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Widespread underpayment of migrant workers has sadly become a commonality throughout Australian workplaces, and with a lack of support from the legal system, reimbursement is hard to come by.
A new report named All Work, No Pay has highlighted the difficulty that migrant workers have had when they have tried to receive compensation for the exploitative nature of their employers underpaying them.
The report calls on the federal government to take urgent action to counteract this detrimental trend that is affecting migrant workers, pointing towards the legal system as a major hurdle in this debacle.
The “small claims” court process was intended to be simple and accessible for these kinds of procedures, when in reality, the report shows that it can be virtually impossible for many workers to use it as an avenue towards compensation.
The proof is in the lack of people who utilise this process. While hundreds of thousands of people are underpaid every year, in 2022–23, only 137 people went to court.
Findings from the Migrant Justice Institute’s survey reiterates this lack of trust between migrants and the small claims process as of 4,000 migrant workers, over half were underpaid. Most were aware of their underpayment, but nine in 10 did nothing. One went to court – but recovered none of their owed wages.
“The court processes must be reformed to deliver migrant workers the wages they are owed. It is currently almost impossible for many migrant workers to make and pursue wage claims without legal support,” Associate Professor Laurie Berg said.
The report detailed the suggested reform that needed to be implemented to ensure that migrant workers were given a clear path to receive their owed wages:
- More accessible, simpler court processes.
- A new pathway for wage claims at the Fair Work Commission, and potentially establishment of a new Fair Work Court.
- More funding for legal assistance.
- A new government guarantee scheme so workers get paid where the employer disappears, liquidates, or refuses to pay.
According to the report, underpayment was the most common exploitation of migrant workers. The Fair Work Ombudsman (FWO) reported that the common breaches were for paying below the correct hourly rate, failing to pay correct weekend penalty rates and failing to pay casual loading penalty rates.
“For most migrant workers in Australia, the risks, and costs of making a wage claim outweigh the slight prospect of success. Existing legal processes are complex and inaccessible. This incentivises employers to underpay their workers, assuming that workers will never hold them to account,” Associate Professor Bassina Farbenblum said.
That fear of failure through the court system can heavily negate migrant workers due to the financial burden of going through the courts.
Imogen Tatam, senior lawyer at Circle Green Community Legal, said: “Time and time again, in our work, we see migrant workers struggle with the small claims processes, or choose not to make claims at all because they are too daunted by the legal system.”
“Legal proceedings are daunting, difficult, and costly for everyone. For a migrant worker who is unfamiliar with Australian laws, the English language, and may be facing significant disadvantage in other aspects of their life, legal proceedings are near impossible.”
Overall, this issue not only affects migrant workers but also the Australian workforce as a whole. When migrants are disregarded by their employers, it sets a precedent that it can happen to any employee at any time; therefore, it can undermine public confidence in the institutions and laws meant to protect all workers.
As these exploitation cases continue to rise, trust issues between employers and employees can increase, leading to a disgruntled workforce. If reforms are not considered, business outcomes could begin to dismantle as relationships in the workplace degrade.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
