Politics Analysis

Albanese Government cracks down on migrant worker exploitation

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The Albanese Government is taking further steps toward reducing the exploitation of migrant workers (Image by Dan Jensen)

After the Coalition left Australia's migration program in chaos, the Albanese Government has announced measures to further clean up the mess. Dr Abul Rizvi reports.

THE ALBANESE GOVERNMENT has announced further small steps towards reducing migrant worker exploitation. This is desperately needed after a decade of the issue being neglected by the Coalition Government, including putting the 2019 report of its own Migrant Worker Taskforce, headed by Allan Fels and established in 2016, on the backburner.

Why did the Coalition Government neglect the issue of migrant worker exploitation for so long? That was either because it considered the issue unimportant, or more likely, this was part of the Coalition Government’s policy strategy to hold down wages. Remember Mathias Cormann describing downward flexibility in wages as a “deliberate design feature of our economic architecture”. Being from Western Australia, Cormann would have been well aware of Gina Rinehart’s view that Aussie workers are far too well paid.

In its efforts to hold down wages through immigration policy, the Coalition Government:

  • looked the other way while the biggest labour trafficking scam in Australian history was taking place;
  • refused to increase the minimum salary for skilled temporary entrants for a decade — the Albanese Government will increase the minimum to $70,000 from 1 July 2023;
  • allowed overseas students to work unlimited hours — the Albanese Government will restrict student work hours to 48 hours per fortnight that classes are taking place;
  • virtually ceased enforcing illegal worker and illegal employment laws; and
  • refused to progress key recommendations of its own Migrant Worker Task Force.

In considering policy to reduce migrant worker exploitation, there is merit in starting with the various groups that may be subject to exploitation as their circumstances are not all the same.

The key groups are:

  • almost 600,000 overseas students whose work rights will again be restricted from 1 July 2023;
  • around 190,000 temporary graduates;
  • almost 100,000 on the special COVID visa;
  • around 140,000 working holidaymakers;
  • around 125,000 skilled temporary entrants;
  • around 30,000 on a Pacific Australia Labour Mobility (P.A.L.M.) visa;
  • over 300,000 New Zealand citizens (not including those who will have access to Australian citizenship after 1 July 2023);
  • over 100,000 asylum seekers of whom over 74,000 have been refused at the primary stage; and
  • newly arrived permanent migrants most of whom face a four-year wait to access social security.

If the labour market weakens as forecast by Treasury over the next 12-24 months, all of these groups will face difficulties retaining a job or the hours they currently have. In past economic downturns, temporary entrants and newly arrived migrants have tended to be the first to lose their jobs.

Refused asylum seekers tend to be the most vulnerable to exploitation. Australia has never before had such large numbers of refused asylum seekers living in the community. This situation is unprecedented in Australia’s history. Assisting refused asylum seekers is enormously challenging because most are unlikely to come forward to seek assistance. And the politics of asylum seekers in Australia is of course fraught.

What is the Albanese Government doing about this situation?

In the May Budget, the Albanese Government started the long process of reducing migrant worker exploitation by announcing one of the biggest shake-ups in immigration policy that I can remember.

It has this week added to that by announcing it will:

  • make it a criminal offence to coerce someone from breaching their visa condition;
  • stop employers from further hiring people on a temporary basis where they have exploited migrants;
  • increase penalties and new compliance tools to deter exploitation; and
  • consult with stakeholders on whistleblower protections for temporary visa holders and strengthen the firewall between the Fair Work Ombudsman (FWO) and the Department of Home Affairs (DHA) to protect temporary visa holders who report employer exploitation.

What impact will these measures have?

Criminalising coercion to breach visa conditions

The new offence will not only target employers but importantly also migration agents/lawyers (registered or unregistered) as well as labour-hire companies. Examples of the behaviour that might be targeted are here and here, that aired on 60 Minutes, here on the ABC, and a documentary by Charles Sturt University here.

There are three main types of breaches that this may address:

  • employing a migrant worker who does not have work rights or employing them beyond the work rights they have;
  • paying a migrant worker less than the relevant award wage or minimum wage (or doing this via a variety of “deductions” in order to avoid detection); and
  • entering into a contrived arrangement in breach of visa conditions (such as paying an employer to sponsor a worker who would otherwise not qualify; a labour-hire company or agent taking a large cut of migrant workers’ already minimum salaries).

The key challenge will be that with most of the above breaches, there is often a degree of cooperation between the migrant worker, the employer and/or any agents/labour-hire companies that may be involved.

Prosecuting cases where an employer/agent tricks or pressures a migrant worker into breaching visa conditions may be relatively straightforward but are likely to be less common. Prosecuting cases where there is a substantial degree of cooperation between the parties would be much more difficult. The key to success with this legislative change will be the extent to which employers/agents/labour-hire companies are deterred from assisting migrant workers from breaching visa conditions due to the potential criminal penalties and the assessed chances of being caught.

As the labour market weakens, however, the most common type of visa breach may be where migrant workers are so desperate for a job that they are prepared to accept conditions or arrangements that breach visa conditions. Would that meet the test of an employer/agent “coercing” the migrant worker or a case of the migrant worker willingly entering into an arrangement that is in breach of visa conditions?

An alternative approach to deterring employers/agents/labour-hire companies from exploiting migrant workers may be to make it a criminal offence to negligently allow a migrant worker to breach visa conditions. In this way, there can be less doubt as to fault. This has in the past been fought tooth-and-nail by the full gamut of industry bodies essentially because it is more likely to work and would be more in line with the recommendations of the Migrant Worker Task Force. It’s not clear if this is also being explored by the Albanese Government.

Stopping disreputable employers from hiring temporary migrants

This has been a policy objective since the former Skilled Temporary Visa (sub-class 457) was established in the mid-1990s. The current requirement for an employer to become a standard business sponsor is that DHA ‘must not be aware of any adverse information about you or anyone associated with you that affects your suitability as a sponsor’. Sustaining a decision to refuse an application for a standard business sponsorship is not straightforward and is often overturned at the Administrative Appeals Tribunal (AAT).

It is not clear from this week’s announcement whether this current requirement will just be strengthened and/or extended to prevent sanctioned employers from employing any type of temporary entrant (not just skilled temporary entrants under SC482). There are likely to be major practical difficulties in trying to prevent a sanctioned employer from hiring, say, an overseas student or a working holidaymaker.

A key challenge in this area is people who run businesses that have committed breaches establishing a new business to avoid sanctions. Checking for such “phoenixing” is often difficult and very resource intensive.

Increase penalties and new compliance tools

This refers to the introduction of compliance notices and enforceable undertakings to assist Australian Border Force (ABF) in changing non-compliant behaviour without imposing a penalty. The goal is to support responsive regulation — assisting employers to voluntarily comply with their obligations in the first instance and using stronger penalties where non-compliance is intentional, repeated or reckless.

ABF has long been able to use “employer warnings” in a similar way. How the proposed compliance notices and enforceable undertakings will differ from the existing employer warnings is not clear.

What is clear is that ABF has steadily reduced the number of illegal workers it locates from 2,394 in 2017-18 to 292 in 2021-22. It has also steadily reduced employer awareness activities from 1,346 in 2017-18 to 546 in 2021-22 and reduced illegal worker notices to employers from 666 in 2014-15 to 81 in 2021-22 (See Chart 1).

(Source: DHA annual reports)

Whether this steady decline reflects ABF giving these matters a lower priority or simply believing these measures don’t work is unclear. ABF has been given extra resources for immigration compliance activities so the former should not be the issue. But if it is the latter, why hadn’t ABF acted earlier to address any shortcomings? Was that another case of DHA Secretary Mike Pezzullo being asleep at the wheel?

Whistleblower protections

The Albanese Government proposes to consult on three possible initiatives:

  • Exploring information and education initiatives to improve migrant workers’ understanding of their rights and responsibilities, including through the role of third parties. This will have great merit if it means a stronger role for relevant unions, including in terms of helping to hold employers, agents and labour-hire companies to account.
  • A firewall between FWO and DHA to encourage exploited migrant workers to come forward and report exploitative behaviour. I am more sceptical of this. Exploited migrant workers are far more likely to trust unions than any government agency. Moreover, a firewall between FWO and DHA may result in unscrupulous employers/agents escaping justice because of a lack of cooperation between FWO and DHA.
  • Protections against visa cancellation for migrant workers who report exploitative behaviour including a pilot of a short-term visa that enables temporary migrants to pursue their entitlements and/or assist with investigations. This is well worth trialling although to some degree DHA already has the flexibility to use bridging visas in such circumstances.

The Albanese Government will also extend the time available for skilled temporary entrants to leave their existing employer and find another sponsoring employer from 60/90 days to 180 days. This will include allowing skilled temporary entrants to engage in part-time or casual employment while they look for a skilled temporary sponsor.

This is an issue that has been extensively discussed in the past with the length of time allowable to find another sponsor extended from a much shorter period on a number of occasions (I recall it may initially have been 14 days). In my experience, many skilled temporary entrants who are dissatisfied with how they are being treated by their sponsor will look for another sponsor before they leave the current sponsor.

The risk with extending the period a skilled temporary entrant can look for another sponsor is that the longer the gap between skilled jobs makes the likelihood of finding another skilled job increasingly unlikely. That will particularly be the case in a weaker labour market. What evidence the Government has that a period of 180 days is appropriate has not been made public. What happens at the end of the 180 days and the temporary entrant has further put down roots in Australia is also not clear.

In my view, a better approach would be to encourage disaffected skilled temporary entrants to come forward with their complaints and require the employer to continue to pay their salary until relevant concerns are addressed. This approach would enable the issues to be addressed by an impartial agency as well as give the skilled temporary entrant time to find another sponsor whilst being paid properly.

Next steps

Dealing with the exploitation of migrant workers is a policy challenge almost every nation has faced with an extraordinary range of measures having been considered or tried with little measurable success.

The Grattan Institute has suggested a range of measures it considers would ‘stamp out’ migrant worker exploitation in its grandly titled report, ‘Short-changed: How to stop the exploitation of migrant workers in Australia’. The reality is that even a marginal reduction in migrant worker exploitation would be a major achievement. Let’s not underestimate the challenge and let’s not give up on the fact this will always remain a work in progress.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.

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