Employers face million dollar fines for exploiting workers

Shadow employment and workplace relations spokesperson Brendan O'Connor is expected to announce the proposal in Townsville today.
Shadow employment and workplace relations spokesperson Brendan O'Connor is expected to announce the proposal in Townsville today. Tom Huntley

THE Australian Labor Party is proposing to introduce a labour hire licensing system requiring all employers to get a license to legally operate in the country.

Shadow employment and workplace relations spokesperson Brendan O'Connor is expected to announce the proposal in Townsville today.

Mr O'Connor said an ALP Federal Government would introduce the system to protect the pay and conditions of vulnerable workers.

"From 1 July 2017, an elected Labor government will make it unlawful for labour hire companies to operate without a licence and for other firms to knowingly or recklessly use an unlicensed labour hire company," he said.

"Breaches of these licensing laws will carry a penalty of $216,000 for individuals (1,200 penalty units) and $1.1million (6,000 penalty units) for a body corporate.

"Recent examples of wrongdoing by dodgy labour hire companies that engage in unscrupulous practices and rip off workers is tarnishing employers that do the right thing, and is undercutting wages and conditions.

"In 2015 we saw too many instances of workers' rights trampled in the labour hire industry:

  • Baiada, a supplier of chickens to Coles, Woolworths, Aldi, McDonalds, KFC and Pizza Hut, was found to have used labour hire companies which paid workers well below the minimum wage at as little as $11.50 an hour for shifts of up to 19 hours a day.
  • D'VineRipe Tomato Growers, which supplies to Woolworths, Aldi, IGA and Costco, terminated its contract with CNC Labour Hire after Four Corners revealed workers were being underpaid by up to $5 every hour.
  • Labour hire company Global Express Consultancy supplied workers to three companies across Sydney - Banquet Desserts, Vienna Schubert Estia and South Pack Laboratories underpaid their workers by more than $45,000.

"To help oversee the new licensing rules, Labor will establish a Labour Hire Licensing and Compliance Inspectorate within the Office of the Fair Work Ombudsman which will have the power to monitor compliance with the licensing regime, and will also keep a public register of all licensed labour hire companies."

Licences will only be granted to employers who are judged to be 'fit and proper' persons, taking into account criminal convictions as well as their cooperation with the Fair Work Ombudsman and the new Labour Hire Licensing and Compliance Inspectorate.

Companies that are based overseas and supply labour to Australian firms, either directly or through other companies, will also have to be licensed to do business here.

Licensing fees will be set after genuine consultation with industry, but will be determined on the basis of cost-recovery principles. The licensing fee structure will also take into account a company's history and compliance risk.

This announcement comes on top of Labor's plans to increase penalties for employers who fail to pay their workers properly, to provide greater protection from sham contracting, and to make it harder for dodgy bosses to 'phoenix' their companies to avoid paying workers what they're owed.

Labor's reforms build on our strong record of protecting wages and conditions. Only Labor understands that fairness at work helps to drive a more productive, competitive and prosperous economy.

Topics:  brendan o'connor employment federal government 2016 jobs

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