Limiting possible exploitation in transportation services for seasonal workers

Some employers choose to purchase vehicles for worker transportation, providing a cheap (or no-cost) option for workers (Credit: Peter Bumseng)

Seasonal workers participating in Australia’s Seasonal Worker Programme (SWP) and New Zealand’s Recognised Seasonal Employer scheme (RSE) are faced with the problem of being overcharged for transportation to and from their worksites. Unlike accommodation, which is well documented, transportation services and costs for seasonal workers are rarely addressed. Like other ‘wrap around’ services, such as accommodation, the costs for transport and the services provided vary. Workers trust providers to charge fair rates for their services, however research has shown (here, here and here) that excessive costs for transport have been imposed on workers, and transport providers have been criticised for disproportionate charges.

As part of the application to become an approved employer under the SWP or RSE scheme, employers/labour contractors must submit a list of proposed deductions for wrap around services. These deductions are assessed by the government agencies overseeing the seasonal work schemes. But how the costs associated with these services are deemed to be fair for workers needs further attention. Employer deductions is an area where there is a risk of exploitation, and one that requires ongoing monitoring and oversight.

In my initial New Zealand (Central Otago) and Australian (Victoria) case studies (2007 to present), employers did not, and still do not, charge a fee for transporting workers to and from work. It was only when workers wished to borrow vehicles for personal use that a charge was applied. Outside of those case studies however, it is common practice for employers to make regular deductions from workers’ wages for transport. The key question is: ‘what is an acceptable charge for transport?’ There are employers/labour contractors who, rather than owning their own vehicles, hire vans from third party providers for the duration of their workers’ stay. This is an extra cost to recoup from the workers. More consideration should be given to the idea of employers purchasing vans and on-charging costs to workers until vehicle repayments are made, or only charging workers to cover the basic running costs (as some employers are indeed currently doing). The transport needs of workers’ out-of-work hours also varies. Lack of access to transport can hinder workers’ participation in local community and church activities, which may contribute to a sense of isolation.

In one case in Australia, a large group of workers complained that they were paying $60 each per week for transportation, a cost they felt was excessive. It was a 20 minute drive to the pack house. Over 20 workers in this group travelled in two vans. Assuming they were standard eleven-seater mini-buses (as are often used for transporting seasonal workers in both countries) and that those vans were full, the labour hire company (since out of operation) who owned the vehicles was receiving $1,320 per week from workers. These workers were contracted for 20 weeks, and paid at least $26,400 in transportation fees during this time. This was the worst case of excessive charging I had come across until recently, when a group of workers from Queensland showed they were paying $75.60 each per week, also to travel 15 to 20 minutes to the worksite. One would think that employers/labour contractors purchasing vans would be more appropriate than renting from third party providers. Clearly the charges mentioned above demonstrate that purchase of a van worth $10,000-15,000 would not be out of the question, even with on-road costs. In a recent large-scale study examining labour challenges in the Australian horticulture industry, Howe et al also found ‘inflated deductions for transportation, accommodation and equipment’ imposed on workers.

Upon further investigation, a number of RSE and SWP workers from Samoa, Timor-Leste, Tonga and Vanuatu have stated that transportation costs vary from $30-80 per week. Understandably there are on-road costs, however charges need to be monitored more closely. Often, government officials argue that it is ‘what workers sign up for’. Workers agree to these costs when signing contracts in their home countries and are aware that employers/labour contractors cannot make these deductions without their permission. However, the reality is workers do not necessarily know what the exact payment is for and will sign their contracts in order to gain the opportunity to participate in seasonal work. It is important that they do not find themselves in a situation of exploitation. Just as the fair cost for ‘suitable’ accommodation is in question, the fairness of transportation costs imposed on workers also requires examination.

Employers and labour hire companies that recruit for the RSE and SWP appreciate workers for their reliability, productivity and generosity. Because these schemes are government audited, seasonal workers sign contracts expecting that their welfare is a priority and that they will not be exploited. Documenting and reporting unscrupulous employers/labour contractors – who use these schemes to generate revenue through excessive charging – is required, as is closer examination of how much workers are charged and exactly what services they are paying for.

This is an edited version of In Brief 2019/12, originally published on ANU’s Department of Pacific Affairs as part of their In Brief series.

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Rochelle-Lee Bailey

Rochelle Bailey is a Research Fellow at the Department of Pacific Affairs, ANU.

2 Comments

  • Hi Rochelle. Have long been a supporter of the great work you have done in this SWP space (which I’m most familiar with) but I, as both a large, very long established labour hire AE and a board member of the A.E.A am disappointed in this blog.
    It is not in doubting that there have been and likely still are rip-offs that take place, that much has been focused on the RSE with the SWP having far stricter rules, and that these vile practices (wherever they are) must be stamped out, but it is the one-sided generalist and minimalist approach that once again paints a (by every measure) a highly reputable sector that does it right with the same brush as those very few who don’t.
    What is the percentage of rip-offs that occur against a myriad of successful transport, etc stories? Is it 15%, 25% or more or, a very small fraction of 1%? Perspective please.
    Other than a few (literally a few) words acknowledging proprietary on-costs what efforts have been made to consult with employers to ascertain true costs…..and hidden costs?
    Surely nobody believes that a one size fits all approach is feasible? That is, a (or even some) grower(s) supply transport for free so possibly everybody can.
    What about those hidden costs. All of us who live this at the coalface day to day have examples (sometime sadly too numerous) of rip-offs that we (as AE’s) must deal with but these do not rate a mention. From unauthorized long distance usage, lack of any care in simple maintenance and driving resulting in much higher repair/insurance costs. One AE recently told me that their numerous vehicles have to be replaced every 12-18 months. There are many more examples that we can provide. Ask us please.
    What about the various regulations governing vehicle supply for a fee? What mention is made of the changed status of a farmer/AE who supplies a vehicle and then seeks fair and reasonable recompense for this? That is, in the eyes of state authorities, they become a form of taxi service (on top of everything else) with different rules, regulations and further increased costs to contend with. Check it out please!
    What about those who choose to use (instead of supplying vehicles themselves) a reputable vehicle rental company to supply to their valued personnel up-to- date, very regularly maintained and properly registered and insured vehicles? Do we seriously expect them to make no profit on their risk?
    What all AE’s would desperately wish to see is a willingness by others to consult with them at the same table, then together we can all present and push through with a unified and unilateral approach to understanding and dealing with ALL the issues governing supply whether it be transport, accommodation, health care, etc, etc. Until then…

    • Thank you for your response Michael. As I informed you on the phone this blog was based on a much larger paper backed up with evidence from both Australian and New Zealand academics with similar findings. You are correct there does need to be better analyses on the percentage of employers/labour contractors overcharging in seasonal worker programs and these industries as a whole and I look forward to working with you again in the future.

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