In the biggest shake-up to Australia’s horticulture sector in decades, farmers will now be forced to pay a minimum wage to pickers after the Fair Work Commission ruled in favour of putting a floor in the award. The move effectively abolishes piece rates, which is when a worker is paid according to how much they pick, rather than an hourly rate.
Farmers have been vocal opponents of any changes to the award rate – with some arguing a floor in the minimum pay rate would be burdensome and result in an increase in prices for customers.
The Australian Workers Union (AWU) lodged its claim with the FWC in December last year, arguing that every worker should be guaranteed a minimum rate of at least $25.41 an hour. In its finding, which was delivered late on Wednesday, the Fair Work Commission said the floor was essential to make sure pickers were paid a minimum wage.
“The existing pieceworker provisions in the horticulture award are not fit for purpose,” it said. “They do not provide a fair and relevant minimum safety net.
“The full bench was satisfied that the insertion of a minimum wage floor with consequential time recording provisions in the piecework clause is necessary to ensure that the horticulture award achieves the modern awards objective.” Piece rates were legally meant to enable the average picker to earn at least 15% more an hour than the minimum hourly rate, but the FWC found they were widely used to underpay workers.
It found a “significant” proportion of pickers earned less than the national minimum wage. “The totality of the evidence presents a picture of significant underpayment of pieceworkers in the horticulture industry when compared to the minimum award hourly rate,” it said. The FWC also found that paying workers an hourly rate would actually make workers more productive.
“It is inherently unlikely that introducing a minimum wage floor will ‘disincentivise’ pieceworkers currently earning more than the minimum award rate,” it said.
AWU national secretary Daniel Walton said it was one of the most significant industrial decisions of modern times. “Fruit pickers in Australia have been routinely and systemically exploited and underpaid,” Walton said. “Too many farmers have been able to manipulate the piece rate system to establish pay and conditions far beneath Australian standards.”
During the hearing, the union presented the commission with research published suggesting the average piecework picker was paid just $11.69 an hour. Walton said this decision would provide a needed safety net for fruit pickers. “Now it will be easy for workers – even if they don’t have good English language skills or Australian connections – to understand if they’re being ripped off,” Walton said.
“From now on if you’re making less than $25 an hour fruit picking in Australia your boss is breaking the law and stealing from you.” The National Farmers Federation, which opposed the changes along with industry groups has not yet commented on the decision.