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Education and Employment References Committee
24/09/2015
Australia's temporary work visa programs

THAM, Associate Professor Joo-Cheong, Private capacity

[12:12]

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. The committee has received your submission. I now invite you to make a short opening statement of no more than a few minutes. At the conclusion of your remarks I will invite members of the committee to put questions to you.

Prof. Tham : Firstly, thank you very much to the committee for inviting me to give evidence to this very important inquiry. I have made two submissions to this inquiry: what I will refer to as my main or principal submission and a supplementary submission in response to the committee's invitation in relation to the 7-Eleven hearings.

In my principal submission I emphatically rejected the view that noncompliance with labour laws, when it comes to temporary migrant workers, was an aberration where the culprits are so-called 'rogue' employers. On the contrary, the principal submission argued:

…there is a structural risk of non-compliance with both groups of workers stemming from their precarious migrant status and, in many cases, from poorly regulated industries.

It elaborated by saying:

…there are structural features of immigration laws and labour laws that facilitate non-compliance by those employing temporary migrant workers. In industries where there is a greater likelihood of non-compliance—

what I dub 'hazardous' industries—

these structural features bring about the reality of non-compliance.

A key implication that follows from this point is that, when it comes to noncompliance in this context, we in fact see noncompliance as widespread in key sectors of the labour market. Indeed, it is business as usual in some parts of this labour market with so-called mainstream employers. Subsequent to my principal submission being completed, the ABC current affairs program Four Corners and Fairfax Media have vividly reviewed how this structural problem is manifested—firstly in the case of working holidaymakers and international students in the food production industry and, secondly, with international workers and some 457 visa workers in the case of the 7-Eleven franchise system. At the risk of repetition, the point I would like to underscore is that the practices exposed in these two cases should not be viewed as isolated cases, but rather as being symptomatic of a larger problem of noncompliance.

In my principal submission I referred to three other industries that also appear to suffer from pervasive and widespread noncompliance: the hospitality industry, the cleaning industry and the taxi driving industry. Structural problems clearly require structural solutions. In my supplementary submission I identified four gaps that need to be addressed for this problem to be met: the compliance gap, the knowledge gap, the gap in fairness and the gap in protection. In terms of addressing the compliance gap, this is particularly crucial in the hazardous industries, where there is a higher level of noncompliance. Recommendation 1 is directed at the government taking steps to actively promote collective organisation of temporary migrant workers, given the well-known barriers to their organising, some of which were canvassed with the previous set of speakers. I should add that I was quite moved by the courage of the workers who came forth, and I say this as a former international student.

There are other measures we have taken in terms of addressing the compliance gap, and here I strongly commend to the committee the excellent submission that my colleague, Dr Tess Hardy, has put forth. This canvasses a whole range of measures from looking at the scope of section 550 of the Fair Work Act, increasing the penalties under the Fair Work Act and increasing the responsibility and accountability of lead companies like head franchisors. The second gap is a profound knowledge gap, with regular statistics not being able to identify the number of temporary migrant workers, let alone the main industries and occupations they work in, let alone where the breaches are occurring. What you see in my supplementary submission in terms of recommendation 2 is directed at better collection of information in terms of plugging this knowledge gap. One of the options I will float, which is not canvassed in either or submissions, is re-establishing what used to exist within the immigration department: the Bureau of Immigration, Multicultural and Population Research, which was really an independent arm of the immigration department devoted to researching the impact of immigration on various aspects of society. Here I am really echoing recommendation 15 of the 2013 Joint Standing Committee on Migration's inquiry into migration and multiculturalism in Australia.

With the gap in fairness, there is of course very important debate on what should be the appropriate visa conditions attached to temporary migrants like international students. The point I will make is that perhaps a more important debate is the consequences that follow the breaches of visas. What you see are rather draconian consequences that flow under the Migration Act for temporary migrant workers who breach their visas in the performance of work. Here I am not just talking about international students; I am talking about working holidaymakers, 457 visa workers—the whole spectrum of temporary migrant workers. With any breach in the performance of work, two extremely serious consequences follow: first, the temporary migrant worker faces the prospect of the cancellation of visa under section 116(1)(b) of the Migration Act; and, secondly, he or she commits a strict liability criminal offence under section 235 of that same act. The point I will stress here is that any breach, however minor, will yield these consequences. An international student worker, for example, who works 40 hours and one minute in a fortnight—therefore breaching visa condition 8105—will be committing a criminal offence and faces the prospect of cancellation of visa and, therefore, deportation. What we see with 7-Eleven is that these draconian penalties strengthen the hand of employers who seek to abuse temporary migrant workers—in this case, international student workers.

But not only that; these penalties are clearly grossly disproportionate and unfair. A recommendation that I made in the supplementary submission, recommendation 3, stipulates that these two very serious sets of consequences—the prospect of visa cancellation, and deportation to follow, and criminal offences—should only apply to serious breaches of the visa. A proportionate system of administrative fines and/or civil penalties should be developed to deal with other visa breaches. I think this recommendation strikes a far better balance between protecting the integrity of the visa system, which is of course a very important public interest objective, and fairness to the temporary migrants.

Finally, I turn to the gap in legal protection. The first aspect of the gap in legal protection is the impact of these breaches upon the enforceability of labour laws. What I detail in my submission is that in a number of cases we have adopted what is called a non-protection approach. The Queensland Court of Appeal as well as the Fair Work Commission have found that breaches of a visa have a consequence of voiding the contract of employment. Very serious consequences follow. As senators are well aware, a contact of employment is actually a precondition for coverage of the Fair Work Act. So you have this perverse position which not only rewards employers who exploit migrant workers and punishes the workers but also undermines the integrity of the broader labour laws regime.

So recommendation 4 is:

The Migration Act 1958 (Cth) and the Fair Work Act 2009 (Cth) should be amended to explicitly state that:

visa breaches do not necessarily void contracts of employment; and

the standards under the Fair Work Act apply even when there are visa breaches.

The other aspect of the gap in legal protection concerns the principle of equality in relation to working conditions of migrant workers, which I think Senator McKenzie very powerfully emphasised in her questioning of Mr Dwyer. This is of course a key principle of human rights and labour rights. For this principle of equality of working conditions to be fully realised, in my view discrimination against temporary migrant workers on the basis of their migrant status should be prohibited. This prohibition, however, is absent from Australian anti-discrimination laws at both Commonwealth and state and territory levels. So the final recommendation in my submission is that these laws should be amended to explicitly prohibit discrimination based on migrant status, including temporary migrant status.

CHAIR: Thank you for that excellent summary and thanks so much for your submission. As much as we hear about the exploitation of workers right across our labour market, we also need to have solutions to these problems. In relation to the issue you raised about sanctions, we have heard that 7-Eleven workers who were international students worked more the 20 hours. What would you regard as a serious breach that would then potentially lead to deportation?

Prof. Tham : Let me approach it this way. An amendment was made a few years ago to make a breach of that particular condition one of five subject to discretionary cancellation. Before that, the position was even more draconian. There was a mandatory cancellation position. So, firstly, I would not support a reversal to that situation. I would support discretionary cancellation only for serious breaches. I think much more work needs to be done in thinking about this. We are looking at serious breaches that are regular and systematic and giving discretion to the immigration department to decide when that actually occurs.

There was a bit of talk about this with the previous set of speakers, and I think Senator McKenzie asked whether the SDA supported the removal of visa condition 8105, which is the limit of 40 hours a fortnight when a course is in session. It used to be 20 hours a week, so there was a bit of—

Senator McKENZIE: Unfortunately, I could not get an answer.

Prof. Tham : My views on this have changed. I say this again: as a former international student, I used to think that this was a very reasonable condition, given its purported objective of ensuring that international students actually devote the majority of their time to the purpose of the visa.

Senator McKENZIE: Exactly.

Prof. Tham : Yes. My views have changed in the sense that I think there are serious questions about whether this visa condition is, firstly, necessary and, secondly, desirable.

Let me address the question of necessity. Visa condition 8202, another mandatory condition for international students, makes it a visa breach if the educational institution in which an international student is enrolled advises the immigration department that the international student is not showing satisfactory progress in the course. If we are thinking about the objective of ensuring that students devote a sufficient amount of time to their course of study, that particular visa condition is sufficient to perform that role. So that goes to the question of necessity.

But I suppose what has really tipped me over the line and changed my views is what we are seeing in 7-Eleven and the hospitality industry more broadly, as another example—that visa condition 8105, together with these draconian penalties, is clearly a mechanism of the exploitation of international students.

Senator RICE: Thank you, Professor Tham. What you are saying makes a lot of sense. You talked about the structural risk, and we have structural issues at play there. Can you reflect on the 7-Eleven case as to how those structural issues are playing out with regard to 7-Eleven?

Prof. Tham : In my supplementary submission, I said that in 7-Eleven, as well as the in practices exposed by the Four Corners report Slaving Away in relation to the food production industry, a toxic combination of four elements appears to be present. One is very strong pressures on labour costs. Secondly—and this is important to stress—we see both in 7-Eleven and in the food production industry a situation where it is seen to be normal and very acceptable for employers to meet those pressures on labour costs by breaching labour laws. Thirdly, there is a vulnerable workforce—in this case, temporary migrant workers. Fourthly—and perhaps this goes to some of the questions that were directed towards the SDA today—there is the limited effectiveness of the Fair Work Ombudsman, as the relevant statutory agency, and the relevant union.

Senator RICE: So they develop into a perfect storm in an organisation like 7-Eleven, particularly with its franchisee arrangement, where the head office can be further away from what is actually going on.

Prof. Tham : Yes.

Senator RICE: Your submission recommends that the government should actively promote a collective organisation for overseas students and overseas workers. How would you see this working? How would that sort of collective organisation be any different to the unions that currently should be doing that work?

Prof. Tham : Let me answer the last point first. We really need a number of strategies and a number of institutions and organisations to deal with this problem. Unions, of course, have a very important role—in fact, a historic role—in enforcing labour standards, and perhaps we are seeing them fall short in this particular case. But we also need other organisations to be facilitated and for the workers themselves to be able to organise.

In terms of specifics, I think that can be dealt with. I suppose the point I am making is this: we have well-established practices where organisations that serve the public benefit should be supported from the public purse. Ethnic community organisations are regularly funded by the government, by the immigration department in particular. Let me add, because I also specialise in money in politics, political parties are also funded from the public purse. If we see this as an important area, I think funds should be used to actively promote it.

Senator O'NEILL: Can I just expand on that last comment. Professor Tham, thank you for your submission. You talk about young people or workers themselves needing to be able to organise. We have heard about cultural barriers that exist there. Can you explain further how a public organisation of workers in their workplaces—public benefit from the public purse—would not be a duplication of what unions could already do if visa protections were available to students and other visa holders?

Prof. Tham : This comes to the point I made earlier on to Senator Rice. It is not about any particular organisation, let alone unions, having a monopoly over enforcement in this area. If we go down this path, we are led into very serious error. Again, we are looking at a multiplicity of organisations.

In terms of cultural barriers, and perhaps becoming more concrete in terms of the proposal, one way forward might be moulded upon what the Victorian government is doing. The Victorian government, in the last budget, gave a series of grants to international-student welfare. It is welfare more broadly, but let us say we think of something more directed. Some of this money could be made available to the established international student organisations, which are already organised on campus. Some of these organisations will, arguably, be more effective in terms of overcoming those cultural barriers that you mentioned than, perhaps, the trade unions or even the Fair Work Ombudsman.

Senator O'NEILL: So it would be providing, I suppose, a 'joiner' between the different organisations, just to increase students' awareness? They might decide that this particular group of advocates might support them or they might make people more aware of what a union does and then they might decide whether or not they want to join that.

Prof. Tham : Of course, yes. I just want to make sure we are abundantly clear, and I said this a few minutes ago: unions have a historic role and responsibility in terms of enforcement of labour standards. I think there is no doubt about it. I would definitely not hold a position that they should have a monopoly in terms of enforcement. I think that is a recipe for limited effectiveness, at least.

Senator O'NEILL: You mentioned hospitality, taxi driving and one other industry in your opening statement. What was that other industry?

Prof. Tham : Cleaning.

Senator O'NEILL: Could you express to the committee what you know about breaches in those areas, and are there any other franchises or chains that you are aware of that the Fair Work Ombudsman should investigate?

Prof. Tham : I suppose the first thing I should say is that my identification of these particular industries actually comes from the activities of the Fair Work Ombudsman. They do not come as, if you like, a reproach in terms of Fair Work Ombudsman activities; they are actually reflected in the Fair Work Ombudsman activities. On page 19 of the principal submission, I quote the Ombudsman in terms of the cleaning industry, where it says that it is 'one of the industries that is subject to national campaigns by the Fair Work Ombudsman.' In terms of, if you like, the structural features of the industry that give rise to problems or challenges of noncompliance, it is an industry that has layers of subcontracting, tight margins, a competitive tendering business, and small businesses—25,000 businesses, according to the Fair Work Ombudsman, with quite a number of young workers, 47 per cent of them born overseas and 10 per cent of them students. So, in terms of the four elements that I mentioned in the supplementary submission and in response to Senator Rice's question, we see this also present in a different way.

Senator O'NEILL: You may be aware that, last week in the parliament, in the debates about legislation around fair pay, one of the comments put on the record by one of the senators was that 80 per cent of something is better than 100 per cent of nothing. Is that comment an example of the ongoing culture of acceptance of wage manipulation and underpayment in the labour market in Australia?

Prof. Tham : I have not read the Hansard on those debates very carefully, so '80 per cent of something' is referring to?

Senator O'NEILL: It is: '80 per cent of a wage, even if it is an unfair wage, is better than 100 per cent of no wage.'

Prof. Tham : I think this goes to the heart of the matter in terms of the rationale for labour standards. We can have a debate, of course, about the level of the labour standards and whether you should have penalty rates or not, but if we decide on the labour standards—which we have under the Fair Work Act—we should expect compliance with those labour standards. It is not just the interests of workers that are served; it is also the interests of employers in terms of a level playing field. It is also important in terms of important principles in a society about the rule of law, and these are statutes passed by parliament. So I think it is a subversion not just of the rule of law but in terms of democratic principles if we endorse reasoning like that as, if you like, a justification for subverting labour standards.

Senator O'NEILL: With regard to the Fair Work Ombudsman and resourcing and cultural capacity, what are you views of the Fair Work Ombudsman and how successfully they will be able to prosecute the sorts of changes that you have indicated are needed?

Prof. Tham : I think I will pass on that, Senator O'Neill. Other people are better placed to answer that. My colleague Tess Hardy has done a lot work on enforcement activities. So I will take a pass on that particular question.

Senator O'NEILL: Thank you very much.

Senator McKENZIE: Prof Tham, thank you very much for your work. On 19 August you made comments, I think in the Age, about the Fair Work Ombudsman needing adequate resources. Is it your contention that the Fair Work Ombudsman is not currently adequately resourced?

Prof. Tham : No. What you point out in the opinion piece is a particular paraphrase of a statement I made in the text of the opinion piece that was not in the phraseology I used, which seemed to call for more resources. The point I was simply making—

Senator McKENZIE: Let's correct the record, shall we, Professor.

Prof. Tham : As you can appreciate, Senator McKenzie, when you write an opinion piece you do not necessarily have full control over the entire content of the opinion piece.

Senator McKENZIE: I do appreciate that.

Prof. Tham : What correctly reflects my position is what is actually in the text of the opinion piece, which basically says that there should be adequate resources. It does not necessarily mean that there should be more resources—I am not an expert in that. But it is quite clear that there should be adequate resources.

Senator McKENZIE: All right. And you are aware that the former Labor government cut the resources to the Fair Work Ombudsman—

Prof. Tham : Yes.

Senator McKENZIE: and that they have now been restored.

Prof. Tham : Yes.

Senator McKENZIE: You follow this area quite closely. At the time of those cuts, was there a public outcry, given the importance of the Fair Work Ombudsman's role in protecting exploited workers across the country?

Prof. Tham : Not that I recall.

Senator McKENZIE: One of the issues that has come up is the tension between the requirement of more education in compliance regarding the rights and responsibilities of migrant workers or temporary visa holders and, indeed, employers versus greater regulation within the system. Many of your suggestions go to greater regulation. Could you tease out that tension for us. If you are someone like me, minimum regulation is a good thing, particularly when we have taken a lot of evidence in this inquiry on how the 417 visa plays out in the agricultural space. An education and compliance focus versus a regulatory focus: how can we get that balance right?

Prof. Tham : I do not necessarily see it as a tension. I think there is an integrated suite which basically covers the spectrum of measures that you mention. I should probably add that some of the recommendations are about less regulation in terms of immigration laws—you know, penalties being more appropriate and fair; that is about less regulation. And a few months ago I canvassed was the possibility of repealing visa condition 8105; that is about less regulation. I think what we should be talking about is appropriate rather than more or less regulation.

Senator McKENZIE: Exactly. And contextualise that, because some people—even unions—have recognised that it is incredibly difficult to get a certain skilled workforce in a certain geographic location, particularly in rural and regional areas that sometimes the visas have to supply. With respect to the 8105 regulation that you talk about, do you think we will get support from the Australian union movement for the repeal of that particular regulation?

Prof. Tham : It is probably a question not best directed to me.

Senator McKENZIE: I will be asking each of them. I am interested in your professional opinion.

Prof. Tham : What I can say is that the last time this was canvassed—sorry, I have forgotten the name of the inquiry; it was a few years back, around the time of the Knight review—there was a Commonwealth parliamentary inquiry into international student education and the public submissions to that particular inquiry had unions opposed to liberalising a visa condition, which was actually 20 hours a week at that time. But I suppose the point I want to stress is that the more important debate is about the consequences. If it is 40 hours or 20 hours but people do not face the prospect of deportation, they do not automatically commit a criminal offence, I think we will perhaps not see the problem we have witnessed before, which is about people living in fear. Of course, the integrity of the visa system needs to be protected—I am all for that—but these are draconian penalties.

Senator McKENZIE: What about regulating the brokers? We heard from the young men in the SDA's evidence. They are being told absolute furphies—to use a very Australian term—about their capacity to be able to get work. They are making decisions to leave home and take on a lot of debt to complete a degree—a path that you have gone down—based on evidence and information that is completely wrong.

Prof. Tham : I think so. It is a real black hole in terms of research, because that is quite difficult to find out, and it is a black hole in terms of regulation. I think this committee's parliament needs to bite the bullet in the sense of not dropping its hands and saying that this is too difficult because it involves actions in different jurisdictions, because of course it involves a strong transnational element. We really need to start thinking: 'We have got a transnational, an international, movement of workers and students. How are we going to develop regulatory models to deal with that?' This is a difficult challenge, but I think it is a challenge that needs to be met.

Senator McKENZIE: Absolutely. We have heard that this business model has predominantly targeted Indian and Pakistan students. In your experience, are there other businesses models that have targeted other cohorts of international students?

Prof. Tham : What we see manifest with 7-Eleven, from my research in the hospitality industry and also from what has been exposed by some of the practices where people are slaving away in the food production industry is why it is sometimes called co-ethnic exploitation. What we basically have—and this is quite understandable—is people coming to a new country, and of course they will firstly rely on their ethnic networks.

Senator McKENZIE: Absolutely.

Prof. Tham : Yes, of course. And in those ethnic networks, as with any ethnic community, whether it be Anglo-Australian or Indian, there are people who have more scruples than others. They are basically part of the push into these kinds of precarious jobs, but they are part of the picture. Something that I covered in my supplementary submission is the push in terms of the discrimination against international student workers and temporary migrants more broadly. What they have is the pull—and you saw this from the workers who very courageously gave evidence—where it is easy to get a job.

Senator McKENZIE: Very easy to get a job, apparently.

Prof. Tham : That is right. But the same story has come across in my research in the hospitality industry. In cafes and restaurants within walking distance around the city, it is easy to get a job. I am going to take that job because I have applied for jobs elsewhere and I just constantly get knocked back. So I think we need to look at it as also a repetition of the push and pull factors where the factor of ethnicity plays a very strong role.

Senator McKENZIE: The international student market underpins the budgets of universities upwards of 40 per cent nowadays. What role do the universities have in ensuring that those students they are bringing in, their undergrads in particular, are fully informed of the realities of the job market here? Youth unemployment is at record highs. It is not a great place to be a young person of any ethnicity looking for a job at the moment. Do you have any comment to make about the role of universities, particularly at a moral level?

Prof. Tham : The first thing to say is that they have a responsibility. I think that is important to emphasise. What I cover in my principal submission is that in some ways international student work has been so-called invisible. This is a paradox. Of course it is not invisible.

Senator McKENZIE: Everyone is quite happy for it to go on, because everyone is a winner out of this, except the students.

Prof. Tham : Yes. That is how it is. It is not that it is invisible. You walk into a cafe around here, you take a taxi and so on and you see the face of the international student worker. But it is invisible from a policy point of view in the sense that international students are just seen as consumers of international education. We need to change that. Of course, they are important participants in the education industry, but they are also important actors in the labour market. That is an important shift in terms of what is to happen. Higher education institutions take some responsibility in terms of the work being performed by international students.

Senator PERIS: I have one quick question. In recommendation 5 you say the antidiscrimination laws here in Australia should be amended. Can you elaborate on that, please?

Prof. Tham : In what sense—the absence of any—

Senator PERIS: Yes.

Prof. Tham : As the senator would know, there are prohibitions against race—

Senator PERIS: I know that all too well.

Prof. Tham : There are various laws. I am going to use an ugly term. They are compendious concepts. They cover a whole range of attributes, from ethnicity and nationality to country of origin, but they do not include migrant status. This is a big gap and it is practically an acute gap in light of the evidence we have that such discrimination is happening. That is wrong in itself. Secondly—there are push and pull factors—that discrimination is partly responsible for channelling international student workers into precarious jobs, where we see these kinds of practices flourishing.

CHAIR: Professor Tham, thank you very much for coming in today. I also thank you for your submission and for the solutions you have put forward. We certainly appreciate that. Thank you very much.

Proceedings suspended from 12:46 to 13:4 0