WAGE THEFT THE SHADOW MARKET
PART TWO: THE HORTICULTURE INDUSTRY
Introduction
At time of writing migration to Australia is at an all-time low. Many nations have begun their roll out of vaccines for the COVID-19 virus however the pandemic still poses a serious threat to lives and economies. To limit the spread of the virus in Australia the federal government has continued its restriction on international arrivals and particularly its halt on immigration to Australia. Many industry representatives including those advocating for the horticultural industry have complained the limits on migration are severely impacting their ability to attract workers and as such their ability to harvest produce. In contrast, employee advocates believe ready labour is available in the form of increased numbers of unemployed local workers and the horticultural industry is struggling to attract workers because it has a preference for vulnerable migrant workers who are easily exploited with illegally low wages and poor conditions.
This report reveals exploitation of migrant workers in the horticultural sector has continued during the period of the pandemic and it is severe, despite the ongoing commentary labour shortages. The Horticulture and Wine Industry awards allow farmers to pay workers either a piece rate, according to how much they picked, packed, pruned or an hourly rate1. Year after year horticultural workers report employer exploitative practices backed by piece rate agreements. Recent reports have provided evidence of migrant workers earning as little as $3 per hour through the piecework system.2
This report is part two of ‘Wage Theft, The Shadow Market.’3 Part one was released by Unions NSW in December 2020 and included the audit of jobs advertised below the minimum wage outside the horticulture industry. This report includes a review of 1,000 job ads for positions in the horticultural industry. Ads were predominately in English, Chinese, Japanese and Korean, and an overwhelming majority (88%) offered a piecework rate. Analysis suggests over 96% of the piece rates advertised would not allow a worker to earn the national minimum wage, and in several instances, workers would earn less than $1 an hour.
Recent Government enactments mistakenly focus on diversifying the regional workforce to ensure labour supply for regional businesses. They do not address the problems at the core of the horticulture industry, labour exploitation, poor working conditions and wage theft. Incentives to diversify the regional workforce with local workers are a ‘low-hanging fruit approach’ to address labour distribution imbalances. This approach will not attract workers towards an industry that already has a reputation for underpayment and exploitation.
Key findings
Recommendations
Part 1
Methodology
Commencing in 2017, this is the third year that Unions NSW has conducted an audit of jobs targeting migrant workers and advertising below the minimum wage. From late-December 2019 to early September 2020, more than 1,000 ads, for positions in the horticultural industry were reviewed.
The research, Wage Theft: The Shadow Market in the Horticultural Industry used fundamentally the same methodology as part one, Wage Theft: The Shadow Market, although given the prevalence of job ads offering piece rates this review included additional interviews with workers and focus groups were also necessary to establish the levels of underpayment.
The job ads reviewed were all distributed through online channels, with the majority found on Facebook community groups targeting backpackers and fruit pickers. In a recent survey of 1,000 workers in the horticultural industry conducted by Unions NSW, over 50% of the respondents indicated that they had found their job online and 35% through Facebook.
The audit was conducted by a multilingual and multidisciplinary group of eight researchers, under the supervision of a senior employment lawyer. Researchers joined over 70 community Facebook groups, specifically for backpackers and farm work job hunting. The majority of job ads for roles in the horticultural sector were written in Chinese, Korean, Japanese or English.
Additionally, researchers audited the most popular websites used by Chinese and Korean speakers, as directed by information gathered through migrant community focus groups and Gumtree ads. Figures 1 and 2 provide examples of websites and social media channels used by migrant workers to find jobs in the horticultural industry.
Researchers used coding, data extraction, online alerts and other IT methods to audit the highest number of ads possible. Of the 1,008 jobs reviewed 88% offered wages by piece rate, and employers were contacted in cases where the advertised piece rate was unclear. Piece rates offered were usually approximated to payments per kilogram.
Importantly, ads that did not provide a rate of pay and repeated jobs ads in the same platform or cross–platforms, were excluded from the analysis. Advertised rates of pay were compared with the legal wage, according to the relevant Award for the horticultural industry and the national minimum wage.
Characteristics and number of ads
The audit examined over 1,000 ads published on social media platforms between December 2019 and early September 2020, advertising positions in the horticultural sector. A significant decline in the number of job ads was found during the COVID-19 lockdown period, particularly from March to April. An increase in the number of positions advertised was observed in July and August (426), accounting for 42% of the ads audited.
The research analysed ads for positions related to 17 crops, with the majority being for positions for strawberry (34%), blueberry (30%), grapes (10%), zucchini (5%) and raspberry (3%) picking.
Contrary to findings in other industries, a considerable number of the ads reviewed were written in English (59%), following by Japanese (20%), Chinese (11%) and Korean (10%) (Figure 3).
The ads reviewed positions in over ten locations, including Coffs Harbour (29%), Caboolture (15%), Bundaberg (13%), Beerwah (9%) and Mildura (4%).
Under the Horticultural and Wine Industry awards, an employee can agree with their employer to be paid a piecework rate or an hourly rate. Under the piecework rate, an employee’s earnings are based on the amount they have picked, packed or pruned. The rate must allow the ‘average competent employee’ to earn at least 15% or 20% more than the hourly rate established under the horticulture or wine award, respectively.
As illustrated in Figure 4, unsurprisingly, an overwhelming number of the ads reviewed offered piece rate arrangements. The audit revealed farm employers vastly prefer piecework over hourly rates. 88% of ads advertised piece rates, while only 12% offered an hourly rate.
Figure 1. Example of farm worker jobs search social media channels
Figure 2. Examples of focus group findings of popular social media groups and websites
Figure 3. Ad languages
Figure 4. Percentage of ads advertising a piecework rate
A disaggregation of the piece rates advertised in the ads reviewed by Unions NSW per crop revealed in several crops, underpayment of less than $2 an hour was not rare.
65%, 22% and 5% of the job ads for strawberry, grape and raspberry picking, respectively, would see a worker make under $2 an hour. 33%, 64%, 24% and 15% of the ads for blueberry, capsicum, zucchini and raspberry, respectively would see a worker earn $10 to $12 an hour. 43% of the ads for blueberry picking and 10% of those for zucchini picking would allow a worker to earn $13 to $14 an hour. 25% of the ads for raspberry and 29% of those for zucchini picking would see a worker earn $ 15 to $16 an hour.Audit Results
Previous reports and audits have uncovered systematic underpayment and wage theft of workers in Australia. In the horticultural industry, the National Temporary Migrant Workers Survey 2017 reported that 15% percent of fruit and vegetable picking and farm related workers were paid $5 an hour or less, while 31% earned only $10 an hour or less. Of all the workers surveyed across different industries, those in crop planting, picking, sorting and packaging were the most underpaid.4
Unions NSW’s audit confirms the levels of exploitation in the horticultural industry reported in academic research remains unchanged, despite farm sector’s claims of labour shortages.
Payment arrangements such as piece rates were conceived to encourage and reward greater productivity in the industry, however this audit reveals that employers systematically misuse piece rates to underpay horticultural workers. 96% of the piece rates reviewed would not allow a worker to receive the national hourly minimum wage of $19.84 per hour (Figure 5).
The percentage of ads offering hourly rates below the minimum wage are likely to be higher if comparing the advertised rate with the $24.80 and $24.73 award wage for casuals established in the Horticulture Industry and Wine Awards, respectively.
The Horticulture and Wine modern awards state that piece rates must enable an average competent employee to earn 15% or 20% more than the award hourly rate, respectively. However, to assess the ‘average competent employee’ is not an easy task, as there is no clear standard for the industry or its subsectors regarding the performance expected from the average competent employee. Assessment can lead to different outcomes, depending on the employee’s level of experience on a specific farm, stability of the workforce, crop type, terrain conditions and the size of the enterprise, among others. Furthermore, even farms with the same crop and location may have a different standard for ‘average competent employee’.
Temporary migrants under the Working Holiday Makers Program (WHMs) undertake the majority of the work in the horticulture sector and most do not have previous experience in the industry. Their level of training is limited to a period of 88 days or six month period, which is the length of farm work required under their visa to gain a second or third year in Australia. During their farm work period, most report little improvement in their wages and under the piece rate work system, are unable to ensure a minimum wage.
Average earned hourly rate
Between December 2019 and early September 2020, Unions NSW researchers interviewed over 100 horticultural workers, enquiring as to the average hourly rate earned per eight hour workday. Information on over 17 crops was collected and grouped per crop. The average and lowest hourly rates earned were able to be identified, and none met the minimum legal wage. The lowest hourly rates earned by workers were in $1.25 for blueberries, followed by $4.10 for peaches, $4.80 for strawberries and $4.90 for grapes (Figure 7).
Figure 5. Percentage of job ads advertising piece rate positions below the minimum wage
Figure 6. Example ad advertising a piecework rate
Figure 7. Piece rate focus groups findings
CASE STUDY: HELEI
Helei is a 30-year-old working holiday visa holder from Taiwan. She worked on the Robinvale grape farm in Victoria from March 2020 until June 2020 under a piece rate agreement, to fulfil her 88 day farm work requirement. When she started to pick grapes, she earned about $40 a day for 8 hrs work, and was required to pay $100 per week to her employer for rent. After several weeks, her speed increased and she was able to pick around 200 kg/day, which earned her an extra $10 a day ($50/day in total).
Helei summarised the breakdown of pickers daily income on her farm:
- 20% earned less than $30 per day
- 25% earned $31 – $50 per day
- 25% earned $51 – $100 per day
- 30% earns more than $100 per day
Helei considered it very unlikely that a working holiday maker could earn $100 a day, with just 88 days of experience.
Migrant workers views on piece rates
Figure 8. Example piece rate agreement
Figure 9. Example of payslip – average competent employee
Figure 10. Piece rate ranges per crop
Piece rates per location
Figure 11. Piece rate ranges per location
Figure 12. Lowest piece rates per location
Figure 13. Temporary migrant warning about exploitative piece rate in strawberry picking
CASE STUDY: Ellen
Ellen is a 26-year-old working holiday visa holder from Taiwan. She worked for a month on a cherry farm in Cobram, earning $8 to $9 an hour, for picking 30 kg a day. She stressed the salary was not enough to allow her to pay her living expenses, and was disappointed she could not earn close to the $1000 a week, which the Facebook job ad suggested.
CASE STUDY: Nadia
Underpayment piece rate vs ads language
Figure 14. Underpayment piece rate per language
CASE STUDY: Catalina
CASE STUDY: Hun
Underpayment ads offering hourly rate
Figure 15. Percentage of underpayment – ads offering an hourly rate
Figure 16. Examples of ads offering hourly rates below the minimum wage
Other forms of exploitation
Accommodation
Figure 17. Example of accommodation provided charging $165 per person weekly
Other common practices identified during the round of interviews of workers conducted by Unions NSW include:
- requesting the employee to take the employer’s choice of accommodation as a condition to receiving the job;
- contracts requiring disproportionate upfront payments of bonds and rent;
- accommodation that does not comply with tenancy and safety laws; and
- misrepresentation of accommodation quality and their rates.
Figure 18. Ads offering accommodation
Sexual harassment
Figure 19. Temporary migrant reporting sexual harassment
Impact of COVID-19
A large- scale survey of over 5,000 respondents conducted by Unions NSW between late March and mid-May 2020, indicated that working holidays visa holders were one of the demographics most impacted by job losses in the early stages of lock down. Close to 70% of farm workers surveyed reported to have lost their jobs during the crisis.7 A reduction in the number of hours also impacted 13 percent of farm workers.8
Facing government restrictions and difficulties maintaining a source of income to meet their basic needs, a considerable number of working holiday makers left the country. The Department of Home Affairs estimated that around 28 percent of working holiday makers have left Australia between March and June 2020.9
This finding is consistent with media reports between late March and April, exposing the mobilisation of backpackers to rural Australia in search of farm work due to the collapse of hospitality jobs in cities.10 While farmers also had to cope with the security restrictions that prevented them from offering jobs to already displaced backpackers, the latter had to face the imminence of homelessness and inability to meet their most basic needs. Ultimately, the difficult situation faced by backpackers force them to depart Australia, a decision that contributed to the horticulture industry’s struggle to find a labour force for the 2020-21 fruit and vegetable season.
Despite Australia depending on this labour to sustain economic growth, temporary migrants were denied financial support during the COVID-19 crisis. This is a government policy which has directly impacted labour sources in regional and rural areas.
Furthermore, despite the claimed labour shortages, new forms of exploitation have been incentivised by the government’s lack of support for working holiday makers. Unions NSW audit identified a proliferation of social media forum ads offering work for accommodation and food only (Figure 20).
Hundreds of social media groups were created in every state to control homelessness and labour shortages through the move from systematic underpayment to unpaid work. This finding is consistent with an academic survey conducted by the University of New South Wales (UNSW) and the University of Technology Sydney (UTS) on the impact of COVID-19 on temporary migrants,11 in which 29% of backpackers reported since 1 March, they had performed work in return for food and housing rather than wages.
Figure 20. Example of a backpacker group offering work for accommodation
Discrimination
Figure 21. Facebook post, working holiday maker reporting discrimination
Recommendations
Piecework rate abolishment
The Horticulture and Wine Industry awards should be amended to abolish piece rates. Unions NSW’s audit, academic research and media coverage have provided compelling evidence to demonstrate that despite the claimed piece rate benefits to incentivise higher productivity, instances of employees working under piece rates earning 15% or 20% more than the relevant hourly award rate are less than rare.
Research has consistently shown over the years that piece rate agreements are systematically misused to pay workers below the minimum wage. The employees’ preference to earn an hourly rate is evidenced in Unions NSW audit which showed an increase in the number of ads offering an hourly rate during August, a month in which there was an increase in the number of positions advertised, suggesting a higher demand for workers (Figure 22).
Visa Reform
The exploitation of workers and wage theft in the horticulture sector is a significant policy and rights issue. Temporary migrants under the working holiday maker program undertake most of the work in the horticulture sector, whist being a very vulnerable group subject to abusive employment practices and poor and unsafe working conditions.15
The requirement for working holiday makers to undertake 88 days of regional work to receive a second-year visa or 6-months to attain a third- year visa intensifies the employer’s power and the vulnerability of temporary migrant workers, who are afraid to report exploitation for concern of a negative impact on their visa.
The Fair Work Ombudsman inquiry into the 417 Working Holiday Visa Program acknowledged the 88- day requirement has facilitated the extensive exploitation of workers highly dependent on employers to comply with their visa conditions.
The requirement has facilitated workers to work for less than the minimum wage and increased the exposure of migrant workers to unsafe situations. Extremely long working hours, hazardous work environments, discrimination, sexual harassment and other criminal offences are a frequent occurrence in regional worksites.
The conditioning of a migratory status to the performance of work through second- and third-year visa extensions makes employees in the horticulture industry targets for exploitation from contractors and recruitment agents.16 Visa extensions without proper and regular oversight and monitoring of working conditions will favour and perpetuate non-compliance of labour standards and workplace regulations in this industry. The requirement for working holiday makers to undertake farm work to extend their time in Australia should be abolished in its current form.
Figure 22. Number of ads offering an hourly rate par month vs number of ads per month
Conclusions
The government’s recent policy changes are focused on addressing claimed labour shortages in regional areas.13 The new measures concentrate on diversifying the regional workforce allowing international students to work more than 20 hours if performing farm work and giving junior workers receiving youth allowance incentives to work on farms. However, the experiences of young workers reveal the policy focus should be about combating labour exploitation, poor working conditions and wage theft from dominating the Australian horticulture industry. Young Australians who undertook the experience to do farm work stated it was impossible to make over $1,000 a week and characterised the job as physically demanding, with health and safety risks.14 Many reported that hostel costs were higher than the wages earned under the piece rate agreement.
The Horticulture and Wine Industry awards should be amended to abolish piece rates. Unions NSW’s audit, academic research and media coverage have provided compelling evidence to demonstrate that despite the claimed piece rate benefits to incentivise higher productivity, instances of employees working under piece rates earning 15% or 20% more than the relevant hourly award rate are less than rare.
Research has consistently shown over the years that piece rate agreements are systematically misused to pay workers below the minimum wage. The employees’ preference to earn an hourly rate is evidenced in Unions NSW audit which showed an increase in the number of ads offering an hourly rate during August, a month in which there was an increase in the number of positions advertised, suggesting a higher demand for workers (Figure 22).
End notes
- Fair Work Ombudsman, Horticulture Showcase, accessed 5 October 2020
https://www.fairwork.gov.au/horticulture-showcase/pay-piecework-rates#pay-rates. - Edward Cavanough and Connor Wherrett, ‘Wage theft and other labour infringements in the NSW Mid-North Coast’s
berry harvest’, The Mckell Institute, 2019/20. - Unions NSW, ‘Wage theft, the shadow market report’, December 2020.
- Report of the Migrant Workers’ Task Force (Report, March 2019)
https://www.ag.gov.au/sites/default/files/2020-03/mwt_final_report.pdf; Laurie Berg and Bassina Farbenblum,
‘Wage Theft in Australia: Findings of the National Temporary Migrant Work Survey’ (20 November 2017) 6. - Joanna Howe et al, ‘Towards a Durable Future: Tackling Labour Challenges in the Australian Horticulture Industry
(2020) 2, 96-7. - Fair Work Ombudsman, Harvest Trail Enquiry (Report on workplace arrangements along the harvest trail, 2018);
Joanna Howe et al, ‘Towards a Durable Future: Tackling Labour Challenges in the Australian Horticulture Industry
(2020) 2, 5, 9-16. - Unions NSW, ‘No Workers Left Behind: Support equal access to welfare for temporary migrants —Survey Results’
(2020) 15. - Ibid 16.
- Unions NSW, ‘No Workers Left Behind: Support equal access to welfare for temporary migrants —Survey Results’
(2020) 6, citing Department of Home Affairs, number of Temporary visa holders in Australia, June 30, 2020. - Brad Thompson, David Marin-Guzman and Elouise Fowler, Farmers swamped by displaced backpackers wanting work,
Financial Review (24 March 2020) accessed 6 October 2020. - Laurie Berg and Bassina Farbenblum, ‘As if We Weren’t Humans: The Abandonment of Temporary Migrants in Australia during COVID-19’ (October 11, 2020).
- Laurie Berg and Bassina Farbenblum, ‘As if We Weren’t Humans: The Abandonment of Temporary Migrants in Australia during COVID-19’ (October 11, 2020).
- The Joint Standing Committee on Migration, Inquiry into the Working Holiday Maker program, Parliament of
Australia (9 September 2020, Press Release). - https://www.abc.net.au/news/2021-01-14/when-backpackers-went-home-these-australians-tried-farm-work/13047062
- Fair Work Ombudsman, Harvest Trail Enquiry (Report on workplace arrangements along the harvest trail, 2018.
Joanna Howe et al, ‘Towards a Durable Future: Tackling Labour Challenges in the Australian Horticulture Industry
(2020).