Myth Busting

21-Jun-2012

TCF OUTWORKERS WIN NEW RIGHTS  

There are many myths circulating about changes to the law regarding workers in the textile, clothing and footwear industry that need to be busted.

Let’s be clear. The new outworker laws are fair and ethical.

Anyone who works in Australia deserves to be treated the same, no matter where they work. This means access to basic workers entitlements such as minimum wages, superannuation, leave, and workers compensation.

Unfortunately for some people in the textile, clothing and footwear industry, such as outworkers and sweatshop workers, this has not necessarily been the case.

Currently, thousands of outworkers and sweatshop workers remain among the most vulnerable and underpaid groups of workers in the country. Everyday, more stories emerge of exploited outworkers making clothing items for some of Australia’s best known fashion labels.

This page has been designed to help you better understand the changes to the Fair Work Act that give these workers the same opportunities and rights that any other worker in Australia is entitled to.

BUSTING THE MYTHS

Myth  

The new law stops new and emerging designers working from home

Fact    

Designers at home who make themselves and sell to boutiques/shops are not affected by the new legislation in any way. 

If they start to have other people make their designs and choose to give that to outworkers then of course they then have responsibilities as an employer (as would be the case with any other small business employer in any other industry).  They could choose to give their work into a factory to be made if they don’t want to take on the responsibility.  The only other way they would be affected would be if they started to make at home for other labels, not their own.

Myth

The new law has new requirements that workers must work at least 20 hours per week.

Fact

Nothing in the new amendments change hours of work or rates of pay and conditions.  Hours of work, rates of pay and other minimum conditions for outworkers (both employees and contractors) have been in place for over 20 years in the Textile Clothing and Footwear Industry Award (previously Clothing Trades Award)

Myth

Jobs will be lost because of this law

Fact

Australian manufacturers have moved manufacturing offshore to low wage countries without protections for workers for over 30 years.  Some companies will always put increased profit over ethics.  Independent research conducted into the industry job losses identifies reduced tariffs, cheap imports, the high Australian dollar and retail slumps as the basis of job loss, not Australian workers labour rights.

Myth

There are only a small number of exploited outworkers

Fact

The results of numerous independent studies, inquiries and research over 25 years are consistent in their findings.  Outworkers are paid well below legal minimum rates of pay, work excessively long hours and do not receive basic entitlements such as annual leave, public holidays, sick pay, superannuation or workers compensation.

The union experience is that the ratio of factory worker to outworkers in the clothing part of the industry ranges between 1:4 to 1:10. TCFUA has been in direct contact with 5870 outworkers between mid 2008 and the end of 2011.  In checking the pay and conditions of these workers the same results have been found

Myth

It now illegal to run a TCF business from home

Fact

Nothing in the amendments prevents or makes it illegal for a TCF business to operate from home.  

Myth

All subcontractors are now banned

Fact

Subcontractors are not “banned”; where they perform the TCF work at home for another business, they are deemed to be employees, with access to the same minimum wages, conditions and entitlements as employees.  Deeming is an operation of the law to ensure outworkers get minimum wages, conditions and entitlements.  You can still be a subcontractor, and if you do the work yourself at the same time a deemed employee, ensuring that you get at least the minimum award wages and other conditions and entitlements that an employee would get.  Or you could still be a subcontractor if you don’t perform the work, but you give the work to other people who do perform the work. 

Myth

The new laws are trying to force people back into factories on minimum wage

Fact

The amendments are not trying to force people into factories.  The laws ensure that, wherever a worker works – whether at home or in a factory – they have access to the same minimum wages, conditions and entitlements as employees.

Some people prefer to work from home or have family commitments that require them to work from home.  Nothing in the law stops this choice

OUTWORKERS' STORIES

Ms Dang: My husband passed away when my only daughter was four years old. I went to school to study and got an aged care certificate, but I could not find a job. So, because I needed to find money to raise my child, I had to learn sewing and became an outworker. I have been working for one employer for four years, but I have not got any entitlements. My employer pays me about $5 per hour. Whether I can make enough money or not depends on how difficult the job is.

Sometimes I have to work day and night but I cannot make enough money because the work is so difficult to do. I virtually have to work 12 hours per day, including weekends. I do not have enough time for my daughter. I do not have enough time for myself. With the little money, not only do I need to spend very carefully on my living expenses but I also need to pay for other working expenses such as power, cotton, machine and other costs when the machinery is broken. My boss normally pays me two or three weeks after the delivery. If the work has any mistakes for any reason, I do not get paid until I have fixed all the orders. The employer wants me to show him my ABN before I can get the job. My life is so difficult. Sometimes I ask the boss for more money but he says can't pay more. If I ask too much he would stop the work and give to other people. I do not want to stop working or find another job because of my age. My daughter is in year 10 and I have to keep working to make money to raise her and pay for the rent.

I hope my work is more stable and I can make enough money for my living and have some rights and entitlements so I do not have to worry so much if my boss stops his work or make me redundant.

I really want to have more time for my family, for myself and I really want to get rid of all the cash-in-hand people so I can have more work. Thank you very much.

 

Ms Tran: Hello, everyone. In 2006 I discovered that my first son had autism. That was the time I started working from home. At the end of 2006 I gave birth to my second son and he also had the same problem as the first one. The reason I work from home is because I want to look after both of my two sons.

My husband left because he could not put up with his sons. My life is so difficult. Over the years I worked for different labels, different factories. They pay me by piecework. I estimate my pay to be about $4 an hour without any other entitlements. Recently some employers asked me to have an ABN number—to set up a company to have a propriety limited—and employ some other workers in my home. Since they know it is hard for me to get to work, they were able to convince me to get paid in cash, but the cash pay is much lower. I have to work from home but, because of the low pay, I have to work very long hours—between 12 and 15 hours per day without holiday pay or super or other entitlements. On one occasion my employer did not pay me for four months, which they blamed on the fact that the principal company had not paid them. After that, my employer said they would pay me a bit at a time until they caught up. I am working here in Australia where workers have entitlements and rights, but unfortunately I do not have those. I hope that I can get the same rights and entitlements as the workers in the factory.

BACKGROUND INFORMATION

Exploitation has been a persistent feature of the TCF industry for many decades. Workers in the TCF industry, both in the formal and home based sectors are some of the most vulnerable workers in Australia. A significant percentage of TCF workers are from a Non English Speaking Background and have poor English language and literacy skills. Many have worked in the TCF industry for the whole, or a significant part of their working life and have limited economic resources other than their weekly wage.

There have been numerous inquiries, reports and research which collectively have found that outworkers (or home based workers) are particularly vulnerable to exploitation. Industrial tribunals at both federal and state levels similarly have acknowledged and accepted that this class of worker are in need of special regulation and protection.

Consistently, research in the past 25 years has found that the average outworker in the TCF industry works excessive hours (both on daily and weekly basis), receives less than award rates of pay, have difficulties in receiving payment for work performed, do not receive accrued leave or public holidays and work in poor health and safety conditions.

The experience of the TCFUA across the country is that exploitation of outworkers in the TCFUA industry persists on a systemic level.

In the formal, factory based sector, the great majority of workers are dependent on the minimum safety net (modern award and NES) and have limited economic power to negotiate enhanced conditions through enterprise bargaining. Even within the formal TCF sector, non compliance with award and other legal obligations is widespread and many factories operate under substandard health and safety conditions.

The phenomenon of sweatshops within the TCF industry is not new, but they are increasingly adaptive to the ‘needs’ and structure of TCF supply chains. Sweatshops may be considered to be part of the ‘formal TCF sector’ in one sense, but they exist in a type of parallel economy, with extremely low levels of scrutiny and transparency of operation. Some sweatshops operate entirely on a cash-in-hand basis, others on a mix of workers ‘on the books’ and those who officially don’t exist in time and wages records. Even where a sweatshop operates formally, many employees ‘on the books’ will be engaged on a casual, or on a periodic basis which mirror the surge or drop in orders. Whatever the particular sweatshop structure, the workers who work in them rarely have any say in how they are engaged as they seek to eke out a living wage from such precarious employment. Sweatshops tend to be more mobile than many other businesses as they often simply contain the bare minimum of machinery to operate. Capital investment in plant, equipment and other infrastructure is negligible.