Sweatshop fears for clothing industry
Outworkers fought long and hard to improve conditions in their industry. Now that could all be undone by the Abbott Government. By Mark Phillips
OUTWORKERS fear a combination of changes by the Abbott Government will wind back improvements to their rights at work and again leave them exposed to exploitation and mistreatment.
The Textile, Clothing and Footwear Union has warned that the changes could see an increase in unregulated sweatshops, which are notorious for underpayment of wages and other entitlements, and for their dangerous health and safety conditions.
The changes include the defunding of an acclaimed accreditation and compliance program, Ethical Clothing Australia, and a review of landmark reforms introduced by the former Labor Government which were the result of years of campaigning by the union and for the first time gave outworkers the same entitlements as other employers.
The concerns come as the union this week launched action in the Federal court against 23 prominent clothing labels, including Drizabone, Fella Hamilton and Mariana Hardwick, alleging they operate unregulated supply chains that pay the people who make their clothes as little as $5 an hour and deny them basic entitlements.
Since the outworker provisions were included in the Fair Work Act, there has been a noticeable improvement in working conditions in the clothing sector, with hopes that sweatshops would eventually be driven out of the industry.
But the National Secretary of the TCFUA, Michele O’Neil, said this was now at risk because of an “ideological crusade” by the Abbott Government and Employment Minister Eric Abetz.
“If you combine the suite of government actions against workers in the TCF industry, and in particular outworkers and sweatshop workers, what you see is a systematic rolling back of protections that have been put in place over the last decade,” she said.
“And that puts at risk some of Australia’s lowest paid and most vulnerable workers. There is no need to do this. It is unnecessary and it is vicious and it will only benefit unscrupulous employers in the industry.”
The first of the changes was made under the guise of “cutting red tape” to abolish a government procurement policy that made it mandatory that any Australian company with a contract of more than $80,000 to supply uniforms or other clothing to a federal government agency must be accredited by Ethical Clothing Australia.
ECA, previously known as the Homeworkers Code of Practice, was established in 1996 to administer an ethical code of practice and accreditation process for clothing manufacturers. It has membership from the TCFUA, peak employer associations including the Australian Industry Group, and several major clothing manufacturers.
In the last five years it is estimated that ECA’s accreditation and compliance program has helped 6000 home-based outworkers have greater awareness of their legal rights and entitlements, and receive Award wages and conditions for the first time in their working lives.
The Abbott Government announced on 19 March that it would revoke the Fair Work procurement principles from the end of June.
In a double-blow, the next day, the Government told ECA that it would be terminating all federal funding to the organisation from the end of June. The defunding was confirmed in last month’s Federal Budget. It will save just $1 million.
“This [ECA] has been a really effective tool to deliver minimum conditions to workers,” Ms O’Neil said. “The impact is that many workers who were being underpaid, not getting annual leave, super, workers’ compensation, are now receiving basic minimum entitlements.
“In the guise of cutting so-called ‘red tape’, these decisions of the Coalition Government will give a clear green light to exploitation.”
Ms O’Neil said the government funding to ECA had been essential to help resource a compliance program operated by the union and it was nonsense that the Fair Work Ombudsman could step into that role, as the Abbott Government has suggested.
“They claim that this is work the Fair Work Ombudsman could do, but the Fair Work Ombudsman and previous government regulators have never been able to effectively enforce conditions in this industry.
“They don’t know how to find the workers and the workers don’t trust them… the very nature of sweatshops is it’s underground, and there is huge fear and distrust among outworkers.”
“In the guise of cutting so-called ‘red tape’, these decisions of the Coalition Government will give a clear green light to exploitation.”
- Michele O’Neil
She said the other key role of the ECA has been to educate both workers and employers about their rights and obligations, and it has strong support from those in the clothing industry who want to end its image of exploitation of low-paid workers.
With the deadline for the end of funding getting closer, the union has combined with one of Australia’s largest fashion brands, the family-owned Cue Clothing Company, to campaign for the funding to be restored.
“If you talk to people like Cue, they say being part of ECA gives them an advantage because they are committed to manufacturing here in Australia and it’s important for them to be able to say that their clothes are being made ethically.
“It’s a really important market tool for them and they see it as giving them a customer advantage.”
But even if ECA does gain a reprieve and funding continues, the review of the TCF outworker reforms achieved under Labor is an axe hanging over decent pay and working conditions in the sector.
These reforms, encompassed in amendments to the Fair Work Act in 2012, sought to directly address the systemic exploitation of home-based workers in the form of chronic sham contracting, widespread non-compliance with minimum Award and legal conditions, and the spread of sweatshops.
The reforms ended an artificial distinction by deeming contract outworkers to be employees, and extending to them the operation of most provisions of the Fair Work Act.
It also gave them an effective mechanism to recover unpaid wages and entitlements up the supply chain, and empowered the TCFUA to enter workplaces to investigate breaches of the Award and other laws, including suspected sweatshops.
Modest improvements in wages and conditions
Ms O’Neil said although the reforms have been in full operation for only two years, they had led to modest improvements in the wages and conditions of outworkers — although cases of exploitation still occur.
“The union has evidence that some outworkers are now receiving minimum pay and conditions for the first time in their working lives and that’s significant to finally see workers have the same rights as other Australian workers can expect. But there’s still many missing out.”
In a media release on 28 March, Senator Abetz said the review was necessary “to ensure that the Act is effective and efficient — providing this dynamic sector both the required levels of protection for workers and a reasonable regulatory framework for business”.
Ms O’Neil said it was likely that the review would result in legislation being introduced into Parliament later this year to wind back or repeal the key reforms achieved in 2012.
Tony worries about a return to the bad old days
LAST Christmas, Tony did something he had never done before in a decade working in the clothing industry. He took a week’s annual leave — and he got paid for it.
To most workers, this would be no big deal, but for Tony (pictured above), it was tangible proof that he was no longer a hidden part of the workforce but a real employee.
Tony (who has asked that we not use his full name) is an outworker and for most of his career in the clothing industry has worked for piece rates, as little as $2 or $3 a garment.
Tony’s work has not altered in the past year, but his rights have changed immensely. His working conditions are now regulated by the Fair Work Act, and subsequently the clothing label he supplies signed up to Ethical Clothing Australia.
‘The main difference is it’s less work’
Sitting in the garage behind his outer suburban house, surrounded by sewing machines and piles of material waiting to be sewn into polo shirts, Tony has no doubt that the changes to employment protections have improved the lives of himself and many other outworkers.
He is now paid an hourly rate, receives four weeks paid annual leave a year, can take paid sick leave, and his employer must contribute to his superannuation.
“The main difference is it’s less work,” he says. “Before you work a lot, you have to make 200–300 garments a week. Now I do 150 which is half the time for the same amount of money.
“I have more time with the kids. They pay me super and I get four weeks’ holiday. Before they no give you work, you have to look in another place and get work and get money. Now he pushes a little bit, but it’s better than before.”
To illustrate the difference between his current situation and his days on piece rates, Tony points to his current order to make 320 polo shirts.
He is capable of making four shirts in an hour, for which he would have been paid about $3 a shirt. For the 80 hours it would have taken him to make the shirts, he would have been paid about $960.
Like all piece workers, he could not afford to be picky when work was available, as there would be some weeks when there was none. And the nature of piece work meant that outworkers were regularly bidding against each other at a lower rate per piece.
Now he is guaranteed $862.22 for a 38 hour week, which includes the Award rate plus a small hourly allowance because he is responsible for the cost of his electricity supply, machinery maintenance and raw materials like cotton.
But that is overshadowed by the right to four weeks’ paid leave a year. Tony took a week at Christmas, but is banking his time for something special.
“Maybe next Christmas I will go and visit my mum [in Vietnam] because she’s getting old,” he says.
A hidden workforce
Tony arrived in Australia from Vietnam as a 17-year-old in 1981 and studied here but turned to the clothing sector when he was unable to find work in his chosen field. Initially he worked in a factory, but needed to work from home for the flexibility it gave him to help care for his four children aged under 10.
“Because I had to take the kids to school and my wife can’t drive, it is better to work at home.
“When you work in a factory you have to come in at 9am and finish at 3.30 but at home you can stop, take the kids to school and go back to work.”
But the flipside of that flexibility is job insecurity, poor working conditions, sub-standard pay and few rights at work. And given the hidden nature of their work, tucked away in garages or spare rooms in non-descript suburban houses far from the reach of unions and regulators, outworkers are prone to exploitation.
Even with outworkers now protected by the Fair Work Act, Ethical Clothing Australia plays a crucial role in ensuring compliance with the law by employers.
Tony is scrupulous in his record keeping and is not afraid to stand his ground if he thinks he is being underpaid, but admits that he could not do so without the backing of the union and enforcement of the law by ECA.
That is why he is worried that the changes proposed by the Abbott Government, he could be back where he started.
“If they cut funding, I would go back to piece work and they would say $3 or we will go somewhere else,” he says. “It’s been like that before.”
Mark Phillips is the editor of Working Life
First published on 6 June 2014.
