Apr 29th, 2022
As of April 28, changes to the Horticulture Award 2020 come into effect.
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Historically, employees could be paid according to “piecework pay rates” – meaning they were paid based on the amount of produce they harvested. The more they harvested, the greater the employee’s pay.
A piece rate is set up with the intention that a competent worker could earn the equivalent of at least $15% above the minimum hourly rate of their classification.
While it was set up with the intention that efficient employees could earn above the minimum hourly rate, it instead often led to employees receiving incredibly low rates of pay.
Over 50% of the horticultural workforce is not made of local workers and fall part of a population segment more vulnerable to exploitation by their employers. The Australian Workers Union (AWU) national secretary claimed some employers used this piece work system to pay employees as little as $3 an hour.
Following due consideration of the matter, the full bench of the Fair Work Commission declared that the piecework pay rates for employees under the award were “not fit for purpose”, and that “they do not provide a fair and relevant minimum safety net”.
At the time, the AWU national secretary claimed this was a great success for the union – one of its most significant victories in its 135 year history.
An employee paid via piecework rates will now be afforded a minimum wage guarantee. While it is possible for them to earn higher than the minimum hourly rate stipulated in the Horticulture Award 2020 if they are sufficiently competent, they must now receive at least the minimum hourly rate, regardless of their productivity while working.
This is also accompanied by new record keeping requirements for employers. Employers must keep records of the hours worked by each employee, as well as the piece rates that have been applied to the employee.
Pieceworkers may be engaged as full-time, part-time, or casual employees, but the nature of the industry means that the majority of employees are engaged on a casual basis. Under these new changes, casual employees would be guaranteed to receive a minimum hourly rate of $25.41.
Affected businesses in the industry have expressed concern that in addition to this possibly leading to increases for consumers, it may also affect current employees if they are unable to perform effectively enough to meet the minimum rate via piecework rates. It may not be feasible for them to keep these employees on. Producers have also indicated it may lead to the work becoming less viable for backpackers, students, and other workers that often may work more casually for a short period as opposed to more professional pickers.
Regardless, the changes are a large step towards minimising underpayment of employees in the industry.
These changes will come into effect from the first pay period beginning on or after the 28th of April. For those that fail to comply, the Fair Work Ombudsman has stated they are ready to ensure compliance, and encouraged businesses and employees to reach out for assistance.
For affected business, the Fair Work Ombudsman has also developed free resources that can assist them with ensuring they meet their compliance obligations, available online.