Trade deal opens way for exploitation


A new “free trade” deal is replacing Australian workers with underpaid foreign labour.

The China Australia Free Trade Agreement (Chafta) is making it easier for employers to flout Australia’s worker protection laws.

This is shown by media investigations and cases before the Fair Work Commission since Chafta came into effect last December.

Negotiated between the federal Liberal government and the Chinese government, Chafta was touted as a breakthrough for Australian service industries – banks, insurers, lawyers, architects and education providers – and some farmers, seeking to sell services and products to China.

There was a little-discussed downside for Australian manufacturers: the elimination of the few remaining tariffs (taxes on imports) on Chinese manufactured goods entering Australia.

Just over half of all Australian manufacturers expected to be hurt by the removal of tariffs on Chinese products, a survey found.

“The FTA will benefit low-employment agriculture and mining while destroying jobs in high-employment manufacturing,” warned the Australian Manufacturing Workers’ Union’s economic adviser, Tom Skladzien.

Chafta is about more than trade in goods and services, however.

Chafta makes it easier for Australian employers to import Chinese workers on ‘temporary’ visas – up to four years at a time, with the possibility of further stay.

Chafta immediately eliminates the requirement to assess the skills of Chinese workers in 10 blue-collar occupations.

Potential consequences for nursing

It aims to eliminate skill tests for Chinese workers in all occupations within five years – a measure which could potentially impact nursing.

Some projects with Chinese investment are permitted to bring in entire Chinese workforces.

Fairfax Media found a Sydney company purchased a car park stacker from China that came “with labour” – seven Chinese workers flown to Australia for 10 weeks and paid $US75 a day – half now and the rest when they returned to China.

Their pay rate was well below the going rate for a lift industry worker of $42 an hour.

And they were not given pay slips, paid penalty rates or paid super, despite working six days a week.

“In effect they agreed to work for less than $US10 an hour, a sum that is illegal in Australia, but more than double the average hourly wage paid in China,” Fairfax Media reported in June.

A Chinese company supplied the equipment and labour and paid the wages. The Australian company receiving the equipment paid the airfares, accommodation and food.

Both companies claimed the visas were granted due to the high level of skills of the Chinese technicians.

However Australian workers on the site disagreed, saying a lot of the work was basic welding.

The non-English-speaking workers were granted “work safely in construction industry” certificates or “white cards” and had no WorkCover insurance.

Australia’s rules easily circumvented

The case “shows the ease with which the rules designed to protect Australia’s labour market and industrial system can be circumvented when free trade agreements open the nation’s markets to the world because of a lack of oversight and enforcement,” Fairfax Media commented.

According to employment migration expert Joanna Howe, a senior law lecturer at Adelaide University, Chafta workers are required to be employed in accordance with Australian law.

But she said there are less checks and balances.

“Chafta prevents labour market testing which means there is no proper mechanism to determine that a Chinese worker is not replacing local workers in the Australian labour market,” she said.

Last September, Prime Minister Malcolm Turnbull accused an anti-Chafta union advertising campaign of “extreme scare-mongering” “designed to frighten people back into poverty”.

The issue briefly resurfaced in the election campaign in June with more advertising by the Electrical Trades Union.

ETU national secretary Allen Hicks said Chafta created a situation in which Chinese workers could enter the country to work “regardless of whether there might be Australians that might be available who are better qualified”.

Tales from the ‘black economy’

Workers from overseas in Australia on work visas now number 1.3 million – equivalent to one in 10 of the Australian workforce.

A Melbourne Age investigation in conjunction with Monash University last year found “hundreds of thousands of temporary foreign workers illegally exploited and underpaid in what has become a widespread ‘black economy’ for jobs.”

The problem extended “across the economy, in food courts, cafes, factories, building sites, farms, hairdressers and retail” with workers paid as little as $4 an hour.

“This is a starkly different labour market from that which greeted the surge of migrant workers after World War II,” the Age noted.

“Back then, newcomers typically had permanent residency and far greater legal and work rights than today’s foreign workers on visas.”

According to the Fair Work Ombudsman, nearly 12 per cent of all requests for assistance in the past financial year came from visa holders, and the agency recouped $1.6 million for underpaid visa-holders.

In recent examples:

  • The Melbourne Age reported dozens of low-paid Chinese workers on the $630 million Bendigo Hospital project had not received any wages for more than two months after their Melbourne-based employer collapsed and went into administration.
  • Convenience chain 7-Eleven was exposed for systemic underpayment of wages mostly to foreign students on visas.
  • A survey by United Voice found that of more than 200 international students, 25 per cent were receiving $10 or less an hour and 60 per cent were earning less than the national minimum wage.
  • The Fair Work Ombudsman launched court action to prosecute an employer it says underpaid four Filipino workers by more than $260,000 between 2012 and 2015. The workers on 457 visas were employed at motels on call 24 hours a day, and paid as little as $3 an hour.
  • A manufacturing business that illegally exploited dozens of Chinese and Filipino workers for as little as $4 an hour is now allegedly refusing to back pay its staff, according to the Fair Work Ombudsman.
  • A Sydney fast-food outlet fabricated employment records and underpaid 11 Korean workers more than $108,000, the Fair Work Ombudsman alleged.