Wednesday, 27 February 2013
Migration Amendment (Reform of Employer Sanctions) Bill 2012; Second Reading
I rise to contribute to the debate on the Migration Amendment (Reform of Employer Sanctions) Bill 2012. In doing so, I indicate that the coalition will not be supporting this bill on the basis that the coalition views the substance of the bill as imposing an additional and unreasonable regulatory burden on Australian employers, the vast majority of whom are honest and law abiding.
On the issue of additional regulatory burden being imposed on employers, the coalition recognises that, if we address the issue of over-regulation, we can provide business with an environment that supports stronger economic growth, greater investment, more innovation and higher productivity. We recognise that all modern economies need regulation, but excessive regulation creates greater costs than benefits and discourages investment and the willingness to have a go and add to Australia's productive capacity. There is clear evidence to show that Australia has been caught in the vice of over-regulation, and that excessive regulation stifles our economic prospects and impedes the work of Australian industry.
On the issue of Australia's migration program, the coalition has made it abundantly clear that Australia's migration program is intended as a supplement, not a substitute, to the Australian workforce to fill the gaps that occur when productivity capacity is unreasonably constrained by Australia's natural population growth. The coalition has also made it clear to industry and business groups that, when supplementation is required to fill vacancies that cannot be reasonably filled by Australian workers, the compliance measures in place will remain.
However, in relation to these proposed new measures outlined in the bill that we are currently debating, we say that they go beyond the notion of reasonableness and will impose excessive regulatory and compliance measures on employers and cannot be justified in their present form. The purpose of this bill, as stated in the explanatory memorandum, is to implement the government's response to the independent report titled Report of the 2010 review of the Migration Amendment (Employer Sanctions) Act 2007,conducted by independent legal expert Mr Stephen Howells, and known as the Howells review. In his report, Mr Howells concluded that the provisions of the act, and in particular sections 245AA to 245AK of the Migration Act 1958, have not proved to be an effective deterrent against the small number of employers and labour suppliers who persist in employing or referring non-citizens who do not have permission to work in Australia. I emphasise the specific words of Mr Howells in referring to the extent of the problem as being 'limited to a small number of employers and labour suppliers who persist in employing or referring non-citizens'. The bill also proposes to amend the Migration Act 1958.
In essence, the bill imposes strict liability offences for employers that allow or refer illegal workers or temporary visa holders to work in breach of their visa conditions. Offences will incur civil penalties of up to $49,500 for corporate bodies, and $9,000 for individuals. In addition, infringement notices of up to $9,900 for corporate bodies and $1,980 for individuals would apply. Companies who sponsor foreign workers on 457 visas and fail to comply with their obligations can lose their sponsorship in addition to financial penalties.
An analysis of the new requirements proposed by the bill indicates that they are both onerous and unnecessary and are in direct opposition to the coalition's commitment to reducing the regulatory burden and compliance costs for small business. Given this government's complete lack of understanding of and contempt for business in this country, it is not surprising that an analysis of this bill confirms that, if it is indeed passed, the new requirements will add to the already substantial regulatory burden imposed by the Labor government on employers who hire overseas workers, like those we have seen in the Migration Legislation Amendment (Worker Protection) Act 2008.
In relation to the bill before the Senate, under the current Migration Act it is a criminal offence for a person or corporation to allow to work or refer for work an unlawful noncitizen or a noncitizen who does not have an appropriate condition on their visa permitting that person to work in Australia. These offences were introduced, lo and behold, by the former Howard government in 2007 in the Migration Amendment (Employer Sanctions) Act 2007 and became sections 245AA to 245AK of the Migration Act. The offences are fault based—and there is an important distinction between this and what is proposed by the current legislation—meaning that the prosecution must prove both physical and fault elements beyond reasonable doubt: that is, the employer allowed the unlawful noncitizen to work, thus breaching the working conditions of their visa, and the employer had knowledge of the lack of work rights of the employee or was reckless about that fact.
Since the commencement of the Migration Amendment (Employer Sanctions) Act 2007, whilst departmental officers have considered approximately 100 instances of possible breach, only four of these possible breaches were suitable to be referred to the Commonwealth Director of Public Prosecutions. And yet it was on the basis of this extremely low prosecution rate that the Howells report concluded:
The provisions of the Migration Amendment (Employer Sanctions) Act 2007 are wholly ineffective as a deterrent against the small number of employers and labour suppliers who engage or refer non-citizens who do not have lawful permission to work or who work in breach of their visa conditions. The Employer Sanctions provisions are also ineffective as an educational tool for recalcitrant employers and labour suppliers.
The inherent contradiction in this statement is, without a doubt, a feature of the report. On the one hand, it is acknowledged that there are few breaches and even fewer convictions, and on the other hand it is proposed that such exceptional behaviour warrants the imposition of an even greater evidentiary and regulatory burden on employers, hence the legislation that we have before us. This is clearly legislation that can be properly described as using a sledgehammer to crack a nut and is a reflection of the chaos which is a daily feature of the government's failed immigration policies.
In relation to the proposed penalty regime, making new penalties applicable to all existing as well as future employees imposes an enormous additional regulatory burden on employers. As previously stated, Australia is already subject to overregulation, and that excessive regulation stifles our economic prospects and impedes the work of Australian industry. This overregulation was referred to by a number of industry groups in their submissions on the exposure draft of the bill. For example, the Australian Industry Group stated:
… we believe that the proposed changes are heavy handed and unnecessary. Imposing strict liability offences on employers and labour suppliers will not deter the small minority of employers or labour suppliers who already knowingly abuse the law to engage cheap labour. Rather the proposed changes will impact the unintended targets, i.e. good employers and labour suppliers. It is unfair that these persons be subject to high regulatory burdens because of the illegal practices of a very small few.
AMMA's contribution on the exposure draft stated:
… AMMA believes the existing framework is sufficient provided there is greater awareness of the current penalties and sanctions against employers who do the wrong thing. While it is important that penalties are in place to deter businesses and individuals in respect of work by non-citizens, the significant number of strong measures in the exposure draft … would impose disproportionate cost and inconvenience on resource industry employers …
… it is imperative that the cost of doing business is balanced appropriately against the cost of ensuring compliance with migration laws.
The National Farmers' Federation had this to say in their submission:
The NFF has been supportive of imposing stricter sanctions for employers who knowingly and repeatedly employ illegal workers. The NFF believe that these employers constitute a relatively small number and therefore we support Government adopting a targeted approach to identifying and prosecuting these offenders. The NFF does not believe that it is necessary and therefore would not be an effective spend of taxpayer money, to implement a broad scale compliance program across all employers.
The Australian Chamber of Commerce and Industry made the following comments:
ACCI believes that the recommendations in the Howells' Report, if implemented, would be a disproportionate and inappropriate response to the problems they are trying to address.
And the HIA contends:
Strict liability offences should only be imposed in circumstances where it is just and fair to do so; not as a matter of administrative convenience. The case is not made in this Bill or the Policy Commentary supporting the Bill.
Yet, despite this repeated feedback from various industry groups throughout the period in the lead-up to the exposure draft et cetera that asserts that strict liability is not appropriate, the Gillard Labor government continues with its relentless attack on Australian businesses. Even the Howells report itself, if you analyse it, failed to make a plausible case that the extent of illegal workers warranted the sledgehammer effect which is a prominent feature of this bill.
In 2010-11, the department conducted 1,097 employer awareness visits, issued 515 illegal worker warning notices and located 1,788 illegal workers—and that is illegal workers, not illegal noncitizens. There is an important distinction between the two, and it is a distinction which Mr Howells appears to refuse in his report. Mr Howells estimates that up to 100,000 people are working illegally in Australia at any one time, but this is despite the department locating a mere 1,788 in 2010-11. One might also wonder if the department's investigations included the four illegal workers found on the Villawood site, who were working directly under the department and the government's nose.
The figure that Mr Howells quotes incorrectly assumes that all overstayers are working illegally. There is no evidence produced to support this hypothesis. The coalition does not seek to trivialise the fact that there are illegal workers in Australia. However, I point out something that Mr Howells in his report does not: the measures proposed by this bill are disproportionate when compared to the limited extent of the problem they are attempting to stamp out. That limited extent is borne out by the department's own statistics.
The bill proposes that a number of offences should be strict liability offences. Whilst the Criminal Code reflects the same starting presumption as the common law—fault must be proven for each physical element of an offence for a person to be guilty—section 6.1 of the Criminal Code negates the requirement to prove fault if an offence is expressed to be a strict liability offence. Whilst the application of strict liability allows a defence of honest and reasonable mistake of fact to be raised, past governments and parliaments have recognised and have had regard for the findings of the Senate Standing Committee for the Scrutiny of Bills, which has long taken the view that any use of strict or absolute liability should be properly justified. The reasoning of the Senate scrutiny of bills committee on the issue of the use of strict liability provisions is that it is generally neither fair nor useful to subject people to criminal punishment for unintended actions or unforeseen consequences unless these resulted from an unjustified risk. Clearly, in this case, the decision of the government to make a number of offences strict liability offences is designed to give the government an easy win or an easy conviction notwithstanding the complexity of the issues and circumstances that could have been raised if fault on the part of the employer had to be proven by the prosecution. It is clear that, unless a prospective employee produces, prior to the commencement of any work performed, a valid Australian passport, valid visa or some other valid documentation permitting work, the employer could be subject to prosecution. The combined effect of these recommendations would mean an employer could be taking a risk of fines before the courts or through an infringement notice should they not check a passport, birth certificate or visa status of a person who presents themselves for work.
The process involved in seeking these documents is not only arduous; it is also inherently discriminatory. For example, employees will in most cases be required to share information about their age and their place of birth. The need for this knowledge may lead to discrimination against persons who may be legitimate Australian citizens or permanent residents but are subject to questioning by their employer because of their racial identity, accent or level of English proficiency.
I touched earlier on the fact that Australia has been caught in the vice of over-regulation, excessive regulation stifles our economic prospects and impedes the work of Australian industry. I note that the current Labor government continues to increase the burden of red tape on industry notwithstanding the ironic election commitment to reduce over-regulation. Since 2008, the Rudd Gillard Labor government has introduced, approximately, an additional 20,900 regulations and has merely repealed 104 regulations despite having promised to cap the growth of regulation with their famous 'one in, one out' policy. Far from 'one in, one out', the Labor government has introduced, approximately, a '200 in, one out' regulatory policy. The Australian Chamber of Commerce and Industry National Red Tape Survey found that 73 per cent of businesses now spend longer complying with regulations than they did two years ago, with one in 10 spending more than 20 hours per week dealing with red tape. Seventy-two per cent of businesses surveyed said the time they spent on tackling red tape had increased in the past two years. Only one in 10 businesses feel that red tape does not impact their business. The Productivity Commission has estimated that reducing the burden of unnecessary red tape in Australia could generate as much as $12 billion extra GDP per year. In the World Economic Forum's Global Competitiveness Report 2012-2013, Australia's ranking relating to the burden of government regulation fell from 60 to 96 out of 144 countries surveyed. This ranking is well below OECD averages.
Whilst the coalition agrees that the exploitation of foreign workers is an abhorrent practice and that any business found to be exploiting workers should be punished to the full extent of the law, it is our view that this bill is a disproportionate response to the issues raised in the Howells report and seeks to place an onerous regulatory and evidentiary burden on all employers rather than providing a more targeted approach directed towards those employers that have been identified as having employed illegal workers. The coalition will not support government policy responses that are based on creating a one-size-fits-all administrative burden for employers that shifts the cost of enforcing the law onto the employers themselves. The existing regulatory regime and cost of compliance that the government has systematically built around the employment of foreign nationals is already onerous, and the proposed changes will significantly increase the regulatory burden and compliance costs on employers. This bill is in direct opposition to the promise and the commitment that the coalition has made to people of Australia to reduce the red tape burden and lift productivity. For these reasons, the coalition will not be supporting this bill.
I rise to speak in regard to the Migration Amendment (Reform of Employers Sanctions) Bill 2012. The problem of people working illegally in Australia is one that this government intends to curb as much as it possibly can. Clamping down on illegal work practices is important not only for the protection of our immigration regime but for the protection of workers themselves.
Noncitizens engaged in paid employment where their visa conditions do not allow them to do so has a number of consequences. Working without permission takes away work that could be available to people, citizens and noncitizens, who are legitimately entitled to it. We need to maintain the integrity of our migration system and ensure that the economic opportunities available to workers in Australia go to those who are entitled. Large numbers of noncitizens working illegally can distort the labour market; undermine the pay and conditions of legitimate workers, including health and safety conditions; and give employers an unfair competitive advantage over those who are doing the right thing.
Finally, the practice of working illegally in Australia can have consequences for the illegal workers themselves. The Department of Immigration and Citizenship has found in its investigations that the deliberate and systematic use of illegal workers in significant numbers is often associated with the abuse of these workers, including sexual exploitation, unsafe work practices and underpayment. It is also associated with crimes such as taxation and welfare fraud. At the extreme end of the scale, some of the practices are very disturbing.
In the other place, the member for Wills, Mr Kelvin Thomson, included in his contribution to the debate on this bill a detailed explanation of some of the tactics used by criminal organisations to bring women into Australia on student visas for exploitation in the sex industry. I will not go into the detail on that matter as deeply as he did, but I would certainly encourage senators to read his contribution or look at some of the work undertaken by the Victorian parliament's Drugs and Crime Prevention Committee in its investigations into this issue. I have also spoken on the issue of trafficking and sexual exploitation of workers—just this week, for example, in my contribution on the Crimes Legislation Amendment (Slavery, Slavery-like Conditions and People Trafficking) Bill 2012.
It is important that we, the Australian government, do all we can to stop the exploitation of workers. The integrity of our industrial relations system and the benefits this provides for Australian workers relies on having an orderly process for providing work for noncitizens when we authorise it and when it is in Australia's national interests. Of course, where noncitizens are needed to fill skill shortages that cannot be filled by Australian citizens, there are a range of visa subclasses available to employers and employees under the skilled migration program. In addition, limited work rights are given to some visa holders to allow them to support themselves financially during their stay in Australia.
The number of people in Australia on a valid visa who either have no permission to work or have limited permission was around 960,000 as of 31 December 2009. These temporary migrants include students, tourists, business visa holders and working holiday-makers. Among those people are three groups of noncitizens who work in Australia without permission: noncitizens who have a current visa that does not permit work and have taken a job and commenced work; noncitizens who have remained in Australia after the expiry of their visa and have taken a job and commenced work; and noncitizens whose visa permits work, subject to certain conditions, but who are working in breach of these conditions. An example in this last category are noncitizens on student visas who are limited to 20 hours per week but who work in excess of those hours.
It is impossible to know how many of these noncitizens are violating the work conditions of their visas, although recent estimates have put the figure at around 100,000. What we can quantify is the number of noncitizens who overstay their visas, which in the past decade or so has fluctuated between around 40,000 and 60,000 every year. The problem may appear relatively small compared with our overall labour market of 10 million workers. However, 100,000 people working without permission is not an insubstantial number.
Australia's lifestyle and living standards are the envy of the world. Noncitizens working in Australia without permission threaten this lifestyle by taking away employment opportunities and undermining hard-won working conditions. The previous government, in recognising this problem, introduced the Migration Amendment (Employer Sanctions) Act in 2007 to provide criminal sanctions for employers and labour suppliers who knowingly employ or refer for work noncitizens who do not have permission to work in Australia. The act quite rightly put some of the onus on employers to check that the workers they were hiring actually had permission to work. It also provided a mechanism to punish those employers and labour hire organisations actively involved in the recruitment and exploitation of illegal workers.
The introduction of this act was coupled with an education campaign and administrative warning notices.
In 2010, barrister Mr Stephen Howells was engaged by the government to conduct a review of the act. Mr Howells's review was wide-ranging, examining the effectiveness of the current sanctions, the impact of the regulation on business, and the effectiveness of the systems verifying a person's right to work based on their visa entitlement or Australian citizenship. Mr Howells found that the criminal sanctions contained in the 2007 act had been ineffective as a deterrent to illegal work hire practices.
I will paraphrase a few sections of Mr Howells's report, which goes some way towards explaining why these sanctions have been ineffective. Since the commencement of the Migration Amendment (Employer Sanctions) Act 2007, departmental officers have considered more than 100 instances of possible breach. They have thoroughly investigated at least 10 matters involving what appears to have been the deliberate and systematic use of these workers in significant numbers at identified workplaces. There have been no successfully contested prosecutions under section 245AA to 245AK of the Migration Act 1958 resulting in a recorded conviction and sentencing.
In December 2010, one offender was convicted and sentenced after entering a plea of guilty and acknowledging a prior criminal record. The principal reason for the failure of the Migration Amendment (Employer Sanctions) Act provisions is that the best evidence of breach would almost always come from the workers themselves, but their evidence is affected by their complicity or independent culpability under section 235 of the Migration Act. They would normally be removed from Australia as soon as reasonably practicable, as required by section 198 of the Migration Act. The cost and the administrative inconvenience of detaining them pending a trial would be prohibitive.
In his report, Mr Howells noted that similar patterns of illegal work practices appeared in the United States, Britain and New Zealand and that the successful responses appeared to be those that included other enforcement mechanisms, such as civil penalties and infringement notices. The compliance regime recommended by Mr Howells is contained in the bill currently before the Senate: the Migration Amendment (Reform of Employer Sanctions) Bill 2012.
What the government is proposing through this bill is a tiered enforcement approach. The scheme is designed to encourage voluntary compliance by business, through education and deterrence, and provide effective sanctions where this does not occur. This is achieved through graduated tiers of education, warnings, infringement notices, non-fault civil penalties and criminal penalties. The legislation's key amendments include amending the criminal offences and creating new non-fault civil penalty provisions and an infringement notice scheme for people who allow or refer an unlawful noncitizen to work, or allow or refer a lawful noncitizen to work in breach of a work related condition; creating statutory defences where reasonable attempts are taken at reasonable times to verify a foreign national worker's entitlement to work; broadening the application of criminal offences and civil penalty provisions to hold a person liable for participating in an arrangement, or series of arrangements, that result in a foreign national working without lawful entitlement; extending both criminal and civil liability in certain circumstances to executive officers of bodies corporate, partners in a partnership and members of an unincorporated association's committee of management; and creating search-warrant and notice-to-produce powers specifically to facilitate the investigation of suspected breaches of these offences and civil penalties.
So, I will explain the tiered enforcement model. Firstly, businesses are informed and educated on the requirement that only noncitizens with a visa that allows work are entitled to work. This will be achieved through a revamped education and information campaign. Then, where departmental officers identify a business or employer who is not complying with the legislation, they will usually issue an illegal-worker-warning notice. Subsequent infringement notices may be issues where repeated noncompliance with the legislation is detected. Finally, proceedings for a civil penalty order or prosecutions for criminal offences may be pursued where persistent noncompliance occurs and/or where serious breaches of the legislation are detected.
Where departmental officers identify an employer who is not complying with the legislation they will usually issue an illegal-worker-warning notice. These notices are available under the current act. Where repeated noncompliance with the legislation is detected, the department can then issue an infringement notice. Proceedings for a civil penalty order or prosecutions for criminal offences may be pursued in cases where the department finds persistent noncompliance or serious breaches of the legislation.
There has been extensive consultation on the measures contained in this bill. Mr Howells undertook consultation with key stakeholders, including employer groups, before releasing his report and recommendations. The government conducted further consultations on the recommendations in Mr Howells's report before releasing an exposure draft of the legislation. And of course there was then consultation on the exposure draft.
In drafting the bill, we have given careful consideration to the submissions made by employer and employee groups, government agencies including the Department Immigration and Citizenship and a range of other key stakeholders. Contained within this bill is a comprehensive package of measures, which, I am certain, based on international evidence, will be effective in significantly clamping down on illegal work hire practices. I would like to congratulate the former Minister for Immigration and Citizenship, Chris Bowen, for his carriage of this legislation.
Now I would like to comment on one of the objections that has been typically raised to sanctioning employers for illegal work hire practices. Some employers say they cannot reasonably be expected to know the work entitlement of prospective employees. The department has overcome this problem with the visa entitlement verification online, or VEVO, system. Through VEVO, employers are able to check whether a named person has a current visa and whether they are permitted to work. Employers without internet access can use the department's toll free visa entitlement verification faxback service.
Mr Howells took into account the concerns of business when he recommended the creation of statutory defences where a business took reasonable steps to check that a worker or prospective worker had permission to work. These defences are now contained within the bill and define what a reasonable step is. It can include checking a computer system as prescribed by regulations or viewing original documentation such as a visa label in the noncitizen's passport which demonstrates that they have permission to work. Another defence recognises that an employer or a referee should not be expected to know whether a non-citizen worker is also working elsewhere. In other words, when a noncitizen has a limited entitlement to work, their employer can only be penalised if that worker exceeds their entitlement through the hours worked with that employer. None of these defences, unfortunately, have satisfied the opposition.
I note that in their contribution to this bill in the other place, the opposition criticised this legislation for introducing new obligations on employers and for imposing red tape and compliance costs. This, as the former Minister for Immigration pointed out in reply, is a furphy. There has not been one additional requirement added to what was already required under the 2007 legislation introduced by the previous government. With this bill, the opposition's usual negativity appears to have reached new heights. They are now opposing a bill on the basis of something that is not even in the bill. These mythical extra obligations to which those opposite refer do not exist. In fact, as Mr Howells pointed out in his review and as I mentioned earlier, the implementation of the VEVO system means that there is less of a compliance burden on business when it comes to verifying whether a visa holder has an entitlement to work in Australia. VEVO makes it easy for employers to conduct a check, and this is not an onerous requirement.
The suite of measures contained in the current bill, the measures which Mr Howells recommended, are not much different to the recommendations handed to the Howard government by their own 1999 review. The coalition rejected them back then too. Those opposite still refuse to accept this advice. They refuse to provide the Department of Immigration and Citizenship with the tools necessary to stop employers engaging in illegal work hire practices and to deal with them under the law.
Those opposite are just not serious about more jobs for Australians. They opposed the economic stimulus plan, putting 200,000 thousand jobs at risk; they opposed assistance for the auto industry, putting a further 46,000 jobs at risk. Now they oppose effective action to prevent 100,000 or so noncitizens working without permission in Australia, taking jobs that could be going to Australians. I am proud to be part of a government that, by contrast, has created over 800,000 jobs since 2007 election during great global turmoil when jobs were being lost in the millions in other advanced economies. We created 800,000 jobs and kept the unemployment rate steady. We kept it lower than the average unemployment rate during the 12 years of the Howard government, despite the doom and gloom of the coalition when they predicted that the mineral resources rent tax, the Fair Work legislation and the carbon price would result in wholesale job losses.
They peddled their doom-and-gloom scenarios and what happened? We did not see wholesale job losses throughout the economy. No, productivity tripled because of the economic reforms put in place by this Gillard Labor government and over 800,000 additional jobs were created.
This just goes to show that the Labor Party is the party of jobs. It demonstrates that we are the only party in this place which is serious about creating jobs for Australians and protecting the employment rights and conditions of Australian workers.