Not fair, not productive: closing the gap for immigrant workers

Immigrant workers who overstay their visas are easily exploited by unscrupulous employers. Julian Smith/AAP

Australia’s population of undocumented immigrant workers lives in constant fear of detection, detention and deportation. Without rights to the wages and conditions enjoyed by the rest of the workforce, they are exploited by unscrupulous employers. And yet their number is growing, representing a major challenge for immigration authorities.

Driving this mounting social, political and economic dilemma is a vast gap at the point where our immigration and employment laws are meant to meet. This problem can, and should, be remedied and the current Productivity Commission inquiry into workplace relations has the opportunity to do so.

Australia is host to a large population of undocumented immigrant workers. They are here without visas, have overstayed valid visas, or are working contrary to visa conditions. The number of undocumented workers in Australia is estimated to be in excess of 100,000. The potential pool of visa holders with no or limited work rights is huge, including millions of visitors and students.

This is a growing phenomenon, but not a new one. The Department of Immigration and Border Protection (DIBP) reports a 10% increase in visa overstayers in the two years to 2013, to 62,700. In 2011, the federal government-commissioned Howells review described non-citizens working without permission as, “in simple numerical terms … the most significant problem facing Australian immigration authorities”.

Undocumented immigrant workers are often exploited by employers. My research in Australia and the United States has found they are paid under the minimum wage, receive no overtime or penalty rates, are sexually harassed and endure unsafe working conditions. The Fair Work Ombudsman (FWO) regularly reports cases of mistreatment of working visa holders such as the recent case of a Sydney sushi bar in Woolworths underpaying a working holiday visa holder by more than A$5,000 over 11 weeks. This is indicative of the norm for undocumented workers except that they cannot recover their lost wages.

Our employment laws do not apply to undocumented workers. Under current case law, an employment contract entered with an undocumented immigrant worker is invalid and unenforceable because the work is prohibited by the Migration Act. Therefore, they cannot benefit from the minimum wage, penalty rates, unfair dismissal provisions etc.

Why solve the problem?

The Productivity Commission now has the opportunity to recommend that the government close this gap. The Fair Work Act should be amended to ensure employers offer undocumented immigrant workers the same minimum employment standards as Australian citizens.

The status quo is unacceptable for numerous reasons.

First, undocumented workers and their employers breach the Migration Act equally, yet employers are allowed to benefit. Workers caught by the DIBP risk detention and deportation and cannot recover wages, the underpayment of which allow their employers increased profit margins. Unscrupulous employers may calculate the savings from long-term exploitation of undocumented workers against the low risk of detection and penalty.

Second, the effects of this imbalance in rights may already be increasing the demand for, and, consequently, the supply of, undocumented immigrant labour to meet that demand. Denying undocumented workers employment rights might actually be increasing unauthorised work.

Third, Australia is risking a “race to the bottom” for employment standards if we continue to exempt employers from minimum requirements. If employment laws don’t apply to the whole workforce, perfect conditions are established for employers, price-taking contractors and other middlemen and women to drive the price of labour down.

Fourth, for these reasons, the Fair Work Act is failing to meet its stated and appropriate aims of fairness, enforceability, non-discrimination and accessibility.

Minimum employment standards must also be practically enforceable. Here the FWO plays a key role. However, its 250 inspectors are responsible for ensuring compliance with the Fair Work Act for up to 11.6 million workers in Australia’s 2.1 million workplaces. The FWO’s funding must be increased to ensure effective enforcement for all vulnerable workers.

The FWO must also be, and be seen to be, independent from the DIBP. FWO inspectors presently carry dual responsibilities for investigating breaches of the Fair Work Act and compliance with 457 visa conditions for the DIBP. To reduce mistrust of the FWO and increase reporting of abuses, the FWO and the DIBP should formally and publicly establish independence for inspection, enforcement and information sharing. Such an arrangement functions well between the United States Departments of Labor and Homeland Security.

These changes are important to ensure fairness for immigrant workers and for Australians. If this gap is not closed, the government opens itself to the criticism that it is regulating to maintain an underclass of easily exploited low-paid labour. If we continue the current approach we could reach a tipping point, passed by the United States many years ago, where exploitation of a large undocumented immigrant workforce becomes the norm in some sectors and an intractable social, political and economic problem.