Outworkers in the Garment Industry
CONTENTS

CHAPTER THREE

Employment Conditions

1.1 Award Entitlements and Conditions

1.2 The main award in the clothing industry is the federal Clothing Trades Award 1982 and its provisions are mirrored by state awards. As employees under the various awards, outworkers are entitled to be paid wages equivalent to factory workers doing equivalent work. Inter alia, outworkers are also entitled to:

• regular work as either full-time or part-time workers;
• overtime;
• paid public holidays, annual and long-service leave;
• superannuation; and
• the right to skill assessment and payment according to the level of skill exercised. [1]

1.3 The Award provides that employers must pay outworkers and contract workers at a specified piece-rate. This rate is calculated using a formula based on the standard factory rate as follows:

• the employer calculates the time that each garment can be made by a machinist of average skill in a factory;
• the time is then inflated to take into account time spent on ancillary tasks such as unbundling and sorting;
• a price per piece is then calculated by multiplying the number of minutes by the minute rate for a worker performing the same work in a factory.

1.4 The Award provides that outworkers are to be given 38 hours worth of work per week or pay for that amount of work. Any overtime is to be paid at a rate of time and a half. Employers and outworkers can agree that work be carried out on weekends and public holidays and for which the piece-rate doubles.

1.5 The Award also provides for detailed reporting obligations for respondents regardless of whether outworkers are directly employed or are employed through an agent or intermediary. [2] These details must be given to the outworker when each batch is delivered. Employers of outworkers must be registered with a tripartite Board of Reference representing the Union, an employer organisation and the Australian Industrial Registrar, and must hold a registration number which must be re-issued annually.

1.6 While there is evidence to suggest that there are some reputable companies which try to ensure that outworkers are not exploited, [3] it appears that the complex chain of garment production for the most part mitigates against payment of award wages for outworkers. The practice of non-compliance with award wages and conditions is so widespread that it is considered to be the norm. [4] In addition, a common breach of the award is non-registration as an employer of outworkers. [5]

As stated by a former Industrial Inspector:

From 1979 until 1984 I was employed as an Industrial Inspector in the NSW Department of Industrial Relations. During that period I conducted several investigations into outwork in the clothing industry. My inquiries revealed widespread non-compliance by employers with their award, statutory leave and workers compensation obligations to their outworkers. … I continue to be concerned at the widespread underpayment and general gross exploitation of outworkers in Australia. [6]

1.7 The are a number of impediments to outworkers receiving award rates and conditions. The most significant of these is the complex chain of production which sees work passed from retailer to manufacturer to contractor to subcontractor to outworkers. With this system, the exact employer is difficult to define. Thus it allows everyone in the chain above the outworkers to avoid meeting any obligation that they may have under the Award.

1.8 The Australian Council of Trade Unions (ACTU) argued in its submission that outworkers were generally unable to access collective representation and, despite concerted efforts of the TCFUA, had not yet achieved the protections of the award safety net. [7] Most outworkers are ignorant of their employment rights, particularly that award conditions are available to them. [8] In addition, because there is considerable expense involved in enforcing compliance, and because outworkers are unwilling to participate in litigious action for fear of reprisals, or cannot afford to become involved in court action, there are few prosecutions of unscrupulous employers to act as a deterrent to others. [9] Thus outworkers, for the most part, remain completely outside Australia's system of industrial regulation. [10]

1.9 The inability of the Union to secure the widespread payment of award rates for outworkers appears also to be due to pressure from intermediaries for outworkers to establish themselves as separate business enterprises and thus become, by definition, self employed contractors. [11] Once outworkers become 'contractors', award conditions no longer apply and entitlements to sick leave, holiday pay, superannuation, accident insurance or worker's compensation are lost. The intermediary may then pay a lower rate to the outworker and take a larger profit themselves. If a manufacturer employs outworkers direct, the use of 'contractors' rather than employees may be a way of reducing production costs.

1.10 In addition, when an outworker becomes a contractor the employer no longer has to provide work on a regular basis, and may use the outworker as need dictates. Consequently outworkers may suffer great discontinuity in the flow of work, having no income at some times while at others being placed under considerable pressure to meet short deadlines. While this may suit everyone else, it places great stress on the outworker.

1.11 It should be noted, however, that at the commencement of the payment process, the original employer (usually the commissioning manufacturer) may have allowed for and paid a fair and equitable rate. It is when this rate is paid to an unscrupulous intermediary that the outworker may receive much less than the original amount allocated. Thus by treating outworkers as contractors, intermediaries are able to evade their legal responsibilities to people who rightfully should be treated as employees but who do not realise the consequences of their altered status.

1.12 However, while the CTFIA noted in its submission to the Committee that the lack of a clear distinction between 'independent contractors' as opposed to 'employees' mitigated against observance of current award provisions, those provisions were in fact not appropriate to the current operating environment of the garment industry. The CTFIA argued that, for example, the seasonal nature of the garment industry made it inappropriate that there be a mandatory award requirement that outworkers be engaged as either permanent part-time or full-time employees with a guaranteed minimum payment, irrespective of the availability of the work. Thus the CTFIA stated: ' … if outworkers are prepared to accept work whenever it is available, and provided they are paid at the appropriate rate, and are given reasonable time to complete the work, then this should be allowed'. [12]

1.13 Similarly, the CTFIA argued that it was the view of employers that Award provisions were based on factory employment conditions and that they did not take into account the special characteristics associated with home-based work which could be of benefit to those people. These benefits included the ability to care for children and other relatives in the home while working, the lack of time and expense associated with travel to and from a factory, the relative autonomy in deciding when to work, and the cultural acceptability for some women to work from home rather than in a factory. The CTFIA, however, did acknowledge that there may be countervailing costs associated with working from home such as payments for heating and electricity, and maintenance of machinery. [13] There may also be costs associated with the purchase of machinery, either outright or on a hire purchase basis from intermediaries.

1.14 The CTFIA argued that a more appropriate and simpler method of payment was one based on a per garment rate, the determination of which was in turn based on the award rate of pay (as opposed to an hourly rate which is standard in factories) and for which there was an internationally accepted standard (GSD). [14]

1.15 The Australian Chamber of Manufactures in its submission pointed out that while outwork is carried out at home, homes have not traditionally been covered by industrial legislation, nor have outworkers always been treated as employees. The Chamber argued that the practice of 'roping-in' businesses under the Federal Trades Award was piecemeal and had a number of associated problems, including the fact that the Award does not cover outworkers working for non-respondents, nor does it apply to intermediaries. [15]

1.16 The Victorian Employers' Chamber of Commerce and Industry noted in its submission that an increasing number of Australian clothing companies were moving production offshore because of the lack of flexibility and competitiveness in employment options in Australia. The submission from VECCI was critical of current employment arrangements under the Federal Clothing Trades Award and stated that the current legal obligations for outworkers which were founded on a factory-based award, were inappropriate for home-based work and difficult to achieve. These problems had resulted in lack of compliance by employers who found the system too complex, too inflexible and in some cases unworkable. The main areas of concern to employers were definition of employee, employer and contractor, inflexible award provisions, and the onerous reporting requirements of the award. [16]

1.17 In its submission to the Committee, Done Art and Design argued that before the widespread enforcement of award conditions was adopted, there should be a substantive analysis of the present industry structure and the impact that technological and market change was likely to have. For example, the submission questioned whether penalty rates and holiday loadings were relevant in home-based work. [17]

1.18 In addition to problems associated with award compliance, employer groups and industry representatives argued that if those companies that compete solely on price were all required to pay award wages and conditions to outworkers, the labour cost component would substantially increase. This would in turn result in higher retail prices. According to the submission from Done Art and Design, if faced with significant domestic price increases, the three largest retailers (K-Mart, Target and Woolworths) would most likely increase their proportion of imported garments. [18] Garment manufacturing companies would then only survive if they gain a competitive edge in some other way, either through design superiority, the application of technology to save labour costs, creating stronger links with local suppliers, or creating a niche or 'label' marketing edge. [19]

1.19 However, despite all these assertions from employer groups and manufacturers, it was the Union's strong belief that manufacturers could and should pay award rates and that enforcement of the award would not have a significant impact on retail prices. [20]

1.20 Impact of the Workplace Relations Legislation

1.21 The Workplace Relations and Other Legislation Amendment Act 1996 will potentially affect the employment conditions of outworkers in two main ways. First, provisions relating to 'Australian Workplace Agreements' will allow employers to negotiate individual contracts with outworkers and, second, provisions relating to union right of entry and access to employer records may reduce the ability of the union to police award entitlements.

1.22 Under the new legislation, outworkers may be employed either through the relevant existing Award or through a new individual 'Australian Workplace Agreement' (AWAs). While the new legislation provides that other matters in awards will be simplified to a set of 'allowable matters', awards can maintain provisions regarding the regulation of outworkers as employees.

1.23 Workplace Agreements will be subject to the 'no disadvantage test' and contracts must be scrutinised by an Employment Advocate. With regard to AWAs, the ACTU noted in its submission to the Committee that:

The plight of outworkers in the clothing industry is indicative of the worst aspects of individual contracts of employment. The lack of regulation of outworkers is offensive to the system of collective regulation and undermining of the efficacy of our system. [21]

1.24 The ACTU argued strongly that outworkers should have access to collective representation and collectively negotiated pay and conditions. The Council alleged that not only were there already many impediments to achieving this for outworkers, the proposed changes to the Industrial Relations Act would only serve to increase these impediments:

The ACTU is concerned that the government's proposed changes to the Industrial Relations Act will leave many more workers potentially vulnerable to exploitation on the basis of individual contracts, potentially without the protection of an award safety net. The increase in homework in other industries, aside from the clothing industry, could also leave workers generally more vulnerable to these sorts of individual arrangements.

The fact that outworkers are forced to compete in an unregulated labour market and are systematically and illegally denied access to such benefits as minimum wages, workers compensation, superannuation and a healthy and safe workplace, does not bode well for an industrial relations system on the brink of deregulation. [22]

1.25 The Act in its final form prevents the entry of union officials to a factory or outworker's premises unless a member of the Union has extended an invitation. In its submission to the Senate Economics References Committee inquiry into the then proposed Workplace Relations and Other Legislation Amendment Bill 1996, the TCFUA expressed considerable concern that any reduction in the Union's ability to enforce award obligations would have a detrimental impact on outworkers in the garment industry. As stated in that submission, changes proposed by the legislation relating to right of entry provisions: 'will by themselves completely destroy the ability of the TCFUA to engage in any preventative policing aimed at outwork exploitation'. [23]

HOW OUTWORK CAN BE EXPLOITED

Outwork may be exploited by garment manufacturing companies directly and indirectly in a number of ways:

• non-payment of award wages, reduced payments for acceptance of cash and complete non-payment of wages in some instances, all of which contribute to a reduction the wages component of garment manufacture;
• non-payment of outworkers for time spent on ancillary tasks (unbundling, learning design, cutting threads, etc);
• costs normally paid by the manufacturing factory borne by outworkers (for example, cotton thread, electricity, machinery repair and machinery leasing costs);
• the deeming of outworkers as 'contractors' resulting in a shift in costs from the manufacturer to the outworker (superannuation and insurance premiums);
• payments in cash and inaccurate record keeping resulting in losses in taxation revenue;
• unregulated hours of work resulting in overwork with consequent health and safety problems among outworkers, the cost of which is then borne by the public sector through Medicare claims and welfare benefits; and
• use of intermediaries to keep the workforce one or more steps removed from manufacturing companies which allows a shedding of responsibilities.

Actual Remuneration

Rates of Pay

1.26 Evidence collected by the TCFUA suggests that the majority of outworkers are not paid according to award requirements. Instead they are paid by a piece-rate which translates to an hourly rate which is considerably less than the equivalent worker would receive in a factory. In fact, as argued by the Union, outworkers are the lowest paid workers in the Australian labour-force. [24] To support this statement, Union Outworker Coordinator, Ms Annie Delaney, presented a number of case studies to the Committee (see Case Studies in Boxes). [25]

1.27 Several community groups who have regular contact with outworkers also gave evidence of the very low rates of pay received by outworkers. For example, the community group Asian Women at Work has a support network for about 50 outworkers, 30 of whom work from their own homes. The remainder work in informal 'factories'. Payment of women in their network was always in cash and often there was no receipt of income. Some did not receive group certificates at all. There were no payments made for superannuation or workers' compensation, nor any other benefits paid. [26] It was claimed that when piece-rates were translated to hourly rates (after the work was actually done), these women were receiving as little as $2.00 per hour. [27]

1.28 According to the community group Association of Non-English Speaking Background Women of Australia (ANESBWA), the piece-rates system had led to 'excessively long working hours [and] the employment of a concealed army of unpaid "assistants" and to child labour'. [28]

1.29 Problems with Payments

1.30 The Union argued both in its submission to the Committee and in oral evidence that underpayment, delayed payment and, in instances, complete absence of payment were frequently experienced by outworkers. [29]

1.31 The most common problem was late payment for completed work. While outworkers should be paid on completion of a job, they were often not paid until several weeks or even months later. [30] During that time they faced the dilemma of either repeatedly asking for payment, with the risk of getting their supplier off-side, and possibly receiving no more work, or keeping silent and risk not receiving the payment at all.

1.32 Actual rates of pay were further reduced by the fact that piece-rates do not take into account the need for other tasks to be performed, such as unpacking bundles of work, checking numbers, assessing more intricate sections of work, and counting and packing finished garments. In a factory, these tasks are performed by other workers. [31] In addition, outworkers were often required to provide their own machinery, pay for cotton thread, electricity, and for any mechanical repairs if their machinery breaks down. [32]

1.33 Job Watch, a Victorian community legal centre which specialises in employment and training law, noted in its submission that the vast majority of initial contacts to that organisation by outworkers were in relation to money owed for work already performed. Because many outworkers had been deemed to be 'independent contractors' by those people providing the work, under the new Victorian system of industrial relations traditional methods of wage recovery were now not available. The only alternative, civil action, was unrealistic given the prohibitive legal costs usually involved in court action. [33]

Payment to outworkers may be irregular, or may differ between different nationalities or people with different residency status. For example, as stated by Ms Debbie Carstens representing Asian Women at Work:

In one particular [informal] factory there were different rates of pay for different people. The people who did not have permanent residency were getting $6 an hour, the people with permanent residency and therefore eligible for social security benefits were allowed to get $5 an hour and those who were just cutting the threads off the garments were getting $3.50 an hour. [34]

1.34 Another common complaint from outworkers was that completed work was subject to rejection from contractors for no logical reason, or for spurious reasons. Then the garments were either taken away with no payment made at all, or the outworker was required to re-sew the garment, or part of it, with no compensation for the extra time involved. ANESBWA claimed it its submission to the Committee that garments rejected on quality grounds were sometimes subsequently sold at 'flea' markets. [35]

1.35 Hours of Work

1.36 Poor rates of pay lead directly to the need for outworkers to work long hours. In addition, self imposed deadlines or, more frequently, unrealistic deadlines imposed by intermediaries mean that outworkers often sew for an excessive period of time each day and for many days without any substantial break. Long hours spent at machines result in both direct occupational health problems as well as indirect stresses caused by having to complete domestic chores as well.

1.37 In evidence to the Committee TCFUA Outwork Coordinator, Ms Annie Delaney, described how extreme pressure may be applied to outworkers by intermediaries to complete jobs sooner than originally requested:

… [outworkers] state it is not uncommon to be given work to be completed in five days but that next day they begin receiving calls from the [intermediaries] to finish the work earlier. They have often been pressured to complete an order in three or four days and have to go without sleep for at least one day to complete the order. There have been times when they have had to get their children to assist them and work through the night to finish an order. They state also that they know many families who are in the same situation as themselves. [36]

TCFUA OUTWORKER CASE STUDIES

CASE STUDY 1 - Ms MAI

Mai had been working as an outworker for 5 years. Earlier this year she completed two lots of work for a particular intermediary. At the commencement of the work she had been told that she would be paid in cash.

The first job consisted of sewing vinyl halter neck women's tops. She was to be paid $3.50 per garment and completed 1757 pieces over 2 months. She reported working 9am to 2am daily seven days a week. Her husband had assisted her after work for 4 hours each night and for 20 hours over the weekend. Mai estimated that it took 2 hours per top to make and that she had three children to look after at the same time.

On completion of the work, Mai expected to be paid $6149.50. After 'deductions' were made it come down to $3410.45 and then a further 20% was deducted for payment in cash, leaving a total of $2739.05. This equated to $1.55 per garment, or 77 cents per hour. She was owed $1340 for an earlier job.

After going to the intermediary's 'factory' 15 times on one day she was given two cheques; one for $2739.05 and one for $1340.00. Both cheques were pre-dated and were not covered by sufficient funds when presented to the bank. A few days later the intermediary came to her house and presented a cash payment of $1050 in exchange for the second cheque. The remaining amounts owed were never received and when the Union was asked to intervene, it was found that the contracting 'factory' no longer existed.

(Source: Evidence pp. 875-877)

1.38 For those outworkers not being paid under award conditions, there are of course no allowances for superannuation, sick leave, holiday pay, overtime or bonuses for meeting short deadlines. [37]

TCFUA OUTWORKER CASE STUDIES

CASE STUDY 2 - Mr NGUYEN

Mr Nguyen has been an outworker for several years. In 1990 he carried out work for an intermediary known to him as Jim. Further work was done for Jim in 1993, although at the latter time Jim had a different company name.

In 1993 Nguyen agreed to sew 810 skirts for $4 each. When they were finished he was owed $3240 but was only paid $2000. Three months later he was approached by Jim to sew 354 pairs of shorts for $3.00 each. Nguyen said he could only sew half that number (174 were completed) but also agreed to do some zips. He was owed $702 for this work. At the end of the second job he was then owed a total of $1942.00.

From 1993 to 1995 Nguyen could not locate Jim his 'factory'. He believed that Jim's company had again changed name and moved. Finally he thought he had traced Jim to a new location and contacted the Union.

When the Union became involved, officials approached Jim but through lack of adequate documentation have been unable to assist in recovering the money.

(Source: Evidence pp. 886-888)

Occupational Health and Safety

1.39 By its very definition, and because the people involved mostly belong to the lowest socio-economic group, outwork is almost always performed in substandard physical environments: a small room in a house or small garage. The space is usually cramped and there is often inadequate lighting, ventilation and heating. Noise and dust from cloth are perpetual problems. In addition, the pressure of tight deadlines compounded by the need to care for children and cater to other family needs, results in considerable occupational stress for many outworkers.

1.40 According to the TCFUA, occupational health and safety among outworkers is a much neglected issue. Most employers of outworkers do not provide any form of worker's compensation insurance, nor do they take any responsibility for occupational health and safety. The use of non-award labour contributes to the incidence of workplace accidents due to poor and unsafe working conditions exacerbated by excessive hours of work. [38] If injuries occur, outworkers often have no alternative but to resort to social security benefits, which means that ultimately responsibility for their work-related injuries moves away from the private sector, which has employed them, into the public sector. [39]

1.41 The Working Women's Centre (NSW) argued that there was 'an unacceptable level of employer disregard for the health and safety of workers'. [40] The National Council of Women of Australia noted in its submission that occupational health and safety standards needed to be addressed urgently before conditions improved and that outworkers needed to be taught their rights and educated in occupational health and safety issues. [41]

1.42 A number of submissions described the health problems experienced by outworkers and Ms Debbie Carstens representing Asian Women at Work gave the following evidence to the Committee:

Occupational accidents and illness are reported by the women in our network. Universally people talk about sore shoulders, back, neck and hands. For some of these women that has actually progressed to what we would call repetitive strain injury. They experience severe pain and actually have to stop working because of the pain that they experience. It is not relieved even by rest in some cases.

They also universally talk about sore eyes from the long hours of concentrating on fine work. Others actually report having double vision and a sensitivity to light. There are some people who do not come to our English classes at times because they said they have sore eyes or they cannot read the print of the books we are studying in the class.

Women talk about dry skin on their hands from constantly handling the material. They say that the colour from material leaves a pigment on their hands that is not removed from washing. Also there is a problem with the dusty environment. Some people have developed coughs and the women have talked about their concern as to what other effects the dusty environment might be having on their health. [42]

1.43 Worksafe Australia provided a detailed submission to the Committee which noted that, in general, Australia carried 'a significant human and economic burden as a result of poor performance in workplace health and safety' [43] and that, specifically, awareness about occupational health and safety issues was low in TCF industries. [44] The submission argued that duty of care for health and safety was clearly defined in formal employment, but it became increasingly less clear in the case of contractors and, more specifically, in the case of outworkers.

1.44 The submission agreed with the classification of outworkers as employees and argued that:

… any attempts to improve the health and safety of outworkers need to address this issue of duty of care and to clearly define where responsibility lies for providing safe and health workplaces and systems of work for outworkers. OHS legislation should acknowledge ongoing employment relationships in the case of outworkers regardless of whether those relationships are considered supplier, contractor or self-employed agent in the same manner as a formal employment relationship. [45]

TCFUA OUTWORKER CASE STUDIES

CASE STUDY 3 - Ms WANG

The Union became involved in Ms Wang's case when she contacted them after she was not paid for one batch of work. The company who employed Wang failed to pay her $1800 and the Union has not been successful in locating her employer.

Wang reported that she had worked very long hours, up to 18 hours a day, seven days a week, and that she often suffered from pains in her arms, neck and back.

When a Union official visited her home she found Ms Wang's eight year old son working at the machine and was told by the son that he helped his mother because she was so tired.

(Source: Evidence pp. 885)

1.45 With specific regard to the occupational health and safety of outworkers, Worksafe Australia noted that there was little reliable information on the incidence of injury and disease primarily because of the clandestine nature of the workforce. However, studies had indicated that at least some outworkers were aware that their work carries with it significant health and safety problems. The types of problems reported include:

• exhaustion from working long hours;
• stress of meeting deadlines and working alone;
• pain in muscles and joints from repetitive movements;
• strain from heavy lifting;
• sore eyes and headaches;
• reactions to dust and material particles;
• noise from machines; and
• dangers posed to young children operating machines.

1.46 Through its Industry Development Program, Worksafe Australia has given priority to working with TCF industries and has formulated an Industry Development Program which includes an OHS Agreement. Although these initiatives are not directly aimed at outworkers it is hoped that those people involved in outworking will benefit indirectly through Union contact and through the involvement of retailers and manufacturers in the Program.

1.47 To reduce health and safety problems among outworkers, and to reduce the community cost of those problems, Worksafe Australia made a number of recommendations, including:

• 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. [46]

1.48 In addition to direct health and safety problems, outworkers also experience secondary health effects, such as depression and anger, caused by the stressful nature of the work, social isolation caused by constantly working at home, and lack of intellectual stimulation. [47] As described by Ms Carstens:

Isolation of these women is very severe and leaves them very open to exploitation. Some of the women never leave their home if the contractor delivers and picks up things. Working the long hours, they very rarely leave home. [48]

Other Problems Experienced

Harassment from Intermediaries

1.49 The TCF Union found in its recent survey evidence that suggested that harassment of outworkers by intermediaries was widespread, with intimidation, and verbal and physical abuse having become regular occurrences in some outworkers lives. [49] The National Council of Women in a submission to the Committee noted that intimidation and harassment appeared to be an everyday occurrence for some outworkers. [50]

1.50 The Association of Non-English Speaking Background Women of Australia (ANESBWA) noted in its submission that outworkers experienced 'a disproportionately high degree of sexual harassment and race and sex discrimination', [51] although they represented a low proportion of people who made formal complaints to the Human Rights and Equal Opportunity Commission. ANESBWA attributed this to the fact that outworkers usually had poor English language skills and a lack of access to information about their rights.

1.51 Many outworkers are fearful of their employers, the intermediaries. As described by Ms Carstens:

For some of the people in our network, the employer-employee relationship is one of distance and is quite fearful. We have had people say that they are scared to take their case to the union to try to get proper compensation for the work that they do on the basis that the employer will send the gangs after them. In some places they have only a name and a phone number as the contact for their employer. [52]

1.52 Job Watch noted in evidence to the Committee that, in general, there had been a 'phenomenal increase in workplace violence over the last 12 to 18 months'. Elaborating on this assertion Mr Rod Wee Hee, Coordinator and Public Officer of Job Watch, stated:

We are starting to receive some most horrific physical, verbal and sexual intimidation cases through our telephone service. It is really having a major impact on the organisation. It comes back down to the unequal power in the employment relationship. [53] … This year to date [16 April1996] we would have received almost 600 calls in relation to workplace violence of a physical, sexual or verbal nature. [54]

1.53 The South Australian Working Women's Centre noted that outworkers were genuinely afraid to talk about their employment conditions, mainly because of fear of employer reprisal. The Centre made attempts to have some outworkers give evidence themselves to the Committee but were unable to convince any outworker to come forward for this reason. [55]

1.54 Confusion and Misinformation

1.55 The TCF Union study which led to its report The Hidden Cost of Fashion, noted that many of the outworkers who had used their toll-free phone service expressed fear and confusion about the circumstances of their work. They were reluctant to name themselves, their employers or the companies for which they worked. Misinformation from employers contributed to a large extent to the confusion experienced by outworkers. Some of the callers were upset or distressed and most calls took a considerable amount of time and patience from the bilingual worker to resolve. The main issues arising from the phone survey were:

• fear of intimidation from contractors;
• fear of approaching contractors because they are relatives or people known to the outworker's family;
• fear of loss of job or pay if better conditions requested;
• confusion about the difference between being an employee and being a self-employed contractor (many outworkers believed that registering a business name gave them status as a self-employed contractor);
• fear of sexual harassment;
• lack of knowledge about award rates and conditions, and how to get them;
• lack of awareness about the LAP program; and
• lack of awareness about rights and responsibilities with regard to social security and taxation. [56]

1.56 The Australian Catholic Social Justice Council stated in evidence that information from various migrant chaplains had indicated that intimidation of outworkers certainly occurred. In Melbourne, for example, the chaplain had 'made it quite clear that he felt people were living under a climate of fear and intimidation' and 'that they were afraid to speak out'. [57]

1.57 Job Watch noted in its submission that:

The operations which employ or engage many of these people provide little or few of the minimum benefits afforded to the vast majority of workers in other industries. They tend to manipulate and coerce the outworkers by providing incorrect or fraudulent information, in relation to social security, taxation and/or immigration laws. Also by threatening and reliance upon outworkers fear of retribution in the form of disclosure to authorities or more fundamentally fear of removal of income. [58]

Impact on Family Life

1.58 Some outworkers who choose to work at home for family or cultural reasons may benefit from that choice. However, excessive time spent on outwork may have a detrimental impact on the families of some outworkers. There are a number of reasons for this. First, the large amount of time spent on garment sewing reduces the amount of time available for family interaction and responsibilities. Second, employment at home invades the dimension of family space and, in what are usually very small houses, physically removes from the home an area which could usefully be used for other family activities. Third, the stresses of over-work detrimentally influences the way in which outworkers interact with their family members. [59] These impacts are all in addition to any time spent by other family members doing outwork themselves.

1.59 As expressed by Ms Jane Tassie of the Dale Street Women's Centre in South Australia:

A lot of women hope to be able to combine the work of parenting and domestic labour and caring for kids with their work. In reality, it was not that easy. Women ended up feeling that they were doing neither job properly, in fact, and that was a real concern for lots of women. I think it is a nice idea but in reality it is very difficult to look after kids and do your work at the same time. They talked about the effect of their work on their family life, and these comments often indicated that women felt guilty, stressed and worried about the impact of their work on their families. [60]

Training and Skill Assessment

1.60 There is currently no formal mechanisms for the training and skill assessment of outworkers. Even in garment manufacturing companies, the Future Strategies Committee Report found:

… little formal activity in regard to training and development. Training tended to be conducted on the job and in an unstructured format. Multiskilling was relatively common, often being developed in response to a shortage of suitably skilled operators or to meet rapidly changing production needs'. [61]

1.61 Vocational training and assessment leading to national recognition through the Australian Vocational Training Certificate scheme is currently being developed for TCF industries, especially in the clothing sector. However, as anticipated by the Union, outworkers may experience particular difficulties in accessing the scheme. The Union therefore recommended that 'strategies be developed to ensure their participation in Vocational Training programs'. [62]

1.62 Associated with the TCF Award is a skill structure and outworkers have the right to be assessed and classified in terms of their work skills. However, as claimed by the Union, outworkers have little or no access to the skill assessment process for a number of reasons. First, they must be aware that assessment is available to them; second, they must have the courage to ask their contractor for an assessment; and third, if they are refused, they must know of their rights and be able to go to the Union to request assistance with assessment. [63]

1.63 English Language Proficiency

1.64 As noted by the Union, and experienced directly by the Committee, many outworkers have poor English language skills. Mindful of the need to improve their English because of the role it plays in employment options, outworkers have shown enthusiasm for participation in pilot language programs organised specifically for them. The Union has thus recommended that the Federal Department of Employment, Education, Training and Youth Affairs allocate resources to establish English language classes for outworkers which include curriculum development specific to their needs. [64]

1.65 The Queensland Government submission to the Committee noted that a study by the Bureau of Ethnic Affairs had found that there were no appropriate re-training courses which outworkers in Brisbane could access and that outworkers with low levels of English proficiency found it difficult to access both childcare and extra English tuition in order to take up training opportunities. The submission also identified a need among contractors for training in business acumen and negotiating skills. [65]

1.66 A recent research project conducted by the NSW Adult Migrant English Service, which examined migrant women outworkers in the clothing industry, concluded that those women were missing out on training opportunities available to factory counterparts. The study also found that there was a high level of demand for English language and literacy services among outworkers. [66] As a consequence of these findings, the NSW Government funded an English Language and Literacy Program for Outworkers in the Clothing Industry from August 1994 to December 1995.

1.67 Underage Workers (Children)

1.68 The minimum age for admission to regular employment in Australia and that recognised by the ILO is 15 years. However, regulation of part-time employment of children in Australia varies among the states; in some there is no legal minimum and no effective mechanisms for regulating or ensuring compliance in most industry sectors.

1.69 The extent to which children are used to assist in the manufacture of garments for the fashion industry in Australia is largely unknown. While the number of older children who regularly sew alongside their parents may be low, and while there appears to be no evidence of organised child labour, the number of children of any age that perform ancillary tasks on a casual basis may be quite high. [67]

1.70 Children assist in a variety of ways, from cutting threads from the finished garment to operating industrial sewing machines after school and in school holidays. The Union suggests that the involvement of children is a direct consequence of the short deadlines imposed by intermediaries and the poor rates of pay. [68] The Union further suggests that some unscrupulous intermediaries may exploit the fact that there are children there to assist in getting the work done. [69] Elderly people may also become involved in outwork because of the pressure of production schedules. [70]

1.71 In addition to being directly involved in sewing and associated tasks, many children take on an exceptional burden of household chores to enable their parents to work longer hours sewing. Large amounts of time spent working at home may then prevent children from completing their homework and from socialising with their peers. [71]

1.72 Deacon Brad Paez of the Footscray Vietnamese Alliance Church gave evidence to the Committee of the indirect detrimental consequences for youth of high levels outworking among Vietnamese women:

The "losers" of this system are the youth who feel alienated from their families - or caged up by a lifestyle which demands their willing participation, dividing them between school, home and friends. … most youth accept these tensions for the sake of the family unit; I doubt if anyone would ever complain to a Senate inquiry on behalf of Vietnamese youth, as such an action would bring shame on the families involved.

Therefore I would urge you to consider the consequences for children through your inquiry. The evil of outworking as far as the Vietnamese in our church is concerned is NOT financial exploitation, but the TIME it takes from children's lives, their education, and, indeed, their community life. [72]

1.73 As noted by Job Watch, child employment in general in Australia has not been subject to any detailed investigation or research, and thus there is little understanding of the issues. Job Watch asserts, however, that 'any comprehensive research and/or study into child employment would find similar abuses [to those reported in the media relating to outworkers] of child labour across a number of industries'. [73] Citing evidence from other studies of work carried out by school students which showed that 42% of Year Seven students surveyed had done some form of paid work, Job Watch argued that this level of employment could not be dismissed as 'hobby work' or for 'pocket money'. According to Job Watch, the issue of child labour in the garment industry is of serious concern, as is the issue of child labour across all industry sectors and should not be seen in isolation. [74]

1.74 Job Watch also emphasised the need for research into child labour practices, particularly in the areas of wages and conditions, impact on education both in the classroom on at home, occupational health and safety issues, including rest and recreation, and moral well-being. [75]

1.75 Finally, the peak garment association, the Council of Textile and Fashion Industries of Australia (CTFIA), was particularly concerned that young people not be involved in outwork. In it's submission to the Committee the CTFIA stated:

While any form of exploitation is unacceptable, the involvement of children in any form of labour, other than limited domestic help within the home, is particularly abhorrent and totally at odds with Australian community norms. The Council … is absolutely committed to supporting any steps taken to ensure that appropriate homeworking arrangements are put in place to make it completely unnecessary for children to be involved in homeworking. [76]

TCFUA OUTWORKER CASE STUDIES

CASE STUDY 4 - THE NGUYEN FAMILY

The Nguyens have been working as outworkers for 7 years, having been unemployed for their first few years in Australia. Over the last five years they have never received rates equivalent to the award have had to rely on their daughters to assist them with work over the last five years. Their average working day is 12-14 hours a day, seven days a week.

The Nguyens have four children aged between 18 and three years old. The children work at the machines sewing from the age of 13. Before this age, they help with ancillary tasks - turning garments out, folding, sorting, bundling and cutting threads. The children assist for an average of three hours at night and up to 10 hours a day on the weekend. On average the children work 35 hours per week.

It is not uncommon for the Nguyens to be given work to be completed within five days but the following day the receive calls from the intermediary to finish the work earlier. They have often been pressured to finish the order in 3-4 days and have had to go without sleep for at least one day to complete the order. They have been threatened in various ways and have been told that they will not receive any money at all if they do not complete they job early.

The Nguyens state that it is not uncommon for intermediaries to withhold payment for several orders as a form of intimidation and harassment. They are then perpetually worried about whether they will receive payment for completed jobs.

(Source: Evidence pp. 880-882)

1.76 The Committee recognises that many children voluntarily assist parents in the running of a family business, particularly in the rural and retailing sectors, and that in many instances the children of outworkers may assist their parents in the home with garment manufacture to a similar level of involvement. It is those instances where children work excessive hours, to the extent that their schooling or health suffers, or to the extent that their presence becomes a means of exploiting outworkers by intermediaries, that are of concern to the Committee.

1.77 The Question of Exploitation

1.78 Some outworkers are paid award conditions but many are not and the Union believes that 'the overwhelming majority of outworkers in the clothing manufacturing industry are unfairly and improperly exploited by the non observance and/or non payment of award and statutory entitlements and benefits'. [77]

1.79 There are a number of factors which make outworkers vulnerable to exploitation and these include the following. [78]

• The fact that outworkers work in their own homes makes them isolated. This means that it is hard for them to get or receive information about relative conditions of their work. Because they are alone, outworkers are vulnerable to harassment. Often the intermediary is a person of their own nationality who may behave in a manipulative and harassing manner.
• The system whereby contractors, and sometimes intermediaries deliver and collect work can result in ignorance about where the work comes from, and thus who should be paying them.
• The chain from retailer to outworker is often so long that getting details from a retailer about exactly who has made the garments is often impossible.
• Because some outworkers receive so little, they may be on government welfare benefits as well and this leaves them vulnerable to blackmail, and unable to take action when payments for work are not forthcoming. It also means that intermediaries may coerce outworkers into accepting lower rates for future work.

1.80 ANESBWA concluded its submission with the statement that outworkers presented a 'picture of marginalisation, exploitation and entrapment for one of the most disadvantaged and vulnerable groups of our society'. [79] The Working Women's Centre commented: 'the social and community isolation of recently arrived NESB women makes them easily incorporated into the illegal economy'. [80]

1.81 However, some outworkers themselves do not see the conditions under which they work as exploitative. In speaking of the Vietnamese community in Footscray, Deacon Brad Paez said in evidence to the Committee:

… they do not use it as slavery in any sense at all. Ninety per cent of the Vietnamese in our church would never view this system as slavery because of the advantages of child care, of relatives looking after children, of the family being together. Many a time they have said to me, 'What else are we going to do.' They have had no education, or perhaps as much as year three, in Vietnam; their English is not sufficient to be employed in nearly all jobs; and they do not trust the Vietnamese factory owners because they could easily be dismissed. So they set up at home where they feel comfortable. [81]

1.82 Committee that the conditions of employment agreed upon by employer and outworkers were not necessarily exploitative but were Industry representative stressed to the often the preferred options of both parties. Indeed, the Australian Chamber of Manufactures argued that if the technical aspects of the award are applied to the conditions under which homeworkers were paid, then there may be a technical breach of the award, but that the application of the award to home work was not necessarily appropriate. In fact, when all conditions of employment were taken into account, some outworkers may in fact be better off than factory workers. [82]

1.83 Finally, on a macro-economic scale, the Australian Catholic Social Justice Council was critical in its submission of current competition policy doctrine that placed great emphasis on the needs of the market while neglecting the needs of the individual:

Economic policy must take into consideration its social impact. Whereas competition is a good thing it cannot be at the expense of exploitation of workers nor at the expense of excessive unemployment. [83]

1.84 While the Australian Catholic Social Justice Council insisted that award wages should be paid to all outworkers to eliminate exploitation, it noted that if this occurred, the greater degree of competition forced on the industry may ultimately result in a very small, up-market industry within Australia, and the problem of exploitation would be pushed offshore. [84]

1.85 Conclusions and Recommendations

1.86 Through the availability of the various clothing trades awards mechanisms exist for outworkers to be paid wages equivalent to factory employees. However, the structural complexities of the garment manufacturing chain, and resultant ease with which various parties can shed responsibility, mitigates against full award compliance.

1.87 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.

1.88 In addition, powers of inspection (right of entry provisions) previously delegated to the Union, will be curtailed. The Committee is concerned that these changes to industrial relations law 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.

1.89 However, Government Members of the Committee 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.

1.90 While some employers do comply with award conditions, it was clear to the Committee that at least some outworkers are employed under extremely stressful circumstances. Problems experienced include: low piece-rates which translate to low hourly rates; impossible deadlines for completion of work; late payment, underpayment, non-payment for completed work and rejection of work; physical and verbal harassment from intermediaries; 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. The final outcome for some outworkers is clearly exploitation.

1.91 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 3.45).

1.92 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.

1.93 In addition, the Committee is concerned that outworking under exploitative conditions may be having a detrimental impact on the educational opportunities and social environment of children of migrant outworkers, and on their family life generally.

1.94 The Committee notes that while some outworkers, because of differing life experiences or expectations, do not see exploitative employment conditions to be necessarily undesirable, these circumstances should not be allowed to continue.

Footnotes

[1] Evidence, p. E 16. For a more detailed description of the award see Evidence, p. E 648-650, and 861-865. Note also that there are a number of provisions in the award which do not apply to outworkers including sick leave, meal allowances, amenities and disability allowances.

[2] For a detailed list of records required see Evidence, p. E 649.

[3] Evidence, p. E 133.

[4] Evidence, p. E 168, 502.

[5] Evidence, p. E 667. The Australian Council of Manufactures noted that as of 10 November 1995 only 79 companies had registered that they use outworkers (Evidence, p. E 324).

[6] Evidence, p. E 712.

[7] Outworkers involved in the manufacture of other goods, such as lounges, curtains and blinds, as well as other soft furnishings, are not covered by any award and working conditions are not regulated by commonly accepted occupational health and safety standards (Evidence, p. E 561).

[8] Evidence, pp. E 21, 252.

[9] Evidence, p. E 37.

[10] Evidence, p. E 272.

[11] Evidence, p. E 37.

[12] Evidence, p. E 374.

[13] Evidence, pp. E 374-5, 391.

[14] Evidence, pp. E 392-403.

[15] Evidence, p. E 318.

[16] Evidence, p. E 412.

[17] Evidence, p. E 118.

[18] Evidence, p. E 117.

[19] Evidence, p. E 118.

[20] Evidence, p. E 9.

[21] Evidence, p. E 270.

[22] Evidence, p. E 298.

[23] Submission No 357 (TCFUA) to the Senate Economics References Committee inquiry into the Workplace Relations and Other Legislation Amendment Bill 1996, p. 4.

[24] As quoted in Evidence, p. E 152.

[25] Evidence, p. E 875-888.

[26] Evidence, p. E 215-6.

[27] Evidence, p. E 216-7.

[28] Evidence, p. E 152.

[29] Evidence, p. E pp. 17, 19, 22 & 236.

[30] Evidence, pp. E 217, 736.

[31] Evidence, p. E 153.

[32] Evidence, p. E 191.

[33] Evidence, p. E 478-9.

[34] Evidence, p. E 218.

[35] Evidence, p. E 154.

[36] Evidence, p. E 238.

[37] Evidence, p. E 16.

[38] Submission No. 38, p. 7.

[39] Evidence, pp. E 17, 39.

[40] Evidence, p. E 168.

[41] Evidence, p. E 846.

[42] Evidence, p. E 219; see also Evidence, p. E 846.

[43] Evidence, p. E 84.

[44] Evidence, p. E 92.

[45] Evidence, p. E 87.

[46] Evidence, pp. E 91 & 93.

[47] Evidence, p. E 155.

[48] Evidence, p. E 219.

[49] Evidence, pp. E 22, 239, 248.

[50] Evidence, p. E 846.

[51] Evidence, p. E 150.

[52] Evidence, p. E 220.

[53] Evidence, p. E 492.

[54] Evidence, p. E 493.

[55] Evidence, p. E 550.

[56] Textiles Clothing & Footwear Union of Australia The Hidden Cost of Fashion - Report on the National Outwork Information Campaign. March 1995. p. 13

[57] Evidence, p. E 139.

[58] Evidence, p. E 475.

[59] Evidence, p. E 156.

[60] Evidence, p. E 523.

[61] TCF Future Strategies Committee Future Strategies for the Textiles, Clothing and Footwear Industries 1996-2000. December 1994, p. 9.

[62] Evidence, p. E 29.

[63] Evidence, p. E 16, 46.

[64] Evidence, p. E 29.

[65] Submission No. 39, p. 3.

[66] Submission No. 38, p. 4.

[67] Evidence, p. E 59-60, 183,188, 299, 904.

[68] Textiles Clothing & Footwear Union of Australia The Hidden Cost of Fashion - Report on the National Outwork Information Campaign. March 1995. p. 20.

[69] Evidence, p. E 60.

[70] Evidence, p. E 21.

[71] Evidence, p. E 504.

[72] Evidence, p. E 460.

[73] Evidence, p. E 480.

[74] Evidence, p. E 480-481.

[75] Evidence, p. E 452.

[76] Evidence, p. E 370.

[77] Evidence, p. E 857.

[78] Evidence, p. E 15.

[79] Evidence, p. E 157.

[80] Evidence, p. E 168.

[81] Evidence, p. E 463.

[82] Evidence, p. E 342.

[83] Evidence, p. E 135.

[84] Evidence, p. E 135.