Underpaid pieceworkers could be compensated according to minimum hourly award rates, following an appeal by the Fair Work Ombudsman (FWO) in a case against Queensland farm Marland Mushrooms.
Currently, piece rates are paid by the amount employees can pick, pack, make or prune, similar to commission rate structures. Although the system is in place of hourly pay rates or project-based salaries, employees can mix shifts paid by piece rates and shifts paid by the hour under current law.
In a statement released yesterday, the FWO said it will be asking the High Court to “consider legal questions” about compensating pieceworkers who receive “inadequate” rates.
It also seeks to ensure employers understand whether those employees are permanent or casual.
This comes in response to a Federal Court ruling in July 2018, which found liquidating horticultural business HRS Country Pty Ltd underpaid 386 mushroom pickers at a Queensland farm operated by Marland Mushrooms.
However, the court disagreed with some of the submissions by the FWO, including its calculations of how much pieceworkers were underpaid and its move to consider HRS director Tau Hu and Marland Mushrooms director Troy Marland accessories in the offence.
FWO appealed in the same month, which caused a split decision in the Full Federal Court in August.
The High Court’s decision could change the obligations employers owe pieceworkers under the Horticultural Award.
Alan McDonald, managing director of employment law firm McDonald Murholme, tells SmartCompany the court’s decision will “very clearly” have “profound” effects on the cost of fresh food and export.
“It changes the way growers do business,” he says.
“It may run problems for Australia because we have free trade agreements and it is very easy for fresh food to be imported from overseas. Then you would have large tracks of Australian farmlands struggling and that’s not a minor consideration.
“I can assure you many will be forced out of business if some of the practices they use are radically changed.”
McDonald recommends small businesses lawfully using pieceworkers to continue business as usual.
“If what they’re doing is lawful, then keep doing it. Then wait for the outcome of any court decision.
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“You can’t stop contracts because of these circumstances,” he adds.