News & Insights

The Australian Workers Union (AWU) has dubbed its successful application to update the Horticultural Award 2020 (Award) as one of the “most significant decisions in modern times”. The insertion of a minimum wage clause, which will ensure pieceworkers (e.g. workers paid based on quantity of produce picked) earn at least a minimum hourly rate of pay, will set a new standard in the industry.

horticultural award to include minimum entitlement

Currently, the Award provides that an employer must fix a piece rate at a level which enables a pieceworker competent at the piecework task to earn at least 15% more per hour than the hourly rate that would otherwise apply, but with no minimum amount payable.

This will now be changed by the introduction of a minimum entitlement to the relevant casual hourly rate of pay (based on an employee’s classification) for hours worked, as well as the introduction of more onerous record keeping requirements.

reasons for change

The view of the Full Bench was that the existing pieceworker clause in the Award was not appropriate, nor in line with the “safety net” as mandated in the Fair Work Act 2009 (Cth). In this context, it was acknowledged that the horticulture industry has a history of many pieceworkers earning less per hour than the national minimum wage. Further, with more than half of the seasonal harvesting workforce being temporary migrant workers, such vulnerable employees have been exposed to exploitation and faced difficulties in challenging underpayments.

The new clause seeks to mitigate such exploitation, and the Full Bench was of the view that by making the relevant amendments, the Award will stack up to the objective of all modern awards and address widespread non-compliance with the clause.

The Full Bench also stated that introducing a minimum wage for pieceworkers should increase productivity as it will provide an incentive for employers to better manage pieceworkers and that “it is also likely that underperforming pieceworkers will be dismissed”. However, this appears to have overlooked that many growers are reliant on labour hire, and that there are significant labour shortages in many areas of the industry.

what’s next?

While the AWU application received support from State governments, it has given rise to backlash from stakeholders in the horticulture industry, concerned that the changes will drive growers out of business.

The Full Bench has invited submissions in response to the decision by 26 November 2021. The submissions are not a chance to contest the determination, but an opportunity to comment on the provisional draft variation to the Award.

what does this mean for employers under the award?

Employers in the horticulture industry will soon be required to ensure they are meeting minimum wage obligations for pieceworkers, as well as new reporting requirements, under the Award.  As a result, they should assess the current structures and processes they have in place for pieceworkers, and may reconsider the utility of such a risk-reward arrangement that has historically been in the interests of both parties to the employment relationship.

If you operate in the horticulture industry and wish to discuss any of these changes, please contact the Employment, Safety and Migration team at Macpherson Kelley for assistance.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.