It’s time for a minimum earning guarantee for Pacific workers

PALM workers in Australia in November 2021 (Pacific Australia Labour Mobility scheme-Facebook)
PALM workers in Australia, November 2021 (Pacific Australia Labour Mobility scheme/Facebook)

The Australian Workers’ Union (AWU)’s most recent campaign calls for Pacific Australia Labour Mobility (PALM) scheme workers to receive a minimum payment after deductions of $250 per week. The AWU proposes that any outstanding deductions should be carried forward until workers are earning enough to cover them.

This is in the wake of several reports of workers receiving low income after deductions, with not much left to support themselves or their families at the end of low weeks. MADEC, one of the largest employers of Pacific seasonal workers, has lifted its minimum weekly payment to $200 per week after being implicated in the Select Committee on Job Security.

The main representative body for PALM scheme employers, the association of Approved Employers in Australia (AEA), also supports a post-deduction wage safety net. In its recent letter to the incoming government, the AEA highlighted that this measure would “ensure that per pay period, workers are not left with an insufficient income after deduction”. Employer support is important, as they would be the ones to pay more upfront and carry the deductions forward, as a commitment to their workers’ welfare.

On the wages front, it seems relatively straightforward too. The minimum hourly rate for casual fruit and vegetable pickers is now $26.73 per hour. Pacific seasonal workers have a minimum average of 30 hours of work per week for the duration of their contract, and on the new minimum hourly rate will earn on average $1,363 per fortnight post-tax. A weekly guarantee of $250 would be only 37% of a worker’s expected post-tax earnings. The piece rate has to allow a pieceworker working at the average productivity of a competent pieceworker to earn at least $30.74 per hour, so it shouldn’t be an issue either.

For Pacific Labour Scheme workers on full-time contracts, their wages don’t have the same level of seasonal variability, and it should be less of an issue. The minimum hourly full-time Meat Award rate of $21.36 leaves Pacific meat workers with an average post-tax earning before deductions of $1,089 a fortnight, closer to a 46% guarantee.

The major group of approved employers and one of the major unions representing seasonal workers are in agreement on this issue, and it should be relatively straightforward to implement. The next question is how much this mandated weekly safety net payment should be. The union says $250. Talking to a few approved employers, you get the sense that they are thinking somewhere around the $150-200 mark. Somewhere in the ballpark of $200 therefore seems reasonable and uncontentious for both short-term and long-term workers in the scheme. This would provide both workers and their families with greater week-to-week certainty.

Anecdotally, many employers do provide a minimum already, but there would be a benefit to making this minimum compulsory. It would reassure workers, other employers and, importantly, the public, that workers are being treated fairly and have a safety net to protect them. This minimum amount will hopefully be more symbolic than necessary, especially now that the normal flows of seasonal labour are starting to resume. On very low weeks, or when the weather is terrible, or when disaster strikes, having a minimum payment would serve as the uniform safety net that all employers must meet.

With the high level of media coverage this specific topic has received, and the support for this idea from both unions and employers, this could be a great addition to Labor’s policies for improving PALM, and seems like an easy win. With the Deed of Agreement yet to be finalised, a safety net should be included to guarantee a post-deduction minimum earning for Pacific workers.

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Disclosure

This research was supported by the Pacific Research Program, with funding from the Department of Foreign Affairs and Trade. The views represent those of the author only.

Evie Sharman

Evie Sharman is a research officer at the Development Policy Centre, working in the Pacific migration team.

3 Comments

  • Hello

    I have been a approved employer for approximately 6 years.

    I consider the program to be a brilliant scene have have found it beneficial for my company.

    When seasonal workers have arrived at my business I have found them to be excellent employees. I further am aware that my employees are incredibly frugal with there money with many able to save up to 17000 Australian dollars on a 9 month placement.

    Further most of my seasonal workers wish to pay off their deductions quickly with many requesting to only receive a small income at the beginning with the rest working to paying off the deductions.

    My concerns with the proposal are 2.

    1 – many seasonal workers arrive in Australia with the intention to abscond. In my experience I employed 20 seasonal workers through a labour hire company (Jobs Australia). Of the 20 seasonal workers 10 absconded within the first month of placement. Jobs Australia had to wear that up front cost with no return. Seasonal workers are well aware of the government loop hole to claim asylum which will in turn have you granted a Bridging Visa A with work rights. They then move to Sydney and work in construction or factory work. I am well aware that the 10 seasonal workers are currently working in Sydney using this loop hole.

    2 – like I stated earlier the seasonal workers who work for me a brilliant savers. If rainy days occur many prefer to pay their costs such as rent with their savings rather than letting them accrued.

    If you have any questions please give me a call

    Regards

    • Hi Jonathon. Thank you for your comment, I’m glad to hear about your positive engagement with the scheme.

      On your first point, the use of protection visas as a defacto work permit is something we’ve talked about on this blog before (https://devpolicy.org/absconding-for-asylum-20220204/). I’m not sure if you’ve seen that the new government is proposing to cover travel costs for Pacific workers, so the upfront costs (apart from the first $300) will no longer be borne by employers, but by the government. Under these new settings, there will (maybe) be less risk that employers will be completely out of pocket, and there will be less incentive to recover costs as quickly. We will have to wait and see what the new government is thinking on that front.

      On your second point, I definitely agree that workers should be able to choose when and how to pay back their costs. What this proposal is about is making sure that there is at least a guaranteed minimum after deductions – that the ‘small income’ requested – isn’t too small, and is enough to live off. If workers are saving $17k in a season, it shouldn’t be too much an issue – maybe only a few weeks that it would fall below and be carried forward. Perhaps the flip side is that in high earning weeks if workers want to voluntarily pay off their costs more quickly they should also be given that choice, while still having a safety net. I suppose my view is that this idea would ensure consistency across the board and give greater public assurance that workers are being treated well.

      Cheers
      Evie

    • 1. How much is paid per fortnight?
      2. How much will be declared for food?
      3. How much will be declared for room rent?

      Please answer all my question above.

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