CHAPTER TWO
Garment Outworking in Australia ; Outworkers and garment production
The Trend Towards Home-Based Work
1.1 New employment patterns are emerging in a range of industries and
the trend towards greater flexibility in managing work has resulted in
increasing numbers of people in a wide range of jobs seeking to work from
home. [1] While outworking is not new, having
been a part of the clothing industry in Australia for over 100 years,
and long considered an appropriate form of work for women with family
responsibilities or who cannot find other forms of employment, [2]
it does appear that the very large increase in the number of outworkers
in recent years has been a direct result of changes which have arisen
from the reduction in industry tariffs.
1.2 Nor does outworking occur solely in Australia. Problems associated
with home-based work have been identified in a number of overseas countries,
including England and America, [3] and are of
sufficient international concern to have recently become the subject of
an International Labour Organisation (ILO) convention.
1.3 The ILO describes outworking as 'the production of goods or the provision
of services for an employer or contractor under an arrangement whereby
the work is carried out at a place of the worker's own choosing, usually
the worker's own home'. [4] Thus an important
aspect of the definition of an outworker is that the work is done outside
the premises of the employer.
1.4 Another important criteria distinguishing outworking from other home-based
economic activities is that it is based on a relationship of regular paid
employment by an employer, although this is often done through an intermediary
(a subcontractor, agent or middleman). Agreements between contractors
and outworkers are often verbal, although written instructions as to the
number of garments to be sewn and the payment per garment may accompany
the delivery of raw materials.
1.5 There are a number of advantages of home-based work for both employers
and employees. For employers, advantages include greater freedom to vary
volume of work in response to irregular and seasonal fluctuations and
a greater opportunity to vary the nature of the work. For employees, advantages
include the ability to receive work which otherwise may not be forthcoming,
the ability to more easily combine family responsibilities and work, and
greater flexibility in pace and timing of work. [5]
While not lawful, the ability to earn income while receiving workers compensation
or welfare benefits, and the ability to avoid taxation obligations through
the receipt of payments in cash, are also seen by outworkers to be advantages.
[6]
1.6 In evidence to the Committee, peak employer group the Victorian Employers'
Chamber of Commerce (VECCI), stressed in its submission that, while outworkers
in the garment industry faced many problems:
… it is also important to recognise the advantages of homework,
not only because of the flexibility it offers to employers and workers
alike, but also as a means of combating unemployment. For many workers,
outwork may be the only means of earning an income because they do not
have access to traditional job opportunities, be it due to a shortage
of jobs, lack of skills, or family responsibilities. [7]
1.7 Industry attitudes to outworker vary but for the most part there
is a strong belief that it is a legitimate and effective means of maintaining
the flexibility and responsiveness necessary for on-shore production to
compete effectively with imported apparel. [8]
Mr Harold Scruby, a consultant to TCF industries, argued that because
the manufacture of basic items of apparel would have almost completely
moved offshore by the end of the century and because the only substantial
part of the garment industry left in Australia would be home-based, outwork
should be thoroughly legitimised and encouraged. [9]
1.8 However, the retail and manufacturing sector does not condone the
exploitation of outworkers. It evidence to the Committee various manufacturing
and employer groups expressed considerable concern that immediate and
effective action be taken to elimination outworker exploitation and, in
particular, to eliminate exploitative child labour practices. [10]
Type of Work Performed by Outworkers
1.9 Many home-based workers only sew clothing, although the type of clothing
varies considerably in terms of fabric and quality of garment. While many
outworkers make clothes at the cheaper end of consumer fashion, quite
a number of home-workers sew clothes for high quality, expensive fashion
labels. [11]
1.10 In addition to garment manufacture, there are a large number of
other products which are subject to home-based work. These include knitting,
homewares (cushions, curtains, lampshades), manchester (sheets, towels,
etc), and outdoor wear and equipment. In addition, other retail items
which need to be processed are increasingly being assembled or packaged
in homes. These include novelty toys, badges, alarm systems, gun sights,
light fittings and foodstuffs. [12]
1.11 Although this inquiry relates solely to outworkers in the garment
industry, it is important to note that people employed in other areas
of home based-work probably also experience problems similar to those
described for garment industry outworkers and that any attempt to formulate
specific regulations based on the type of work performed may be artificial.
As explained by Ms Kaz Eaton of the South Australian Working Women's Centre:
Sometimes all that is different is the actual task that is being performed
- the hours, the contracting arrangements, the pay rates, the working
conditions and the lack of, or the wrong, information provided to workers
can be much the same. This is particularly obvious when one tries to
distinguish between an outworker sewing shirts and an outworker sewing
curtains. One is in the garment industry and specifically covered by
an industrial award; the other is in the furnishing trades industry
and not specifically covered by an industrial award. So the point that
we would like to stress here is that outworking is actually a form of
work which is widespread in our community and our consideration of it
must not be hampered by artificial distinctions based on the task performed.
[13]
1.12 Another increasing area of homework is in computing and office services
(often termed 'teleworking'). [14] However,
this type of work is usually performed by people who have tertiary educational
qualifications, whose first language is English and who, having previously
worked in an office, have chosen to work at home for life-style or family-care
reasons. This group of people are quite different from those who sew clothes
and are not considered further in this report.
1.13 While not falling strictly under the definition of 'home-work',
another area of employment where employees suffer exploitative rates of
pay is letterbox delivery services. Correspondence received by the Committee
indicated that people who undertake suburban letterbox deliveries are
also paid well below award wages because there is no relevant Federal
award and while State common rule arrangements may apply, they are usually
ignored by employers who take advantage of the difficulty of establishing
a clear employment relationship. [15]
Magnitude of the Outworker Industry in Australia
1.14 Estimates of the number of people involved in outworking in the
garment industry vary widely. The only government estimate available is
that of the Australian Tax Office which has calculated the magnitude of
the outworker labour force to be about 50,000; a figure derived from data
provided by manufacturers involved in the garment industry. [16]
1.15 However, the TCFUA has estimated that the number of outworkers is
increasing with more than 300,000 workers currently involved. This figure
encompasses both full-time and part-time outworkers and may include people
who are involved in outwork intermittently or for only a few hours each
week. [17] The Union has also estimated that
outworkers exceed factory workers by about 14:1 and that about 75% of
companies in the clothing sector have the majority of their production
performed in private homes. [18]
1.16 In the recent Union report, The Hidden Cost of Fashion, the
following claims were made for the number of outworkers in each state:
1.17
| Victoria |
144,000 |
| NSW |
120,000 |
| Queensland |
25,000 |
| South Australia |
25,000 |
| Western Australia |
15,000 |
| Total |
329,000 |
Source: The Hidden Cost of Fashion: Report on the National Outwork
Information Campaign, March 1995, TCFUA, p. 5. [19]
1.18 While community groups generally supported the Union's assessment,
or stated that the actual number may be even higher, employer groups and
government instrumentalities argued that the Union figure was likely to
be a considerable over-estimate of the actual number of outworkers involved
in the garment industry.
1.19 In its submission to the inquiry, the Association of Non-English
Speaking Background Women of Australia (ANESBWA) stated that the TCFUA
estimate of 300,000 outworkers was a 'very conservative estimate', [20]
and argued that although:
… available statistics on outworkers are unreliable and patchy
… there is a strong indication that outwork is carried out on a
large and significant scale in Australia … [and that] available
statistics usually underestimate the situation. This is due to the prevalence
of large-scale clandestine and undeclared working arrangements. [21]
1.20 When asked to comment on the various estimates of the number of
outworkers in the garment industry, Monash University academic Mr Ernest
Healy commented: 'The only thing I would say there is that the official
statistics data is almost certainly an under estimation [and that] involvement
in garment industry work and garment industry outwork was much more prevalent
than indicated in the official statistics'. [22]
1.21 Similarly, both the Construction, Forestry, Mining, and Energy Union
and Dale Street Women's Health Centre in South Australia commented that
the official ABS statistics were likely to be an underestimate. [23]
1.22 However, the Council of Textile and Fashion Industries of Australia
(CTFIA) disputed the Union figure, stating in oral evidence:
We would not say that it is 300,000 people … if you multiplied that
number with any reasonable amount of money per year, you would come up
with telephone numbers for the supposed added value in Australia for this
particular section of the industry. There is just no way, if you look
at the total output of the industry and the total sales of TCF, that you
could get any realistic relativity in that sense. [24]
1.23 Although the CTFIA held the view that, regardless of the actual
figure, the number of outworkers involved in potentially exploitative
employment practices was sufficiently high for them to be 'extremely concerned'.
[25]
1.24 The Retailers Council of Australia (RCA) also disputed the Union
estimate of the number of outworkers. While acknowledging that the RCA
did not have any evidence as to the correct number, Mr Phil Naylor, Chief
Executive Officer, made the observation that the figure of 300,000 seemed
to be very large:
… given that the whole retail industry - that is, every retailer
in Australia - only employs about one million people and the clothing
sector of the retail industry probably only employs about 100,000. It
does seem to us that 300,000 people involved in the manufacturing process,
which is a relatively small part of the manufacturing industry, is a
very large number … [26]
1.25 Finally, the Queensland Government, in its submission to the Committee
noted the TCFUA estimate of 25,000 outworkers in Queensland and commented
that: 'In view of the size of the clothing industry in Queensland and
the smaller population of people from non-English speaking countries (compared
to the southern states) the TCFUA's estimate appears to be rather high'.
[27]
1.26 Profile of a Typical Outworker
1.27 In its report The Hidden Cost of Fashion, the Union defined
outworkers as: 'mainly migrant women of non-English speaking background
who sew garments, in their own home, or some one else's home, for the
clothing industry'. [28] Outworkers are typically
recent migrants who, largely because of poor English language skills and
family-care responsibilities, have limited employment opportunities and
are thus unable to join the regular labour force. They are most often
women, although there are some men who perform outwork full-time. There
are also many other men who assist their wives on a part-time basis while
holding another full-time or part-time job. [29]
As well as sewing, men are often involved in ancillary tasks such as collecting
and delivering work, and sorting and bundling job batches. Other family
members, such as older relatives or children may also be involved in peripheral
jobs such as cutting threads or turning collars, as well as sewing.
1.28 There appears to be no shortage of recent migrants available to
do outwork. This is primarily because that sector of the population has
a very high rate of unemployment, particularly among women. [30]
In addition, there is a chronic shortage of semi-skilled jobs in the manufacturing
sector in Australia. [31]
1.29 The countries of origin of outworkers surveyed by the TCFUA in its
National Outwork Information Campaign were found to be predominantly Vietnamese
and Chinese (mainland China, Hong Kong, Macau, and Taiwan), with fewer
numbers of Arabic, Filipino, Khmer, Korean, Laotian, Portuguese, Spanish,
and Turkish people involved. [32] As a further
example, the community group Asian Women at Work reported that it has
regular contact with a number of outworkers who were all Chinese women
aged between 28 and 45 (most were between 30 and 35), who were usually
married, and who usually had one or two young children. [33]
1.30 Outworkers are generally aged between 25 and 35, and most have young
children for whom they have primary responsibility in addition to housework.
The fact that they cannot afford to pay for child-care leaves many outworkers
no choice but to work at home. If child-care was not so expensive, however,
many outworkers would consider working away from home. [34]
1.31 Many outworkers have no educational qualifications, although some
have qualifications gained in their country of origin which are not recognised
in Australia. [35] Outworkers usually experience
significant barriers to obtaining alternative employment. They feel trapped
in a working situation that offers little relief, inadequate support and
few opportunities for change.
1.32 Garment sewing is usually performed within an outworker's private
home, or in a garage associated with the home. In some instances several
outworkers may work in the same private premises. Generally outworkers
have their own machines and some have several machines for different sewing
applications. Sometimes the employer owns the machines, or the outworker
may be buying them on a hire-purchase basis. As described by Ms Debbie
Carstens, representing Asian Women at Work:
We have seen people with machines in their laundry, their bathroom,
their kitchen, their lounge room, their dining room and their garage.
One woman has two machines in her bedroom - an overlocker and a sewing
machine. They are often very dark and confined spaces with not much
air and there is a lot of dust in the air from the cloth they are using.
[36]
1.33 Although outworking has apparently increased in magnitude over the
last decade, it appears that conditions experienced by outworkers have
not improved and have probably even worsened. [37]
The Union firmly believes that working conditions for outworkers have
deteriorated in the last few years:
Outworkers, when they get work, typically work 12-18 hours per day,
7 days a week for about a third of the award rate of pay, and with no
access to even the minimum conditions enjoyed by factory workers. [38]
Ethnic communities, unions, community organisations, employers, and Federal,
State and Local Government instrumentalities have been debating strategies
to improve the situation of outworkers for over twenty years. Conditions
for outworkers are now worse than they have ever been. [39]
1.34 This view was endorsed by the Victorian Associates of the National
Council of Women of Australia. In a submission to the Committee the Council
noted that in 1987 it had investigated conditions experienced by outworkers
and found them to be unacceptable. Since that time, the Council argued,
nothing had changed for the better and, if anything, conditions had got
worse. [40]
1.35 According to Ms Alcorso who gave evidence to the Committee on behalf
of the Working Women's Centre (NSW), the deterioration of working conditions
experienced by garment industry outworkers has been a direct result of
the impact of government policy in reducing tariffs and quota protection
which had consequently increased competitive pressure to reduce labour
costs. [41]
1.36 Employment Status
1.37 The question of whether an outworker is an employee or a self employed
contractor is central to the issue of the terms and conditions under which
that person works. As defined through judicial determination, 'employees'
are considered to be people who work under contracts of service,
whereas 'independent contractors' are people who work under contracts
for service. Thus whether an outworker is an employee will depend
on the facts of the relationship and while many outworkers are considered
in practice to be 'independent contractors', by legal definition they
are more likely to be employees. To assist in this determination a number
of legal 'tests' have been developed. [42]
1.38 While the federal Industrial Relations Act 1988 does not
refer to any particular occupation as part of the definition of an employee,
legislation in both NSW and South Australia defines outworkers as employees.
For the purposes of the NSW Industrial Relations Act 1991, people
who perform work outside a factory for the occupier of that factory or
a clothing trader, are deemed to be employees of the relevant factory
occupier or clothing trader. [43] An employer
who wishes to engage an outworker must do so under terms which are no
less favourable than the conditions provided for under the award and must
register the contract with the State Clothing Trades Conciliation Committee
through the Industrial Registrar of the NSW Industrial Relations Commission.
1.39 In South Australia, however, the legal status of outworkers is confused
by the fact that while the Employee and Industrial Relations Act
defines outworkers as employees, the Workers Compensation and Rehabilitation
Act does not recognise outworkers as employees unless they come under
an award. [44]
1.40 The TCF Union emphatically asserts that, regardless of any legislative
definitions, an outworker is an employee. As stated by Mr J Riordan, who
gave evidence to the Committee on behalf of the Union:
The decision … was made by the Australian Conciliation and Arbitration
Commission in April 1987 … that outworkers are employees. [45]
1.41 The Occupational Health and Safety Commission supported the Union
in its definition of outworkers as employee's, stating in evidence to
the Committee that 'the nature of outwork in the industry defies the commonsense
understanding of an independent and self-employed person'. [46]
1.42 The Union gave evidence that despite clearly having the employment
status of factory worker (that is, an employee), outworkers were frequently
misled into believing that they were self employed people operating their
own businesses, coerced by intermediaries into registering their own business
name, and not given work until they did. [47]
1.43 The Victorian agency Job Watch noted in its submission that from
a practical point of view, outworkers invariably operated in a 'quasi'
employment state and that this status excluded them from many of the minimum
protections, government assistance programs and review and complaints
mechanisms usually afforded other employees. [48]
Job Watch argued that the spurious requirement for outworkers to register
business names was 'designed purely to enable the employer to avoid obligations
in respect of workers compensation insurance, payroll tax and group tax'.
[49]
1.44 Similarly, the Australian Chamber of Manufactures noted in its evidence
that the various types of outworker arrangements were difficult to define,
partly because the homeworkers themselves often arranged their affairs
to receive business concessions and thus there was considerable confusion
in the industry. The Chamber received calls on a daily basis for assistance
on defining whether a member had a contractor or employee on the books.
[50]
1.45 As a way of resolving this confusion, and because it believes that
the industry would be unable to absorb all outworkers as employees, the
Chamber suggested that it might be possible to retain two streams of home-based
workers: one which would encompass separate entities who wished to operate
as contractors and a second to provide for people who wished to operate
as an employee with all relevant entitlements. [51]
1.46 Finally, information provided to the Committee by the Director of
the Parliamentary Library Law and Administration group noted that while
'most garment industry outworkers, despite the casual nature of their
employment, are covered by relevant federal awards and should be treated
as employees, not independent contractors … there may indeed be some
workers engaged in the production of garments who are not employees. These
would include persons who are not potentially under the control of any
one employer and persons who are not engaged by body-hire agencies under
contracts [of their own] … . Large numbers of outworkers will,
however, come within the standard definition/understanding of the term
'employee' irrespective of whether they work from home, work for piece-rates
or are permanently engaged'. [52]
1.47 In conclusion, the Committee wishes to emphasise that while most
outworkers are and should be considered to be employees, some people who
carry out home-based work in the garment industry choose to be contractors
and should be considered as such.
1.48 The Chain of Garment Production
1.49 Parties Involved
1.50 The production of a garment involves a number of stages: designing,
cutting, sewing, finishing, pressing, packaging and distribution. Prior
to rationalisation of TCF industries, most garments made in Australia
were manufactured wholly within company-owned factories. Recent restructuring,
however, has meant that there are now very few garment companies which
complete every stage from beginning to end in their own factories. Most
companies now contract out at least the sewing stage, while some contract
out all stages and do not own any factory premises at all. They are simply
a fashion 'Label' which coordinates the various stages. Thus there may
be as many as ten parties involved in the manufacture and retailing of
one single garment. [53]
1.51 When contracted by a retailer for a particular garment, the manufacturer
in turn contracts out the various stages of production to different parties
(outworkers). However, the process of contracting out is most frequently
coordinated by an intermediary (a subcontractor or middleman) who collects
bundles of cut material from the manufacturer (or a cutting contractor),
along with instructions for sewing, and distributes them to outworkers.
1.52 Employers who engage outworkers are required by law to be registered
and must provide outworkers with details of the work to be done, the price
to be paid, the number of units to be sewn and the completion date. [54]
While this information may be passed on by the intermediary in writing,
sometimes it is only given verbally, or not at all. The intermediary then
collects the work and passes on the payment from the manufacturer, although
there is often some delay in this.
1.53 While the Committee met either informally or formally with individuals
and groups representing all stages of the garment chain, from retailers
to outworkers, it was unable to arrange any meeting with intermediaries.
Nor was any written information received directly from them. Thus evidence
about the role and practices of this group remains second-hand and circumstantial,
though not necessarily unreliable.
1.54 It is usual for the intermediary to be from the same country of
origin as the outworker, the only difference being that the intermediary
will usually have better English language skills and may have been in
Australia longer. [55] Sometimes there may
be a hierarchy of subcontractors, and outworkers may move up the hierarchy
to become intermediaries themselves. [56] Intermediaries
compete for work from manufacturers and often undercut each other in an
effort to receive work. These cuts are then passed on to outworkers by
the intermediaries who may have a large pool of outworkers to play off
against each other in an attempt to 'persuade' them to accept work at
lower rates and to complete it in a shorter period of time.
1.55 According to evidence given by the Springvale Indo-Chinese Mutual
Assistance Association:
One of the main factors that has enabled the fashion industry to prosper
and make huge profits in the last few decades in Australia has been
the fact that companies and fashion houses of this industry were able
to manipulate the existing outsourcing environment and the fierce competition
amongst middle agents for contracts to gain maximum outputs with minimum
pay hours at the expense of the outworkers' working conditions and wages.
[57]
1.56 While there was some speculation as to the level of knowledge and
understanding held by intermediaries of their own responsibilities and
the employment rights of outworkers, Ms Debbie Carstens of the community
group Asian Women at Work, argued that the intermediaries were fully aware
of their responsibilities because they were often able to take advantage
of the system to get the best out of it. [58]
Supporting this statement was anecdotal evidence and information received
by the Committee informally from outworkers with whom it met which suggested
that much manipulation of employment conditions occurred at the level
of intermediary.
1.57 Conversely, it was suggested to the Committee that a large take-off
of profits happened at the retailing end because the difference between
what an outworker was paid for sewing and the retail price of that garment
could be considerable. [59]
1.58 However, Mr Phil Naylor, the Chief Executive Officer of the Retailers
Council, rejected this assertion [60] and provided
the following break-up of component costs for garment manufacture to emphasise
that retailers did not profit from the exploitation of outworkers:
1.59
| ITEM |
COST ($) |
| Fabric & accessories |
20 - 24 |
| Make up costs |
12 - 14 |
| Manufacturer's administrative costs,
overheads & profit
|
7 - 13 |
| Cost of garment to retailer |
45 |
| Retailers Costs
(Wages, rent, administration, advertising, distribution, interest,
etc
|
40 |
| Average Markdown * |
10 |
| Retailer's profit before tax |
5 |
| Retail price * |
100 |
* 'In the volatile and competitive retail fashion market, markdowns are
a feature. The size of the markdown will depend on the item and how well
it is selling (or not selling). … In this example, a 10% average
across the sales of this particular garment has been used. In this example
therefore, the average price paid by customers for this garment would
have been $90'. [61]
1.60 While it is clear to the Committee that the potential exists for
intermediaries to be profiteering through manipulation of the system,
and for retailers to be profiting excessively, these views are simplistic
and do not take into account the fact that because the chain of garment
production is so long, it is easy for responsibility to be passed off
to another element at any stage along the chain. This appears both to
have occurred inadvertently and to have been deliberately arranged.
1.61 As described by the Australian Catholic Social Justice Council:
The outworker chain can be viewed as a structure of injustice. It provides
the means for exploitation to occur. No one group is solely to blame,
rather a convergence of factors, labour practices, economic policy and
educational disadvantage and manufacturing practice and the retail market
have brought about a structural injustice whereby the most disadvantaged
suffer. [62]
Role of Retail Pricing Policy
1.62 According to the Retailers Council of Australia, the 'retail clothing
sector transacts approximately 10% of total retail sales and provides
a livelihood for over 5,000 individual retail clothing businesses including
department stores, discount department stores and speciality clothing
chains'. [63] Retailers compete in sourcing
products from manufacturers either directly or indirectly through apparel
agents.
1.63 However, in the opinion of the Union, retail concentration is very
high in Australia with a few large retailers controlling manufacturing.
This concentration of ownership, the Union argued, has allowed retailers
to 'squeeze their suppliers' prices while also demanding more flexible
production and delivery schedules'. [64] Manufacturers
are thus being pressured into strategies which can result in the lowest
possible costs for garment production.
1.64 The Retailers Council of Australia, however, refuted the suggestion
by the Union that the clothing retail sector was highly concentrated in
Australia. In it submission to the Committee the Council stated:
The facts are that there are 5,000 retailers in Australia (operating
over 15,000 shops) competing on the one hand, for products from manufacturers
and on the other hand, for the patronage of consumers, both local and
tourists.
This sector is one that is characterised by small businesses and speciality
clothing retailers. Specialist clothing retailers transact about 60% of
retail clothing sales in Australia. Specifically they transact 58.4% of
women's wear sales (57.6%) of men's wear sales). The "major"
viz department stores and discount stores transact 37.6% of women's clothing
sales (35.4% of men's wear sales). … The remaining sales (4 to 6%)
are transacted by supermarkets and other stores. [65]
1.65 In addition, the Retailers Council argued that the sector was intensely
competitive, as indicated by the fact that retail prices and profit margins
had actually fallen over the last few years. [66]
The Council rejected the argument, put by the TCFUA, that the retailer
dictated the price per garment and that the warehouse then allocated the
work to the lowest bidder:
There seems to be, at the very least, some fuzzy and contradictory
logic in statements which assert, on the one hand, that a concentration
of retail ownership enables retailers to squeeze suppliers, yet, on
the other hand, per a response by the TCFUA to a question in the Sydney
hearings, which proposes that it is the competitive forces of retailers
which force manufacturers to pursue unjust prices. If there was a concentration
of retail ownership such that could control the market as asserted one
would expect this to make its presence felt in the retail market in
forcing up consumer prices. In fact the contrary has been recent industry
experience. [67]
1.66 Nevertheless, the Union maintains that while the retailer may be
some steps removed from the actual manufacture of a garment, the principal
power within the clothing industry still lies within the retail sector.
[68] This premise is based on the argument
that when agreeing to purchase clothing from manufacturers, the primary
consideration of retailers is price.
1.67 Thus there is immense pressure on the manufacturer to reduce costs
in any way possible. The most effective way for a manufacturer to do this
is to contract out as many stages as possible to outworkers. As described
by the Australian Chamber of Manufactures:
Many manufacturers are under extreme pressure from retailers to meet
specific price points and also to meet deliver schedules that are sometimes
unreasonable due to late decisions etc. Outworkers provide the flexibility
to do this. I believe the demands made on suppliers by retailers, plus
the competition of imports, creates the need to work with outworkers.
[69]
1.68 Warehouse distributors vie for work from retailers and, having been
successful, then allocate the work to the lowest manufacturer, who then
allocates the work through a network of contractors, who in turn pass
it on to the outworker who will accept the price. Each level seeks to
optimise the margin between the level above and below and manufacturers
have thus been forced to shift from inside workers to outworkers. Manufacturers
who stay with in-house production, providing award wages and conditions,
and who pay factory overheads, are at a disadvantage compared to those
manufacturers who have moved to using outworkers.
1.69 Clearly a manufacturer who uses under-paid outwork will have a competitive
advantage over a manufacturer who complies with Award requirements (given
similar garment quality). According to the NSW Government, its task force
on outworkers found that contractors who were complying with award conditions
were forced to quote unprofitable prices in order to maintain their market
share against competitors who were paying below-award wages. [70]
In this way legitimate employers were being forced out of business by
unscrupulous manufacturers who employed outworkers on below-award wages.
[71]
1.70 The per unit price paid for an item of clothing is dictated by the
retailer and may bear little relation to the quality of the end result
or the skill and patience required to make it. The unit price paid to
the outworker may not necessarily relate directly to the final price for
which the garment is sold by the retail store; outworkers are regularly
paid only marginally more for a top-of-the-range fashion item than for
a cheaper one. [72]
1.71 The Union argued in its submission that: 'manufacturers and retailers
... have promoted a system of production that is currently allowing them
to avoid paying their employees award wages and conditions ... it has
allowed them to exploit already vulnerable workers in order to maximise
their own profits without proper regard to widely held social justice
values'. [73]
1.72 The Union further asserted that retailers are in a position to threaten
manufacturers with going off-shore for production if contract prices are
not kept to a minimum. Despite increasing costs for manufacturers, wholesale
prices have been held down by retailers. Production times have had to
become shorter to give local companies an edge over imports. The result
has been that ever decreasing margins and unrealistic deadlines have been
passed down the garment manufacture chain to finally reach the most vulnerable
group - the outworkers. Thus the Union concluded that: 'by asserting control
over the market, major retailers are effectively being supplied with local
products - bearing the 'Made in Australia' tag - for wages as low as those
in China, Indonesia or Vietnam'. [74]
1.73 Conclusions and Recommendations
1.74 The Committee concludes that it is impossible to state accurately
the number of people involved in home-based garment manufacture in Australia.
Estimates provided indicate that there is somewhere between 50,000 and
330,000 people involved in outworking in TCF industries on a full and
part-time basis. However, regardless of the absolute number of people
involved, the Committee accepts that it is highly likely that the number
of outworkers has increased considerably over the last decade. More
importantly, however, the Committee believes that there are sufficient
people involved in the industry for concern about them to be warranted.
1.75 The Committee is concerned that there are increasing numbers of
people being employed in areas of home-based work in circumstances where
the enforcement of statutory or contractual obligations is difficult with
the consequence that vulnerable workers may be exploited by manipulative
employers or unscrupulous intermediaries. This appears to be particularly
so in the garment industry.
1.76 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.
Footnotes
[1] Evidence, p. E 421.
[2] Evidence, pp. E 15, 389, 515.
[3] Evidence, pp. E 38, 364, 302, 370, 704.
[4] As cited in Evidence, p. E 150.
[5] Evidence, pp. E 133, 410, 421, 516.
[6] Evidence, p. E 848, Submission No. 39, p.2.
[7] Evidence, p. E 408.
[8] Evidence, pp. E 390, 408.
[9] Evidence, p. E 673.
[10] Evidence, p. E 70, 133, 367, 408, 422,
698.
[11] Evidence, p. E 36, 51.
[12] Evidence, pp. E 495, 504, 519.
[13] Evidence, p. E 546.
[14] Evidence, p. E 552.
[15] Letters dated 13 June and 26 November
1996, from Mr Lawrence William Mousley, Scarborough WA.
[16] Evidence, pp. E 603, see also pp. 74-5,
595, 608, 610.
[17]Evidence, pp. E 21, 40, 906-8.
[18] Evidence, p. E 21.
[19] Note: Estimates are based on information
from companies listed as suppliers to large retailers; appearing on contractor
lists provided by principle clothing companies; registered as clothing
manufacturers; involved in the Federal Clothing Trades Award; or from
which outworkers have reported receiving work.
[20] Evidence, p. E 180.
[21] Evidence, p. E 150.
[22] Evidence, p. E 796.
[23] Evidence, p. E 572 & 518, respectively.
[24] Evidence, pp. E 389 & 393.
[25] Evidence, p. E 389.
[26] Evidence, p. E 708.
[27] Submission No. 39, p. 1.
[28] Textile Clothing & Footwear Union
of Australia The Hidden Cost of Fashion - Report on the National Outwork
Information Campaign. March 1995. Cover Page.
[29] Evidence, p. E 223.
[30] Evidence, p. E 9.
[31] Evidence, p. E 21.
[32] Textile Clothing & Footwear Union
of Australia The Hidden Cost of Fashion - Report on the National Outwork
Information Campaign. March 1995. Pages 8 & 12.
[33] Evidence, p. E 216.
[34] Evidence, pp. E 29, 516, 546, 554.
[35] Evidence, p. E 22.
[36] Evidence, p. E 218.
[37] Evidence, pp. E 462, 581.
[38] Textile Clothing & Footwear Union
of Australia The Hidden Cost of Fashion - Report on the National Outwork
Information Campaign. March 1995. p. 4.
[39] Evidence, p. E 10.
[40] Evidence, p. E 846.
[41] Evidence, p. E 193.
[42] Evidence, pp. E 652-3.
[43] The NSW counterpart of the Federal award
is the Clothing Trade (State) Award.
[44] Evidence, p. E 547.
[45] Evidence, p. E 36.
[46] Evidence, p. E 87.
[47] Evidence, p. E 17. In addition, the fact
that outworkers believe that they must have their own business name was
evident to the Committee during its inspections of outworker homes, where
certificates of registration of business name were clearly displayed in
the work area.
[48] Evidence, p. E 476.
[49] Evidence, p. E 476; see also E 37, 217,
524, 547, 719.
[50] Evidence, p. E 319, and see for example
letter on p.322.
[51] Evidence, p. E 327.
[52] Undated letter from B Bennett, Director,
Law and Public Administration Group, Parliamentary Research Service, to
R Diamond, Secretary, Senate Economics References Committee, p.1.
[53] Evidence, p. E80.
[54] Evidence, p. E 17.
[55] Evidence, pp. E 136, 222, 224.
[56] Evidence, p. E 462.
[57] Evidence, p. E 810.
[58] Evidence, p. E 223-4.
[59]Evidence, p. E 191.
[60] Evidence, p. E 705.
[61] Evidence, p. E 703.
[62] Evidence, p. E 136.
[63] Evidence, p. E 697.
[64] Evidence, p. E 13.
[65] Evidence, p. E 697.
[66] Evidence, p. E 697.
[67] Evidence, p. E 698.
[68] Evidence, p. E 865.
[69] Evidence, p. E 317.
[70] Submission No. 38, p. 2.
[71] Evidence, pp. E 35, 117, 134, 317.
[72] Textile Clothing & Footwear Union
of Australia, op cit p. 16.
[73] Evidence, p. E 9.
[74] Textile Clothing & Footwear Union
of Australia, op cit p. 15.