A Fair Work Ombudsman (FWO) report into horticulture compliance has found several South Australian labour hire providers had not paid workers superannuation and were allegedly operating without a licence.
The report, released last week, details investigations in 15 “high-risk” Australian regions where non-compliance was reported to the FWO.
From December 2021 to April 2024, the FWO inspected 360 sites across the nation, issuing $760,405 in fines to employers who failed to meet pay slip and record-keeping obligations.
Citrus and wine grape properties had some of the highest non-compliance rates in South Australia’s Riverland. (ABC Illawarra: Justin Huntsdale)
Labour hire firms ‘notorious’
Properties were inspected in South Australia’s Adelaide Hills and Riverland regions.
Investigators found 92 per cent of the audited labour hire providers in SA were non-compliant, with strawberry and citrus producers having some of the highest non-compliance rates in the state.
Citrus Australia CEO Nathan Hancock says no worker should be taken advantage of. (ABC Riverland: Amelia Walters)
According to the FWO, workers interviewed at a South Australian strawberry farm told inspectors they were paid in cash and did not receive pay slips.
The employer was a labour hire firm that “didn’t provide any employee records to the FWO” and was issued with multiple infringement notices amounting to more than $12,500.
Fair Work Ombudsman Anna Booth. (Supplied: Fair Work Ombudsman)
Speaking with Narelle Graham on ABC SA Regional Drive, Fair Work Ombudsman Anna Booth said it was common for labour hire providers to not supply wage records or pay slips and to be uncontactable.
“Labour hire is, unfortunately, notorious for the kind of breaches that we found,” she said.
“Underpaying often goes hand-in-hand with cash in hand.”
One labour hire provider was issued with more than $12,500 worth of infringement notices. (ABC News: Cam Lang)
The investigation also uncovered 10 labour hire providers operating at one South Australian strawberry farm.
Of those, three refused to engage with the FWO when it asked for records. Workers, the report says, were paid between $19 and $25 per hour in cash.
Six infringement notices totalling $28,860 were issued to five labour hire providers operating at the property.
Illegal phoenix activity
The FWO also made unannounced site inspections in SA involving a network of labour hire businesses suspected of illegal phoenix activity.
According to AUSTRAC, illegal phoenix activity occurs when a company liquidates its operation to “avoid paying its creditors, taxes and other regulatory payments”, only to later reappear as a newly created company with the same directors.
The cycle of illegal labour hire phoenix activity according to AUSTRAC. (ABC News: Stephan Hammat)
Workers and managers in the Adelaide and Riverland region had accused “various enterprises” of failing to meet taxation obligations and not paying superannuation on behalf of employees.
The FWO report says it was also tipped off about three suspected phoenix labour hire providers in the state’s Riverland region operating without a licence.
Citrus Australia chief executive Nathan Hancock said illegal phoenix activity had been occurring “for a long time”.
“I think it’s wrong and we need to get it out of our industry,” he said.
Nathan Hancock wants illegal phoenix firms out of the citrus industry. (Supplied: Citrus Australia)
Mr Hancock said many horticulture industries wanted a national labour licensing scheme that protected all labour hire workers from “bad actors”.
“The loopholes that are created by the lack of such a regulation mean people are getting away with exploiting their fellow man, which is really disappointing,” he said.
“I think the federal government and state governments need to work more closely to align their regulation and have adequate people on the ground to stamp this out.”
Employment and Workplace Relations Minister Amanda Rishworth said the federal government remained “committed” to implementing national labour hire reform.
Amanda Rishworth. (ABC News: Ian Cutmore)
“[We] will continue to work with state and territory governments on pursuing a national approach,” she said.
“National labour hire reform will be on the agenda for the next meeting of state and territory ministers, which will be convened as soon as practicable.”
Ms Booth said while the “very high” breach areas would be prioritised and revisited during the next two years, it will continue to stamp out bad behaviour across Australia.
“If we get any intelligence or any referrals from any other regulators with whom we work with, or we get any workers ringing us up, we will be there,” she said.
