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Education and Employment References Committee
18/05/2015
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

[11.10]

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. At the conclusion of your remarks I will invite members of the committee to put questions to you.

Ms James: I do have an opening statement. Thank you for inviting us to appear here today and giving us the opportunity to make this opening statement. As you mentioned, the Australian government has provided you with a written submission that incorporates information from a number of government agencies and departments, and that includes information and data from the Fair Work Ombudsman. It is a whole-of-government submission so we are able to talk to the components that are relevant to us but perhaps not everything in it. I want to provide some context for the information in that submission.

It is important to emphasise that protecting the workplace rights of visa holders is a key priority for us at the Fair Work Ombudsman. I just want to give a little bit of background to our organisation and its role. We were established by the Fair Work Act on 1 July 2009. Our role is to provide education, assistance and advice about the Commonwealth workplace relations system and to enforce compliance with the workplace laws. Each year we respond to more than half a million calls to our fair work info line. We received more than a million visits on our website. We manage around 24,000 complaints each year. These requests for assistance generally come from people who are concerned about their wages or other workplace issues. We recover around $20 million for these workers every year.

Our approach to our work is explained in our enforcement and compliance policy, which we released in March this year. It sets out how we respond to these requests for assistance. There are a range of actions we can take, from helping the parties understand their rights and obligations to assisting them to settle the matters in dispute via mediation and all the way through to a range of enforcement actions, the most serious of which is taking someone to court. We reserve court action for the most serious of matters. They usually involve an employer who is not prepared to cooperate with us or who has deliberately exploited workers, often vulnerable workers.

Litigation can result in hefty fines as well as underpayments being rectified. We actively promote our litigation program and the individual cases through the media. This ensures we are deterring others from breaching the law as well as rectifying the situation for the particular parties in question. Resolving a matter through court action takes a long time, usually more that a year and some times in more complex cases much longer. It is not the quickest way to deliver unpaid wages back into the hands of the workers which is why we use it as a last resort. We put between 40 and 50 matters into court every year.

Temporary visa holders working in Australia are covered by Commonwealth laws. They are entitled to the minimum rights and protections contained in the Fair Work Act just like any other worker. We know they face a number of barriers to understanding and enforcing their workplace rights. Youth, language and cultural differences and concerns about their visa status all contribute to making them more vulnerable to exploitation. For these reasons we prioritise these employees. We have a dedicated overseas workers team. We are active in industries known to employ high numbers of visa workers, such as hospitality, horticulture, poultry processing, cleaning, convenience stores and trolley collectors. We also focus on providing tailored resources and communications to them primarily through our website and we work with their community groups. Tomorrow, for example, we are announcing a social media campaign targeted at international students and alerting them to their workplace rights.

Currently about 10 per cent of all the requests for assistance to our agency come from visa holders. This represents an increase on recent years. In the past three years, we have dealt with over 6,000 requests for assistance from visa holders. We have recovered more than $4 million in outstanding wages and entitlements for them. Since July 2009 we have commenced 62 legal matters involving visa holders. This represents around 20 per cent of all our legal activity for this period. The proportion of matters we escalate to court that involve visa holders is increasing. While currently, as I mentioned before, one in 10 of the people who make a complaint to us is a visa holder, a visa holder is involved in one in three of the matters we have taken to court in the last 18 months. This is illustrative of the fact that the matters involving visa holders often involve serious and wilful noncompliance warranting the most serious of enforcement responses.

Turning to the visa categories probably of most interest to you, it is people who are working under 457 and 417 visa categories who we most commonly find come to us for help. In the last three years we have recovered almost $900,000 for underpaid 457 visa holders. It is important to note that with respect to these workers we have a broader role. In addition to enforcing the Fair Work Act, we are also responsible, since 1 July 2013, for checking for certain sponsorship obligations. We do this on behalf of the Department of Immigration and Border Protection. We check that 457 visa holders are receiving their nominated salary and performing the functions of their nominated position. These responsibilities arise from the visa and immigration framework, not the Fair Work Act, and, as explained in the government submission, the nominated salary is generally higher than the minimum rates payable under the Fair Work Act. If our monitoring suggests an employer is not meeting their sponsorship obligations, we refer that to the Department of Immigration and Border Protection for its action.

Between 1 July 2013 and 31 December 2014, we had monitored over 3,000 subclass 457 visa holders. During this time, we identified concerns in around 18 per cent of cases. The government submission provides further information about the department of immigration's approach to these matters. It refers to the sanctions that can be applied in the event that they find, on further investigation, that sponsorship obligations have not been met. With respect to 417 visa holders, in the last three years complaints from this cohort have increased. I think I said at the last estimates hearing they have increased dramatically, which is an unusual thing for a bureaucrat to say, but, on reviewing the numbers, it is quite a significant increase. They now represent a greater proportion of complaints from visa holders than 457 visa holders. We have just put our seventh case into court this financial year involving 417 visa holders. That is seven out of about 35 or 36. I am not quite sure what we are up to.

In response to this, we have commenced two deeper inquiries that affect and focus on this cohort. These inquiries complement the active enforcement I have already outlined. They are longer term pieces of work designed to understand the systemic issues behind the noncompliance and to work within industries to change behaviour. In August 2013 we launched the first of these inquiries, the Harvest Trail campaign. We have made numerous field trips to regions throughout Australia, meeting with growers, labour hire contractors, hostel operators, industry bodies, councils, unions and of course workers. This campaign has achieved and will continue to achieve enforcement outcomes, but what we are really interested in is changing behaviour and understanding the systemic issues at play.

A year on, in August 2014, we announced a national inquiry focusing on 417 working holiday visa holders. This inquiry focuses on allegations that workers attempting to qualify for the second-year visa by undertaking the necessary 88 days work in a regional area, fitting all those requirements, are being exploited. We commenced a similar major inquiry in November 2013, focusing on the poultry sector and labour supply chain practices.

We have always taken a collaborative approach to addressing noncompliance with workplace laws. We have longstanding and formal arrangements with a number of government departments, including the Department of Immigration and Border Protection and ASIC. We share information, refer matters and undertake joint activities. I am very proud of the work the Fair Work Ombudsman does in this area. Our staff feel that they are making a real difference. I am proud of the results we have achieved for workers and of the strong relationships we have built with communities and representative organisations that also have an interest in building a culture of compliance in these industries.

I acknowledge that there are challenges and that we have some way to go. These challenges stem from the common characteristics that we find in visa holders and the markets in which they work. There are a number of factors, for example, that contribute to the visa holders not wanting to come to us or to cooperate in our proceedings. They are transient. They may only be in their employment for a few months or indeed in the country for one or two years. They encounter cultural and language barriers and often have a limited understanding of their workplace entitlements. They may be primarily concerned with their visa status.

These factors sit alongside structural issues in the labour arrangements that can make it difficult for us to obtain evidence as to the identity and arrangements of employers. There may be minimal if any physical evidence of employment. We encounter inadequate and inaccurate records about hours of work and amounts paid and an unwillingness from parties to cooperate with us or provide evidence. We cannot compel people to cooperate with us or to talk with us. There may also be a lack of transparency about the arrangements in place, including the final beneficiaries of the labour.

Just to give an example: the latest matter we filed involving 417 visas was filed on Friday. We have not put a media release out on this yet. The scenario involves 417 visa holders who were allegedly being paid $6 per bucket of fruit picked in a situation where it was primarily cash arrangements. The only records the employer was keeping was a diary containing the employees' first names and a tally of the number of buckets picked. The almost complete lack of records has prevented us from pursuing the underpayments. Indeed, it has not been possible to identify or even locate the employees involved. But we have initiated proceedings in relation to the failure to keep proper records. I should say that this employer has actually—and this is unusual in this area—taken steps to rectify their practices. But, nevertheless, we have initiated proceedings in that matter.

We continue to do this work and continue to collaborate within government, with communities and representative organisations and other stakeholders to overcome these challenges, Thank you again for the opportunity to address the committee. I appreciate and welcome any questions you have.

CHAIR: Thank you, Ms James. As a former union official who did prosecutions in the contract cleaning industry, I can certainly sympathise with everything you say and the difficulties.

Senator O'NEILL: Can I just ask if Ms James could table that document? It would be very handy for us to reference now.

Ms James: I can, but perhaps not this version because I have marked it up, and it is possible that I did not stick entirely to the script.

Mr Campbell: We will get one for the committee.

CHAIR: There are a whole lot of questions, and I think we might have to ask you to come back at some point. I am not sure if you were in the room when one of the NUW union members gave evidence about her payslip. She said it was a hand-written envelope with no tax taken out and a cash payment. Is that typical of the sorts of prosecutions you see across the horticultural sector?

Ms James: The fact that she received a payslip at all perhaps puts her ahead of some. Mr Campbell, perhaps you might like to address that question.

Mr Campbell: Certainly cash payments in that sector are very common. I should say that cash payments are not necessarily unlawful so long as they meet the minimum.

CHAIR: I appreciate that.

Mr Campbell: But, yes, they are not normally coupled with a payslip and certainly the employers involved do not generally have employment records.

CHAIR: When you are looking at an employer—and let's say it is a labour hire employer, because that is the evidence we heard this morning where the vast bulk of the 417 visa workers in agriculture were employed—do you pursue whether that contractor has workers compensation, tax or superannuation records? I know that tax and superannuation records are the providence of the tax department, but do you alert the tax department? What is that relationship?

Ms James: We make referrals to a number of agencies when we discover things wanting. It is often the case that if they are not complying with the recordkeeping requirements under the workplace relations framework that they may well not be complying with any requirements and so we have arrangements in place with the ATO, with ASIC, with the Department of Immigration and Border Protection, whereby we refer information back and forth.

CHAIR: So where you find an employer cannot establish to your satisfaction any workers compensation insurance, where does that the complaint go?

Mr Campbell: Whether or not we inquire into any workplace health and safety matters or insurance arrangements would be very much dependent on the circumstances. Our jurisdiction does not flow into that space.

CHAIR: No, I know.

Mr Campbell: So it would need to be something that is evident in front of the inspector that might make them check. What I would say is that when we are looking at some of these fly-by-night operators, they are very unsophisticated albeit very profitable concerns. You have an individual with a mobile phone and an ABN—

CHAIR: So they have an ABN?

Mr Campbell: Yes and that is the extent of their assets. Then they have access to a workforce which they can move into different businesses. Very rarely is there a mailing address that leads anywhere other than perhaps to a PO box or a business address where the individual named on the company list does not exist. Going into issues of workers compensation is very much dependent on the circumstances we identify in any particular matter.

CHAIR: We heard evidence this morning from a worker who is obviously quite fortunate to have had scribbles on an envelope. She told us also she was paying $105 a week in rent and I understand that worker is also charged to be driven to and from work, that it can be around $9 a day. So when you are working the underpayment out, do you ask for evidence of what other deductions are being made?

Ms James: I think it is fair to say that we do see a number of deductions being made. There are some technical issues around which are unlawful under the workplace relations framework. Irrespective of how the money is being paid, it is clear that the leverage being exercised over the visa holder is such that the visa holders do not feel they have a great deal of choice about making these payments.

CHAIR: What you mean by 'leverage'?

Ms James: I would suggest that visa holders are not choosing freely to enter into an accommodation arrangement. For example, we found circumstances where the work has been conditional on certain accommodation arrangements involving certain payments. Certainly unlawful deductions is something we see. In fact, we put out a media release just this month about a matter where an employer was taking employees to the ATM and demanding they take money out to pay him. I think they were 457 visa holders. We see that kind of behaviour.

Mr O'Shea: It really does highlight the case by case basis on which we need to approach these matters. In many cases, deductions for accommodation in all sorts of work forces are okay. You have that in live-at-home arrangements with child care and so on. There is a scale. What the Fair Work Ombudsman is interested in in terms of deductions is when it is it exploitative but more importantly when it is a breach of the act. Some are and some are not and that depends on the case.

CHAIR: I think we know that, Mr O'Shea. In relation to the overseas workers team how many staff are there, an actual headcount, and where are they?

Mr Campbell: There are 17 inspectors in the overseas workers team and they are based in Adelaide, Melbourne and Brisbane. I can get a breakdown for you, but the rump would be in Adelaide, Melbourne and Brisbane.

CHAIR: And they are 17 full-time inspectors?

Mr Campbell: Yes.

CHAIR: And the Department of Immigration and Border Protection also has inspectors?

Mr Campbell: Yes. Sorry, if I did not say Sydney, I need to say Sydney. They do have inspectors. There are 17 inspectors within an inspectorate of around 250 inspectors all up.

CHAIR: But you have 17 as part of this overseas—

Mr Campbell: That are focused on this work, but they are not the only inspectors who work in this space. They are just building up a skill set and have a focus in that area.

CHAIR: But they are across all of your visa categories?

Mr Campbell: Yes.

CHAIR: So 457s, seasonal workers, labour market agreements, students?

Mr Campbell: Yes.

CHAIR: So that is a significant workload.

Mr Campbell: It is, but they are complemented by the inspectors in our 24 locations around the country. As Ms James pointed out, the two major inquiries that we have on foot at the moment—the harvest trail campaign and the 417 campaign—utilise resources from our regional network as well as our overseas workers—

CHAIR: So how many inspectors have you got outside of the 17?

Mr Campbell: About 250 all up.

CHAIR: But they have to do all the inspecting work plus this particular—

Mr Campbell: That is true. Our operating model is a little more centralised than that. We try to deal with the majority of requests for assistance by way of voluntary compliance but then there is a certain amount we go out into the field to conduct and that includes work in the overseas workers space.

CHAIR: Ms James, you said there were deeper systemic issues around 417 and you have two inquiries looking at that. I am wondering when you will have some headline announcements or statements to make in relation to systemic issues.

Ms James: These inquiries are ongoing pieces of work and so we need to take time to make sure we are building the relationships we need to and getting our facts right. We certainly hope that the inquiry we are carrying out into chicken poultry processing will be ready for release quite soon.

CHAIR: 'Quite soon'—is that two weeks or six months?

Ms James: We expect there will be a number of parties that are interest in what we have to say and we need to talk about how we engage with them prior to its release, particularly within government. As you have already touched upon, there are a range of agencies that should be interested in some of the conduct that is going on. I certainly hope that we will have something to say in relation to that matter in the next four to six weeks.

CHAIR: You said—and I absolutely understand—that you settled in a lot of cases. Is that a confidential settlement?

Ms James: I would not say so much 'we settle in a lot of cases'. What we do is—and as we outlined in our compliance and enforcement policy—identify the best way of resolving issues. When I say the 'best way', that depends on a range of things. It depends on what the complainant is interested in, it depends on the amount of documentary evidence we might have and it depends on whether the employer is cooperating with us or not. If we can resolve the matter quickly and we do not think there is wilful and deliberate non-compliance then those matters by and large are managed through dispute resolution and mediation. Matters involving visa holders—

CHAIR: If I can stop you there. Are those settlements then confidential?

Ms James: I do not think they are confidential. We would not talk about individuals of course but there is nothing to stop an individual talking about their settlement, subject to whether they as a result of mediation sign an agreement that in some circumstances means they agree to not release certain details, but—

CHAIR: I will tell you why I am asking that question—and you might need to take it on notice. Woolworths were very clear this morning that they act on prosecutions. I absolutely appreciate as a former union official how hard it is and I absolutely agree with you that it takes a long time et cetera. Obviously in the case of $6 per bucket you will get that employer potentially on fines around breaches of particular parts of the Fair Work Act where they are supposed to keep records et cetera. So the problem is we have Woolworths at one end saying, 'We act on published prosecutions,' which by your evidence—and I accept—are difficult. As a union official I know that most of the settlements we made were confidential, so how do we let companies like Woolworths, who have got a really good ethical products policy, know that there have been these settlements that have not necessarily led to prosecutions, but that there is a problem in a sector?

Ms James: I think it is a very narrow approach to say we rely on prosecutions.

CHAIR: That is the published data, isn't it? The available data?

Ms James: Yes. I do not want to name any particular employer, but when we see patterns of behaviour, when we see complaints coming from a particular source—let us just say complaints coming from people whose work is resulting in supplying produce or providing services to a particular supermarket—we do not just sit in our offices receiving complaints and responding to them. We engage with the community and we engage with those end users. In fact, I made a speech in August last year about the need for companies to pay more attention to what is going on down their supply chain. There is potential liability, so we will often approach a company firstly to say: 'Are you aware that one of your suppliers, maybe one or two layers away from you, is engaging in this kind of behaviour, and we are taking them to court?' Or 'We are very concerned about the volume of complaints coming from the supplier.'

CHAIR: Have you spoken to Woolworths, Coles or Aldi in relation to 417 or 457 or any visa holder in the agriculture sector?

Ms James: We certainly have talked to supermarket chains about supply chain issues. I am not sure whether we have done so directly with respect to 417 visa holders, but we took Coles to court over trolley collecting arrangements they had in place. We were very pleased when they admitted some responsibility for those arrangements and entered into an enforceable undertaking with us.

CHAIR: Would you share on the record if you have spoken to them particularly around what is happening in this supply chain?

Ms James: We can share that. But what I would say, and what we do say to companies, is that it is in your interests—both legal and reputational—to pay attention to what is going on down your supply chain.

CHAIR: I certainly agree with you!

Ms James: There are steps companies can take to audit their supply chain to pay attention to what is going on in their supply chain. I would suggest is not prudent and not good business to simply enter into procurement arrangements and then turn a blind eye to what is going on down that chain.

CHAIR: And you made a speech to that effect?

Ms James: Yes—in August last year to the ALERA conference. It focused on trolley collectors, but the primary point of the speech was to talk about the care that I consider employers involved in certain types of work should take when entering into procurement arrangements. It is completely legitimate to outsource labour, particularly when you need short-term labour, and I can understand why. The point I made in that speech is that where you have industries where you have labour intensive, low-skilled work, low profit margins, a high degree of outsourcing and multiple layers in the supply chain, there is a high likelihood there that, unless you put arrangements in place to satisfy yourself that workers are being paid properly, you might be profiting or benefitting from labour that is not being paid lawful rates of pay, that is being paid black market rates.

CHAIR: I appreciate you are not the department of immigration, but in relation to that second visa where you have to do the 88 days in agriculture, do you know if you can still do a component of that unpaid?

Mr Campbell: As I understand it, Senator Cash's announcement in recent weeks was that the intention was to change, if it has not already changed, the rules around that in that there had to paid employment to secure your second year visa.

Senator RICE: I would like to continue with the Chair's line of questioning in terms of it being prudent for buyers to follow through on what is happening in their supply chain. Woolworths this morning said that they saw Australia as a low-risk country in terms of their ethical compliance framework and that they did not see a need, because of Australia's laws and regulations, to regularly audit their suppliers. I am just interested in your response to that attitude from Woolworths.

Ms James: I might ask Mr Campbell to respond to that.

Mr Campbell: I did not see the evidence that Woolworths put to the committee; but I would say that the more work we are doing in the horticultural sector the more I see part of the solution being pressure put on employers at the top of the supply chain to take responsibility for what is occurring down the lines. So, in the same way that Coles took responsibility for what was occurring in the supply chains around shopping trolley collection at their sites around the country, we have said the same to Woolworths and Aldi about shopping trolley collection. The same is very much true for the horticultural sector, in my view. If Coles, Woolworths and others intend to sell the produce, I think they need to care about how it got to their stores. I can only influence their decision making by conducting inquiries like the ones we have at the moment. Coles and Woolworths may not choose to act on individual cases, which I suspect was evidence that was put to Senator Lines before, where there is no litigation—perhaps they receive only one complaint from one worker and perhaps they think they do not need to act on that—but I think the evidence which will be considered and ultimately reported on as part of our inquiries should hopefully give large companies something to act on. I think that Coles and Woolworths certainly have something to add to improving the employment standards for visa workers in the horticultural sector.

Senator RICE: You have noted that you cannot compel people to cooperate with you. This seems to me to be a problem, given these fly-by-night labour hire companies that you cannot compel to cooperate with you. Do you have any suggestions, from the inquiries you are doing, as to how we could better regulate or control labour hire companies?

Ms James: Speaking generally, our inspectors do have a range of powers. They are set out in the act. Our inspectors have the power to enter, to require records to be handed over. As we have discussed, in these arrangements often records are non-existent. One of the things that we do not have the capacity to do, which some regulators do have the capacity to do, is to compel people to speak with us, to participate in an interview and to give us evidence. That is a power that some regulators do have. I would not suggest that it is necessary for all of our work, but this is an area where what we are encountering are systemic issues and strong disincentives for people to talk to us voluntarily. Before this role, I was involved in drafting legislation, and whenever a regulator came saying that it wanted enhanced powers, you would always say, 'Yeah, right, of course you do. You probably want guns too.' Looking at the conduct we are seeing in this area, I wonder whether that capacity to compel the giving of evidence might be something worth considering. I do not know if you want to add to that, Mr Campbell. You are the one who sees the investigation reports more closely than I do. There are real barriers to getting the evidence we need to put some matters into court.

Mr Campbell: Compulsive evidence gathering powers certainly assist regulators; there is no doubt about it. I have executed those powers in other roles and they have assisted in investigations and litigations. I would note that one of the challenges of dealing with employers, particularly in the very unsophisticated operations well down the contract chain, is that they have generally only got a mobile phone as their business asset, and they come and go and disappear very quickly. It has been my experience that a business owner has disappeared from an operation in Adelaide only to pop up in Darwin—maybe with the same name and maybe not, but we know it is the same individual or person of interest. You need to be able to find the person you want to speak to, as much as getting them to cooperate with any interview you might be conducting with them. Having access to more information, sharing information with other law enforcement agencies will certainly assist us just as much as having the ability to sit down and have a chat with the individual who may be involved in the contravention.

Senator RICE: Given the difficulty of knowing who you are dealing with, what do you think of the call by the National Union of Workers to license labour-hire companies?

Mr Campbell: Again, I did not hear the testimony and I probably do not have anything to offer on that issue at the moment.

Senator RICE: Okay. What is the total budget for the Fair Work Ombudsman's office?

Senator McKENZIE: That is next week, Senator Rice.

Senator RICE: How much has been spent on the overseas workers team?

Ms James: I am not sure we can separate that out; we do not have separate line items. The 2014-15 year funding is just a touch over $110 million.

Senator RICE: How much money has been spent on the overseas workers team? What is the budget for your current inquiry or the Harvest Trail campaign, for example?

Ms James: I certainly cannot give you a number on that today. As Mr Campbell said, we have a range of activities that relate to visa holders—there is the team, the broader inquiries. Much of the time of our communications staff, for example, is taken in designing campaigns like the one I outlined in my opening statement for international students. If you were to ask me to put a dollar figure on the effort of our organisation, that would be a difficult thing to do. I certainly cannot do it off the top of my head.

Senator RICE: The evidence from the union this morning was that we do have a systemic issue that there is a constant stream of referrals to you. Do you think you need extra funding for those activities to deal with the level of infractions that appear to be occurring?

Ms James: I have been asked before by the Senate estimates committee whether we have sufficient funding. I think I said on the record before: 'Well, any regulator I ask, "Would you like more resources?", is going to say, "Yes." It is the same when you ask: 'Would you like more powers?' Of course—knock yourself out. It is not my job to determine what the appropriate level of resourcing is, but I would say that we have been very active in this area. We have prioritised it, we have achieved some good enforcement outcomes in this area and certainly our existing resources are sufficient to support the work we are currently doing. As I said in my opening statement, there are challenges and we are very focused on looking for long-term and sustainable ways of changing behaviour. There is no doubt that our resourcing levels and the powers available to us are relevant to our ability to achieve outcomes in this area. So to is our ability to work strategically with other agencies and to work up the supply chain. Working smarter is not just about boots on the ground, but certainly resource levels are relevant to how quickly outcomes can be achieved and how many outcomes can be achieved.

Senator McKENZIE: Thank you for your evidence and the work you are doing on the ground. I have been reading your statement in response to the Four Corners report, dated 7 May. It is my understanding that visa holders across the array of visas we have are informed of their employment conditions. You are nodding, Mr O'Shea.

Mr O'Shea: That is also my understanding, Senator.

Senator McKENZIE: But we heard this morning that, rather than going through that process and feeling empowered, there are language barriers et cetera. How do you assist those workers, for whom English may not be their second language, understand their full entitlements?

Mr O'Shea: Hopefully, quite adequately. We do work with Immigration and Border Protection on the document that goes to new visa holders when they begin work in Australia. There is, we hope, some rejigging of that as per the minister's announcement last week, which we hoping to assist the immigration department further to make that more meaningful and usable.

Going directly to your question: we have fact sheets on working in Australia in, I think, 27 different languages, which are free and available on our website. We also have a free interpreter service. There is that collateral, if you like, that is available. It has a wide coverage. Working within the community and working within the media to make ourselves as well known as possible is the other element to that. People can only approach the regulator if they know the regulator exists.

Senator McKENZIE: I note you have YouTube videos in 14 different languages.

Mr O'Shea: That is right.

Senator McKENZIE: How successful is that communication strategy? As we heard from Ms Yao this morning, it is a text; it is more that word-of-mouth, worker-to-worker, friend-to-friend communication.

Mr O'Shea: I think Ms James put it well in her opening statement when she said that there are people in this sector—the employers and the employees who we are talking about—who are concerned with employee rights. Sometimes, however, they are more concerned with visa rights and getting the ongoing visa, and so the work becomes front of mind for them. In that instance, it is harder to ensure that they understand their rights and entitlements whilst in Australia.

Senator McKENZIE: One of the recommendations put to the committee is regulating the labour hire contractors. Do you have a view on that? I have just asked you for an opinion, and I do apologise.

Mr O'Shea: As Michael Campbell said before, we did not hear the NUW or Woolworths testimony this morning, so it is hard to comment clearly on what was said. So I do not really have a view on that at this time.

Ms James: The only comment I would make there is that I do not think the operators who are deliberately setting out to exploit this dynamic, this situation, are going to succumb to any sort of regulation. They are not succumbing to regulation now. I am not sure that creating a framework for regulation based on the bad behaviour of some in the sector—bearing in mind that labour hire is a very broad sector, with a number of very legitimate operators working in it—is the answer. There is no doubt that a range of proposals on the spectrum of regulation could have an impact here. If these are people who phoenix in and out of corporate arrangements and change their SIM cards and what have you, I do not think a new code of conduct or regulatory framework is going to be 'the thing' that makes a difference.

Mr Campbell: To pick up on your question before about responsibilities of large corporate citizens: if you have in this sector, for example, a large producer in regional Victoria, they have a vertically integrated structure, they own and operate all aspects of the supply chain and production chain and they are a profitable business, I would put it to the them that they need to know who is working on their site. They need to know the names of the contractors. They need to know the names of the employees of those contractors. They need to have electronic systems on site which allow workers to tag in and tag out. They have responsibility not just to let ghost contract labour gangs come onto their site, work and then go. Whether or not they are licensed or otherwise, I go back to my point that the lead firm, the producer at the top of the supply chain, needs to put systems in place to know who is working on their site, because that allows the regulator, whichever regulator it is—Immigration, Fair Work Ombudsman or otherwise—to come in and get records of who is on site, the hours that they worked, where they worked on the factory, which subcontractor they worked for, so that we can then make an assessment about what that person should be paid. Whether or not the labour hire contractors have kept records almost becomes irrelevant at that point, because we have got their workers on site and we have got electronic records. It is something that I think a large producer or end firm could pretty easily and cheaply put in place to make sure the contractors on their site were not being taken advantage of. Whether or not we regulate labour hire contractors more, I do not know, but I think the solution is the people who run the sites.

Senator RICE: The corollary of that is that the large buyers should not be dealing with any producers who have not got those conditions in place.

Mr Campbell: Going to my point earlier, I think that they have something to think about in that space. Have they thought about who they are contracting with and the arrangements they have on their site? I am not going to besmirch their names, necessarily, but I think that they could take a few steps to change a few things down the supply chain.

Ms James: They could start by looking down the supply chain.

Senator O'NEILL: We had evidence this morning from Woolworths about that oversight down the chain. We had evidence that indicated that until 2010 they had undertaken some auditing but that, given an international overview, Australia was not considered a risk. So their auditing processes have been withdrawn after a short period of testing. What is your response to that?

Ms James: I am not going to respond to how they run their business. All I would say is that it is up to every company to consider risk and reputation, and risk includes legal risk of liability. I mentioned before that we do have accessorial liability provisions under the Fair Work Act. Section 550 extends liability, if you like, to people who are knowingly involved, and that is a provision that can sheet home formal legal responsibility to people up a supply chain. Certainly, if it becomes evident through community debate or news stories coming out of current affairs television shows that there is something to look at and they continue to not look down the supply chain, it beggars belief that there is not something that they should be informing themselves of. It is up to them to assess risk, responsibility and reputation. It is not up to me to tell them how to do that. Risk is an evolving thing and one should always be reviewing one's risk levels depending on the circumstances.

I would say that it is pretty clear to us that a number of the industries that are producing goods for sale on our supermarket shelves are highly competitive. As I said before and as I said in my speech last August, low skilled and labour intensive work, lots of contracting out, and multiple layers in the supply chain are all factors that I would suggest lead to a higher risk of people not being properly paid their lawfully entitled wages.

Senator O'NEILL: I think that we have probably established that there is a context where there is no deniability now—that there is a problem for everybody; we are all aware of it. With regard to some of the submissions we have had from UnionsWA and also from the AWU from Queensland, UnionsWA say:

At a time when unemployment remain stubbornly above 6% and youth unemployment is more than double that, the Australian community needs to have confidence that such a large and growing temporary work visa program is not having adverse impacts on employment and training opportunities for Australians, particularly young people.

Equally, the community needs to be assured that employers and others are not exploiting vulnerable temporary overseas workers who are unaware of their rights or not in a position where they feel able to exercise those rights.

Can I ask you, Ms James, or any of the representatives, are we at a point where it is established now that there is a problem in the temporary working visa category and it is impacting the permanent residents and citizens of Australia's employment capacity in this particular sector?

Ms James: I do not think that we are in a position to talk about employment and training opportunities and the impact of these programs on the broader labour market. I think that you could quite fairly direct that question to the Department of Employment and probably the Department of Immigration when they appear. Obviously, we are seeing some exploitation of workers that is very serious, but I could not tell you whether or not that is having that sort of knock-on effect on the economy. I could only tell you about our own experience in enforcing the workplace rights of these workers.

Senator O'NEILL: Can I particularly draw you then to the Tully Sugar mill? The AWU put out a media release. It is from 2013, but it is typical of many of the situations that come to our attention: the positions that had generally been filled by local employees have been able to be filled more and more frequently by people from these visa categories that we are exploring today. Are you seen this change happening around the harvest trail that you are investigating?

Ms James: Again, I probably could not comment on the relativities between who was working there before and who is working there now. All I can say is that, when it comes to the 417 visa category, there are certainly more of them coming into the country, and the nature of the 88-day requirement for eligibility for the second visa means that we do find them in certain sectors, and horticulture is one of them.

Mr Campbell: I would probably add that, through our work in the harvest trail campaign, we have identified far more employers who are doing the right thing and producers who are doing the right thing than ones who are doing the wrong thing. Where we seek to engage with their representative organisations, such as different growing associations, we have a lot of employers coming to us asking us to check them: 'Make sure that we're doing it right. We want to keep our workforce. It's very hard to maintain a workforce, and we want to do our best to keep them.' We obviously help out there, too. We have a tendency sometimes to focus our efforts on those employers that are doing the wrong thing; that is our job. But I would not want to leave the committee with the view that the overwhelming majority of employers in this sector are doing the wrong thing. It is just that there are a few that are treating their employees very, very poorly, and they are the people that we want to focus our attention on and change their behaviour, without question.

Ms James: We have certainly had a really good response to our harvest trail campaign from growers associations and farmers. They do not want to be associated with this kind of conduct. Certainly, in Mildura, we saw local identities and perhaps even local members saying, 'We don't want our town associated with these kinds of stories.' It is that kind of engagement and awareness-raising that we feel actually will begin to change the behaviour, because it means that the people who are unaware of the behaviour that is going on and perhaps unknowingly benefiting from it will start to look down the supply chain and will start to say, 'This is unacceptable; we don't want it going on in our communities and our towns and we're going to do something about it.'

Senator McKENZIE: Mr Campbell, in terms of your brief response there, if you have any quantitative data or analysis from your journeys around the harvest trail, could you supply that on notice? That would be fantastic.

Mr Campbell: No worries.

Senator O'NEILL: I go back to your opening statements with regard to the last three years and 417 visas. I thought that was the tip of the iceberg with regard to information you might be able to provide us about the shift you have noticed over that time. It lines up with some of the commentary from the unions about changes in the workplaces that they are representing. So if you could provide more information with regard to 417s over the last three years, and the increasing concerns. I think you said seven out of 35 matters were in court in the last year; is that right?

Ms James: That is this financial year. Just on Friday, we filed our seventh matter involving 417 visa holders. Bear in mind we are filing matters all the time, so the proportion is changing. But I think it is seven out of, roughly, 35 or 36.

Mr O'Shea: That is correct.

Ms James: I will also say the government's submission does include some data from us. It includes, for the last three years plus this financial year so far, figures on the complaints that we have received from each of the cohorts—417s and 457s—and the number of litigations. For example—

Senator McKENZIE: We do not have that yet.

CHAIR: They got an extension. So it is all right.

Senator O'NEILL: If you could just put it on the record, that would be good, because I am after some of those numbers.

Ms James: Yes. I can read them out to you if you like.

Senator O'NEILL: Thank you.

Ms James: From 417 visa holders in 2011-12, we had 216 complaints; the following year, 2012-13, 750; the year after that, 1,042; and, this year so far, 410. In terms of litigations, in 2011-12 we had four; in 2012-13, four; and, in 2013-14, two. As for so far this year, the figures you will receive in the government's submission say six; it is now seven—obviously, it is a year that is still going. If you do the maths on those percentage increases, they are pretty big. It is looking at those numbers and also hearing some of the stories about what these visa holders are encountering that led us to put in place the couple of inquiries we have talked about today.

Senator O'NEILL: Ms James, do you report on settlements?

Ms James: It depends on what you mean by 'settlements'. If we put a matter into court and that matter is settled in court, that is reported on.

CHAIR: No, outside of court.

Senator O'NEILL: Outside of court.

Ms James: We do not report on individual cases. We report overall numbers. We can give you the numbers generally on the matters that come to us and how they are resolved.

Mr O'Shea: And where contraventions are found versus where they are not found.

Senator McKENZIE: Who refers the matter to you? Do you take data on that, as to whether it is an individual or an organisation?

Mr Campbell: The vast majority of our complaints are individuals making complaints on their own behalf.

Mr O'Shea: Whilst we are on the data, for the benefit of the committee, it is also worth pointing something out about visa statuses. Whilst we are diligent in trying to determine whether someone is a visa holder, unless it is for the purpose of our dual role under 457 visas, we sometimes require them to self nominate that they are a visa holder. That is simply because their entitlement to the Fair Work Act protections are not always dependent on whether they are visa holder or not. As Ms James said in her opening statement, they are covered by Australian workplace laws. The numbers could potentially be higher, but they would not be lower.

CHAIR: What we are trying to do, like you are, is encourage everyone along the supply chain to take a look. I am particularly wanting supermarkets to take a look. I think if we were able to show the supermarkets that actually there were this number of prosecutions which are publicly available on the record and there are also a range of settlements reached in the 417 area, it might compel them to take a look. That is really what we are interested in, if you can give us that on notice. I can say, as a former union official, I did many more settlements than prosecutions. I take the point: prosecutions are long, it takes ages to get into a magistrates' court and so on and so forth. It is easier when you can settle, but obviously it does not always systemic problems in the industry.

Mr Campbell: We tend not to name and shame.

CHAIR: I am not asking you to name and shame, just to give us the numbers if you are able to. 'We settled X number of matters for this amount of money,' if that is possible.

Mr Campbell: We are talking about investigations. We get a complaint, we review the nature of that complaint, we make some assessment of the evidence available to make out the complaint and then we will work with the parties to resolve it. In the vast majority of cases, that is how it is done. That is because the employer probably was not aware of their obligations, had not updated their spreadsheets or whatever. These things happen. We try to work with them to resolve it. They get the chance to get it right. If they pop up on our radar again, we treat them differently. If they pop up on our radar three times, then they get a different treatment again. We tend not to name publicly or even list contraventions against an employer where they are resolved through an early assisted resolution process, because it would have a negative effect on people's willingness to work with us to resolve what we generally think off as bread and butter type cases.

CHAIR: I not asking you to resolve that. What our union did was this: those settlements in the main outside of a magistrates' court were confidential, but we certainly reported. For example, 'In the contract cleaning industry, we settled out of court with 17 employers for this amount of money.' That is not naming anyone. Woolworths were very clear this morning that they were hiding behind, if you like, the fact that there had only been one or two prosecutions.

Ms James: We will take a look at it. We do report in a number of different ways. We break down complaints and we can talk about which industries they come from. We can talk generally about how they are resolved. The level of granularity depends on the limitations of our system. Like all areas of government, we always say that our systems are behind what we would prefer them to be. It is something that we are working on and investing in, in actual fact. We will take a look at it.

What I would say is this: if companies who are interested in being ethical traders and are interested in understanding what is going on down the supply chain come to us to talk to us about what sort of things we are seeing in the labour market and is there anything we can tell them generally about conduct that might be going on of interest to them, then we do engage in those kids of conversations. In fact, we seek them out. We have had those sorts of conversations, as I said earlier, where we see patterns and where we see conduct going on that is benefiting an employer further up the chain that they not aware of.

A little while ago, we instituted proceedings against a company involved in hiring charity collectors. One of the things we did then was make sure that we contacted all of those charities, considering that those charities may want to be aware of this litigation and may well want to reconsider their procurement arrangements. We are actively working on influencing those who are benefitting, perhaps unknowingly, from this sort of behaviour to help them make good choices about their procurement.

CHAIR: I am not sure if you took it on notice, but have you had that specific conversation with the supermarkets?

Ms James: I am not sure.

Mr Campbell: On different subject matters, we have. There is no doubt that we have had conversations on horticulture.

CHAIR: But on these issues?

Mr Campbell: It will not be a surprise to them, in the sense that conversations are happening at operational levels within Fair Work Ombudsman with different representatives from those supermarkets, either individual supermarkets or head office type arrangements. Whether or not horticulture has come up, I cannot say right now, but they know—

CHAIR: Sorry to interrupt, but they can claim immunity. This is no criticism of you. You have been very open about the difficulties et cetera. If they look to the number of prosecutions, which are small, and you have not had a specific conversation to say, 'Hey, you might want to have a look at your supply chains in relation to your fresh produce', then they can continue to operate in ignorance if it is not specifically drawn to the attention. I agree with you. They are part of the solution, or they should be a part of the solution, because you are at the tail end. You are going after companies once the act has happened. We want ethical production.

Mr Campbell: The results of the inquiries are going to give us the opportunity to have that conversation. The poultry processing inquiry that we talked about will be released shortly. Part of the recommendations flowing from that will be to speak with the end users and corporate customers of the suppliers to say: 'You should be aware of these findings'—whatever they may be. We want to engage with those at the top of the supply chain, and the 417 inquiry and the harvest trail inquiry will involve that type of engagement too. Like you said, we need to be able to give them something to act on, and assertions probably will not do that.

CHAIR: You have settlements at the moment that you could use.

Mr Campbell: They are of their subcontractors or of their suppliers' subcontractors.

CHAIR: Woolworths were absolutely clear in evidence this morning that subcontractors are of concern to them, and it is number 12 of their ethical products policy. They did not try and shy away from subcontracting. They made a point of that. But they relied back on prosecutions.

Mr Campbell: I am very happy to hear of their interest in it.

Senator O'NEILL: They even spoke about mirroring contracts. Ms James may be able to table the document from which she was reading.

Senator McKENZIE: We may have to have you back.

Senator O'NEILL: Can you table that document from which you gave that factual evidence.

Ms James: The numbers?

Senator O'NEILL: Yes.

Mr O'Shea: It is in the whole-of-government submission.

Ms James: Those numbers that I was referring to are in the whole-of-government submission at attachment D.2.

CHAIR: Unfortunately, we will have to leave it there. We will probably ask you to come back. Thank you for coming today. That concludes today's proceedings. I thank all of our witnesses who gave evidence to the committee today. Thank you also to Hansard, broadcasting and the secretariat. I declare the hearing adjourned.

Committee adjourned at 12:13