New ruling on fruit picking wages shakes up farming industry
In a major shake-up in the horticultural farming sector, employers will have to pay minimum fruit picking wages to their workers under a new decision by the full bench of the Fair Work Commission.
This means if you earn less than $25 per hour fruit picking in Australia, the farm employer is breaking the law. Penalties for underpaying employees can be as high as $126,000. Directors can also be held personally liable and fined.
The ruling will effectively abolish “piece rates” which paid a “pieceworker” according to how much fruit or vegetables they pick in a shift, rather than being paid by the hour. (See Decision – Horticulture Award 2020,  FWCFB 5554.)
Reforms of fruit picking wages expected in 2022
The Commission found that workers being paid a piece rate had no guarantee of meeting the $25.41 minimum hourly wage. Piece rates were initially set up to enable good pickers to earn at least 15 per cent more than the hourly minimum rate. However, some casual workers are being exploited under the system and being paid as little as $3 per hour.
The changes to fruit picking wages are expected to be finalised for next year, when workers will have to be paid the minimum hourly rate, regardless of how much they picked.
Farm employers will have to keep detailed paperwork for each employee’s hours and the classification of the type of work they did.
Fairer fruit picking wages necessary to keep contingent of foreign workers
The Commission said of the 120,000 to 140,000 horticultural workforce, 47 per cent are local workers, 33 per cent are working holiday makers and international students, and an unknown number – estimated in the thousands – are undocumented migrants.
Temporary foreign workers constitute over half the workforce, and these people are more vulnerable to exploitation than local workers. Many need the farmer to sign documents so they can get their second year visa. This has put them at a disadvantage when confronted with underpayment for their work.
The industry needs these foreign workers, and bad publicity over underpayment and exploitation of fruit pickers in Australia could deter them from coming.
Costs of employing fruit pickers likely to rise
The ruling will mean a lot more paperwork for farmers and a likely increase in the cost of fruit picking wages. Several farmers told the Fair Work Commission a guaranteed $25 per hour would allow workers to slacken off and be far less productive.
Some said many foreign workers just want to be on a farm for the required 88 days to extend their visa.
Farmers also told the Fair Work Commission that good workers earn more through piece rates than with hourly pay.
Existing pieceworker provisions “not fit for purpose”
The judgement by the Fair Work Commission states pieceworker provisions in the horticulture award are “not fit for purpose”.
“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 the horticulture award achieves the modern awards objective,” the Fair Work Commission said.
Agriculture Minister David Littleproud has suggested fruit and vegetable prices may have to increase if labour costs rise. (See Fair Work rules every farm worker on every farm entitled to take home a minimum rate of pay, ABC Rural News, November 2021.)
Important victory for Australian Workers Union
Australian Workers Union national secretary Daniel Walton, whose union fought for the wage floor, said the case was one of the most significant industrial decisions in modern times.
“This decision ranks among the great victories of our union’s 135-year history,” Mr Walton told the Financial Review. (See Farmers fret over $25 minimum wage for fruit pickers, November 2021.)
“Fruit pickers in Australia have been routinely and systemically exploited and underpaid. Too many farmers have been able to manipulate the piece rate system to establish pay and conditions far beneath Australian standards.”
For more information please see Tougher penalties for employers to protect foreign workers.