2.1
This chapter outlines key issues raised in evidence before the committee, and sets out the committee’s view and recommendation.
2.2
The key issues discussed in this chapter are:
the effectiveness of the bill in the absence of broader reforms to support migrant workers;
uncertainty in definitions and scope of the bill’s work-related offence provisions;
uncertainty in the scope and application of the bill’s prohibited employer declaration and associated offence provisions;
concerns regarding flexibility in relation to the bill’s proposed new requirements for use of Visa Entitlement Verification Online (VEVO) system; and
adequacy of existing enforcement efforts.
2.3
Various other issues are also outlined in this chapter.
Effectiveness of the bill in the absence of broader reforms
2.4
A number of submitters raised concerns that the bill would not achieve its policy intention of enhancing protections for vulnerable migrant workers if it was not accompanied by broader reforms to address the underlying factors which contribute to this vulnerability.
2.5
For example, the Australian Council of Trade Unions (ACTU) commented:
This Bill does not address the systemic factors that lead to migrant worker exploitation and is fundamentally flawed…Because this Bill does nothing to address the barriers to reporting abuse that migrant workers face, it is unlikely to have any impact on reducing exploitation.
2.6
The Migrant Workers’ Centre (MWC) commented:
[The Bill] aims to protect migrant workers from labour exploitation. And yet, it exclusively focuses on punishing employers who have breached the Act and does not address any of the…factors that render migrant work vulnerable to exploitation. Owing to its limited scope, we believe the Bill will have limited effect on protecting migrant workers.
2.7
Some submitters and witnesses proposed a range of reform measures, which are discussed in the following sections.
Safeguards to protect workers who report exploitation
2.8
Some submitters called for safeguards to protect workers who report exploitation; to guarantee that they will not be subject to immigration-related consequences.
2.9
For example, the ACTU stated:
To increase the confidence of migrant workers to report exploitation, there must be a clear, legislated guarantee that temporary visa holders will not face immigration-related consequences for reporting exploitation. This must include whistle-blower protections to protect workers from making complaints and providing evidence to an investigation, and an amnesty for workers who make a complaint to stay in Australia while their case is heard.
2.10
In response to these concerns, the Fair Work Ombudsman (FWO) advised that:
…the Fair Work Act applies to those visa holders in the same way as all workers in Australia, and there are protections under the Fair Work Act for adverse action if someone takes action such as terminating employment because they’ve made a complaint about their workplace conditions.
2.11
When asked about the role of the bill in relation to other measures in place to protect migrant workers, the Department of Home Affairs (the department) commented:
The measures in this bill are complementary and help us to lift and better address behaviour that is inappropriate in regard to migrant workers. We do currently have a number of frameworks in place that are used to ensure that the employers of migrants do the right thing. There are broad obligations on any employer who employs a non-citizen through the act.
Improvements to the Assurance Protocol
2.12
The Assurance Protocol (the Protocol), implemented in January 2017 between the department and the FWO, seeks to ‘protect visa holders so they can seek help if they are being exploited in their workplace’.
2.13
Pursuant to the Protocol, the department undertakes to not cancel a temporary visa with work rights where:
The visa holder has reported exploitation to the FWO and is assisting with investigations, provided they agree to comply with their visa conditions in the future and there is no other basis for visa cancellation (such as character or health concerns).
2.14
Further ‘[t]o date, none of the visa holders referred under the Protocol have had their visa cancelled’.
2.15
A number of submitters raised concerns regarding the Protocol. The Law Council of Australia (Law Council), for example, stated:
There is low public awareness of both the existence of the Assurance Protocol and the way in which it operates;
The Assurance Protocol as it is currently promoted, does not provide sufficient certainty for visa holders in alleviating their fear of visa cancellation, in order to achieve its intended purpose of facilitating more active workplace complaints.
2.16
The Retail Supply Chain Alliance was concerned about action being taken in relation to vulnerable workers on the basis that the content of the Protocol has not been made public:
…no parts of the Assurance Protocol are made public, or set out in regulations or legislation. A public fact sheet says that ‘eligible’ workers who ‘meet the conditions’ of the Assurance Protocol will ‘usually’ not face their visa being cancelled because of workplace exploitation. This offers no reassurance to exploited workers who cannot assess the risk of deportation from reporting breaches…
2.17
In response to a question on notice, the department made the following observations regarding the Protocol:
The Assurance Protocol offers visa holders an avenue to seek FWO’s assistance with a level of assurance about the status of their visa so any firewall may have the unintended consequence of removing that level of assurance offered by the Protocol.
The FWO and Home Affairs work collaboratively together and share information to try and detect and disrupt those who exploit visa holders and migrant workers and the Protocol reflects a whole-of-government approach to addressing this serious issue which crosses Australia’s regulatory frameworks.
2.18
When asked in a question on notice regarding the rationale for the Protocol not being made public, the department commented:
Information relating to the Assurance Protocol is published on both the Department of Home Affairs (the Department) website (homeaffairs.gov.au/visas/working-inaustralia/work-rights-and-exploitation) as well as the Fair Work Ombudsman (FWO) website (www.fairwork.gov.au/find-help-for/visa-holders-migrants). The Department and FWO have also published Assurance Protocol communications in news items and social media posts.
2.19
In its submission, the department referred to a 2018 review of the Protocol which found that:
On balance, the Assurance Protocol is largely a positive initiative- it provides meaningful and visible support to encourage migrant workers to report their exploitation while also hindering the ability of employers to use threats of visa cancellation as a means to exploit workers.
The Review identified opportunities for improvements which are being considered and implemented.
2.20
The Migrant Workers Taskforce recommended that the department and the FWO review, within 12 months, the effectiveness of the Protocol. The department did not refer to the status of this review; however, the context paper published by the department suggests that the recommendation will be addressed separately.
2.21
The FWO told the committee that the Protocol has been invoked for 77 workers since it came into effect:
The number may seem low, but to clarify: only those workers who are in breach of their visa conditions have needed to access the assurance protocol. We assist other visa holders who come to us who have no need to invoke the assurance protocol because their visa is not in jeopardy, not at risk. So the number of workers that we refer under the assurance protocol is not reflective of the number of visa holders we assist.
2.22
In clarifying the role of the Protocol, the department remarked:
…it’s important to note that it is not simply incumbent upon a worker themselves to report a matter. There are manyy mechanisms by which these measures already are identified, including through our Border Watch allegation and referral team. Anyone can make a call to that team and provide us with information about a case of inappropriate behaviour towards a migrant worker. We really would encourage stakeholders to do that. The protocol is supported by a range of information-sharing protocols that we have with the Fair Work Ombudsman, but also it is secured within operational policy documents that our staff are trained on and that they follow.
Firewall between the Department of Home Affairs and Fair Work Ombudsman
2.23
A number of submitters called for a ‘firewall’ to prevent the exchange of information between the department and the FWO.
2.24
The ACTU expressed what it considered the need for this as:
Currently, if a worker brings an issue with their employer to the Fair Work Ombudsman that reveals migration law breaches, the Department of Home Affairs may be informed, leaving the worker vulnerable to deportation for breach of their visa conditions. Under section 116(1)(b) of the Migration Act, the Minister may cancel a visa where they are satisfied that its holder has not complied with the conditions of the visa- meaning that if a visa holder was to report a breach of the coercion-related conditions in this Bill which involve a breach of their visa conditions, they could risk their visa being cancelled.
2.25
In response to a question on notice, the department made clear its position on a ‘firewall’, commenting:
A firewall would undermine the Government’s collaborative approach to address migrant worker exploitation which is characterised by information sharing and joint operations to maximise the outcomes of compliance and enforcement efforts.
Under the Assurance Protocol between the Department of Home Affairs and the Fair Work Ombudsman (FWO), temporary visa holders who have breached a work-related condition of their visa will generally not have their visa cancelled if:
They believe they have been exploited at work, have sought advice or support from the FWO and are helping the FWO with its inquiries;
They commit to abiding by visa conditions in the future; and
There are no other grounds for visa cancellation (such as national security, character, fraud or health concerns).
The Protocol thus relies on communication and exchange of information between the department and the FWO in order to provide support to visa holders to come forward and report exploitation. The Fair Work Ombudsman will only refer a visa holder to Home Affairs under the Assurance Protocol after having obtained their informed consent and to date, no one referred under the Assurance Protocol has had their visa cancelled.
National labour hire regulation
2.26
National labour hire regulation was discussed during the course of the inquiry, as another means to address the underlying issues which affect the protection of migrant workers. Some submitters opined that these broader issues also need addressing to assist achievement of the bill’s policy intent.
2.27
In this regard the ACTU commented:
The ability of employers to evade their legal employment and migration obligations through the use of labour hire intermediaries must be addressed through introducing a robust national system of labour hire licensing that places obligations both on the labour hire company and end user or host.
2.28
The National Farmers’ Federation (NFF) raised a number of concerns that it considered would be addressed by implementation of this scheme, such as “phoenixing” of companies (addressed in greater detail later in this chapter), commenting:
Although the Federal government indicated that it intended to introduce the scheme more than 3 years ago, there has been little concrete development…these circumstances only further demonstrate the need for uniform National Labour Hire Regulation, in order to maintain integrity, ensure migrant workers are safe, treated fairly and to prevent unscrupulous employers getting away with avoiding penalties imposed on them for contravention of the Migration Act.
2.29
The Electrical Trades Union (ETU) commented:
…our understanding to date of the proposed federal model is that it would be weaker than the state models. If there were to be a federal system implemented, it would need to be much more robust than the strongest of the current state schemes. Even under the strongest of the current state schemes we are experiencing ongoing issues with worker exploitation under the labour hire model.
2.30
The Attorney-General’s Department provided an update on the development of the scheme:
Last year…the Attorney-General and Minister for Industrial Relations wrote to her state and territory counterparts suggesting that they work together to look at opportunities to harmonise labour hire schemes across the country…last year there was a meeting of ministers at which they tasked officials across the Commonwealth and the states and territories with preparing a report for ministers on those opportunities, and that report has now been finalised.
Other reforms
2.31
Other reforms suggested by submitters and witnesses, as necessary for broader reform in relation to migrant workers, included:
A specific new visa category for migrant workers while their complaint is being considered.
A focus on migration being permanent and independent rather than on temporary and employer-sponsored pathways (modelled on programs such as the Seasonal Worker Program and Pacific Island Labour Mobility Program).
Removal of the requirement for 88 days of farm work for Working Holiday Visa holders.
Amendment of the policy in relation to visa cancellation, to enshrine a
‘presumption against visa cancellation where there is prima facie evidence of exploitation put forward by the visa holder’.
Improvements in the cultural awareness of Commonwealth departments and agencies such as ‘specific protocols and checklists for staff, engag[ing] dedicated staff, and particip[ing] in resource education and engagement programs’
Work-related offence provisions
2.32
While inquiry participants were generally supportive of the bill’s attempts to target exploitative behaviour by employers through new offences and associated civil and criminal penalties, a number of submitters raised concerns about the proposed work-related offences in sections 245AAA and 245AAB.
2.33
In relation to these provisions, stakeholders voiced concerns about:
the threshold for ‘undue’ influence or pressure;
the scope of offences and their application to persons outside the employment chain;
the appropriateness of the fault elements;
uncertainty in the concept of ‘arrangement in relation to work’; and
the application of defences.
2.34
These issues are discussed in the following sections.
Threshold for ‘undue’ influence or pressure
2.35
A number of submitters raised concerns regarding the threshold level of ‘undue’ influence or pressure in proposed sections 245AAA and 245AAB. The Law Council commented:
Arguably, if the prospective employer knows that the proposed work arrangement will cause the visa holder to breach a work-related condition (or is reckless to that possibility), any degree of influence or pressure exerted to accept or agree to that arrangement could fairly be characterised (as a matter of policy) as being undue, and meritorious of criminal sanction.
2.36
The Law Council further stated:
Requiring proof of the physical element of ‘undue’ influence or pressure in paragraph 245AAA(1)(a) may have the effect of allowing morally culpable conduct to go unpunished.
2.37
The Law Council however noted that the threshold of ‘undue’ may have greater applicability in relation to section 245AAB, commenting:
In clause 245AAB, the work arrangement need not itself give rise to a breach of a visa condition. What matters for the offence is that the visa holder feels pressure to accept or agree to the arrangement in order to avoid some other detriment – an adverse effect on their visa status or the non-satisfaction of a work requirement. In this way the intention to apply pressure on the visa holder and the extent of the pressure – factors which go to whether the pressure or influence is ‘undue’ – are arguably necessary aspects of the offence.
2.38
The Australian Industry (Ai) Group was ‘[c]oncerned about the broad application of these undefined concepts [of ‘undue’ influence, coercion or pressure] and the lack of adequate certainty as to the types of conduct and issues to which the conduct relates for the purpose of criminality’, stating ‘as currently drafted the offence appears to be based on the application of coercion (or undue pressure or undue influence) rather than a non-compliant outcome.’
2.39
According to the Explanatory Memorandum (EM) the rationale for leaving undue influence and pressure:
…is to target conduct that, similar to coercion, may be characterised as excessive, unfair or exploitative.
2.40
The EM further noted that:
Undue influence or pressure may arise from widely different sources, dependent on the facts and circumstances of the alleged offending, one of which is excessive pressure. It is not intended that, to be considered undue, the influence or pressure must be characterised as illegitimate or improper. Undue influence or pressure is a lower threshold than coercion.
2.41
Further, in response to a question on notice, the department elaborated on the rationale for this threshold:
The purpose of criminalising undue influence or pressure is to target conduct that has an excessive, unfair or exploitative character (such as, coercion). The inclusion of the term “undue” in the provisions makes this intention clear.
Relevantly, where other provisions on the Commonwealth statute book proscribe the use of influence or pressure to bring about an outcome, they typically refer to the use of “undue influence” or “undue pressure” – for example, section 344 of the Fair Work Act 2009, which deals with undue influence or pressure in an employment context. As such, omitting the qualifier “undue” in the proposed offences would be exceptional, and inconsistent with the approach in other Commonwealth laws.
Criminalising the application of any degree of influence or pressure in the employment context may set the bar for criminal culpability too low, and would not be consistent with the intended focus of the new offences.
Scope and application of offences
2.42
Some submitters raised issues regarding the scope of the offences in proposed sections 245AAA and 245AAB.
2.43
Several submitters commented that by applying to any ‘person’, these provisions could capture coercion, influence or pressure exerted by a person outside the employment chain (such as other vulnerable workers). For example, the Retail Supply Chain Alliance told the committee:
Given the far reach of exploitation in the horticulture workforce, responsibility must lie with the labour hire firms and employers that create and benefit from schemes to avert migration laws. An individual worker participating in a broken system should not…face any risk of prosecution…
The examples provided in the Explanatory Memorandum would be suggestive of a focus on employers; however, this still leaves excessive ambiguity that should not be left to prosecutors of the new offences and the court to resolve. It can be easily resolved by limiting the scope of these offences.
2.44
The Law Council also suggested that the provisions may result in a family member, who places undue pressure on a person to accept or agree to an arrangement in relation to work, being inadvertently captured.
2.45
In answer to a question on notice regarding the concerns that the offences may capture persons outside their intended scope, the department made clear that the application of the offences is intended to be limited to those in the employment chain:
Use of the term ‘person’ in the proposed offences in subsections 245AAA(1) and 245AAB(1) is consistent with the drafting of the existing work-related offences under the Migration Act, and more broadly with the Criminal Code and other offences on the Commonwealth statute book.
The intention in framing the offences to apply to a ‘person’ is to ensure the offences cover the range of participants in the employment and labour-supply chain - employers, labour hire intermediaries, facilitators, agents and other participants in making arrangements for the performance of work by a non-citizen.
The expression ‘arrangement in relation to work’ in the second element of the offences is also intended to ensure there is a work nexus. The offences are drafted in such a way that, for a person to coerce, or exert undue influence or pressure on a non-citizen to get them to agree to a work arrangement, the person would need to be in a position to offer the arrangement to the non-citizen. A colleague or friend, not in the employment chain, would generally not be in a position to make such an offer.
2.46
Fragomen discussed circumstances where the offences may inadvertently capture employers who seek or engage in work arrangements to comply with visa requirements, stating:
It is important to ensure that the provision in s245AAB(1)(c) not inadvertently penalise employers who are seeking to vary an employment arrangement to ensure compliance with visa conditions and in circumstances where the non-citizen may be reluctant to accept the arrangement…
The wording of s245AAB(c) could expose employers to civil liability, despite the employer actively working to comply with migration laws. The significant penalties which apply for contravention of these provisions could therefore result in a reluctance by employers to make genuine requests of a non-citizen with regards to a work-related arrangement, even where such a request would allow both the employer and the non-citizen to remain compliant with migration laws.
2.47
Fragomen was also concerned about the lack of clarity in the term ‘arrangement in relation to work’, recommending:
…further clarity as to why it constitutes an arrangement in relation to work under these proposed sections so to avoid inadvertently penalising employers who seek to vary an employment arrangement to ensure compliance with visa conditions, in circumstances where the noncitizen may be reluctant to accept the arrangement. We see this could arise, for example, in situations where an employer requests a noncitizen to temporarily stand down from their employment arrangements because the employer discovered a breach of a work-related condition.
2.48
The Ai Group was similarly concerned that, as currently drafted, the ‘undefined term “arrangement in relation to work”…is capable of broadly applying to many lawful terms and conditions of employment’. Ai Group suggested that:
If the new offences are to be framed around broad general law concepts of undue influence, undue pressure and coercion, it is essential that the offences contain some moderating parameters to ensure that lawful conduct is not criminalised, and the offence appropriately targets the types of conduct the legislation is seeking to criminalise.
2.49
The Migrant Justice Institute also called for ‘arrangement in relation to work’ to:
…be clarified to be broad enough to cover known conditions to which many migrant workers have been subjected. This includes, for instance, where working holiday makers are made to submit to sexual harassment or sexual acts, as well as sub-standard accommodation and withholding of passports, to receive their employer’s sign-off for ‘specified work.’
2.50
The EM does not provide any further clarity on what may constitute an ‘arrangement in relation to work’.
Appropriateness of the fault elements
2.51
Several submitters expressed concern regarding the fault elements for the new offences. For example, the Recruitment, Staffing and Consulting Association observed that the fault element of recklessness:
Widens the scope of criminality to the point that legitimate staffing agencies who – upon making an administrative error, for example – might find themselves facing the same charges as a criminal syndicate operating in deliberate and systematic contravention of the law.
2.52
Both the Recruitment, Staffing and Consulting Association and the Australian Chamber of Commerce and Industry (ACCI) advocated for clearer fault elements of ‘wilful blindness’ or ‘reckless indifference’. The Recruitment, Staffing and Consulting Association opined that these are fault elements are preferable because they ‘are able to boil down the behaviour of organisations that have a clear disregard of migration law and international worker’s rights’.
2.53
In response, the department advised that:
The term ‘recklessness’ has been included to ensure that a person cannot be wilfully ignorant of a work-related condition of the visa of a non-citizen they allow to work…
The term ‘recklessness’ does lower the threshold below ‘knowledge’, but still to a criminal standard, and we feel that is an appropriate standard. It is consistent with other work-related offences in the Migration Act. Even more importantly, if the new offences didn't expressly state 'knowledge' or 'recklessness', the criminal code would, in any case, provide that recklessness would be the default fault element.
2.54
The EM also outlines the rationale for the fault element of recklessness attaching to these offences. For example, in relation to section 245AAB, it notes:
By expressly providing that the fault elements in relation to the physical elements in new paragraphs 245AAA(1)(b) and (c) of the offence are knowledge or recklessness, this operates to ensure that a person could not be wilfully ignorant of the work-related condition of the visa of a non-citizen that they allow to work, and proceed to act recklessly as to whether, as the result of an arrangement in relation to work, the non-citizen might breach the work-related condition…
The purpose of this subsection is to prevent the prosecution from having to prove that the defendant intended to put the non-citizen in breach of a work-related condition of their visa by reason of the arrangement referred to in new paragraph 245AAA(1)(a). Without this provision, proof of this element to the required standard could be difficult in cases where the defendant has been wilfully blind or recklessly indifferent to the non-citizen’s visa conditions. It is not acceptable for a person to seek to rely on a claim that they did not enquire in relation to the work-related conditions of a non-citizen worker or prospective worker’s visa, and that they were therefore unaware that the arrangement would or may result in the non-citizen breaching a work-related condition.
2.55
The EM also makes clear that the bill does not expressly provide for a fault element for the conduct by the first person under each offence (coercion, undue influence or undue pressure exerted in relation to a non-citizen) and, as such, intention is the default fault element:
In criminal proceedings, this would require the prosecution to prove beyond reasonable doubt that the defendant engaged in conduct of an illegitimate nature intended to lead the non-citizen to agree to the work arrangement. For clarity, it is not intended for the prosecution to be required to prove a link between the conduct by the first person under new paragraph 245AAA(1)(a) and knowledge or recklessness by the first person as to compliance by the non-citizen with a work-related condition of the non-citizen’s visa.
Application of defences
2.56
The Ai Group discussed the application of defences to the proposed new offences, expressing concern that:
Unlike existing work-related offences in the Migration Act, the two new offences do not align with the Act’s established defences for when an employer can demonstrate it took reasonable steps to prevent the contravention. This departure from the established defence framework results in two new offences that are extremely broad and potentially disproportionate to the range of conduct that could be construed as an offence under the Bill’s provisions.
2.57
In answer to a question on notice regarding these concerns, the department commented:
The existing work-related offences in sections 245AB, 245AC, 245AE and 245AEA of the Migration Act deal with circumstances in which a person allows a non-citizen to work, or refers the non-citizen to another person for work, and that non-citizen either: - is an unlawful non-citizen; or - would be working in breach of a work-related condition of their visa. In this context, each of subsections 245AB(2), 245AC(2), 245AE(2) and 245AEA(2) establishes a specific defence (or exception, in the case of the related civil penalty). The defence is available where a person can demonstrate they took reasonable steps at reasonable times to verify the non-citizen worker is not an unlawful non-citizen, or is not working in breach of a work-related visa condition. Use of the Visa Entitlement Verification Online (VEVO) system is prescribed as one such reasonable step. By using VEVO to verify that a non-citizen has the required permission to work, the person has taken appropriate action, consistent with the underlying policy intention of these provisions.
The new offences in proposed sections 245AAA and 245AAB are substantively different from the existing offences. The new offences target conduct that amounts to coercion or the exertion of undue influence or undue pressure on a non-citizen, intended to get the non-citizen to agree to an arrangement in relation to work. The focus is on the employer, or other person in the employment chain, having engaged in conduct of an exploitative character in relation to a non-citizen, in a work context. In the context of the offence in proposed section 245AAA in particular, the third physical element of the offence is that, as a result of the arrangement, the non-citizen breaches, or would breach, a work-related condition. It would not be consistent with the intention of the proposed offences to make VEVO verification an available defence.
If a person has used VEVO to verify that a non-citizen is subject to a work-related visa condition, and then proceeds to exert undue pressure to get the non-citizen to work in breach of that condition, this would be a significant concern. In these circumstances, the fact that a VEVO check was conducted may go to proving the fault elements of the offence – for example, as a result of the VEVO check, the person knew the non-citizen was subject to a work-related visa condition and acted recklessly by coercing them into an arrangement that resulted in a breach of the condition. It would not be appropriate to make VEVO checking available as a defence.
Prohibited employer declarations
2.58
While submitters were generally supportive of the proposal to prohibit employers subject to certain sanctions from employing additional non-citizens, a number of submitters raised concerns about the proposed prohibited employer declarations.
Scope of ‘migrant worker sanction’
2.59
Several submitters expressed concern regarding the scope of the ‘migrant worker sanction’ which permits the minister to declare an employer prohibited.
2.60
Other than where the person is subject to a bar imposed under paragraph 140M(1)(c) or (d) of the Migration Act 1958 (the Migration Act), a migrant worker sanction requires a relevant employer to have received a court outcome (the person has been convicted of a work-related offence, is or was subject to a civil penalty order in relation to contravention of a work-related provision, or is the subject of an order for certain contraventions under the Fair Work Act 2009).
2.61
The Immigration Advice and Rights Centre highlighted the lengthy nature of court processes, which ‘create a disincentive for migrant workers to enforce their rights.’
2.62
Further, the ACTU stated that the scope of the definition of ‘migrant worker sanction’ does not: ‘[r]eflect the reality that the overwhelming majority of workplace issues are dealt with other than by final determination of a Court’.
2.63
AMES Australia told the committee that ‘[m]any instances of discrimination and exploitation are underreported and that many migrants make anonymous complaints, which are not captured in the Bill’s provisions’.
2.64
AMES Australia called for the grounds on which a migrant worker sanction can be issued to include circumstances where the employer has:
been subject to multiple compliance notices issued by the Fair Work Ombudsman;
been subject to any other regulatory action indicative of a pattern of exploitation; or
breached other workplace laws (including anti-discrimination laws and laws that govern occupational health and safety).
2.65
The ACTU similarly called for these grounds to include where:
the Fair Work Commission is satisfied (on the basis of all available evidence, including evidence previously provided to the FWO or obtained by an officer or employee of a registered organisation exercising entry rights) that the provisions referred to in section 245AYE were contravened by the person; and
the person fails to comply with a compliance notice issued or enforceable undertaking entered into in relation to a work-related provision.
2.66
Other submitters conversely raised concerns regarding the breadth of the grounds on which a migrant worker sanction can be issued. The Recruitment, Consulting and Staffing Association commented:
Civil penalties as they relate to this new offence present a problem in their own right. With no obligation to prove the person’s state of mind, there is no doubt that this provision will capture administrative errors, making the prohibitions for such an offence even less suitable.
2.67
The Recruitment, Consulting and Staffing Association called for first-time offenders to be treated differently from criminal organisations who ‘knowingly coerce, influence, pressure, punish, and deter criminal organisations in their pursuit to knowingly coerce, influence, pressure and exploit migrant workers.’
2.68
The Ai Group was concerned that the range of contraventions of the Fair Work Act 2009 (which can provide the basis for a migrant worker sanction) may capture unintentional contraventions by employers, such as ‘payroll errors or errors of interpretation’, and argued that these should be:
Limited to those contraventions that meet the definition of ‘serious contravention’ in section 557A of the FW Act. A ‘serious contravention’ is generally where the person knowingly contravened the provision and the person’s conduct constituting the contravention was part of a systematic pattern of conduct relating to one or more other persons.
2.69
In relation to this point, the department confirmed the intention of the prohibited employer provisions is to be used for ‘the more serious range of offences.’
2.70
The department further clarified that, for other instances of behaviour that do not meet the bar to have a migrant worker sanction imposed, there is a ‘proportionate, saleable system where we can in a minor offence start, where some cases start now, with education awareness-raising.’
Appropriateness of minister as decision-maker
2.71
A number of submitters raised concerns regarding the power to declare a person a prohibited employer sitting with the minister, considering that this power more appropriately sits with an agency such as the Fair Work Commission/FWO.
2.72
The ACTU, for example, commented:
…it is not appropriate for the Minister to be the decision maker in respect of prohibition of employers nor is it appropriate that the only person entitled to be heard in deciding those matters is the employer who faces prohibition…
Given the public interest issues at play, there is merit in a broader, transparent and more accountable process with standing given to workers, regulators and registered organisations.
2.73
The ACTU also considered that this decision-making power being vested in the FWO would improve the appeal options in relation to a prohibited employer declaration. If the power is vested in the minister, only a decision to declare a person a prohibited employer is reviewable by the Administrative Appeals Tribunal (AAT), not a decision to decline to do so; if this power was vested in the Fair Work Commission, appeal to the Full Bench of the Commission would be available.
2.74
The Salvation Army of Australia and Uniting Church in Australia Synod of Victoria and Tasmania (Salvation Army & Uniting Church) similarly considered that the power more appropriately sits within the FWO’s jurisdiction, as ‘migrant workers may be more likely to disclose their situation to labour inspectors’. However the submitter made clear that they in principle supported the measure, commenting ‘we would rather see the measure implemented than delayed on the basis that it needs to be legislated under an alternative portfolio’.
2.75
The department advised that:
The question of where that particular power should lie was the subject of discussion through the Migrant Workers' Taskforce that Home Affairs has been engaged on for several years with our colleagues from the Attorney-General's Department and the Fair Work Ombudsman.
The ultimate drafting of the legislation reflected where that conversation landed, which was that, because the bill seeks to address misuse of visa programs, it was most appropriate for the minister for immigration to have that power. It is consistent, in that the minister has a number of powers under the Migration Act. The act really is drafted with the minister and his delegations in mind, so that was felt to be appropriate and consistent with the rest of the act.
Uncertainty in definitions of ‘work’ and ‘allows to work’
2.76
Uncertainty in the definitions of ‘work’ and ‘allows to work’ in the prohibited employer offences was discussed by some submitters and witnesses.
2.77
The proposed definition of ‘allows’ to work includes a person who ‘engages a non-citizen, other than in a domestic context, under a contract for services.’ Some submitters raised concerns regarding this exclusion of work in a domestic context; for example, the Salvation Army & Uniting Church was concerned that this ‘…fails to apply a consistent standard to all employers of temporary visa holders and puts a particularly vulnerable class of workers at greater risk’.
2.78
The Retail Supply Chain Alliance commented:
Domestic services are precisely one of the areas where exploitation is rife, arguably reaching lows that put them in the category of modern slavery. Au pairs, for example, are almost always migrant workers, and are engaged for as little as $7 per hour (before tax) without the protection of Australia’s employment regulations. Even with the provision of board and meals, this relationship leaves workers highly prone to exploitation: many are compelled to do tasks outside of the terms of their engagement and some experience grave verbal abuse and even sexual harm.
The Explanatory Memorandum suggests that this exclusion is to ensure individuals who are prohibited employers can still engage non-citizens for contracting services such as plumbing, electrical work and cleaning. These workers do not face the same arrangements as migrant workers who would be excluded (for example, they would not be expected to live on site). However, au pairs would very clearly fit into this category and are arguably some of the most-exploited workers in the country, facing a very similar set of difficulties to farm labourers…excluding domestic services from an even greater ranging of compliance mechanisms will serve only to entrench the risks of exploitation in the sector. Any exemption must be strict enough to cover only essential trades on a non-ongoing and non-residential basis.
2.79
The Ai Group was concerned that, as currently drafted, the definition of ‘allows to work’ might capture employers engaging contractors:
While we presume that the expanded prohibition to include independent contractors is to limit the opportunity for avoiding the effect of the prohibition (e.g. for roles that may be more suited to employment), our concern is that businesses are placed in the position of having to determine whether each contractor engaged with is in fact a non-citizen or is supplying non-citizen workers, to comply with declaration.
The definition also potentially covers employers who may inadvertently engage non-citizens where those non-citizens are employed by somebody else (such as a labour hire arrangement or other contracting entity), and whether that is included as a ‘contract for services’. This outcome in our view exceeds what was contemplated by the relevant recommendation in the Migrant Workers Taskforce Report.
2.80
The Law Council and the ACTU were concerned about the exemption where work is ‘merely incidental to a business of the person or the body corporate’. The Law Council questioned:
…whether it should be permissible for a prohibited employer to allow a non-citizen who does not hold a visa to do any work or the business, even if incidental to the business…
2.81
The ACTU echoed this concern, stating that this is a ‘highly uncertain exception’.
2.82
In response to concerns regarding the domestic exemption, the department advised that:
The bill is drafted in a manner that is broad enough to cover a wide variety of employer-employee relationships, including a situation where someone has employed an au pair to work in their home. The domestic exemption has been drafted to cover the situation where an employer has engaged in conduct that has resulted in a sanction, has subsequently been prohibited, but then faces a situation where he or she may need to engage the services of, for example, a tradesperson to fix a tap or a small matter within their own home. The exception is meant to cover that scenario, not ongoing employment in the domestic context.
2.83
In relation to the exemption pertaining to incidental work, the department highlighted that this exception:
…is intended to cover circumstances where a person may engage the services of a non-citizen temporarily or on an ad hoc basis as an independent contractor.
Other concerns
2.84
A number of other concerns were raised during the course of the inquiry in relation to the prohibited employer provisions, such as retrospectivity and delegation of legislative power.
2.85
The Ai Group discussed the retrospective application of the migrant worker sanctions, stating:
Many employers in recent years have invested heavily in legal advice and governance systems to ensure that the varied and many terms and conditions in modern awards, enterprise agreements and workplace laws are complied with. In most circumstances, it would be unjust for a past contravention order to result in the employer being declared a Prohibited Employer where the employer has taken the necessary remedial actions to avoid subsequent breaches.
2.86
The Law Council expressed some concern that the bill may inappropriately delegate legislative power; by permitting regulations to prescribe criteria to be considered by the minister when making a decision to declare a prohibited employer. The Law Council recommended appropriate confinement of the minister’s power in the absence of primary legislation setting out these criteria.
2.87
The Law Council was also concerned about the application of the prohibited employer scheme and possible confusion that could arise in differentiating between a person and a body corporate:
By proposed subparagraph 245AYH(1)(b)(ii), which appears to distinguish a ‘person’ from a ‘body corporate’ by providing that a person who is a prohibited employer will contravene that clause if ‘the person has a material role in a decision made by a body corporate to allow a non-citizen to begin work’.
2.88
The Law Council also expressed concern regarding the procedural fairness implications of the bill; particularly that the prohibited employer declaration provisions are subject to a code of procedure which manifests an ‘exhaustive statement of the natural justice hearing rule.’ In this regard, the Law Council directed the committee to the concerns raised by the Scrutiny of Bills Committee (discussed in Chapter 1).
2.89
In relation to procedural fairness, the department noted that:
The procedural fairness provisions balance the rights and interests of the person being considered for declaration as a prohibited employer (including to be heard before a declaration is made) and the need to ensure serious matters concerning the mistreatment of migrant workers are dealt with promptly. This approach guarantees that when a person is being considered for declaration as a prohibited employer, standard processes will be followed, and standard timeframes will apply.
2.90
The department further commented in the hearing:
The legislation anticipates that natural justice would be applied to a decision to consider prohibiting an employer. There would also be an ability for an employer to seek to have that matter reviewed; however, it is anticipated that in making a decision the minister would weigh up a broad range of information and it would be open to the employer to put forward details of the particular impact on them, their business, their industry or their regional area for the minister to consider.
Visa Entitlement Verification Online (VEVO) provisions
2.91
Some submitters expressed in principle support for the proposal to strengthen requirements in relation to use of the VEVO system. For instance, the Salvation Army & Uniting Church commented:
Our own experience is that too many employers have attempted to use labour-hire businesses and other intermediaries to knowingly or recklessly establish plausible deniability that they did not know people were employed in breach of their visa conditions. Establishing required system users will allow individuals and industries with the highest risk of non-compliance to be required to use the VEVO system and be unable to try and shift the blame for any non-compliance onto other intermediaries.
2.92
The Australia Workers Union stated:
…it’s positive that there is an increased emphasis on the use of that electronic system, but we would say that should be mandatory for employers upfront, that all employers should be mandated to use that system to check the workers’ status before they engage them and that there should be an offence attached to this.
2.93
However, a number of submitters expressed concerns regarding the proposed new requirements.
2.94
For instance, Fragomen expressed concern about the administrative burden placed on employers to undertake ongoing VEVO checks for sponsored employees, commenting:
I think our main concern around this amendment is just that we want to ensure that there is a balance—that the obligations don't impose an unnecessary administrative burden on employers but, at the same time, do ensure that there is a positive obligation on employers to take reasonable steps, positive steps, to ensure that the individuals that they're employing do have appropriate work rights, which I think is a point of ambiguity in the current legislation.
2.95
Fragomen recommended that:
There should be clear guidelines from the department as to what constitutes ‘reasonable steps’ on an ongoing basis to ensure those types of visa holders maintain appropriate work rights and that, again, there’s not unnecessary ambiguity or administrative burden on cohorts that present lower risk, particularly those who don't have as strong a connection to the employer, in terms of further visa pathways, as students and other vulnerable visa holders might.
2.96
The Law Council called for greater flexibility in the proposed new requirements:
The Department [to] ensure regulations are made which permit a person to access the information required for these provisions from sources other than VEVO, when the information cannot be sourced from VEVO.
2.97
The Law Council highlighted that:
There are many people in the community who do not have a birth certificate or an Australian passport (including Aboriginal and Torres Strait Islander People with unregistered births) and who will therefore be unable to produce the documents listed.
The new regulations for the provisions in Part 3 of the Bill should provide for a way an employer can comply with the legislation in circumstances where the prospective worker does not have these relevant identity documents- the Law Council suggests these regulations be subject to public consultation.
2.98
The Ai Group similarly highlighted the importance of flexibility regarding who may undertake VEVO checks.
2.99
In relation to these flexibility concerns, the department advised:
The onus is on the employer (or referrer) to determine whether the prospective worker would have the required permission to work; however, the new provisions generally allow flexibility for the VEVO check to be undertaken either directly by the person, or under an arrangement where another person logs into and uses VEVO to source the information. Such alternative arrangements could include, for example:
An arrangement by contract under which the contractor logs into and uses the prescribed computer system to source information that is supplied to the first person; or
An arrangement between an employer and a prospective worker where the prospective worker logs into VEVO and arranges for a system-generated e-mail to be sent by VEVO directly to the employer.
By clarifying the requirement to use VEVO, these new measures provide employers with clarity and assurance about how to comply with their obligations.
2.100
The department further commented:
The shift from a defence to a positive obligation will help to ensure that checks are being undertaken appropriately in the interests of protecting employers from inadvertently contravening the existing, well-established ‘allow/refer’ offences.
Adequacy of enforcement
2.101
Submitters were generally supportive of increased penalties in relation to work-related offences committed by employers. The Salvation Army & Uniting Church stated for example:
We refer to arguments from the criminological literature that the availability of criminal law and high penalties is important- not because of their deterrence impact, but because of their moral implications in legitimating and substantiating content of the message about compliance at the bottom of the regulatory pyramid.
2.102
However, some submitters raised concerns regarding existing enforcement under the Migration Act for exploitative action by employers, and questioned the effectiveness of increased penalties unless accompanied by proportionate monitoring and enforcement methods. For example, Unions New South Wales (NSW) commented ‘you could have all the penalties in the world, but if you don’t have someone enforcing them they’re not worth the paper they’re written on’.
2.103
A total of 1060 employer sponsors have been sanctioned for breaches of employment-related sponsorship obligations as a result of Australian Border Force enforcement action, since 18 March 2015. In that same period, the Department of Home Affairs has granted 270,241 employer-sponsored skilled visas. This puts the number of employer sponsors sanctioned around 0.4 per cent of the total number of approved sponsors. The United Workers Union (UWU) observed in relation to this:
So, despite there already being ample and broad employer sanction provisions under the act, the exploitation of temporary migrant visa holders remains rife and endemic, and the sanction provisions are rarely called upon to remedy it.
2.104
Based on feedback from practitioners and its constituent bodies, the Law Council reflected that:
While additional offences and increased penalties are important, increased investment and appetite for meaningful enforcement action in relation to the laws which already exist is required to achieve the public policy goals of reducing exploitation and abuse of temporary visa holders…
Information provided by the Department under the Freedom of Information Act 1982 suggests that there three investigations conducted in relation to the offence and civil penalty provisions in relation to work by non-citizens and sponsored visas in Subdivisions C and D of Part 12 of the Migration Act in 2019-20 and 2020-21: two were terminated and one resulted in an infringement notice.
Anecdotally, the Law Council is not aware of any criminal proceedings commenced by the Department in relation to the existing offences. The Law Council understands that the most likely outcome for an initial contravention is an ‘Illegal Worker Warning Notice’ (IWWN) as the Department generally prefers to educate, rather than sanction, first-time offenders…
The [LCA} understands that issuing of any of the above penalties (including an IWWN) usually leads to delays in visa processing and a request for further information issued seeking a response to why adverse information against the company is reasonable to disregard and should not prevent the grant of such visas.
2.105
Evidence was presented regarding the extent of the FWO’s efforts in monitoring and enforcing migrant workers’ safe working conditions. For example, the UWU highlighted:
The work of Laurie Berg and her colleagues tells us that the Fair Work Ombudsman is drastically underutilised despite a very significant amount of its work and policy research now being pivoted towards addressing migrant worker exploitation.
2.106
Further, in relation to wage theft, the UWU commented:
Wage theft in silence in 2019 identified the huge rates of wage exploitation. The Fair Work Ombudsman, of those workers that went to the Fair Work Ombudsman for help with wage theft, 58 per cent of those workers recovered nothing via the Fair Work Ombudsman and only 20 per cent, or one in five of those workers, actually recovered the full amount owing.
2.107
The ACTU further commented ‘the Fair Work Ombudsman is doing more prosecutions year on year, but it is barely scraping the bottom of the barrel’.
2.108
In relation to the enforcement capacity of the FWO, the committee heard that $180 million in funding has been provided to the Ombudsman since 2016 to ‘assist it as the workplace regulator’.
2.109
In a media release from October 2021, the FWO highlighted the enforcement action it has taken in 2020-21, including:
the recovery of $148, 374,054 for 69,735 underpaid workers in 2020-21, ‘a record sum of back-paid wages and entitlements’.
entering into 19 enforceable undertakings with businesses, of which 17 related to self-reported non-compliance by large employers; and
76 new litigations, 41 per cent more than in 2019-20, which secured more than $2.8 million in court-ordered penalties, of which more than $2 million related to matters involving migrant workers.
2.110
The FWO highlighted its enforcement approach:
We use what we’ve got available to us in terms of enforcement tools and resources – whatever they may be – and the framework in our efforts in a strategic way so that we can have the greatest impact with those.
2.111
In evidence at hearing, the FWO provided further details about its efforts addressing workplace exploitation, highlighting that it had in 2020-21 it received 14,000 anonymous reports and finalised around 630 complaints in relation to formal disputes that related to visa workers, recovering around $824,000 for those people.
Various other issues
2.112
A number of other issues were raised over the course of the committee’s inquiry in relation to the bill’s provisions, with some of these issues canvassed below.
Enforceable undertakings and compliance notices
2.113
Submitters were generally supportive of the bill’s proposed amendments to expand the range of regulatory tools to respond to instances of workplace exploitation through enforceable undertakings and compliance notices. For instance, the Australian Fresh Produce Alliance (AFPA) commented:
The AFPA support the establishment of a framework in the Migration Act to enable the use of compliance notices. The use of compliance notices as an educational and behavioural change tool is well documented and will result in a greater level of voluntary compliance.
2.114
However, some submitters expressed concerns regarding the effectiveness and appropriateness of these measures.
2.115
The Salvation Army & Uniting Church, for instance, expressed some concern about the use of ‘light touch’ deterrent measures, commenting:
We suspect that the first time many breaches of the law are detected concerning exploitation of people on temporary visas, it will be after the person breaking the law has done it many times…there is a danger in the use of compliance notices that it may reinforce in the offender’s mind that the illegal activities they are engaged in are not seen as serious and lead to further offending when the opportunity arises…
Against those concerns, it has been argued that the initial deployment of ‘softer’ forms of social control later legitimises the regulator’s use of more punitive sanctions…
2.116
The ACCI expressed some concern regarding the impact on employers of the increased use of enforceable undertakings:
There are concerns from the employer community regarding the practicality and proportionality of undertakings being sought by some regulators, and of a regulatory tendency over time towards unreasonableness and disproportionality in the terms of undertakings. There is a genuine risk then if such tools become bureaucratised, and iterative (with the regulator adding new mandatory provisions overtime based on its experience and priorities) then their attractiveness to employers and contribution to improved compliance will fall.
The analysis would need to be done, but it may well prove to be an iron law of bureaucracy that constructive, innovative tools of pragmatism, flexibility and encouragement will cease to have those qualities over time in their application by regulators.
This risks a lack of confidence from employers and lapsing into a situation in which undertakings cease to offer the alternative that is fundamental to their effective operation and role in compliance and enforcement. This is something to bear in mind as this potentially very important and positive, but potentially fragile and delicately calibrated, option is incorporated into migration law from the ground up via this Bill.
2.117
The Law Council raised concerns regarding the retrospective application of the compliance notice scheme, which applies in relation to conduct (including an omission) occurring before, on or after the commencement of Schedule 1:
In this case, it is noted that the retrospective application of this scheme would have the advantage that conduct in breach of existing offences and civil penalties are dealt with in a manner that is less onerous than through the use of other compliance management tools.
However, it appears both from item 40 and the description in the Explanatory Memorandum that the compliance notice scheme will capture new offences introduced by the Bill in relation to conduct which occurred before the commencement of the bill. The Explanatory Memorandum does not appear to provide sufficient explanation for a retrospective approach in those circumstances…and the Law Council suggests an amendment to item 40 to provide that it does not apply to conduct occurring before the commencement of the new offences and civil penalty provisions.
“Phoenixing”
2.118
A number of submitters, while supportive of the proposed offences and sanctions in the bill, expressed concern regarding the possible “phoenixing” of labour hire companies to avoid the liability that is the policy objective of the bill.
2.119
The NFF, for example, commented:
The flexibility of many labour hire companies means that certain bad actors could, for example, be declared a prohibited employer by the Minister. They can then dissolve the company, register a new ABN and business name and get back to hiring and deploying migrant workers, due to the sheer number of small labour hire enterprises and the lack of government oversight on the sector.
Education and information
2.120
A number of submitters argued that the bill must be implemented along with appropriate educational material and information for stakeholders.
2.121
The ACCI went so far as to call for a staged commencement of the bill, in order to:
Give the Minister discretion to stagger the commencement of the changes and to work with stakeholders on implementation, promotion and information to ensure the changes can deliver the outcomes sought.
2.122
The NFF similarly called for the development of educational material and information for both workers and employers, to ‘ensure widespread comprehension of the new provisions, increasing compliance and, ultimately, conditions for non-citizen workers.
Committee view
2.123
The committee recognises the critical role migrant workers play in Australia’s workforce and acknowledges that protection from exploitative action by employers is essential to these workers’ safety and security, as well as Australia’s reputation globally in attracting and retaining these workers.
2.124
The committee further acknowledges workforce shortages across Australia, particularly in regional Australia, where the unemployment rate is at 3.8 per cent. Migrant workers are essential to addressing these workforce shortages.
2.125
While recognising that the Department of Home Affairs and the Attorney- General’s Department are continuing to implement the recommendations in the Migrant Workers’ Taskforce Report, the committee considers the bill an important step forward in implementing the recommendations of that report by enhancing protections for vulnerable workers. The committee supports the whole-of-government efforts to implement the recommendations and encourages their implementation as a priority.
2.126
The committee acknowledges the concerns raised by submitters and witnesses regarding the underlying problems affecting migrant workers, particularly the power imbalances between workers and their employers. The committee considers that the bill strengthens migrant workers’ rights and the ability of the Department of Home Affairs and the Fair Work Ombudsman to address exploitation of these workers.
2.127
The bill would also introduce significant changes to the obligations and rights of employers and workers. It is appropriate for these changes to be accompanied by educational material and information so that stakeholders are aware of the new requirements and obligations.
2.128
The committee acknowledges the concerns raised during the course of the inquiry regarding a number of undefined or unclear terms in the bill, particularly in relation to the work-related offence provisions and the prohibited employer declaration provisions. The committee accepts the Department of Home Affairs’ advice that this approach is intended to afford flexibility in the application of the proposed provisions. The committee urges the government to apply provisions and exercise its powers under the bill in ways that further the intent of the bill to enhance migrant workers’ rights.
2.129
The committee recommends that the Senate pass the bill.
Senator the Hon Sarah Henderson
Chair