Australia: Employee & industrial relations issues in the agribusiness industry - how not to deal with labour shortages and what's keeping the FWO busy

Last Updated: 29 September 2014
Article by Maree Skinner and Libby Radjenovic
Focus: Key considerations for agribusiness employers as a result of labour shortages
Services: Employee & industrial relations

In this update, we take a closer look at:

  • a recent decision of the Fair Work Commission (FWC) concerning a chicken farm in Victoria, which highlights one of the risks associated with labour shortages in the agricultural industry, and
  • the monitoring and compliance projects currently being undertaken by the FWO in recognition that the agricultural industry attracts a significant number of workers on a 417 working holiday visa.

Direction to work extra hours unreasonable

In a recent decision, the FWC ruled it was neither lawful nor reasonable that Hazeldene Chicken Farms (Hazeldene) required an IT employee to work additional unpaid hours and make himself available on-call.

Following the employee's refusal to answer calls from his manager while on annual leave, Hazeldene sought to vary his contract of employment, requiring him to work additional hours for no extra payment, and to be included on an on-call roster for 13 weeks a year in return for a payment of $77 per week. When the employee refused to accept the variation to his contract of employment, Hazeldene terminated his employment for refusing to follow a lawful and reasonable directive.

The FWC found that the employee had been unfairly dismissed, stating that there is a significant difference between being required to "work such hours as may be reasonably necessary to meet operational requirements" (as required under the employee's existing contract of employment) and being required to participate in an on-call roster. Interestingly, the FWC also reiterated that employees are entitled to annual leave "without interruption". The employee did not seek to be reinstated in his employment as he had found a new job shortly after his dismissal, and he was awarded $7,500 in compensation.

This case demonstrates that seeking to deal with labour shortages by increasing the hours of existing employees requires careful consideration to avoid the risk of unfair dismissal and adverse action claims.

FWO review of 417 working holiday visas

In August 2014, the FWO announced that its Overseas Workers Team (OWT) will commence a review of the wages and conditions of overseas workers on the 417 working holiday visa, having identified that a significant number of inquiries come from workers in the agriculture, forestry and fishing industries.

While the FWO is currently conducting investigations in regional Victoria and New South Wales involving the employment of 417 visa-holders by a range of labour-hire agencies and contractors, the OWT will commence field visits to growers employing 417 visa-holders later this year.

Harvest Trail project

The Harvest Trail project, a three year campaign commenced by the FWO in August 2013, has already taken FWO inspectors to tomato growers in Northern Queensland, strawberry farmers in regional Victoria and cucumber properties in Western Australia. Over the next two years, the FWO will continue to visit employers in the horticulture and viticulture industries to ensure understanding and compliance with federal workplace laws, particularly with respect to seasonal workers.

Fruit & vegetable pickers' campaign

In addition, the FWO recently commenced a campaign targeting fruit and vegetable growers throughout Australia. Inspectors from the FWO's regional services teams have already made unannounced visits to properties in Bundaberg and the greater Darwin area in order to inspect pay records and written employment, contractor and piece-work agreements.

Key considerations for agribusiness employers

To better protect themselves in light of increased scrutiny in this industry, agribusiness employers should:

  • Be aware that requesting employees to work additional hours poses unfair dismissal and adverse action risks if the request is determined to be 'unreasonable'
  • Consider alternative labour hire arrangements to address fluctuations in work flows
  • Effectively use incentive arrangements to retain employees
  • Ensure compliance with the minimum wages and conditions in the Fair Work Act 2009 (Cth) and any relevant industry awards, such as the Horticulture Award 2010 and Pastoral Award 2010
  • Review employment agreements to ensure there are appropriate clauses dealing with immigration approvals and the right to work in Australia, as employers may be subject to a civil penalty under the Migration Act 1958 (Cth) if they allow an unlawful non-citizen to work, or if they do not take reasonable steps to verify a worker's visa status
  • Be aware of your obligations when using a labour-hire service to provide contractors
  • Ensure there are written agreements in place for workers who are paid piece-work rates. In the absence of piece-work agreements, workers are required to be paid hourly rates of pay under the Horticulture Award 2010
  • Ensure that workers give written consent prior to deducting any accommodation, travel or other expenses from their wages
  • Ensure that you are keeping all of the time, wages and other records employers are required to keep in relation to their employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Libby Radjenovic
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