Clothing contractors subject to new reforms: Vic

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Clothing contractors subject to new reforms: Vic

Complex clothing contracting chains that result in the non-payment of wages will be broken under new outworker laws recently passed in Victoria.

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Complex clothing contracting chains that result in the non-payment of wages will be broken under new outworker laws recently passed in Victoria.
 
The new laws attempt to breakdown the complex clothing industry chain of production to determine who is responsible for the payment of outworkers wages, Victorian Industrial Relations Minister, Rob Hulls said.
 
They make the principal contractor liable for any unpaid wages, if an outworker’s direct employer disappears.
 
Outworkers will also receive the same entitlements as employees.
 
The laws are similar to the NSW outworker laws to ensure consistency in the two jurisdictions that employed the most outworkers, Hulls said.
 
The Outworkers Improved Protection laws passed through the Victorian Parliament without any amendments on May 2, and are expected to commence in the middle of the year.
 
Profile of an outworker
 
Under the new laws outworkers are defined as a ‘person engaged for someone else’s business in or about private residences or other premises that are not necessarily business or commercial premises to perform clothing work’.
 
According to Hulls, not all clothing retailers and manufacturers exploited their outworkers, but significant exploitation existed in Victoria.
 
Research concerning 119 Melbourne outworkers conducted in 2001 by Dr Christina Cregan of the University of Melbourne found:
  • outworkers earned on average $3.60 per hour;
  • the highest hourly rate was $10.00 and the lowest rates less than 50 cents an hour;
  • three-quarters experienced wages not being paid on time, and nearly half (46%) experienced wages not being paid at all;
  • most (89%) said their family could not manage without their wages;
  • the average number of hours worked per day was more than 12;
  • three-quarters (74%) worked 12-to-19 hours a day;
  • over half (62%) worked seven days per week, 26% worked six days per week, 12% worked less than this;
  • two thirds (65%) don’t like their work, 22% stated neither like nor dislike it and 13%, said they liked their work;
  • the main reasons for doing outwork was they could not get a job outside the home (70%) and that their English was not good enough to get other work (63%);
  • two-thirds (68%) relied on other family members to help - 54% relied on their partner, while 31% relied on their children assisted, and sometimes neighbours and friends helped;
  • many worked routinely during the school holidays (93%), on Saturdays (91%), Sundays (87%) and on public holidays (89%).
Hulls expected the new laws to improve the conditions of outworkers.
 
Breaking down the contracting chain
 
The new laws would facilitate the identification of contractors responsible for the payment of wages and simplify the recovery of unpaid wages, Hulls claimed.
 
Outworkers who don’t receive their wages can serve a claim for payment to the person they believe is their employer. The person can be anywhere on the production chain from delivery to the principal contractor, Hulls said.
 
The claim must be served within six months of the completion of work. The person served the claim has 14 days to pay the claim or refer it to the person they believe is the actual employer.
 
If the actual employer cannot be located or refuses to accept liability, the person served the claim is liable to pay the outworker’s remuneration.
 
Where the claim has been paid in the absence of the actual employer, the new law has provisions for the person who has paid the claim to deduct the payment from any money it owes the actual employer.
 
Unresolved claims will be determined in the Industrial Magistrates Court. The person served the claim will be liable for payment unless they can show work was not done or the amount is incorrect.
 
It will be an offence to intimidate or make false and misleading claims. The maximum penalty will be $12,000.
 
Principal contractor
 
Hulls said to ensure that the top of the production chain didn’t escape responsibility, principal contractors would be liable for the payment of wages, if a subcontractor disappeared or refused to pay an outworker.
 
This situation won’t be enforced if the principal contractor has a written statement from the subcontractor that all outworker wages have been paid.
 
Until the statement is provided, the principal contractor will be able to refuse to pay money owed to a subcontractor without penalty.
 
The principal contractor is not liable for payment of outworker wages where the subcontractor is in receivership or bankrupt.
 
Unresolved claims will be determined in the Industrial Magistrates Court.
 
Outworkers as employees
 
The new laws define outworkers as employees, not independent contractors. Outworkers will be entitled to the same benefits as employees.
 
Employee provisions of the Victorian Long Service Leave Act, the Occupational Health and Safety Act, the Public Holidays Act and the Federal Award Uniform Systems Act will apply to outworkers.
 
Right of entry
 
The new laws allow for the provision of information officers to provide information to employers, employees, outworkers and other members of the community about laws relevant to outworkers. The officers will also facilitate compliance.
 
The officers will be able to enter any premises where outwork is being or has been done, or there are documents relevant for determining compliance.
 
Unions also have a right of entry if their officers have permits issued by the Court and the employer is bound by a federal award or a common rule order based on a federal award; or where outworkers are or are eligible to become members of a union.
 
Union officials can make copies of relevant documents, including time and pay sheets, inspect any work, material or machinery, and interview any employees or outworkers, who are or are eligible to become members of the union, about suspected non-compliance.
 
The textile clothing and footwear union will have the power to prosecute an employer for breaching the new laws and common-rule orders.
 
Ethical council
 
Under the new laws the Ethical Clothing Trades Council of Victoria will be established. The main role of the council will be to facilitate voluntary compliance and to secure lawful entitlements for outworkers.
 
Members of the Council will be appointed by the Industrial Relations Minister and include union and industry representatives.
 
 12-month trial period will be put in place. The council will give quarterly reports to the Industrial Relations Minister about the payment of entitlements to outworkers; and industry activities relating to the home workers code of practice agreed to by industry and union groups in 1997 and other voluntary arrangements.
 
If voluntary compliance is unsuccessful, the Minister may make a mandatory code of practice.
 
If a mandatory code becomes necessary, penalties for non-compliance will be set at a maximum of $12,000. Also individuals or classes of individuals may be exempt from the mandatory code.
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