A commissioner able to raid Victorian employers and launch criminal prosecutions is among the sweeping reforms to be introduced by the Andrews government to tackle the exploitation of workers by labour hire syndicates.
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Fairfax Media can reveal a legislative overhaul of the labour hire industry will be introduced by the Andrews government later this year and is set to be the toughest in Australia. While lauded by unions, it is likely to be attacked by some business groups and may also risk pushing worker exploitation interstate.
The changes come after a series of investigative reports by Fairfax Media and Four Corners exposing the systemic exploitation of vulnerable workers by labour hire syndicates. Some of the syndicates operate across state and national borders, are controlled by organised crime groups and are embedded in the supply chains of major companies, including in the retail and construction sector.
In Victoria's food bowl, thousands of mostly undocumented Malaysians work with labour hires syndicates contracted by farms, including those supplying supermarket chains.
Last November, an undercover Malaysian journalist working with Fairfax Media exposed one of Australia's largest stone fruit growers knowingly using workers underpaid and exploited by a network of labour hire companies in Swan Hill.
The Cutri Fruit farming operation in Swan Hill, along with large farming enterprises owned by A & G Lamattina & Sons and the Vizzarri family in Victoria's south east, have all faced accusations of engaging exploitative labour hire contractors. All three farms are key suppliers to major supermarket chains, who insist they run their own robust supply chain integrity schemes. These claims have been undermined by repeated revelations that leading produce suppliers are using exploited foreign workers.
Each has previously denied any wrongdoing.
Under the laws to be introduced by the state government, a new statutory agency headed by a commissioner will oversee a licensing scheme that will ban those not of "fit and proper" character from operating labour hire firms.
Firms who breach labour or immigration laws will be denied licences or face civil or criminal sanctions. The proposed agency will likely confront outlaw motorcycle gangs and other organised crime syndicates, who have previously been exposed operating exploitative labour hire agencies in the construction sector with the covert backing of a small number of major building company executives and union officials.
"This scheme will bring some much needed transparency to the labour hire industry. Businesses will need to show they treat their workers fairly and become licensed or face hefty penalties," Victoria's Industrial Relations Minister Natalie Hutchins said in a statement.
Professor Anthony Forsyth of RMIT University's Graduate School of Business and Law, whose inquiry into Victorian labour hire syndicates last year uncovered systemic worker exploitation in the agriculture and poultry sector, said the reforms went further than those he recommended as they will not be confined to high risk industries.
While he said the scheme's broader remit "will benefit more workers," Mr Forsyth also cautioned that the new regime would only be effective it had was adequately resourced and prepared to prosecute offenders.
He also warned the reforms – which will be tougher than similar labour hire regulatory regimes planned for South Australia and Queensland- may drive some labour hire syndicates to states with little or no oversight.
"Clearly a national scheme will be preferable to ensure that doesn't occur," he said, echoing calls by Ms Hutchins for the federal government to follow Victoria's lead.
The National Farmers Federation has previously called for a national labour hire licensing scheme and criticised the federal government for failing to act.
The NFF has warned state-based schemes will be too cumbersome and create red tape burden for farmers.
The National Union of Worker's Gary Maas said the Victorian reforms would reduce the "misery" faced by the state's most vulnerable workers.
"We welcome the key elements of the legislation – universal coverage, a fit and proper persons test on owners/directors, an independent Statutory Authority with Right of Entry and compliance powers, and civil and criminal penalties for non-compliance," Mr Maas said.
The federal government recently said it will introduce a Modern Slavery Act which requires large companies to publicly audit their supply chains to prevent worker enslavement, although critics of the proposed Act say it appears to be piecemeal.
