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Fair Work Ombudsman Natalie James warns retailers to keep their practices in check.
For the past two years, I have warned about the risks for a business that neglects its labour supply chain.
I have spoken about the strong correlation between outsourcing of low-skilled work, the prevalence of vulnerable workers in such labour markets, and worker exploitation.
We find that these workers are sometimes paid well under the minimum wage of $17.70 an hour.
The community and the media are noticing more than ever that visa-holders are over-represented in matters of worker exploitation.
A company that cares about its reputation and recognises the growing value of that reputation in a competitive market place must take an interest in what’s going on in its labour supply chain.
At the Fair Work Ombudsman, we are increasing our use of accessorial liability powers under the Fair Work Act 2009 as we seek to extend responsibility for breaches of workplace laws beyond the direct employer to others who have played a part in the conduct.
Just as customers of the Australian fashion industry now strongly demand an ethical product manufacturing supply chain overseas, the same customers want to know that workers here in Australia are not being exploited.
It is now business as usual for us to investigate the drivers of behaviour in complex supply chains and develop strategies to shine a light on and stamp out non-compliance with workplace laws.
The community expects nothing less and is sceptical of protests from an established, profitable business that it is not legally responsible for workers in its labour supply chains or network. Especially where there is a sense that those profits have come off the back of the underpayment of workers.
Customers expect such a business to play a part in the solution.
But of course, this is a choice for business. You don’t have to take this approach. But it’s your risk to assess and manage.
It’s for you to decide whether to get out in front of any problems in your labour supply chain or to wait for someone else to go looking – one of my inspectors or the media.
Most employers in this country want to do the right thing – that is our experience.
It is also our experience that those who come awry, do so because they’ve run into difficulties applying our complex system of workplace regulation.
But at the other end of the spectrum, we have a disturbing stream of cases where workers are getting paid well under the minimum hourly rate of pay. And that’s before we consider penalties, allowances and overtime.
If we want to turn this around, we need to accept that we all have an interest in compliance with workplace laws. When workers get ripped off, everyone is affected.
When workers get ripped off, businesses that are trying to do the right thing can’t compete with those who are willing to find a competitive advantage by doing the wrong thing.
And when they can’t compete, those well-meaning businesses often have to make hard choices. To let some of their workers go, or not hire the additional workers that they in truth need.
At the extreme, to go out of business altogether, leaving consumers with fewer legitimate choices and potentially driving up prices. And, worst of all, to follow the lead of those unscrupulous businesses and underpay their workers.
Non-compliance with workplace laws distorts the market, and this affects all of us. It creates a race to the bottom, and black market rates of pay well below the lawful minimum rates. It impacts on the reputation of industries, sectors and regions.
Compliance with workplace laws is not just the business of the Fair Work Ombudsman. Compliance with workplace laws is everyone’s business.