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Australian farm workers guaranteed minimum wage in a historic ruling

Farm workers and fruit pickers will now be guaranteed a minimum wage following a major Fair Work Commission ruling in favour of the Australian Workers Union (AWU). Under the Horticulture Award minimum casual wage, workers will now be paid at least $25.41 per hour. 

The decision came after the union filed a claim last year to amend the existing horticulture award to ensure farm workers receive the minimum casual wage amid reports that farm workers were earning less than $2 an hour.

AWU National Secretary Daniel Walton said it was one of the most significant industrial decisions of modern times.

“Fruit pickers in Australia have been routinely and systemically exploited and underpaid. Too many farmers have been able to manipulate the piece rate system to establish pay and conditions far beneath Australian standards,” Mr Walton said.

“The changes our union proposed, and that the FWC has now accepted, will put a safety net under fruit pickers to ensure they get what every worker in Australia deserves — a fair day’s pay for a fair day’s work.”

Piece rate agreements

The National Farmers Federation, AiG, and other employer groups opposed the AWU’s case, defending a system that allowed farms to avoid paying the minimum wage by using piece rate agreements. 

Earlier, employers were able to avoid paying the minimum hourly wage under the piece rate agreements by paying workers on the basis of the amount of fruit or vegetables picked or harvested.

However, the FWC ruled in favour of the AWU finding “the existing pieceworker provisions in the Horticulture Award are not fit for purpose; they do not provide a fair and relevant minimum safety net.”

“Now it will be easy for workers — even if they don’t have good English language skills or Australian connections – to understand if they’re being ripped off. From now on if you’re making less than $25 an hour fruit picking in Australia your boss is breaking the law and stealing from you,” Mr Walton added.

“I expect the federal government will join the NFF in fear mongering about this decision. After all they have just hatched a plan to bring in even more easily exploited workers from South East Asia. But now those workers can at least know if they’re being exploited. A clear floor has been put in place.

“This decision is not just a huge win for our union and for workers, but for regional and rural Australia. Workers who earn more, spend more in local shops. They pay tax. They rent local houses and contribute to regional communities,” he said.

Adding to the complexities

 According to National Farmers Federation CEO Tony Mahar, the decision by the Fair Work Commission to bow to the Australian Workers’ Union’s demands and introduce a floor price on piece work rates, will push many farmers’ wage costs to unsustainable levels and may drive horticulture’s most capable workers away from the industry.  

“It is a bitter blow to many farmers who are already doing the right thing, but who are right now facing another harvest with a woefully inadequate workforce,” Mr Mahar said. 

“Farmers want to ensure workers are paid fairly and they also want to be able to reward their most productive workers.  

“The increase in wage costs, most farm’s largest input, threatens to make the most productive workers unaffordable. The loss of these workers will put a handbrake on agriculture’s growth, at a time when our country can least afford it.  

“It’s unfortunate that instead of addressing the complexity of the formula required to calculate piece work rates, the Commission has opted for wholesale changes that will result in greater complexity.”

Furthermore, the Fair Work Commission stated in its findings that “most growers” do not determine piece work rates in accordance with the provisions of the Horticulture Award. Mr Mahar said that the NFF has long advocated for a more streamlined and less complex industrial relations framework. 

He also added that the FWC findings came at a time when horticulture was facing an unprecedented labour shortage and agriculture was the engine room of an economy still suffering from the effects of COVID-19.

“The decision is out of step with what’s in our nation’s interest and is a disproportionate response to the issue at hand. The NFF will now consider our next steps.”

Australia’s backpacker tax

Recently, Australia’s top court ruled in favour of an English backpacker who filed a case against the government-imposed backpacker’s tax after the court found the rule to be discriminatory. 

The Australian Taxation Office (ATO) stated that the ruling was only applicable in cases where the working holidaymaker had been a tax resident in Australia since 2017. It only applied to those from the United Kingdom, Germany, Israel, Japan, Norway, Finland, Turkey, or Chile.

Backpacker’s tax began in 2017, with the government levying a flat 15 per cent tax on income up to A$37,000 earned by holders of working holiday visas known as the 417.

High retail prices due to labour shortages

Retail fruit and vegetable prices increased by almost 5% in June 2021, according to government data, due to a labour shortage. The closure of the international border has resulted in significant labour shortages in Australia’s agriculture sector. 

Later in July of this year, Immigration Minister Alex Hawke extended the 88-day “specified work” requirement for working holiday makers to include tourism and hospitality in northern, remote, and very remote Australia, causing backpackers to forego farm work.

As a result, in order to replace the void left by absent foreign workers, the government began offering cash incentives to Australians. Furthermore, from November 1 of last year, the government began paying reimbursements of up to $6k to anyone who moved to work on farms.

“The so-called labour shortage in fruit picking has, in large part, been created by greedy employers destroying Australian working conditions. This decision is a huge step along the path to fixing this,” Mr Walton said.

Here’s the summary of the decision: https://bit.ly/3bKMjAd

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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