Shoppers are being warned that cost-of-living pressures may get worse from today as pay changes on farms across the country have the potential to make fruit and vegetables more expensive.
- A new minimum pay guarantee for horticulture workers on piece rate begins April 28
- Consumers are being warned to expect higher food prices as farms potentially pass on costs
- Compliance is key to ensuring the measures are effective in protecting workers from underpayment
It is the first day of a new wage structure for workers in the horticulture industry, marking one of the most significant changes ever for Australian agriculture.
Under the new rules, workers picking or packing produce by piece rate — that is, getting paid by how much they harvest — now have a guaranteed minimum rate of pay.
It follows the ruling by the Fair Work Commission late last year, which many farm groups rallied against, saying it would dis-incentivise productive workers.
Chief executive of Fruit Growers Tasmania, Peter Cornish, said while a minimum pay guarantee was “a good thing” and much work had been done in the lead up to the new system to ensure farms complied, it was “likely” to increase produce prices at the supermarket.
“There will be higher cost pressures. Whether that transfers into [sale] prices or not is another matter, but there will be a pressure on that for sure,” he said.
“If they have to top up people that are below the minimum, that means higher costs and it may well transfer into higher fruit prices as well.”
Growers will have to ensure all harvest workers under the Horticulture Award are paid at least $25.41 an hour, though they can earn more than that for increased productivity.
Good day for farm workers, union says
The case was brought to the Commission by the Australian Workers Union (AWU) after years of successive headlines about farm workers being severely underpaid.
The Commission’s full bench “expressed the view that the existing pieceworker provisions in the Horticulture Award are not fit for purpose”.
AWU national secretary Daniel Walton said some growers were using piece rates to pay workers as little as $3 an hour.
“Underpayment was widespread. That’s the evidence we put forward, and that’s what the independent umpire found sufficient to rule to put in this pay floor,” he said.
Mr Walton said farmers could still incentivise workers to be more productive in a way that benefited everyone.
“What this also does is stop those unscrupulous, dodgy employers from the countless examples right across the country from paying workers well below the award,” he said.
Backpacker pickers ‘thing of the past’
Producers have had mixed responses to the change, but most agree it will fundamentally overhaul the way fruit and vegetables are produced and harvested, for better or worse.
Laurie Adams is the general manager of Burlington Berries, a producer south of Launceston.
He watched similar measures be implemented in the United Kingdom in 2012 and expects similar consequences.
“It’ll be a more structured workplace, more suitable for the professional workers and unfortunately less viable for backpackers, students, semi-retired people who liked to come in a few days a week and were happy to earn some cash in hand,” he said.
Mr Cornish agreed, saying 10-20 per cent of the Tasmanian workforce would not be able to stay employed “because they won’t be able to meet that minimum daily amount, so they’ll be subsidised by the employers and the employers won’t be able to afford that”.
In the same way the UK farms became more reliant on repeat seasonal workforces from Eastern Europe, Mr Adams expected Australian farms would need more workers from the federal government’s Seasonal Worker Program, which mostly come from Pacific island nations.
At his farm, opinions differed between two pickers.
Hendra, who did not give his last name, moved to northern Tasmania from Indonesia two years ago and disagreed with the changes.
“If you’ve got a picker working hard and one not working hard and they get paid the same price, I think that’s not fair,” he said.
Rio, who also did not give his last name, also moved to Tasmania to pick fruit.
He arrived from Timor Leste three years ago and he said he was “pleased to hear about the changes” because it would attract more people to do seasonal work.
“I think this job is really motivating to work fast but not everyone can do that,” he said.
Compliance key to protecting workers
Mr Cornish hoped the new structure would be enforced better than the last set of rules.
“One of the issues we’ve had with this is the Fair Work Ombudsman needs to get out and ensure they’re policing these new changes,” he said.
“[Underpayment] is one of our bigger issues, and the public, workers, and growers can approach this now with confidence that that’s addressed — as long as it’s enforced.”
Mr Adams said he had always seen the debate as less about wages and more about compliance.
“The problems in the past came not from a lack of a system, but from a lack of compliance.
“It’s the businesses that weren’t following the previous set of rules that really need to be challenged and forced to comply.”