Seasonal workers engaged in fruit picking entitled to minimum rate of pay

Farm workers and pieceworkers guaranteed minimum wage from April 2022

Minimum wages for seasonal workers engaged in fruit picking (and other produce picking) apply from April 2022 after the Full Bench of the Fair Work Commission (the Commission) handed down a decision, approving variations to the Horticulture Award 2020 (the Award). From 28 April 2022, workers under the Award will be paid a minimum hourly rate of $25.41 (indexed annually).

Background

On 15 December 2020, the Australian Workers’ Union (AWU) made an application to vary the Award. The application sought to vary clause 15.2 that dealt with piece rates. Piece rates are where a person is paid according to how much produce they pick. The more they pick, the more they earn.

The clause, as it stood prior to April 2022, allowed an employer and employee to enter into an agreement for the employee to be paid a piece rate only. The proposed variation provides a floor for the earnings for pieceworkers. An employee working under a piecework agreement must be paid, for each hour of work, at least the minimum rate payable for the employee’s classification and the type of employment, as scheduled in the Award.

The proposal also sought to require an employer to keep a record of all hours worked by a pieceworker to ensure that the requirement to pay a pieceworker at least the minimum hourly rate is capable of being monitored and enforced.

November 2021 Fair Work Commission decision

On 3 November 2021, the Commission handed down a decision, Re Horticulture Award 2020 [2021] FWCFB 5554, (November 2021 Decision) accepting that the pieceworker provisions in the Award were not fit for purpose. The Commission provisionally approved the application by the AWU to vary the pieceworker provisions of the Award. The Commission was satisfied that the variation was necessary to ensure the Award achieves the modern awards objective.

The Commission issued directions to provide interested parties with an opportunity to make submissions on the proposed variation determination.

February 2022 Fair Work Commission decision

On 1 February 2022, the Commission handed down their final decision, Australian Workers Union [2022] FWCFB 4, approving the variations to the Award, inserting, among other things, a minimum wage floor and time recording provisions.

Some aspects of the November 2021 Decision were challenged.

One challenge concerned the extent to which a minimum wage floor would impact productivity. The Commission invited submissions from members of the agriculture industry who opposed the changes making assertions that the:

introduction of a minimum wage floor will disincentivise horticulture workers and productive workers will leave the industry.”

The Commission was not persuaded by these submissions finding:

[t]hese assertions are speculative and unsupported by any evidence.”

The Commission noted that similar arguments had been raised in the earlier proceedings from lay witnesses who expressed the opinion that the introduction of a minimum wage floor would:

“demotivate underperforming employees from lifting their performance and ‘disincentivise’ pieceworkers currently earning more than the minimum award rate”.

The Commission noted that they had accepted the first assertion at [359] of the November 2021 Decision, particularly in respect of underperforming employees and that they can be managed by, for example, setting proficiency targets.

The Commission explained they had not accepted the second assertion. It was noted that there was a consistent theme in the employer evidence that piecework is an attractive option for workers because it provides an opportunity to earn substantially more than the minimum hourly rate.

The Commission reiterated its conclusion from the November 2021 Decision:

“[w]e accept that appropriately set pieceworker rates can provide an incentive for workers to increase their output, as their earnings will increase. We are not persuaded that introducing a minimum wage floor will ‘disincentivise’ pieceworkers currently earning more than the minimum award rate. It seems to us that such an outcome is inherently unlikely.

The Commission concluded that nothing in the more recent submissions had persuaded them to depart from the conclusion made in the November 2021 Decision.

There were also challenges to the finding in the November 2021 Decision in respect of non-compliance with cl. 15.2 (the clause dealing with piece rates). The notion of non-compliance was “totally” rejected by a number of submissions.

Sunny Ridge, a strawberry farm, submitted that:

“The Summary of Decision complains that there is widespread non-compliance with clause 15.2 of the Horticulture Award. There is no evidence to suggest that the larger firms are guilty of exploitation.”

They continued noting that there are requirements for inspections and audits and they “cannot afford to cut corners”.

After consideration of the subsequent submissions, the Commission concluded that they were not persuaded to depart from the earlier findings in the November 2021 Decision.

Key takeaways regarding minimum wages for fruit pickers

The key takeaways from the variation to the Award are:

  • Employees can still be paid a piece rate for performing the work. However, the piece rate must allow for the average competent worker to earn the equivalent of at least 15% above the minimum hourly rate for the employee’s classification.
  • “Minimum Wage Guarantee”: workers paid a piece rate will be guaranteed a minimum wage for each day they work.
  • Employers must record the hours worked by a pieceworker and the piece rates applied.

You can read more detailed information about the new piecework rules on the Fair Work Ombudsman’s website here.

Seasonal workers – important things to know about your workplace entitlements

Temporary foreign workers (including backpackers) make up a large portion of the Australian workforce. These workers are more vulnerable to exploitation than local workers as many do not know their rights and protections under Australian laws.

Seasonal workers have the same minimum rights and protections as other employees in Australia under the National Employment Standards. There may also be entitlements available under the Award or any registered agreement individual workers may be covered under.

If you feel your workplace rights and entitlements are being breached, you should speak with your Union in the first instance or with a lawyer experienced in employment law.

You can contact us by phone or email to arrange your consultation; either face-to-face at one of our offices, by telephone or by videoconference consultation.

Phone: 1800 659 114
Email: general@hallpayne.com.au


  This article relates to Australian law; either at a State or Federal level.

The information contained on this site is for general guidance only. No person should act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your particular circumstances. For further information, please do not hesitate to contact Hall Payne Lawyers.


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Get in touch with today's blog writer:
Alexandra Jarrett

Solicitor in Industrial & Employment Law

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