EXECUTIVE SUMMARY
The Textile, Clothing and Footwear Industries in Australia have undergone
major restructuring over the last decade as a result of reductions in
tariffs and bounties, forced by government in an effort to make the industry
more internationally competitive. Manufacturing in routine, high-volume
clothing areas has, for the most part, moved off-shore. Manufacturing
in high fashion, seasonal areas has remained in Australia. However, in
an effort to remain competitive in the face of increased imports, manufacturing
has moved from a factory-based workforce to outworkers. Outworking is
now so prevalent that it is not just a characteristic of the industry,
the entire industry is structured around it.
With the addition of a large outworker labour force and their associated
intermediaries, the chain of garment production has lengthened. In some
instances, as many as seven parties many be involved (distributor, retailer,
manufacturer, cutting contractor, sewing contractor, subcontractor, outworker).
Because the chain of garment production is so long, it has become easy
for responsibility to be passed off from one element to another along
the chain.
Estimates provided indicate that there is somewhere between 50,000 and
330,000 people involved in outworking in the garment industry on a full
and part-time basis. However, regardless of the absolute number of people
involved in home-based garment manufacture in Australia, it is highly
likely that the number of outworkers has increased considerably over the
last decade. More importantly, the Committee believes that there are
sufficient people involved in the industry for concern about them to be
warranted.
Most outworkers are migrant women, aged between 25 - 35, who have young
children at home. Some are assisted by their husbands, either in a full-time
or part-time capacity. Most have very poor English language skills and
are thus unable to find work elsewhere. Elderly people and children assist
in many outworker families with ancillary tasks.
Problems experienced by outworkers include: low piece rates which translate
to low hourly rates; impossible deadlines for completion of work; late
payment, underpayment, non-payment for completed work, rejection of work
and unreimbursed expenses; physical and verbal harassment from intermediaries
(blackmail, threats, coercion and bribes); substandard working environments;
and worries associated with combining work with family responsibilities.
These stresses are compounded by the lack of English language skills and
inadequate training.
Through the availability of the various clothing trades awards, mechanisms
exist for outworkers to be paid wages equivalent to factory employees
and some outworkers are paid award wages. If this is done, it can provide
a satisfactory employment option for women who for family or cultural
reasons would prefer to work at home. However, the structural complexities
of the garment manufacturing chain, and resultant ease with which various
parties can shed responsibility, mitigates against full award compliance
and it appears that the majority of outworkers are not paid award wages.
Some outworkers are seriously exploited.
The Committee notes that the Workplace Relations and Other Legislation
Amendment Act 1996 will change the circumstances under which outworkers
may be employed by providing for individual Workplace Agreements with
scrutiny of such agreements available through the Employment Advocate.
It is the Committee's view, however, that in accordance with the nature
of outwork and past experience in the industry, it is probable that most
outworkers will not be required to sign any contract and will continue
to be employed in the same manner as they have been in the past.
In addition, powers of inspection (right of entry provisions) previously
delegated to the Union, will be curtailed by the new legislation. The
Committee is concerned that these changes have the potential to adversely
affect the conditions under which outworkers are employed. The Committee
concludes that for both these reasons alone, outworkers need extra employment
protections as outlined in later conclusions and recommendations.
However, Government Committee Members believe that the strengthening
of penalties for breaches of awards and the proactive role to be played
by both the Office of the Employment Advocate and the Awards Management
Section of the Department of Industrial Relations concerning outworkers,
under the new Workplace Relations Act 1996, will improve outworker
protections.
The Committee received compelling evidence that the employment status
of outworkers is confused. While some legislation and certain awards make
it clear that some outworkers are employees, the lack of clear national
legislation and, more importantly, the actual conditions of employment
experienced by outworkers give rise to the belief among many people that
outworkers are contractors rather than employees. The Committee believes
that, because of the nature of the work undertaken and the circumstances
of their employment, most outworkers in the garment industry should be
considered to be employees. Accordingly, the Committee recommends that
the Government examine ways to clarify the employment status of outworkers
in the garment industry (Paragraph 2.69).
The Committee notes that occupational health and safety of outworkers
is a neglected issue. Although the magnitude of occupational and secondary
stress induced health problems is not known, the Committee is concerned
that because outworkers are treated as contractors rather than as employees,
the ultimate cost of accidents and illness among them may be being borne
by the public sector. The Committee endorses the recommendations made
by Worksafe Australia (Paragraph 3.84):
- That TCF industry parties continue and extend the steps already taken
to work co-operatively in order to improve the OHS performance of their
industry;
- That retailers and contractors in the TCF industry continue and extend
the co-operative establishment of agreed minimum standards covering
the conditions applied to outworking;
- That the TCF Development Authority give consideration to incorporating
OHS criteria when determining funding for industry restructuring and
training under the TCF 2000 Development Package; and
- That the TCF Development Authority consider allocating funds under
the Authority's Best Practice program … to develop … a framework
in which to achieve improvements in workplace control over hazards and
more appropriate contractual arrangements with outworkers (Paragraph
3.45)
Evidence shows that children are involved in outworking and the Committee
concludes that there is sufficient evidence to suggest that some children
are involved to an unreasonable extent. The Committee believes that the
situation endured by exploited children will only be ameliorated through
an improvement in the employment conditions experienced by their parents.
Having regard to Australia's international and national obligations to
protect children from exploitation, the Committee suggests that Government
consideration of this matter is warranted (Paragraph 3.85).
The Committee concludes that enforcement by government agencies of compliance
with award wages and conditions has declined considerably in recent years,
being more reactive than proactive, and that this in itself has contributed
to an increase in the level of non-compliance. However, the Committee
acknowledges that the level of non-compliance in TCF industries is exacerbated
by an unwillingness on the part of outworkers to report non-compliance
and to have government agencies involved in the circumstances of their
employment.
The issues of taxation obligations and eligibility for welfare benefits
are of concern to some outworkers, particularly those who may have been
coerced into infringements. As evidenced by the introduction of the Reportable
Payments System and the Social Security amnesty for outworkers, these
issues are clearly also of concern to the relevant government instrumentalities.
The Committee strongly believes that the Australian Taxation Office could
take greater advantage of the Reportable Payments System to fully investigate
taxation avoidance in TCF industries. The Committee notes that an important
additional benefit of the Reportable Payments System is that it will assist
in identifying all parties involved in the garment manufacturing chain,
particularly those at the level of intermediary. In addition, the Committee
notes that information gained from the Reportable Payments System is able
to be used by the Department of Social Security to investigate welfare
benefits fraud.
The Committee concludes that the Social Security amnesty for outworkers
has been of limited success because of the difficulties associated with
conveying information to outworkers and with their reluctance to become
involved with government agencies. The Committee believes that the amnesty
had merit. The Committee recommends that the Government consider reinstating
an amnesty for outworkers for a period to allow community groups sufficient
time to communicate with outworkers and to persuade them of its benefits.
The Committee further recommends that funding from the TCF 2000 Development
Package be made available for community groups to inform outworkers of
the amnesty (Paragraph 4.53).
The Committee notes that despite a low participation rate, the Labour
Adjustment Program has been of benefit to a number of people in TCF industries
who would otherwise have continued to be employed as outworkers in undesirable
circumstances. The Committee believes that more outworkers would benefit
if the cut-off date for prior employment was extended from July 1994 to
some appropriate date in the future. The Committee therefore recommends
that the government consider extending the cut-off date for prior employment
of the Labour Adjustment Program to a date in the future to be determined
in consultation with the Union (Paragraph 4.54).
The Committee notes that Australia has not become a signatory to the
ILO Convention and Recommendation on Home Work, but that the Government
is currently undertaking consultations with the states, the Australian
Chamber of Commerce and Industry and the ACTU with a view to presenting
a report to Parliament on this matter by the end of June 1997. The Committee
will review the Government's position in relation to the ILO Convention
on Home Work in 12 months time (Paragraph 4.55).
The Committee notes the cancellation of the grant by the current Government
to the Textiles Clothing and Footwear Union of Australia for outworker
related activities. The Committee believes that the grant made by the
previous Government to the Union for outworkers activities had already
resulted in a number of beneficial outcomes. The Committee recommends
to the Government that in evaluating proposals for expenditure from the
TCF 2000 Development Package, consideration be given to the need for outworker
projects similar to those carried out recently by the Union (Paragraph
5.24).
The Committee endorses the approach taken by the Union in promoting and
establishing Deeds of Cooperation between the Union and garment retailers,
manufacturing companies and government purchasers of clothing. The Committee
recommends to all government agencies involved in clothing procurement
that they consider whether outworkers are used in the manufacture of that
clothing and, if so, whether they are able to enter into such Deeds of
Cooperation (Paragraph 5.25).
The Committee believes that the draft voluntary industry 'Homeworkers
Code of Practice' originally promoted by the Council of Textile and Fashion
Industries of Australia could be an important step in changing the circumstances
under which outworkers are employed. The Committee recommends that an
industry 'Homeworkers Code of Practice' should be adopted by all participants
in the garment retailing and manufacturing process. The Committee regrets
that further progress has not been made towards establishing a voluntary
Code and undertakes to review progress towards voluntary regulation in
a further 12 months (Paragraph 6.50).
In attempting to resolve the problems faced by outworkers, quite a number
of recommendations were made to the Committee by various government, industry
and community groups. It is clear from the number of suggestions that
a combined and coordinated approach is needed. Of those recommendations
made, the Committee endorses and recommends the following actions.
The Committee endorses the concept of labelling garments. The Committee
recommends to the garment industry that it voluntarily adopt an agreed
label declaring that the employment conditions under which the garment
was made complied with legislative requirements (Paragraph 6.52).
Because the problem of outworker exploitation is multifaceted, the Committee
sees merit in having a National Outwork Committee, coordinated at government
level, which would include representatives from industry, unions, community
groups, and government agencies. The Committee recommends that the government
investigate the concept of a National Outwork Committee which would have
responsibility, inter alia, for the initiation and allocation of
funding for projects relating to outwork (Paragraph 6.53).
There is insufficient information about the number of outworkers involved
in garment manufacture, and in other areas of home-based processing. The
Committee recommends that the Australian Bureau of Statistics conduct
a comprehensive survey of the number of home-based workers across all
industries. The ABS should carry out this survey in conjunction with the
ATO and information gained from the Reportable Payments System on the
number of outworkers (Paragraph 6.54).
The English language skills of many outworkers are often completely inadequate.
This reduces their ability to negotiate contracts and to understand the
conditions under which they are employed. Notwithstanding existing programs,
the Committee believes that there would be merit in all governments reviewing
programs for English language education with a view to increasing access
for outworkers. The Committee recommends that the Government review federally
funded arrangements for English language education with a view to increasing
accessibility for migrants involved in outwork (Paragraph 6.55).
A contributing factor in the shedding of responsibility along the garment
manufacturing chain appears to be ignorance among participants as to their
own rights and responsibilities, and those of other parties. There is
a need for increased levels of industry education in areas of award compliance,
industrial relations, taxation compliance, and management skills. The
Committee recommends that the government review educational arrangements
in TCF industries for industrial relations and small business management
(Paragraph 6.56).
The Committee believes that because a multifaceted approach is needed
to eliminate exploitation of outworkers in the garment industry, the Government
should move quickly to allocate funding identified in the TCF 2000 Development
Package specifically for projects relating to outworkers, including those
recommendations given above (Paragraph 6.57).
The Committee undertakes to review in 12 months time outworking in garment
industry, with particular reference to the recommendations contained in
this report (Paragraph 6.58).