Chapter 1

Background to the inquiry

Inquiry terms of reference

1.1 On 24 March 2015, the Senate referred the following terms of reference to the Education and Employment References Committee for inquiry and report by 22 June 2015:

The impact of Australia's temporary work visa programs on the Australian labour market and on the temporary work visa holders, with particular reference to:

the wages, conditions, safety and entitlements of Australian workers and temporary work visa holders, including:
1. whether the programs 'carve out' groups of employees from Australian labour and safety laws and, if so, to what extent this threatens the integrity of such laws,
2. the employment opportunities for Australians, including:
  1. the effectiveness of the labour market testing provisions (the provisions) of the Migration Act 1958 in protecting employment opportunities for Australian citizens and permanent residents, and
  2. whether the provisions need to be strengthened to improve the protection of employment opportunities for Australian citizens and permanent residents and, if so, how this could be achieved,
3. the adequacy of publicly available information about the operation of the provisions, and
4. the nature of current exemptions from the provisions and what effect these exemptions have on the reach and coverage of labour market testing obligations and laws regarding wages, conditions and entitlements of Australian workers and temporary work visa holders;
the impact of Australia's temporary work visa programs on training and skills development in Australia, including:
1. the adequacy of current obligations on 457 visa sponsoring employers to provide training opportunities for Australian citizens and permanent residents,
2. how these obligations could be strengthened and improved, and
3. the effect on the skills base of the permanent Australian workforce;
whether temporary work visa holders receive the same wages, conditions, safety and other entitlements as their Australian counterparts or in accordance with the law, including:
1. the extent of any exploitation and mistreatment of temporary work visa holders, such as sham contracting or debt bondage with exorbitant interest rate payments,
2. the role of recruitment agents, and
3. the adequacy of information provided to temporary work visa holders on their rights and obligations in their workplace and community, and how it can be improved;
whether temporary work visa holders have access to the same benefits and entitlements available to Australian citizens and permanent residents, and whether any differences are justified and consistent with international conventions relating to migrant workers;
the adequacy of the monitoring and enforcement of the temporary work visa programs and their integrity, including:
1. the wages, conditions and entitlements of temporary work visa holders, and
2. cases of 457 visa fraud, such as workers performing duties outside or below the job classification of the visa;
the role and effect of English language requirements in limited and temporary work visa programs;
whether the provisions and concessions made for designated area migration agreements, enterprise migration agreements, and labour agreements affect the integrity of the 457 visa program, or affect any other matter covered in these terms of reference;
the relationship between the temporary 457 visa and other temporary visa types with work rights attached to them; and
any related matter.

That in conducting the inquiry, the committee shall review the findings and recommendations of previous inquiries into such matters, including the Legal and Constitutional Affairs References Committee's report, Framework and operation of subclass 457 visas, Enterprise Migration Agreements and Regional Migration Agreements.[1]

Context of the inquiry

1.2 With the changes wrought by globalisation, including the global mobility of labour, Australia has become increasingly reliant on temporary migration. Indeed, Australia's migration program has been transformed to such an extent over the last two decades that it is no longer accurate to consider Australia a country solely of permanent settlement.[2]

1.3 Over the last 20 years, Australia's approach to skilled migration has changed significantly, most notably with the introduction in 1996 of the Temporary Work (Skilled) (Subclass 457) Program (457 visa program).

1.4 However, temporary migrants perform a range of work far greater than the skilled occupations provided for by the 457 visa program, and in vastly greater numbers than that provided for by dedicated skilled labour migration programs.

1.5 In fact, while primary 457 visa holders in Australia numbered 106 755 at 31 March 2015, approximately 1.4 million temporary visas held in Australia at 31 March 2015 had work rights attached to them:

New Zealand (subclass 444);
Student (subclasses 570 to 576);
Temporary graduate (subclass 485);
Temporary skilled (subclass 457); and
Working Holiday Maker (subclasses 417 and 462).[3]

1.6 Despite the large number of work rights available under the range of temporary visa programs, the committee notes that as the principal dedicated temporary skilled migration program, the 457 visa program has been subject to several specific and related inquiries and that, to date, much of the temporary work visa policy focus has been on the 457 visa program.[4]

1.7 The committee further notes that until this inquiry, there has not been a holistic assessment of Australia's temporary work visa programs.

Scope of the inquiry

1.8 As the terms of reference for this inquiry make clear, the committee was directed to examine more broadly the impact of Australia's temporary work visa programs on the Australian labour market and on the temporary work visa holders.

1.9 The committee notes that while the majority of submissions originally received[5] addressed matters primarily related to the 457 visa program, certain submitters also addressed the particular vulnerabilities of migrant workers on Working Holiday Maker (WHM) and student visas. These matters are covered further in chapter 2 of this report.

1.10 The value of the broad scope of the inquiry was reaffirmed during 2015 as two separate media investigations exposed a range of exploitative practices associated with the employment of temporary migrant visa holders other than 457 visa holders.

1.11 First, on 4 May 2015, an investigation by the Australian Broadcasting Corporation's Four Corners revealed exploitation of certain groups of migrant workers, many on WHM visas, in the meat processing and horticulture industries. Issues included the underpayment of wages, long working hours, and sub-standard living conditions. Unscrupulous labour hire contractors were implicated in many of the instances of non-compliance with Australia's workplace laws.[6]

1.12 Then, on 31 August 2015, a joint investigation by Four Corners and Fairfax Media revealed the deliberate falsification of employment records by employers (franchisees) and the systemic underpayment of the wages and entitlements of international students working on temporary visas in many 7-Eleven convenience stores across Australia.[7]

1.13 During its inquiry, the committee took evidence on a range of temporary visa programs including the student, WHM, and 457 visa programs. These visa programs raised specific and related issues including:

impacts on the Australian labour market;
impacts on training and skills development in Australia
exploitation of vulnerable migrant workers;
non-compliance by employers with workplace laws; and
gaps in the regulatory system.

1.14 The committee also heard evidence that the interaction between the various temporary visa programs raised fundamental questions for a liberal democracy, including the potential unintended consequences of a growing cohort of indefinitely temporary migrants.[8]

Definition of temporary migrant work

1.15 With the preceding paragraph concerning the notion of 'indefinitely temporary' in mind, the committee notes that care needs to be taken when defining 'temporary migrant work', 'temporary work visa programs' and 'temporary work visa holders'. In particular, the committee notes the point made by Associate Professor
Joo-Cheong Tham that temporary relates more to a limited right of residence than it does to the length of time that a person resides in Australia, or indeed, to the length of time that certain sectors in the Australian economy may require temporary migrant work:

Temporary migrant workers are only 'temporary' in the sense that they have a limited right of residence. They are not necessarily 'temporary' in terms of the length of their residence in Australia – many of them would have lived in this country for years. Neither are temporary migrant workers, according to this definition, necessarily 'temporary' in terms of their intention to continue residing in Australia – many aspire to secure permanent residence in this country. Further, reliance on such workers is not necessarily 'temporary' – many key sectors like hospitality and agriculture heavily rely upon temporary migrant workers. These enduring aspects of temporary migrant work in Australia make it apt to speak of the 'permanence of temporary migration'.[9]

Conduct of the inquiry

1.16 Notice of the inquiry was posted on the committee's website. The committee also advertised the inquiry in The Australian and wrote to key stakeholder groups, organisations and individuals to invite submissions.

Submissions and public hearings

1.17 As of 12 October 2015, the committee has received 63 submissions. The submissions, answers to questions on notice, tabled documents, and additional information are listed in Appendix 1.

1.18 To date, the committee has held eight public hearings:

18 May 2015 in Melbourne;
12 June 2015 in Brisbane;
19 June 2015 in Melbourne;
26 June 2015 in Sydney;
10 July 2015 in Perth
14 July 2015 in Adelaide;
17 July 2015 in Canberra; and
24 September 2015 in Melbourne.

1.19 A list of witnesses who gave evidence at the public hearings is provided in Appendix 2.

Extension to the inquiry

1.20 On 14 May 2015, the Senate agreed to extend the reporting date to 19 August 2015.[10] On 11 August 2015, the Senate agreed to extend the reporting date to 14 October 2015.[11] During this period, the committee focused largely on matters related to the 457 and WHM visa programs.

1.21 Following revelations of the exploitation of international students on temporary visas across the 7-Eleven network of stores, the committee agreed to inquire into these matters as well. On 7 September 2015, the Senate agreed to extend the inquiry with the final report due on 11 February 2016.[12]

1.22 The committee held a hearing in Melbourne on 24 September 2015 related to the employment conditions of temporary migrant workers employed at 7-Eleven. Prior to the hearing, the committee invited specific submissions from those witnesses attending this hearing.

1.23 A subsequent hearing on further matters arising is planned for November 2015.

Acknowledgements

1.24 The committee thanks those organisations and individuals who contributed to the inquiry by preparing written submissions and giving evidence at public hearings.

Structure of the interim report

1.25 Chapter 2 summarises the key observations so far and in particular evidence relating to the 457, WHM and student visa programs. It also summarises issues that will be explored further during the extension.

Note on references

1.26 References to the committee Hansard are to the official Hansard with the exception of 24 September 2015 which is the proof Hansard. Page numbers may vary between the proof and official Hansard transcripts for 24 September 2015.

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