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Damien Carrick: Hello, Damien Carrick here. Nice to be back with you on the Law Report. I've spent the last three months with the Background Briefing team. And I just want to say a big thanks to the wonderful Rachel Carbonell who has been bringing some great legal stories.

This week, vulnerable workers. Exploitation in the workplace can happen anywhere and to anyone. But some are more vulnerable than others. Young people are one such group. Another are recent arrivals to Australia.

Maricar Virata: When we realised that we were being exploited, we just can't help but to remain keeping quiet because we didn't want to lose the job.

Regine Mbuyi: And they do dishes and they don't finish, and you are blamed, you are not going to leave until you finish your work. And you will stay there, finish the work and you are not going to pay them overtime. And people who do night shift, they don't pay their allowance, things like that.

Rita Verma: We can easily say on a piece of paper the law looks good, and the Fair Work Act is supposed to do a good job. But what happens in practice is not what is the spirit of the law.

Damien Carrick: Upholding the spirit of the law; always a difficult ask.

Last week there were reports in Fairfax media of employees at Caltex service stations being paid as little as $12 an hour and of some even sleeping in beds at the back of the store. Most are from Pakistan and India, here in Australia on student visas.

Catherine Hemingway is a senior solicitor with WEstjustice, a community legal centre in Melbourne's west. She's speaking for the first time about a report titled 'Not Just Work', which is going to be released next week. The report spells out in stark terms the types of exploitation faced by temporary visa holders and recent permanent arrivals.

Catherine Hemingway: It's a huge problem, exploitation is rife across numerous industries. We've seen it in big companies, we've seen it in small companies, we've seen it for permanent arrivals, refugees, as well as asylum seekers, international students, temporary migrant workers on 457 or working holiday visas.

Damien Carrick: Yes, even skilled workers can find themselves exploited.

Maricar Virata lives in the Philippines. In 2013, she arrived in Australia with her husband on a 457 skilled work visa. The couple were engaged to operate a motel in regional Victoria.

Maricar Virata: We were hired as a couple to work and operate the motel. The amount was $55,000.

Damien Carrick: So $55,000 each?

Maricar Virata: No, that's for the both of us.

Damien Carrick: How many hours were you both working a day?

Maricar Virata: It was basically the whole time. The reception would start at seven, the breakfast cafe would start at seven, and then that would end until maybe 11 or 12 and 1am, it depends on how busy the hotel gets.

Damien Carrick: How long did you work at this motel for $55,000 for two people, full-time work?

Maricar Virata: We were terminated on July 2015 while we were in the Philippines for vacation.

Damien Carrick: Why were you terminated?

Maricar Virata: I received an email from the owner, it was told that because of misconduct. The termination came out of the blue. And then later during the investigation of the unfair dismissal they elaborated that I was bullying, and then they also mentioned about the arguments that me and my partner were having. But they were all not true, they were all fabricated. The owners all made up those reasons just to terminate us.

Damien Carrick: Maricar says she and her partner were initially happy with the agreed wage, which was more than they could earn in the Philippines, but they soon realised they were being exploited.

Maricar Virata: When we realised that we were being exploited, we just can't help but keep quiet because we didn't want to lose the jobs. We computed the amount that we were getting, we were actually getting five dollars an hour each.

Damien Carrick: Have you gotten any money via the lawyers from your former employers?

Maricar Virata: I won the unfair dismissal case and the decision was last November 2015, and I received a compensation $27,500 before tax for the unfair dismissal.

Damien Carrick: Do you still have another case for being underpaid in the first place?

Maricar Virata: I believe there is an existing matter going on with the Fair Work Ombudsman that is related for the underpaid wages.

Damien Carrick: This prosecution for underpayment brought by the Fair Work Ombudsman is still before the courts. Ashurst Lawyers acted for Maricar in her successful $27,500 unfair dismissal action. Lawyer Catherine Hemingway says the fact that Maricar and her partner agreed to come to Australia for such little reward doesn't make it legal.

Catherine Hemingway: Minimum standards apply to all workers, regardless of any other agreement that might be reached between an employer and an employee. And look, we've heard from other employers who think that they are doing the right thing by giving workers a chance to come here, and don't seem to think that all workers are entitled to lawful minimum wage and other entitlements.

Damien Carrick: And presumably there are lots of Australians who are qualified to run motels, and if somebody is being paid $55,000 for two people's work, then they are not going to be in the market to get that work because they are going to be twice as expensive.

Catherine Hemingway: That's right.

Damien Carrick: Rita Verma is a university law lecturer and mediator. Many international students confide in her about their employment situation.

Rita Verma: Underpayment is a norm really. Students tell me that they have no experience, so what do you expect? They are quite happy to get $10 or $12 or $13. When I tell them that a minimum wage is $17.70 their jaw drops and they say, well, I can't expect $17.70, they won't pay me. The maximum we will get cash in hand is $12 or $13, and they are quite happy with that, as if it's normal.

Damien Carrick: What sorts of industries are we talking about?

Rita Verma: The industries which have been quite talked about are the cleaning industries, the hospitality industry. A student came to me and told me that she was invited to work for four or five hours in the night shift in a restaurant. She was there for five hours, no customers came, she was not paid for that night. She said, well, I suppose if there is no customers, I can't expect him to pay me. So what did you get? I get only my dinner on the day. Whereas the law says that if you invite someone to the workplace, they are giving their time, you must pay them. And it's not understood by the community, by the workers themselves.

Damien Carrick: It is part of the problem that people come on student visas and there are certain conditions about the amount of work they do and they might be not complying with those conditions, so they want to be under the radar? Is that part of the issue here for some people?

Rita Verma: I would say…you said, Damien, some, I will say a majority of them. The international students, they are allowed to work for 20 hours, and the employer knows very well on a piece of paper the employer can show that he or she works for 20 hours, in fact that person will be working 40 to 60 hours. The employer does not pay the minimum award rate. When the student complains about the minimum wage they say, well, we are going to tell the immigration office that you have been working for 60 hours, so what would you like?

Damien Carrick: What do you say to people listening to this who might say, well, people come here and they are not complying with their visa conditions and they get exploited, so in some ways they are stepping into the fire?

Rita Verma: They are, but they are very new, and they are desperate, they are vulnerable. It's almost unconscionable. So an employer needs to be told; if you do that there will be someone monitoring you. And unfortunately the current system is not working well.

Damien Carrick: Last week the front page of the Age spoke about the alleged conditions at some of Caltex petrol stations. The people coming forward to complain where Indian and Pakistani people. What do you know about those sorts of cases?

Rita Verma: Well, students tell me that they have to work for longer hours there, and the maximum pay which is given cash in hand is $12-$13. Many of the students live at the back of the store room and then they change shifts…

Damien Carrick: Really? You're talking about a petrol station?

Rita Verma: Yes, some of them will live at the back room where there is a storeroom, and then the other friend will come and then take over the next shift. For the pittance of work which they do, and the intimidation and bullying and threats which they face are atrocious.

Damien Carrick: Are you talking about across service stations generally?

Rita Verma: Across service stations and across the hospitality industry as well. And on top of that we have 457 visas as well. So we had an Indian chef employed by a large restaurant, I won't name the restaurant. That person came here for 457 visa for four years, he had to work for almost 12 hours a day non-stop. He was staying at the back of the hotel. He was not given any leave or any super. There was a deal which this person and the owner of the restaurant has struck with him, that he will pay X amount of dollars in Indian rupees, and he will then stay and work for them. And when he complained, he was beaten. This particular cook didn't want to take the matter any further because he was worried that his family back in India may be threatened because this owner of the restaurant is quite influential person and that person can do something to the family back home.

Damien Carrick: University law lecturer and mediator Rita Verma.

Catherine Hemingway from WEstjustice says a number of her clients report serious intimidation.

Catherine Hemingway: We had one client who I'll call Johnno. He was working in manufacturing and he worked six days a week and he was not paid any extra money for overtime hours. Often on a Sunday he was also required to work and on his holidays, and he was living on site, paying an exorbitant amount back to his boss every fortnight for rent, and in addition to that paying an exorbitant amount back to his boss because he was required to do that. So he would go to the ATM every fortnight after he was paid, take out cash and give it back to his boss. When he challenged his boss on that and said, look, I'm not going to do this anymore, he was dismissed, and he has since been required to leave Australia.

Damien Carrick: Was he able to obtain any kind of compensation or restitution for that practice?

Catherine Hemingway: It's something that we are working on, his case is still ongoing.

Damien Carrick: But it sounds like it's not an isolated one.

Catherine Hemingway: It's not an isolated case from our experience, no.

Damien Carrick: It's not just temporary residents who experience workplace exploitation. Regine Mbuyi is a nurse who in her spare time provides support to migrants and refugees from Africa.

Regine Mbuyi: Yes, there's a lot of things, underpayments, like people working there, working in hospitality, like you know when they do in the kitchen they do dishes and they don't finish, and they're blamed, oh, you're not going to leave until you finish your work, and you're not going to pay them overtime. And people who do night shift, they're not going to pay their allowance, things like that. So people who do security, they'll be underpaid because they don't know their rights. That's the kind of issues that we have been dealing with in the community, and we are encouraging people to do this…that's why the Employment Law training was really important to me to take so that I can bring awareness in the community and people will know their rights and responsibility to work.

Damien Carrick: Regine Mbuyi, who works with recently arrived migrants and refugees from Africa.

Both Regine and law lecturer Rita Verma have completed a 10-day Employment Law course run by the WEstjustice Community Legal Centre.

You're listening to the Law Report on RN, Radio Australia, ABC News Radio and of course on the ABC Radio app. I'm Damien Carrick.

Today we're looking at how well our employment laws serve both temporary visa holders and also recently arrived migrants and refugees.

Susie (not her real name) arrived in Australia from India a few years ago. Desperate for money she fell for what's commonly known as 'sham contracting'. That's where an employer avoids forking out proper wages by engaging you as an 'independent contractor'.

Susie: Yes, last September I started working in one of the training institutes as an administrator. I worked with them for about two months. When I start the job the person committed to pay me $12 per hour on an ABN.

Damien Carrick: It sounds like Susie's employer got a bargain. But he then tried to avoid paying Susie at all for the work she'd performed.

Susie: After one month I ask him about my pay. He said, 'I'll give it to you next week.' Once next week finished he said again, 'I will give you next week.' And even that day I ask him about the money and he was shouting at me, 'Don't ask me again and again about money,' and he feel guilty, he went to an ATM and got out some money and give it to me. At that time I need $1,600 and he just gives me $1,415. He said, 'The rest of the amount I deducted tax.' If I work on an ABN than I need to pay tax, then why are you deducting tax from my pay?

Catherine Hemingway: Unfortunately we have seen widespread sham contracting in a number of industries where workers are engaged as contractors. They have to get an ABN. They are responsible for their own tax, when really they should be an employee. We've seen that particularly in construction, cleaning and administration work, and Susie's case is an example of that. So Susie wore a uniform. Susie came to work from 9 till 5pm as a front office receptionist for a registered training organisation. Clearly Susie is not running an admin business of her own. All her tools and equipment were supplied by the company. And people use these arrangements as a way to avoid paying workers the minimum wage. Independent contractors, there's no rules around that.

Damien Carrick: Lawyer Catherine Hemingway.

One of her clients likes to be known as 'The Artist'. In many ways this guy doesn't fit the stereotype of the exploited worker with limited options. He's from affluent Taiwan. He's a writer and he spent two years in Australia on a working holiday visa. The Artist worked as a fruit picker on farms and also as a kitchen-hand in Chinese restaurants.

The Artist: I always do the kitchen job and the farm job.

Damien Carrick: Tell me, you were working in a restaurant I think in Melbourne, getting something like $11 an hour.

The Artist: Yes.

Damien Carrick: How long did you work in that job for?

The Artist: About five months. You know, it's very terrible.

Damien Carrick: You went to see Catherine Hemingway. Did you get your money back?

The Artist: Yes. It was over $8,000.

Damien Carrick: $8,000?

The Artist: Yes, yes.

Catherine Hemingway: When we first tried to help The Artist to recover his underpaid wages we were informed by the employer that he was an on-call trainee, that he was only required for a couple of hours a day and then he decided to stay on for the rest of the 10 or 12 hour shift that he was doing.

Damien Carrick: And he was working there full-time, yes?

Catherine Hemingway: He was working there full-time. And look, underpayment of wages and entitlements is the single most common problem that we've seen at our service. And unfortunately it's really hard for clients to be able to recover their money. There's a number of steps that are preventing them from doing it. So, for example, if a client hasn't kept records of the hours that they've worked, even though an employer is required to do that under law, if they don't provide the records it makes it very difficult for our clients to prove their case.

So one of the key recommendations from our report is that there should be a reverse onus in wages claims. If an employer has failed to comply with Section 535 of the Fair Work Act and they haven't made and kept records, that it should be up to the employer to disprove the employee's assertion of the hours that they worked. I mean, at the moment our first step often with clients will be to write to the employer and make a request for employee records in accordance with the Act. If an employer doesn't do that they are rewarded because it makes it harder for our clients to then bring their claim, and that's just not fair.

Damien Carrick: Lawyer Catherine Hemingway. One reform that does look set to be implemented, in Victoria at least, is around the operation of labour hire firms.

RMIT Professor Anthony Forsyth is Chair of the Victorian Government Inquiry into the Labour Hire Industry and Insecure Work. Two weeks ago the final report was released and the Victorian government announced its intention to adopt the inquiry's recommendation to regulate the industry.

Anthony Forsyth: Yes, so what I found was that you have very sophisticated, well established labour hire providers who have been doing this business in Australia for nearly 30 years now with very good systems in place for how they manage their workforce, ensuring they pay the award or sometimes an EBA site rate will be paid, and good processes for dealing with things like health and safety and workers compensation.

But at the other end of the spectrum you have what are described in the report as rogue labour hire providers, and they are generally not really what you would recognise as a legitimate business. It might be someone with a van and a mobile phone and the internet, and they are using those mechanisms to source labour to people who want them but who are evading a lot of the employment regulation and other laws that we have in Australia to protect vulnerable workers.

Damien Carrick: The inquiry hosted hearings across the state. What sorts of stories did you hear about the way some of these rogue operators work?

Anthony Forsyth: Yes, there were 17 hearing days and we heard from something like 200 witnesses in Melbourne, but more interestingly and importantly in regional areas. So in the horticulture sector, for example, I heard evidence of people being provided by businesses to work on farms, picking and packing of fresh fruit and vegetables, being paid as little as $12-$14 an hour. The casual award rate is around $21 an hour. I was given evidence at the Morwell hearing of a pile of advertisements in foreign language newspapers and on foreign language blogs that had been translated by union officials that advertised work at those very low rates.

I also heard, for example, at the Mildura hearing about people working in, again, picking work in seasonal industries, you know, really not being accorded basic health and safety standards, being transported to farms in dangerous vehicles, being put up in very substandard accommodation, not being provided with basic things like water during work that often involves long hours in very hot conditions.

And really our labour force for the fresh produce supply chain in Australia has now very much been geared towards and is provided by overseas backpackers and international students. There is a level of vulnerability for a lot of those workers given a lot of them don't speak English as their first language. And also the 88-day visa requirement. So the idea that you come as a backpacker and you get a year on your visa, and to get a second year you need to have someone sign off that you've done 88 days of regional work. That adds a layer of vulnerability because people will accept work on any terms in order to ensure they get the second year on their stay in Australia.

Damien Carrick: You recommended, and the Victorian government has accepted this, that there should be a nationwide licensing system for all labour hire firms, initially in a number of specific industries, but perhaps to be rolled out over time across the board?

Anthony Forsyth: Yes, so because it was a Victorian focused inquiry for the Victorian government, my recommendations could really only deal with the Victorian regulatory system. But I did recommend that the licensing proposal I put forward, clearly it would be better if that were to work on a national level, and I recommended that Victoria work through COAG to try and get that up, and the South Australian parliament inquiry recently recommended the same. And Queensland has also looked at this. A national scheme would be better, but I don't think Victoria can wait for that to occur. There are things the Victorian government can do that are within its legislative power. And introducing some barriers to entry to this sector is one of the key issues I think because the scenario I mentioned earlier of the person with a van or a few vans who ferries people around to farms, they are doing that because no one is saying they can't. Sure, we have our workplace laws and awards that they are avoiding, but if they couldn't even get into the market to begin with because they can't meet stringent licensing standards that I propose, then that would be a significant impediment. And the other part of that is that an obligation would be placed on the users of their services. So in the horticulture context, the growers. That they can only use a licensed provider. And that two-pronged approach has proven to be quite effective in the UK, which is one of the main models for the scheme I've proposed.

Damien Carrick: The licensing system that you are proposing would exclude anybody with a criminal record or with previous workplace breaches or with a collapsed business from operating as a labour hire company.

Anthony Forsyth: Yes, so there would be licensing standards that you would have to meet in order to get your licence to be able to operate as a labour hire provider. As you said earlier, it is in three sectors, it's in horticulture, cleaning and meat processing.

Damien Carrick: The Recruiting and Consulting Services Association have said in response to your report that a licensing scheme would just impose costs on reputable labour hire companies that are already following the rules and do nothing about these dodgy fly-by-nighters. What's your response to that?

Anthony Forsyth: Well, I think there would be a lot of participants in the three sectors I'm talking about that are reputable businesses. But I was really led by the evidence before the inquiry, and that's one of the reasons I came up with the sector specific proposal rather than doing this across the board because I did accept the argument that in a lot of other sectors of the economy where labour hire is prevalent, like manufacturing and warehousing and logistics, for the most part the labour hire providers are complying with the law. I don't see that this would have a massive impact on legitimate businesses who are already doing the right thing.

Catherine Hemingway: I can tell you the story of Joyce (that's not her real name) who came to see us in fact about a different underpayment issue, working in a franchise. But previously she told us about her experience working as a tomato picker out in regional Victoria. She explained that she worked for up to 10 hours a day for $10 an hour, sometimes less, and that others were paid even less, depending on how much fruit they picked. I might just read a little bit of her story:

'The machine started to move straight away once we were all on our seats. You couldn't stop picking or go to the loo when the machine was running. They only gave us two five-minute breaks, and 20 minutes lunch break for a 9.5-hour shift. There was no toilet so we had to pee wherever we were. There were no sheds at all, so some of the workers had hot-stroke sometimes, also because we didn't get a chance to have a sip of water. The farmer bus picked up the cherry tomato picking backpackers on the way back. The poor girls worked all day non-stop, but they were told that they were only going to earn $25-$40 for 9.5 hours work. It sounds terrible, but the worst thing happened after that was we never got paid at all. Nobody complained to Fair Work. I guess we were all a bit scared to say anything or fight too much. What if they do anything to us when we are in the middle of nowhere? The universal feeling we had was a mixture of confusion, anger, helpless and loss of dignity.'

Damien Carrick: How long did those people work for in that environment?

Catherine Hemingway: I think with Joyce's situation she was there for quite a few weeks, but she left as soon as she could.

Damien Carrick: And she was never paid for any of the work that she did?

Catherine Hemingway: No.

Damien Carrick: What happened to her? Was she able to gain some kind of recourse?

Catherine Hemingway: In respect to that matter, no. As Joyce explained, she was too fearful to bring action at the time, and then a significant amount of time had passed before she came to our centre. We were able to help her recover money for a franchise arrangement. So she was working for a pretty big company. She was told when she started that she would be on probation, so she was going to be paid a flat rate of cash money, she was not going to be getting any leave entitlements, no superannuation, and she was to work in that situation for the first three months of her work.

When it came to the end of that three-month period she started to realise that this wasn't right and this wasn't what was meant to be happening, so she came to see us at WEstjustice. We helped her to write a letter in her own name to the boss, asking to be paid properly the correct hourly rate under the award.

The boss's first response was that she was a volunteer at this company, she wasn't in fact working. And we were able to help Joyce write another letter back to the boss in our name referring to the vast amount of evidence that showed that in fact she was an employee, for example text messages saying, 'You are working on Saturday,' sales records and sales targets that she had met very well, and numerous other bits of evidence to show that she was in fact an employee and not a volunteer just hanging out for free at work. And ultimately Joyce was able to recover all of the money that was owed to her from that experience.

Anthony Forsyth: Anthony Forsyth, exploitation is never okay. But is there a situation where the international students, they are clear about what their visa restrictions are in terms of the amount of work they do, yet they choose to nevertheless work more, earn more money. To what extent is there a situation in that category and in other categories where everybody knows what the deal is, and to some degree there is kind of a wink and a nod to what the real situation is and we all know it?

Anthony Forsyth: Look, I think there's all sorts of complicity in exploitation going on to some degree it's the workers themselves who accept these arrangements because it suits them for other purposes. A lot of the time it is not the case, they are accepting it because it's the only option on the table for them, and even though they know they might be breaching their own visa requirements, they still do it. But we also have to look at complicity within supply chains. In the labour hire context I think we have, for example again, turning to horticulture, growers who must know that the labour being provided to them is too good a deal to be true and they are undercutting their competitors who are using legitimate labour hire providers.

And then in the broader supply chain we have supermarkets and other businesses, fast food businesses that are no doubt benefiting from the fact that they are not the direct employer of some of these workers, but someone else is. But that someone else clearly must be underpaying because the contract with the fast food chain or the supermarket is beneficial to them, gets them the product at a good price. So I think we can't excuse people being complicit in arrangements. I think as a society we have to look at the whole system and what can be done to address exploitation at each level.

Catherine Hemingway: Businesses that are doing the right thing are missing out. Businesses that are undercutting our workers are getting a competitive advantage. We need to think about this as an issue. Exploitation is widespread and it affects all of us, and I think we really need to do something about it.

Damien Carrick: WEstjustice lawyer Catherine Hemingway. And before her, Professor Anthony Forsyth from RMIT.

Do visit our website, we have links to Victorian government report on labour hire, and we also have links to the unfair dismissal case of motel manager Maricar Virata, and also we have a link to the WEstjustice website, whose report 'Not Just Work' will be released next week.

That's it for the Law Report this week. Big thanks to producer Anita Barraud and to technical producer this week Brendan O'Neill. Talk to you next week with more law.