract are being met?

Mr Campbell : The Department of Immigration and Border Protection has primary jurisdiction for this space. Our role sits underneath that and makes sure that the Fair Work Act is a safety net for all workers in the country. So where there is a dip below the safety net our jurisdiction is enlivened. Where there is an entitlement that is above that safety net, that is where the Department of Immigration and Border Protection has the power to enforce an outcome.

CHAIR: The other thing we have heard in evidence across the country is that, despite there being some English language testing, most people's language is poor. In fact the Employment Law Centre told us that in most cases it has to use an interpreter. That is on the evidence they provided last week. So someone calls up because they are not getting their wage according to the sponsor document, and you give me this bureaucratic gobbledegook. Is that what you are telling the worker?

All I am asking is: who enforces that sponsor's contract when the contract is not being met? It is a pretty simple question.

Mr Campbell : This is what we covered at estimates for nearly an hour and a half. If it is under migration then it is the Department of Immigration and Border Protection. If it is under workplace relations law then it is ours.

CHAIR: So where does the 457 worker who is being underpaid go?

Mr Campbell : How about I give you some stats and you can—

CHAIR: I am not interested in stats.

Mr Campbell : We do do it.

CHAIR: I am asking you—

Mr Campbell : And I am going to answer your question.

CHAIR: I am giving you a scenario. The Employment Law Centre in Western Australia has a list of cases on documents that have been tended to this committee that involve 457 workers not getting what their contractual arrangements are. So just answer that question.

Mr Campbell : I will take that on face value, because I have not seen that evidence, nor have I seen the—

CHAIR: Sure, so let's treat it as a fictitious case.

Mr Campbell : That is a hypothetical, and I am not doing hypotheticals, Senator. I was going to give you some context. Last year we received—

CHAIR: I am not interested in stats.

Mr Campbell : Why not?

CHAIR: Because they are in the document.

Mr Campbell : Even though we do work in this space?

CHAIR: Where does the 457 worker go? They get lost in the system.

Ms James : We deal with many, many workers in this country, including 457 visa holders. If that person were to come to us with an inquiry, we would examine the contract that you speak of and we would make a decision about whether we are best placed to pursue that matter on behalf of this worker or whether the Department of Immigration is. We do not have before us the document that you describe, but I think what you are describing is probably the sponsorship documentation, which the Department of Immigration is responsible for. Usually the wages that are set out in that sponsorship material are higher than the Fair Work Act wages. That is part of how the program is designed. So it would be the Department of Immigration's role to deal with that matter.

We are very active in this space. We achieve outcomes for 457 and other visa holders all the time. If that matter came to us as a complaint, we would manage that.

CHAIR: So do they then send the underpayment portion back to you to deal with?

Ms James : No.

CHAIR: So they have the facility to—

Ms James : If we have a worker who is entitled under their sponsorship agreement to a wage of, say, $60,000 a year—

Mr O'Shea : The market rate.

Ms James : I think the market rate is around $54,000 a year. But let's just say it is $60,000 a year. It would be almost certain that their Fair Work entitlements would be lower than that. So, if they have not been paid the $60,000, and if they had been paid below what their Fair Work entitlements are, the maximum of what they are entitled to is what they should be paid. It is the Department of Immigration that is able to deal with that matter, rectify that matter, take sanctions, if that is appropriate, against that sponsor if it is found that the obligations have been breached, and to recover the money on behalf of the employee. So we would refer that matter to the Department of Immigration, because the Department of Immigration has the power to recover what has been agreed, what the visa holder expected when they came to this country, and what they are entitled to under the immigration framework.

CHAIR: The Employment Law Centre told us in Melbourne and in Perth that they refer matters to you. Are they referring them incorrectly?

Ms James : It is not incorrect. We work very closely with the Department of Immigration to manage this behind the scenes. In government we know that we need to be joined up. We know we are not always perfect at that, but I would suggest to you that our engagement with the Department of Immigration is very good. At any moment in time, one of my staff is probably on the phone to someone in the Department of Immigration talking about the joint work that we do. We work very closely together and we also work very hard to get good outcomes for visa holders, as we do for all employees, and to do the work behind the scenes to ensure that the appropriate outcome is achieved for the visa holder, irrespective of whether the obligations rest in immigration law or—

CHAIR: Let's just put this in simple terms, because the person who has been underpaid and who has limited English skills does not understand all of this bureaucracy. So what you are telling me is that, if they go to the Employment Law Centre, they refer to you and you refer to Immigration and they might deal with it or they might send some of it back to you. It is not a very transparent process for the poor person with limited English, who does not understand the process, who went to the Employment Law Centre.

Ms James : I am not going to comment on a hypothetical. All I will say is that I think we—

CHAIR: It is real.

Ms James : People end up in all sorts of agencies and go to all sorts of different places for assistance and we work very hard within government and with communities as well, including employment law centres, many of which we have strong relationships with, to make sure people do end up getting the outcome that is appropriate and that they are entitled to.

CHAIR: Before I hand over to other senators, I just want to go to the incident with Benara Nurseries. There was a raid done by Immigration some time ago and workers without proper visas were taken and deported. We then had on that site, as I understand it, 457 workers and 417 workers. We have now had a second investigation into Benara Nurseries where you acted on behalf of 417 workers who were having illegal deductions taken from their pay. You have uncovered some money. Were those 417 workers part of the first raid? How did you come to find out about those 417 workers?

Mr Campbell : We had requests for assistance directly from the 417 workers involved.

CHAIR: When was that?

Mr Campbell : I do not have that date with me. I could probably get it for you.

CHAIR: Just roughly—was it a month ago, two months ago?

Ms James : It was in mid-2014.

CHAIR: That was after the raid by Immigration?

Mr Campbell : I suppose so. Sorry, I am not familiar with the raid that you are talking about.

CHAIR: I guess the point I am making here is that we had a raid by Immigration, a dodgy employer, there were illegal firearms and all sorts of stuff going on there, and then some months later we had the same employer still continuing, like Baiada, to just run foul of the law and rip workers off.

Mr Campbell : I cannot speak to that. I can speak to the facts of the case that we investigated, which you alluded to, which is that we found significant deductions for rent—unlawful deductions for rent. We were able to recover that money as a result of our actions for 16 workers. The company has made—

CHAIR: I know you said there was an enforceable undertaking and they had to make apologies and all of that, but, right at this point, there is no prosecution of the way Benara operates, because this is the second time they were raided and they had workers without visas, and now they have moved on to backpackers. Two months down the track, who knows how Benara is going to be behaving. They did not learn the first time, did they?

Ms James : I do not think we can talk to the activities of another agency with respect to another legal framework.

CHAIR: You just told me you have a really good relationship with Immigration.

Ms James : We do, but we cannot speak to the detail of that. There are a lot of activities that we and the department of immigration are involved in—

CHAIR: Were you aware that there had been a previous—

Ms James : There is no overlap with respect to all of them.

CHAIR: So were you aware that there had been a previous incident at Benara Nurseries that involved workers without visas?

Ms James : I think we were aware of that.

CHAIR: So you were aware of that. Fine.

Ms James : Yes.

CHAIR: Then we had the second incident involving—

Ms James : I do not necessarily see them as being related from the point of view of our jurisdiction.

CHAIR: I think the public do. I certainly see them as related. We have an employer doing the wrong thing with some workers who do not have formal visas. Those workers get deported, so forget about their underpayments. Who knows what they were earning. They were never given the chance to get their money. We have a second incident, which people called you about. That is good. You recover the moneys and Benara continues along its merry way.

Ms James : I am not sure that it is fair to assert that.

CHAIR: It has already been picked up once with workers without visas and now twice by you.

Ms James : We only very recently announced—it might have been yesterday or the day before—the enforceable undertaking that we have entered into. That is an enforceable document that requires Benara to undertake a number of steps. We would certainly hope that they would take it very seriously, and if they—

CHAIR: They did not learn the first time.

Ms James : This is very recent, Senator. I do not think it is fair to judge them on it just yet. The enforceable undertaking has a number of obligations that are imposed on them. If they breach those obligations, they are in breach of the law and we would take that very seriously.

CHAIR: They were already in breach of the law the first time around.

Ms James : We do actively monitor our enforceable undertakings. Bear in mind that the focus of the Fair Work breaches were unlawful deductions. There were concerns about overcrowding in the house. That is not a Fair Work Act responsibility. But through this rather creative enforceable undertaking, we have been able to impose obligations on this company to take steps to ensure that the accommodation is fit for purpose going forward. That is not an outcome we would be able to get through litigation.

CHAIR: Are you going to go and check on Benara Nurseries?

Ms James : We will be actively monitoring this enforceable undertaking, as we do for all of them and as we will be doing for all of the 42 enforceable undertakings that we entered into over the course of the last financial year.

CHAIR: We need structural change here because we have a company in Benara Nurseries which broke the law the first time by employing workers without visas. My understanding of that workplace—and, Mr Campbell, you might be able to help here—is that it employs local workers who, as strange as it may seem, are paid correctly; it then employs workers without visas; it breaks the law; Immigration comes along and raids the place; those workers are deported, and goodness knows how much they are owed, but no-one will ever know; then you get a call about 417 visa workers. Here is a company that is blatantly breaching the law. But it seems to me that doing so is almost part of its business model that it costs in. The company says, 'Well, I might pay'—how much was it? I think it was $10,000.

Mr Campbell : $30,000.

CHAIR: 'It will cost $30,000 as a business risk, and we will go along our merry way.' It is the Baiada case on a much smaller scale.

Mr Campbell : You are right in that there were large numbers of labour hire companies or subcontractors on the various sites—

CHAIR: And this was a labour hire company, wasn't it?

Mr Campbell : That workforce of a former labour hire company became directly engaged by Benara. That has then led to the onsite accommodation issue coming up. I am not going to draw a line between the sins of the subcontractor in that case and Benara because I do not know enough about the matter that you are referring to or about the raids that Immigration—

CHAIR: But you knew about that, and had seen that?

Mr Campbell : I recall raids in 2014 in Western Australia dealing with the horticulture sector. I apologise, I am not an expert in it. But, in this circumstance, Benara now has an obligation to ensure that the types of practices that it had in place with regard to its direct workforce will not be repeated.

CHAIR: But the message that employers who want to do the wrong thing are getting—remembering that lots of employers do the right thing—is, 'We can get away with it, so let's just put it as part of our business model.'

Senator McKENZIE: I do not have too many questions. One of the things that we have heard is that some of the unions lack confidence—I think that was the direct quote—in the Fair Work Ombudsman, as they have raised issues with you on behalf of workers that have come to them and they have not heard back. I am just wondering if you could give the committee some assurance that you take seriously any breach of our country's workplace laws that is reported to you and that there is a sort of mechanism for reporting back and advising those who come to you of the outcomes of your investigations.

Ms James : That is right. We have positive relationships with a number of organisations in the community, including registered organisations—unions and employer organisations. We have memoranda of understanding in place with a number of them, including the National Union of Workers and the SDA. Unions are often our source of information about conduct going on at sites that we do want to be aware of. They do share information with us, and we do work with them. We do keep them up to date on matters where they are representing members in relationship to a particular matter.

When we investigate a matter, obviously it is our investigation and there is a need to follow our own processes and procedures. Unions also have entitlements under that Fair Work framework to take their own action, and they often do. If a union is taking action on behalf of workers, we may say to it, 'If you have got this then we will take a step out because we do not need two enforcement actions going on here.' There are a number of cases in which we will work very cooperatively with unions. Generally, we get very good feedback. If unions had been reporting to the committee their unhappiness with us, I would be very happy to hear from them. But I have not heard that directly myself.

Senator McKENZIE: You might just like to review today's Hansard.

Ms James : I would be happy to.

Senator McKENZIE: I know one of my National Party colleagues raised issues in the horticulture industry with labour hire contractors over a year ago. Adjournment speeches were made and forums were held in Queensland in May and June 2014. In the course of your investigations in the recent past, have you had any examples of intimidation of producers by labour hire companies?

Ms James : I am not sure about 'intimidation of producers'. I would say that our Harvest Trail campaign, which is underway at the moment, is one where we have been very active in communities and in the horticulture industry dealing with producers and growers. We have had a very positive response in relation to that campaign. I think we talked about it last time. I am happy to talk about it in more detail.

Senator McKENZIE: Yes, we did, but there were no specific examples.

Ms James : I do not personally know of that. I am familiar with the fact that there can be pressure in these industries. These are industries where, it is fair to say, there are not a lot of discretionary costs. One of the things that concern us is that growers come under a lot of pressure to cut costs to meet their supplier obligations with the people they are supplying—end users, if you like. Sometimes that may make them vulnerable. They require workforces at very short notice—large workforces in regional locations—and that can place them at a disadvantage and can cause challenges. We have heard that. I am not sure if we have heard about intimidation. Mr Campbell, did you want to comment on that?

Senator McKENZIE: Maybe take that on notice.

Ms James : I would be happy to.

Senator McKENZIE: Finally, we heard from the NFF a couple of weeks ago, and again from Coles today, about an industry response to this issue—particularly in the agricultural sector. Have you been actively working with industry to give them the type of advice they need to ensure that they can come up with a code—or a framework, if you like—for their producers to ensure these practices are no longer continued?

Ms James : As part of our Harvest Trail work, we have talked to well over—I think I have a list somewhere here—60 different entities involved in various parts of the Harvest Trail, including the National Farmers' Federation, winegrowers associations and a number of other associations. We are actively working with them. We hope that as we proceed with our Harvest Trail work we will be able to engage with them on next steps when that comes to a conclusion. We are still very much in the community engagement and fact-finding stage at the moment. I am very encouraged by some of the statements from the National Farmers' Federation about the importance of migrant workers in the agricultural sector; by the recognition that farmers have a responsibility to make good choices about their employment practices; and by the fact that they are looking to establish a scheme to assist growers and farmers to do that. We have some material on our website as well that gives advice to growers and farmers about questions that they should be asking labour hire contractors to assure themselves that these labour hire contractors are doing the right thing by their workers, that they are fulfilling their obligations under the Fair Work Act, and that they are not setting in course a model that is designed to exploit visa holders.

Senator McKENZIE: Absolutely. Thank you.

Senator RICE: We have heard lots of evidence over the course of this inquiry about breaches of laws and breaches of agreements. What I want to try to get at is how many of these are the bad eggs and to what extent we have a systemic problem in the temporary visa program, and issues associated with that—particularly the use of labour hire companies. On page 13 of your submission there is a statistic referring to the immigration department having surveyed 4,000 sponsors of 457 visas and found that just under a third of sponsors were in breach of their obligations. I want to get into the issues that you, being at the end of the pipe, are facing; the resources that are available to you; and whether you feel that there is a systemic issue. If there is, do you, realistically, have the resources to be able to deal with what seems to us—from the evidence we have received—to be a systemic issue?

Ms James : There is a lot in that question. Perhaps to go to the end first, the resources question: I think I was asked this question last time. I think I said something along the lines of a regulator would always welcome extra resources or extra powers, for example. But what I would also say is that we are very active in this space and are achieving great outcomes with our existing resources. Last financial year, between a third and a half of all our enforcement outcomes involved visa holders. Since 2009 we have recovered almost $6 million on behalf of visa holders and initiated over 70 matters in court. We are very active in this space. We are achieving outcomes for visa holders. But you are quite right: just achieving these outcomes for individual visa holders is not the answer; it is not the total answer. There are some systemic problems in place and I would suggest that they are in part the result of the characteristics of visa holders themselves. They obviously face cultural and language barriers on a number of occasions. They are often young, particularly 417 visa holders. They are transient and they are not familiar with our system.

There are also some issues around the markets that some of these visa holders work in, particularly the working holiday visa holders. They are working in regional locations. If they are trying to get the second year of their visa, they need to spend 88 days in a regional location doing certain work, like agricultural work. So, they are isolated, they are young and they are working in markets where the margins may be very tight and growers may be coming under a lot of pressure. The use of labour hire companies is of course a legitimate business choice, and for growers you can understand why, when they have a short-term need for a lot of workers, they would use labour hire companies. So the combination of factors here and perhaps pressures they might be encountering from the companies they supply might all add up to an environment where there is exploitation of workers, where there is cutting of labour costs—which, say, in horticulture, our understanding is that they are often more than half, even up to 60 per cent, of the costs for farmers. That may well be where the pressure comes from.

So I would suggest there are a number of responses that we need to put in place here. Some of our work, like our 417 inquiry, like our harvest trail inquiry, is designed to work with communities, with people working in this market—growers, employers, employer organisations, unions, communities, local councils and local members—to really understand the dynamics at play. One of the most basic and essential things that we can do to make a difference is to make sure that the right information is put into the hands of people operating in this market—the visa holders themselves. We have a range of information on our website in some 27 different languages. We have recently enhanced the material on our website. We have fact sheets in Mandarin, Vietnamese and a couple of other languages—

Senator McKENZIE: Korean?

Ms James : Korean might be the other one, actually, Senator—directly targeting people. They are designed for people who are engaging in this kind of harvest trail work, for example. There is also a need to put the right information in the hands of the producers—something we have also been doing. We have been very active there as well. We have had examples where we have talked to growers and suggested to them, based on intelligence that we have received, that perhaps they might want to ask their contractor some questions. There is a list of questions they can ask their contractors on our website. We had one example in Mildura where the grower brought his contractors together, asked them the questions and then reported back to us that he had sacked them all based on their inability to answer those questions.

Putting the right information in the hands of people acting in the market, releasing a report like our Baiada report, shine a light on this conduct. It gets people's attention and then it makes people think: I can't have a situation continuing where I am complicit in a market or perhaps even contributing to an environment that is causing directly or indirectly exploitation of these vulnerable workers. That is the work which we are engaging in at the moment, and we are doing that with our existing resources. What we are looking for is sustainable outcomes over time. I think we are having an impact and we will see sustainable outcomes over time.

Senator RICE: You have all of those measures in place. From the evidence that has been presented to us you have the information to workers on your website, you are working with suppliers and you are working with the industry players, but we have still seen from the evidence presented to us that we have a systemic problem of a significant proportion—I am not saying it is a majority—of players in the industry who are continuing to engage in unlawful practices, because they feel that they can get away with it.

Senator McKENZIE: Can I just clarify something, Senator Rice. When you say a 'significant proportion' of the industry, do you mean a significant proportion of the labour hire contract industry or do you mean the agricultural industry.

Senator RICE: Well, they are both complicit in it.

Senator McKENZIE: That is outrageous. It flies in the face of evidence we have had.

CHAIR: Senator McKenzie!

Senator McKENZIE: You have heard from producers, as you have heard from visa holders, on their desire to do the right thing.

CHAIR: Senator McKenzie, please. Senator Rice is entitled to her opinion. Continue, Senator Rice.

Senator McKENZIE: I would prefer if it were informed by fact, rather than a false assumption.

CHAIR: Senator Rice is entitled to her opinion, as you are entitled to yours.

Senator RICE: Whether it is the industry or the labour hire companies that are doing it, and what the relationship between them is, it is all pretty murky to me, from the evidence that has been presented to me—

Senator McKENZIE: You are saying that a significant proportion of the agricultural industry wants to exploit workers. That is false.

CHAIR: Order, please. Let's talk to our witnesses.

Senator RICE: Getting to the nub of it, the question is one of whether you feel that the sort of initiatives you have in place at the moment are going to be sufficient to address these ongoing issues of this proportion of people in the industry who are not abiding by the law?

Ms James : Systemic problems do not get fixed overnight. We have been actively recovering money and taking action on behalf of visa holders for many years now. These deeper pieces we are engaged in are newer. They have not delivered yet, if you like. So we are still in engagement phases with respect to our Harvest Trail work and our 417 work. It is a fine balance here. We are active in terms of taking unscrupulous operators to court. As I said, 21 out of the 50 matters we have put into court in the last financial year involved visa holders.

Senator RICE: You are obviously doing a lot of good work, but it is whether it is sufficient. It is whether it being at the end of the pipe is actually addressing the issues.

Ms James : I would say that in addition to the work we are doing I think there is a need—and I am seeing good responses now—for government to work in a really joined up way here. For example, Task Force Cadena, which we have just formed with the immigration department will provide a new focus and ensure that we and the immigration department are working in a very integrated way to stamp out these sorts of conducts. The phoenixing task force, which was announcing in just the last few months and involves both the Fair Work Ombudsman, the tax office and ASIC and a range of other agencies, I think, also has a range of new information-sharing powers that will enable us to really take steps against some of the sorts of conduct we have seen—and Baiada has some examples of this—of companies deregistering or disappearing and then the same directors popping up and carrying out the same operations some weeks later. So I think it is incumbent on government to work better together and use the existing powers we have.

I think it is really important that we do look at the way the corporate veil is sometimes being exploited in these cases. That does enable unscrupulous individuals, who I do believe are in the minority, to continue to pop up in different guises and to continue to avoid the operation of a number of laws, not just workplace laws. In our Baiada report we cite examples of cash payments. Paying people in cash in and of itself is not unlawful, but it is if it is not accompanied by proper record keeping, proper payslips and the remittal of tax and superannuation. It is important that we ensure that all of the laws of the Commonwealth, and state laws as well, when we look at some of the accommodation scenarios we are seeing, are enforced. It is incumbent on government, I think, to operate in a more joined up way, and we are just starting to see that happening now.

So, I take your point. We have not solved the problem yet. Systemic problems do not get solved overnight, but if you want sustainable outcomes and if you want to change behaviour over the course of time it takes some time and an extraordinary amount of effort on behalf of a number of regulators, not just us.

Senator RICE: Regarding the extent of the problem, do you feel, on the basis of the work that you have done, that there is a greater rate of exploitation of 417 visa holders than, say, the 457 visa holders?

Ms James : I would certainly repeat what I said last time when I appeared before the committee: the proportion of complaints that we have been receiving from the 417 visa cohort has been increasing over time. The number of complaints we get from 417 visa holders is now greater than from 457 visa holders, for example. There perhaps are some characteristics of that group that make them more vulnerable, particularly—and this is what our 417 visa inquiry is focused on—when they want that second year in the country and they need to do this 88 days of work in a regional location. There are particular vulnerabilities around that. I do welcome Minister Cash's recent changes to the 417 program that require that this work now must be paid work and that pay slips need to be provided in order to satisfy the department of immigration's requirement for that second year of visa. That ensures that the work is carried out on the books and that there are records. One of our greatest frustrations in this area is often a lack of records.

Senator O'NEILL: One of the pieces of evidence you just gave is borne out by the submission from the ACTU, which indicated that between 2011-12 and 2013-14 complaints from visa holders to the Fair Work Ombudsman increased by 165 per cent, from 909 to 2,625. The complaints from 457 visa holders increased 157 per cent from 157 to 404 and complaints from 417 visa holders were up 382 per cent from 216 to 1,042. You have dealt with 5,733 complaints from visa holders. That is the evidence we have received. Is that close to your recollections or your understanding?

Ms James : I assume the ACTU has extracted that information either out of the government's submission or out of other evidence we have given. I went through some data in my opening statement last time I appeared. Certainly what I covered off then was that we have seen increases in complaints from visa holders generally and that the proportion of complaints from 417 visa holders as opposed to other visa types has increased by a large number.

Mr O'Shea : Attachment D to the joint submission goes through all our data in quite a lot of detail.

Senator O'NEILL: And I would like to go to attachment D.3 now, please, and complaints from identified visa holders and then litigations relating to identified visa holders. When we look at the number of proceedings initiated and decisions, there is a massive gap between the numbers of reports and those that have proceeded to litigation.

Ms James : Senator, we receive around—

Senator O'NEILL: Two proceedings were initiated last year, four the year before and six up to 31 December 2014. By comparison to the thousands and thousands of complaints, there seems to be a pretty significant gap.

Ms James : I would not say there with thousands and thousands of complaints. If you look above at the numbers—

Mr Campbell : I think that visa holders probably get a disproportionate run in our litigation activities. Ms James pointed to the fact that last financial year we litigated 21 matters involving a migrant worker out of the 50—

Senator O'NEILL: Are you saying that they are not entitled to support as permanent Australians are?

Mr Campbell : I think this agency through its actions has indicated quite the opposite. We have dedicated significant resources and energy to addressing noncompliance as it relates to migrant workers. It is something that we take very seriously.

Senator O'NEILL: Given the reality that, in evidence that we have heard, there are so many disincentives for temporary visa holders to come forward and make a complaint, is it fair to say that what you are seeing really is just the tip of the iceberg?

Ms James : What I would say is that you are focused, as many people are, on the litigation. We receive 25,000 or so complaints to our agency every year. The litigation is one part, and it is the minority, of how we get an outcome on behalf of people who come to us. There were 25,000 complaints and 50 litigations, of which 21 in the last financial year were visa holders. But we also secured enforcement outcomes—

Senator O'NEILL: I have the outcomes, but the thing is that the public respond to seeing people who are doing the wrong thing actually being dealt with by the law. The chair has alluded to business models that are almost incentivised by a failure of Fair Work to investigate what is going on in that place and by a failure of Fair Work to get litigation outcomes that are so significant and so instructive to the broader community that people doing the wrong thing will actually stop doing the wrong thing.

This is one of the concerns that we have in representing ordinary citizens. We think that you are an enforcement agency. Do you have adequate legislation to enforce the law? Do you have adequate resources to go and investigate? We even heard from Coles today—and this is their words—'Our response will be broader than that of the Fair Work Ombudsman. We will inspect every workplace.' That is exactly what every Australian thinks you can and should be doing.

I draw your attention to your words when you were asked by Senator McKenzie, I think, about workers being well represented by other bodies. The Fair Work Ombudsman just says, 'If the union is looking after them, we'll step out of that space and let them go.' There is so much uncertainty about your action and so much uncertainty about anybody getting charged or suffering a significant financial impact that the whole sector—horticulture and all the food areas—seem to be rife with systemic problems and exploitation of young people visiting this country on 417s. Do you have a response to that? Do you have adequate legislation? Do you have adequate resources? From what we can see, it does not look that way.

Ms James : I am not sure what your question is.

Senator O'NEILL: Do you have adequate resources to meet Australian expectations about watching what is going on in these workplaces?

Ms James : I answered the question about resources at the last hearing and I just responded to Senator Rice asking a similar question. I think I have put my statement on the record with respect to that. I would say that, if the government wished to give me as a regulator more resources, I would certainly take them. Could I achieve more with them? Almost certainly. But I also reject the suggestions you make that we are not actively enforcing in this space. Twenty-one out of 50 litigations in the last financial year, recovering over $1.6 million, were on behalf of visa holders, in one financial year, and 20 out of 42 enforceable undertakings, or almost one in two of all of our enforceable undertakings in 12 months, 37 out of 118 compliance notices—

CHAIR: Sorry. Are you reading from stats that are in the document?

Ms James : No, I am reading from the most recent statistics, from the end of the last financial year.

CHAIR: They are part of the submission?

Ms James : It is not part of the submission, because the submission was filed well before the end of the financial year.

CHAIR: Maybe you want to table those.

Ms James : I am not going to table my written notes. I am happy to continue to read from them. Thirty-seven out of 118—

Senator O'NEILL: Could I ask you to provide them on notice?

CHAIR: I have allowed the time to run over. That is my responsibility and I am trying to fix that because our next witness is here. So I would appreciate it if you gave those stats to us in another form, on notice.

Ms James : I am happy to take on notice the enforcement outcomes that we have obtained on behalf of visa holders in the last financial year.

CHAIR: Thank you.

Senator O'NEILL: With regard to the enforceable undertakings and your follow-up, we have heard about a number of companies that are in your purview at the moment, but there are also former instances where there have been enforceable undertakings by particular companies. I refer to the 7-Eleven stores, which are known to you and have used practices in the past that certainly helped them fall foul of the law. In terms of the 7-Eleven business model currently, what are you doing to watch these people, this business structure that is already known to have been compromised in the past? How can you guarantee that what is going on in that organisation is within the law now? What are you doing?

Mr Campbell : The Fair Work Ombudsman has had instances before where we have found employment record keeping practices at 7-Eleven outlets that contravene workplace law, that effectively falsify the amount of hours an individual works at the store and gives the impression that they are paid the required minimum over a fixed amount of time—say, 36 or 40 hours—but in fact they are working longer and being paid less. I am not going to tell you that is a systemic practice across 7-Eleven because I do not have that evidence. What I will say is that outlets like 7-Eleven are an area of focus for our operations, and practices like that are those which we are seeking to shine a light on but also address. So that is about as far as I can comment on that at the moment. But the circumstances that I just described to you are unlawful, and where we do identify them we can take action against them.

Senator O'NEILL: Is it true, Mr Campbell, you have already undertaken that kind of a process on two previous occasions with 7-Eleven, and yet again it is your focus? So that brings me back to the question that I just asked. We go through all of this process with an employer that is proven to be untrustworthy, proven to be exploiting workers, and then another three or four years later down the track we are going back over the same territory. Surely, there is something wrong with this process. Is it the problem with the law? Is the law inadequate or is the current regulatory structure, of which you are a part, inadequate?

Senator McKENZIE: Chair, is that an opinion?

Senator O'NEILL: That was a question.

Senator McKENZIE: I think you are asking the officers for an opinion.

CHAIR: No. Senator O'Neill is free to ask questions. The officers can determine whether they answer them or not.

Ms James : Where we see a pattern of complaints or a pattern of conduct coming to us, we do actively pursue those matters. Certainly, if we think there are systemic problems in place, we do engage with that. I do not want to say very much more because I do not want to comment on things that we are actively looking at at the moment. I would also just observe that my understanding of organisations like 7-Eleven is they do operate on a franchise basis. So sometimes what you see in some franchises is not indicative and is not a sign that there is an issue at head office, so to speak, and sometimes it is. A little like the work we are doing with Baiada, it can take a little time for us to understand what the root cause of some of this conduct is. We actively pursue those sorts of matters. They can be more complex and they can take a little more time for us to deliver outcomes.

Senator O'NEILL: You already did this in 2009—didn't you?

CHAIR: Sorry, I think we are going to have to leave it there. Thank you, Mr Campbell, Ms James and Mr O'Shea for coming back again today. You never know, we might call you again. Thank you very much. We appreciate your evidence.