New Fair Work Commission Rules - Minimum Rate of Pay for All Farm Workers across Australia
April 19, 2023
Author name
What are the Fair Work Commission’s new rules?
In what has been described as one of the most significant industrial decisions of modern times, the Fair Work Commission has ruled that workers on a piece rate must now be guaranteed a minimum wage under the Horticultural Award.
For decades many workers in the fruit and vege industries have been paid according to the amount of produce they harvest which is also known as a piece rate. However, those practices are set to change after the Commission’s recent ruling.
The ruling comes after the Australian Workers Union (AWU) lodged a claim with the Commission, arguing that every worker should be guaranteed a minimum casual rate, currently $25.41 per hour. The Commission "expressed the view that the existing pieceworker provisions in the Horticulture Award are not fit for purpose", and “do not provide a fair and relevant minimum safety net as required by the Act”.
Who do the new rules apply to?
The horticulture industry includes all fruits, vegetables, grains, seeds, hops, nuts, fungi, olives, flowers and other specialised crops (excluding broadacre field crops). Examples of employees covered by the Horticulture Award include:
- fruit or vegetable pickers;
- sorters and packers, including employees using machines and equipment;
- drivers of lorries, harvesters, forklifts and tractors; and
- employees performing inventory, store control and quality assurance/control.
The Horticulture Award also covers labour hire businesses and their employees who are placed with an organisation in the horticulture industry.
How will the rules work?
Prior to the ruling, if an employee was being paid under a piecework rate system, they may not necessarily receive the equivalent of the minimum wage. Typically, this applied to slower pickers who worked below the average of other pickers. Piece rates were used to incentivise workers but this concept may now be obsolete.
The new changes essentially act as a safety net so that all horticultural workers will be guaranteed a set minimum hourly rate. The piecework rates can still operate and be used by farmers but workers now have a second option and a safety net.
What are the implications on farmers?
The Full Bench of the Fair Work Commission has said that “the insertion of a minimum wage floor with consequential time recording provisions in the piece work clause is necessary to ensure that the Horticulture Award achieves the modern awards objective”.
However, federal agriculture minister David Littleproud suggested that “the ruling could mean Australians will be asked to pay higher prices for their produce, as the cost of producing that produce should be reflected at the checkout”.
The National Farmers' Federation have also raised concerns and said they oppose the changes arguing that ‘piece rates promote productivity and any change to the award could drive farmers out of business.’
The changes to the Award do not prevent farmers from using piecework agreements with their employees, but it is important that farmers are aware of the rules regarding piecework rates. The rules include:
- if an employer uses piecework rates to pay their employees, they should be able to demonstrate how they calculated their piecework rates;
- piecework rates must be set at the time a piecework agreement is made;
- a piecework agreement must be made before work starts under the agreement; and
- piecework rates must also be reviewed regularly.
By Matilda Lloyd (Paralegal)
If you would like more information about how to understand and use piecework agreements or how the above matters may affect your business, please contact us on (08) 9321 5451 or by email at
office@bailiwicklegal.com.au.
For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/
The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
Our June 2024 newsletter is now available. Have a read to find out what we have been up to in the first half of the year!
The International Sustainability and Carbon Certification (ISCC) System has come to the attention of many Western Australian farmers recently, as the scheme has changed one of its policies regarding aerial spraying. What is the ISCC? The ISCC is one of the world’s largest voluntary sustainability certification schemes enabling participants to demonstrate they are producing materials in a sustainable way that meets or exceeds community expectations. In Australia it is widely used in the canola industry, enabling Australian canola growers to access the European biofuel market. CBH Marketing and Trading holds certification for the ISCC EU and ISCC PLUS programs, that cover canola, barley, oats, wheat and lupin, allowing WA growers to participate in both programs. Participating in the ISCC program can result in a premium on grain, however participants are subject to more stringent measures to satisfy sustainability accreditation requirements. Recent decision on aerial spraying ISCC Principle 2.6.2 prevents aerial spraying from taking place within 500 metres of a body of water. CBH has successfully lobbied for an exemption to this Principle, for farm dams and salt lakes of low ecological value. As part of its lobbying, CBH provided expert reports to the ISCC on the hydrology and ecology of WA farm systems. For farmers who are signed up to the ISCC program, this removes an obstacle during the season for weed management. The Principle does still require a 500 metre buffer for other bodies of water, including freshwater lakes, rivers, ponds or creeks. However, for those who farm yabbies and marron, this change may not be welcome. Marron and yabby farmers have noticed impacts on their populations where aerial spraying has taken place close to their properties, and aerial spraying can unintentionally damage natural vegetation, including young and old growth trees. For growers, it’s always prudent to follow best practice guidelines for aerial spraying to avoid spray drift – including monitoring weather conditions and the effect of water added to the chemical. For some farmers, this decision may prompt an examination of whether signing up to the ISCC program might be best for their business. In this circumstance, it is important to weigh up the potential benefits of the program compared to the sustainability accreditation requirements. For others, this decision is a timely reminder to stay up to date with best practice guidelines when it comes to spraying, particularly during the seeding season. For assistance with all of your agribusiness needs, contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au By Ciara Nalty (Solicitor) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
How does the Annual Wage Review affect workers and small business owners? Each year, the Fair Work Commission reviews the National Minimum Wage and the minimum wages set out in awards. Cost of living and inflation are front of mind for both employers and employees, and this year’s Annual Wage Review is likely to see an increase in the minimum wage and award rates. The Annual Wage Review is conducted by an Expert Panel, which takes submissions from interested groups, including the Federal Government, unions, and business lobby groups. The Federal Government’s submission to the Wage Review this year called for an increase to the minimum wage, though not specifying an amount. The Australian Chamber of Commerce and Industry has advocated for an increase of 2 per cent, at most. The announcement will likely take place in early June and any increase to the national minimum wage will take effect in the first full pay period on or after 1 July 2024. Failure to pay employees at least the minimum rate that is set out in an applicable award can result in penalties, including requirements for back pay and fines. The Fair Work Ombudsman uses its enforcement powers to issue compliance notices to employers, and recovered $14.8 million in unpaid wages in 2022-23. Small and medium businesses are subject to the same scrutiny as large businesses. For business owners, this is a timely reminder to review employment agreements and payments to staff. You should be conscious of which awards cover your staff members, as award rates for each level increase commensurate with the national minimum wage increase. It is also important to be aware of employee entitlements and set-offs, to ensure you are paying employees what they’re entitled to and avoiding future claims. If you are not sure what award your employee is covered by, have a question about employment conditions or require any other assistance with employment and workplace matters contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au . By Ciara Nalty (Solicitor) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
Working with you, working for you
