Penfold, Carolyn --- "Fighting outworker exploitation" [1999] AltLawJl 16; (1999) 24(2) Alternative Law Journal 85

... This case discloses a very distressing situation which has no place in a society which embraces the concepts of social justice. The undisputed facts reveal the existence of widespread and grossly unfair exploitation of migrant women of non-English speaking background who are amongst the most vulnerable persons in the workforce ...

The remuneration and treatment generally ... is scandalous and represents a serious affront to the moral and social conscience of the community.[1]

More recent studies suggest that in practical terms little has changed. A 1996 report lists outworkers’ problems as including:

... low piece rates which translate to low hourly rates; impossible deadlines for completion of work; late payment, underpayment, non-payment for completed work, rejection of work and unreimbursed expenses; physical and verbal harassment from intermediaries (blackmail, threats, coercion and bribes); substandard working environments; and worries associated with combining work with family responsibilities. These stresses are compounded by the lack of English language skills and inadequate training.[2]

The many reports and studies carried out in the last few years evidence a high recognition of outworker problems; the lack of resolution evidences how complex and entrenched the problems are.

Current status

A perusal of the Clothing Trades Awards 1982 (Cth) and (NSW) shows that outworkers in the textile, clothing and footwear (TCF) industries have been (theoretically) well protected by law.[3] Clauses 26, 27, and 27A of these awards require the registration of employers of outworkers, require documentation and reporting of outwork employment (making enforcement possible through access to employer records), stipulate that wages and conditions of outworkers must be no less favourable than for factory workers, confirm the application of general award provisions to outwork employment, and make specific provisions as to hours of work, overtime etc.

Further, the awards shift the onus of proof onto employers in specified circumstances, enabling outworkers more easily to prove first, that they are owed money by an employer (26(c)(v)), and second, that they are employees and not independent contractors (27(d)). This is a crucial factor in allowing outworkers to pursue their rights.

Also crucial for outworkers’ legal protection was the inclusion in the Workplace Relations Act 1996 (Cth) of outwork as an allowable award matter. The Workplace Relations Bill had strictly limited the matters which could be included in a federal industrial award (‘allowable award matters’), but following negotiations the Workplace Relations Act included as an allowable award matter:

pay and conditions for outworkers, but only to the extent necessary to ensure that their overall pay and conditions of employment are fair and reasonable in comparison with ... employees who perform the same kind of work at an employer’s business or commercial premises.[4]

While the intent of the legislation was to encourage employers and employees to reach agreements appropriate to themselves and their industries, for clothing trades outworkers non-coverage in awards would have meant a serious curtailment of rights. The history of clothing trades outwork clearly demonstrates that individual agreements are not a real option by which outworkers could secure their rights, and the isolation of outworkers makes ‘workplace agreements’ inappropriate.

Further, there was concern that existing federal award provisions required for the regulation and enforcement of outworker rights may be struck down as extending beyond the limits of the outwork allowable matter (s.89A(2)(t)), but the Australian Industrial Relations Commission has now confirmed that these provisions are, in their entirety, ‘allowable matters,’ and so will be retained in the federal Clothing Trades Award.[5] Although the operation of the Workplace Relations Act may still detract from the provisions of the federal award (for example, through curtailing union rights of entry and inspection (ss.127AA and 285A), and minimising Commonwealth jurisdiction where state awards or agreements exist (s.111AAA)), the Act itself cannot be blamed for outworker exploitation. Even prior to the Workplace Relations Act, with strong awards working in concert with other general employee legislation, outworkers were not really protected.

Clearly then, legal protection is insufficient in these circumstances, and more is needed if a practical protection is to be afforded. It is necessary, therefore, to look beyond the legal framework for ways to address the problems of outworker exploitation.

Players in clothing trades outwork

There are six key groups which could help to fight outworker exploitation: trade unions, outworkers, employers, retailers and large fashion houses, consumers, and governments. Each of these has a role, but it is unlikely that any one of these players could itself combat outworker exploitation.

Trade unions

The Textile, Clothing and Footwear Union of Australia (TCFUA) has played a huge role in helping to raise awareness about the situation of outworkers in NSW and nationally. It has argued in NSW and Commonwealth Industrial Commissions, regarding both general award provisions and specific employees; made submissions on behalf of outworkers to government inquiries; negotiated with individual employers and industry groups; run information campaigns for outworkers; and negotiated the Homeworkers Code of Practice. While unions have not always been supportive of outworker rights, the last decade has seen a concerted campaign by the TCFUA against exploitation. This union has fought hard for the protection which outworkers have under the State and Federal Clothing Trades Awards, and continues to fight to retain these protections. The TCFUA argues that legal protections mean nothing if there are insufficient powers to allow enforcement of the awards, and that repeal of some clauses of the federal award which were envisaged under the Workplace Relations Act (relating to registration, documentation and reporting) would have made the union impotent in terms of award enforcement. If the TCFUA can’t enforce existing laws, there is little hope of fighting outworker exploitation. It was the TCFUA’s arguments in the Australian Industrial Relations Commission which has led to confirmation of the continued operation of those award provisions.

Outworkers

A second key group is outworkers themselves, who unfortunately have little power. They often do not even know that there are laws which could offer them protection. Some outworkers have sought relief from exploitation through joining unions or approaching community groups which can speak on their behalf. Through these avenues, and to a lesser extent individually, outworkers have had their voices heard in courts and inquiries. Outworkers are often hugely disadvantaged here, however, by their inability to speak English, and by other factors (being female, being migrants etc.) which isolate them from power in Australian society.

On top of this isolation there are other factors which may inhibit individual outworkers from acting for themselves against exploitation. Even where it is possible to access community groups, trade unions or advocates (such as the employment advocate), outworkers may be unwilling to bring complaints against employers who are often members of their own community. As well as the fear of bringing the community into disrepute, they may also be fearful of speaking out against abusive employers who can withhold work or payment at will. Further, outworkers may be in such poverty that they are unable to refuse work while there is no alternative work available, and generally for outworkers this is the case. They tend not to be workers who could find alternate jobs.

Employers of outworkers

Employers are a third group which could help stop exploitation of outworkers, but this may jeopardise their own livelihoods. It seems that ethically run businesses are undermined by others that produce goods more cheaply through exploiting outworkers; ethically run businesses cannot compete with less scrupulous operators.[6] The need to use exploited labour results from the current structure of the industry where, to win manufacturing contracts, employers need to offer the lowest prices, often considerably lower than the prices at which garments could possibly be made without exploitation. The TCFUA suggests that this constant cost cutting is forced on employers by buyers for retailers and large fashion houses which refuse to jeopardise their own profits.

Award enforcement is required if employers are to compete with one another on equal terms, but this is a hugely difficult task requiring very significant resources. Such resources are unlikely to be forthcoming given the current trend in industrial relations away from the awards system.

Retailers and large fashion houses

This leads to the fourth group, retailers and large fashion houses, which could assist in halting outworker exploitation, but may have the most to gain by allowing it to continue. Barry Tubner of the TCFUA suggests that if outworkers were paid award wages and worked under award conditions, consumers could still buy at present prices if retailers and fashion houses would accept lower profits. He suggests that if they would accept only 150% profit rather than 200%, all outworkers could be properly paid![7]

Unfortunately, the growing globalisation of the economy, the withdrawal of industry protections, and the ease and speed of international commerce now mean that threats to buy overseas if local prices are too high can be easily acted on. In this context, in a capitalist economy with productivity, efficiency and individual freedom dominating economic thinking, it seems ridiculous to suggest that retailers should forego profit for social causes. Money makes the world go round!

Consumers

A fifth key group with an obvious interest in and influence on the clothing industry is consumers. Retail price of garments can be a major determinant of consumer behaviour. While the price of some clothing has come down with increasing imports and increasing outworker exploitation, it is also true that the price of some clothing, especially higher quality fashion, has not come down at all. While many high quality fashion goods are made by exploited labour, the continued high price means higher profits for retailers and large fashion houses; the savings are not being passed down the line.

Unions, churches and community groups believe that consumers have a major part to play in halting outworker exploitation. To that end they have run campaigns to try to raise public and consumer awareness of the issues, and urged consumers to buy only ‘clean’ goods (namely, those made by workers employed under award conditions). Currently in development is a swing tag to identify ‘clean’ goods, and it is hoped that once consumers are familiar with this, goods carrying the tag will be preferred by consumers over ‘sweated goods’. It is difficult of course to know, especially in the current economic climate, to what extent the clean/sweated distinction will sway a buyer if the product is what they want and at a good price, but it is hoped that consumers will be sufficiently influenced to force retailers and fashion houses to choose to sell clothes bearing this ‘clean’ tag. However, unless consumers do clearly distinguish between clean and sweated goods when purchasing, there will be little incentive for retailers and fashion houses to work to achieve this endorsement.

Government

The final potential player involved in fighting outworker exploitation is government. Unfortunately, while concerted efforts of interested governments could make a huge difference to the situation of outworkers, such efforts have been minimal. As with the other key players, it must be noted that ‘government’ is not an homogenous group, and includes both State and federal governments, and governments of differing political persuasions and ideologies.

The NSW government has made an effort to assist outworkers, and this has included supporting the TCFUA’s push for award reforms, and supporting its push to introduce a code of conduct for those in the clothing industry. The NSW government recently stated that it would no longer purchase goods from suppliers who could not show that their goods were ‘clean,’ and that it would make compliance with award conditions a term of any supply contracts; non-compliance to be a basis for termination of the contract.[8]

The federal government has done less, especially when we consider that the huge growth in outworker numbers is largely attributable to the federal government’s economic policies. The federal government has referred the problem of outworkers to a Senate Economics References Committee, run an industry information campaign to ensure that both workers and employers know their rights and responsibilities, funded labour adjustment programs to assist workers to move to more viable industries, supported English language classes for migrants, and offered a social security amnesty to encourage outworkers to move into the formal economy. Many of these programs have now lapsed or been withdrawn.

Further, there have been a great number of recommendations made to government but not implemented; some because they are expensive, others because they contradict the government’s ideology. Those which could make a real difference if implemented include:

•	the re-introduction of appropriate labour adjustment programs (but with the understanding that not everyone can be ‘adjusted’!);
•	re-introduction of more accessible English language programs for new and established migrants;
•	requiring government departments to move to ethical sourcing in all procurement contracts;
•	withholding industry assistance from retailers and manufacturers who don’t agree to abide by a code of practice for outworkers;
•	implementing the recommendations of recent OH&S reports;
•	intervening on behalf of outworkers and the TCFUA in the Industrial Commission to retain award provisions protecting outworker rights (now won without government help);
•	ratifying the ILO Convention on Homework;[9]
•	and allocating money for enforcement activities.[10]

It is clear that there are very many areas where government policy and action could play a part in fighting outworker exploitation, and that a refusal to act may relegate outworkers to continuing exploitation. While outworkers, trade unions, community groups, employers and retailers all have a role to play in this fight, governments have perhaps the greatest opportunities.

Costs measured in dollars hold sway with governments, and in the case of outworker exploitation these include amongst others the costs transferred to the public health system by injured workers unaware of workers compensation entitlements, or whose employers do not carry insurance; social security payments to workers who legally or illegally supplement meagre wages by resort to government benefits; and loss of taxation revenue through unrecorded or ‘black market’ transactions. The latter costs government is trying to save through data matching and the increased use of a ‘reportable payments system’.[11] It appears, however, that while outworkers work for such little wages and in such conditions they will need to supplement their wages in this way. ‘Catching’ outworkers, without offering any alternatives, is unlikely to work as a cost saver.

Social costs

Governments bear some financial burdens associated with outwork, outworkers bear financial burdens associated with exploitation. More important, however, are the non-quantifiable costs, not measured in profit and loss statements, which the whole society will increasingly bear if outworker exploitation is allowed to continue unchecked. For some years now governments and others have seemed uninterested in social costs, but ignoring them will not make them go away. In the long term these costs will be far more harmful to our society than any financial benefits which may accrue from ignoring them.

These costs include having within Australian society large groups of disadvantaged migrants, mostly women, in poverty, without sufficient English language skills to make contact with the broader community, nor to participate in that broader community, with no representation in government or other power elites, theoretically but not practically protected by law, injured, abused, working long hours, nights, weekends and holidays, without annual leave or long service leave, without time to devote to their children (or to themselves), and worst of all, without anticipation of a better life. It is inequitable not only for the individuals involved, but results in an increasingly less equitable society.

Despite this, arguments have been made against offering outworkers further protection. It has been suggested that exploitative work is better than no work for the communities and individuals involved, and that stopping this exploitation could lead to price rises and a resultant shrinking of demand, or may lead to increased imports.

While these are real concerns, they are not good reasons for allowing continued exploitation. The argument that exploitation is appropriate if it keeps the price of goods down, if it keeps the demand for Australian goods up, or if it provides work for those unable to get it elsewhere should not be countenanced. It condones exploitation as a work practice, and takes the pressure off government and others to seek or pursue equitable alternative options. It leaves the costs of the industry on those least able to bear it. It has ‘no place in a society which embraces the concepts of social justice.[12]

Conclusion

All of the players in the outwork game have a role to play in changing this situation. Outworkers need to associate and to complain, to stand up against exploitation, but as those most affected, they are also in the weakest position from which to fight. Consumers need to refuse to purchase sweated goods, and to take a principled stand in the matter. Trade unions need to continue to fight, not only to improve the protection afforded to outworkers but to stop their situation becoming even worse. They need to continue to work on recruitment of outworkers, on raising awareness of outworker exploitation, and on fighting for redress for individual outworkers. Retailers and large fashion houses need to accept lower profits, but more than this need to introduce ethical business practices and to take responsibility for their part in outworker exploitation. But most of all governments — and particularly the federal government, which invites migrants to Australia, and makes economic and industry policies — which have the power to do so much, need to act strongly and swiftly if the increasing exploitation of outworkers is to be halted. It is pointless to continue to criticise law for its failure to stop exploitation; it is people who need to make the moves.

References

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[1] Re Clothing Trades Award (1987) 19 IR 416 at 419 and 421.
[2] Senate Economics References Committee, Outworkers in the Garment Industry, Parliament of the Commonwealth of Australia Senate Printing Unit, Canberra, 1996, ppxi-xii.
[3] Most clothing trades outworkers in Australia are in NSW and Victoria, with fewer outworkers spread across other States. While legislation in Victoria and other States differs from that of NSW, the issues of outworker exploitation are applicable across the country.
[4] Workplace Relations Act 1996 (Cth), s.89A(2)(t).
[5] Workplace Relations Act 1996 (Cth), s.107 reference to Full Bench (unreported 12/3/99, C0037 CRA Dec 232/99 S Print R2749).
[6] Wynhausen, E., ‘Slaves to Fashion’, Australian, 13-14 May 1995, p.1.
[7] Personal conversation with Barry Tubner of TCFUA. August 1998. See also McArthur, J., ‘This Jacket Cost $800’, Sun Herald, 14 February 1999, p.21.
[8] NSW Department of Public Works and Services, NSW Code of Practice on Employment and Outwork; Obligations for Textile, Clothing and Footwear Suppliers, NSW DPWS, Sydney, July 1998.
[9] International Labour Organisation, C177, Home Work Convention, 1996.
[10] Senate Economics References Committee, Outworkers in the Garment Industry, Parliament of the Commonwealth of Australia Senate Printing Unit, Canberra, 1996; Senate Economics References Committee, Outworkers in the Garment Industry Review Report, Canberra, July 1997; Mayhew, C. and Quinlan, M., Outsourcing and Occupational Health and Safety, A Comparative Study of Factory Based and Outworkers in the Australian TCF Industry, UNSW Industrial Relations Research Centre, Sydney, 1998.
[11] Government Response to the Report of the Senate Economics References Committee on Outworking in the Garment Industry. Australian Senate Hansard, 3 September 1997.
[12] Re Clothing Trades Award (1987) 19 IR 416 at 421.