The way the horticulture industry pays its workers to pick fruit and vegetables has been thrown into turmoil this week.

The sector is trying to understand the implications of the Fair Work Commission ruling that farm workers picking fruit on a piece rate must be guaranteed a minimum hourly rate of $25.41.

Traditional piecework rates pay workers according to the amount of produce they harvest or pack.

Farm lobby groups argue they allow competent employees to earn more than the minimum hourly rate.

On the other hand, the Australian Workers Union (AWU) has long claimed the piece rate system has allowed fruit pickers to be exploited and underpaid.

Daniel Walton Australian Workers Union

Australian Workers Union National secretary Daniel Walton has praised the minimum pay ruling.(ABC News)

While the Commission’s draft determination does not outlaw piecework, it guarantees a minimum hourly rate regardless of productivity.

AWU National Secretary Daniel Walton described the ruling as ‘one of the most significant industrial decisions of modern times’.

The Commission found a substantial proportion of the seasonal harvesting workforce was engaged on piecework rates and comprised a large number of temporary migrant workers, vulnerable to exploitation.

The ruling said there was widespread non-compliance with the award provisions and the evidence'” presents a picture of significant underpayment of pieceworkers in the horticulture industry when compared to the minimum award hourly rate'”.

An older man dressed in blue farm work gear and brown boots kneels between rows of freshly planted strawberries. He smiles

Queensland Strawberry Growers Association president Adrian Schultz believes the Fair Work ruling will send farmers broke.(ABC Rural: Melanie Groves)

But while Queensland Strawberry Growers Association President Adrian Schultz agreed that some farmers were doing the wrong thing, he said the decision rewarded slow workers.

Growcom Chief Executive Officer Stephen Barnard said many employers would no longer be able to afford to offer piece rates because they could not pay hourly rates for unproductive workers or carry the extra administrative burden.

A number of people picking vegetables in a field

Farm lobby groups say they are price takers not price makers and the changes will hurt them.(Stephanie Anderson)

Will prices rise?

Could fruit and vegetables now cost you more? Federal Agriculture Minister David Littleproud seems to think so.

“Farmers have to be paid for their produce, and the cost of producing that produce should be reflected at the checkout,” Mr Littleproud said.

The Fair Work Commission will now accept submissions on its draft determination until November 26

Backpacker tax ruling mixes things up

Meantime the so-called ‘backpacker tax’ was back in the headlines this week after the High Court found it contravened non-discrimination clauses built into tax treaties signed by Australia with eight countries, including the UK.

In 2017 the federal government introduced a 15 per cent tax on foreign nationals working in Australia on 417 and 462 visas, applied from the first dollar they earned.

On the other hand, Australian workers don’t have to pay tax until they pass the $18,500 tax-free threshold.

A person holds a turquoise coffee mug underneath the spout of an espresso machine

Working holidaymakers on 417 and 462 visas pay 15 per cent tax from the first dollar they earn.(ABC News: Sam Ikin)

Catherine Addy, an English backpacker who worked as a waitress in Sydney, successfully argued she had been discriminated against because of her nationality when she was made to pay tax at a different rate to Australian residents.

Could the ruling prompt a flood of similar cases?

The Irish-based law firm taxback.com said that of almost 820,000 417 and 462 visas granted between June 2017 to June 2021, more than 320,000 were issued to people from the countries affected by the backpacker tax ruling.

A young woman with her hair up sits next to a conveyor belt in a packing shed.

UK working holidaymaker Amy Langton will be investigating if she is eligible for a tax return.(

Tom Major

)

Working on farms in the Burdekin, British backpacker Amy Langton said she was unsure what she could claim back in tax after two years in Australia but planned to investigate if she was eligible for a return.

“Definitely, anything a bit extra would be nice,” Ms Langton said.

“The money I have earned here has stayed in the country. I think [the ruling] will definitely be good to get more backpackers here so that it’s better for the Australian economy.”

What happens next with backpackers?

The Australian Tax Office said it was “currently considering” the High Court’s decision and would “provide further guidance” to employers on its website “as soon as possible”.

For now, it is advising employers not to make changes and follow the current taxation guidelines.

Growcom’s Manager of Policy and Advocacy Richard Shannon said he hoped the ruling would improve farmers’ prospects of attracting workers.

“The labour situation is still desperate in horticulture. We are really short on workers, as is the rest of the economy,” Mr Shannon said.

A man smiles at the camera holding fresh ginger which still has the stalks and leaves attached.

Australian Ginger Growers’ Association president Shane Templeton belives the backpacker tax makes it harder for farmers to compete for workers.(ABC Rural: Jennifer Nichols)

Australian Ginger Growers’ Association President Shane Templeton said the 15 per cent tax should be dropped as soon as possible for the eight countries that share tax treaties with Australia.

“When backpackers come here, they don’t come here to send money home. They come here so that they can have a good time.

“They spend it on food. They spend it on accommodation. They spend it on going out to explore places like the Great Barrier reef and things like that.

“So, in the end, I reckon you’d have to say more than 90 per cent of every dollar that backpacker earns gets spent here in Australia.”

Posted , updated 

Agriculture sector labour shake-up explained
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