Labour

The horticulture industry requires access to a productive workforce if it is to achieve the Australian Government’s goal of agriculture reaching a value of $1 billion by 2030.

Industry has raised awareness of the worsening labour crisis for over a decade, yet the COVID-19 global pandemic (coronavirus) has fully exposed the market failures government must address. The response to the coronavirus pandemic has caused state governments to spend millions on marketing campaigns and cash incentives to attract Australians to jobs in horticulture. Though the pandemic is only a short-term issue, it has provided a catalyst for governments to invest in responding to the labour shortage in horticulture.

It is clear through the various governments’ own statistics that the call for more Australians to take on short-term seasonal work has not been the success they might have hoped.  The response in comparison to demand in each state provides strong evidence that the interest or the will is not there for Australians alone to fill this gap. Short term seasonal work poses issues for Australian residents such as availability of suitable accommodation an issue which only now, through the lens of the pandemic, are governments truly recognising the magnitude of.

This policy sets out priorities for industry that can only be addressed through action by government to address the various market failures.

WHAT INDUSTRY WANTS

Action to improve pathways to accreditation in farming careers

1. Government to assist industry to develop an education and skills strategy that engages the Commonwealth and State government education initiatives.
2. Government to work with Citrus Australia on behalf of industry, to develop a recognisable pathway for school leavers to enter agriculture, beginning with an apprenticeship in production horticulture which allows an unskilled worker the opportunity to train on the job.
3. Government to work with Citrus Australia to develop a long-term career engagement strategy to reintroduce Australia’s youth to the significance of horticulture in providing food for the nation and to the realities and opportunities of working in horticulture in the 21^st Agriculture and horticulture must become a ‘destination’ career.

Revision of the suitability of the basis for measuring skills for sponsorship

1. Citrus Australia calls for a review of the Australian and New Zealand Standard Classification of Occupations (ANZSCO) as the basis for measuring skills for sponsorship.
2. The Department of Home Affairs (DHA) must provide the following to ensure the pathway for skilled migration is relevant to the needs of Australian business owners in horticulture:
   • concise and efficient information and processes;
   • policies and standards that are logical, fair to both the employer and the employee, and guided by advice of the experts in skills assessment; and
   • departmental staff with a strong understanding of the migration system who can answer questions about visa requirements.

Access to a reliable source of low skilled workforce

1. Citrus Australia supports the announcement of the Australian Agriculture Visa and continues to work with government and industry in the development of this, to provide one solution to this long-term issue.
2. The Australian Agriculture Visa, whilst having rigour and protections for the worker, must also have flexibility to match industry’s needs, and access to workers must be achievable by a broad range of business sizes.

Minimise worker exploitation in horticulture 

1. Citrus Australia calls for a National Labour Hire License Authority and uniform labour hire licencing across all states and territories.
2. Citrus Australia calls for increased resourcing of the Fair Work Ombudsman, including additional offices in regional areas.
3. Citrus Australia calls for a review of laws that make an employer culpable despite evidence that a third party acted alone in exploiting a worker(s).
4. Citrus Australia calls for a review of penalties for worker exploitation offences.
5. Citrus Australia calls for a review of accommodation providers who act as intermediaries in supplying labour.

The Horticulture Award

1. Citrus Australia calls for a review of the change to the award which saw casual employees paid overtime.
2. Citrus Australia is supportive of the piece rate as a legal and ethical form of compensation for workers. Correctly calculated, the piece rate is a fair method of payment for both parties and offers motivation for efficiency and reward; it should not be modified, but enforced.
3. Citrus Australia is opposed to the changes to Working Holiday Maker superannuation.
4. Citrus Australia calls on the Federal Government to repeal the backpacker tax legislation entirely.

Regional accommodation shortage

1. Citrus Australia calls for the Australian Government to develop a stimulation package to increase available accommodation facilities in regional areas.

BACKGROUND

The following paragraphs provide background to the issues Citrus Australia has called for action on. These issues are raised with us by grower members nationally and resonate with many other horticulture peak industry bodies across the country with which we consult.

Action to improve pathways to accreditation in farming careers

There is a dearth of skilled and semi-skilled worker availability in Australia, at a time when agriculture employers are crying out for managers and supervisors across a range of job types. The agriculture industry has found it difficult to compete with other industries for new talent and many see jobs in horticulture as only picking and packing. There is a variety of other roles than need to be filled and the pathway to those roles is unclear, for students and parents of school leavers too.

Citrus Australia believes that career pathways need to be reinvigorated to showcase the importance of horticulture domestically and globally, and to highlight contemporary opportunities such as increased reliance on technology in farming and postharvest practice. Agricultural cadetships could produce opportunities for students to explore all areas of horticulture, learning about biosecurity, agrichemicals, marketing, exporting, robotics, mechanics, irrigation, growing and packing.

Issues:

Growers and packing shed operators nationwide advise that the job types most consistently difficult to recruit for include irrigation, fertigation, biosecurity, management, quality assurance, mechanics, and IT.

A school leaver interested in apprenticeships is likely to seek out roles that are identifiable and have a pathway to accreditation. Current Certificate IV in Horticulture training does not adequately address the need for on-the-job training that farming needs and it doesn’t provide a significant qualification or leave the graduate with a ‘trade’. Employers report that the quality of student improves if they are trained on the job, i.e. under an apprenticeship model.

Governments should empower industry to develop an education and skills strategy which addresses industry’s needs, and provide guidance to industry as to how, under its education policy, the strategy can be achieved. The education sector has had too great of an influence over the type of training meaning the objectives of both parties has drifted apart.

Young Australians have a negative view of industry based on what’s seen in the media. Higher Education Trends released by the Department of Education, Skills and Employment show that the domestic enrolment of students in ‘Agriculture Environment and Related Studies’ is lower than any other subject.  Whilst all other subjects have shown an upwards trend in the past 20 years, Agriculture shows a drop in enrolment of 20 per cent between 2001 and 2019.

Evidence suggests that a high percentage of Australian youth do not understand, nor have an interest, in horticulture as a career. The Developing Student Interest in the Agriculture Sector Final Report of 2017 shows that of senior high school students surveyed in Western Australia, 49 percent know ‘a little bit’ about agriculture careers, and 33 per cent know ‘nothing at all’. Students are not aware of opportunities that involve robotics, technology, engineering, sciences, and travel.

Revision of the suitability of the basis for measuring skills for sponsorship

It is time the Commonwealth reviewed its approach to skilled migration in the agriculture sector in recognition of the shortage of skilled staff and addressed the shortcomings in its processes.

Access to overseas skilled and semi-skilled workers has become a significant and important method to access staff in horticulture, due to the lack of skilled workers in Australia. Whilst the preferred long-term strategy is to reinvigorate horticulture as a destination career in Australia, in the short term, providing access to skilled workers from overseas is a priority to fill the gaps.

The Commonwealth government must review skilled worker sponsorship, so that it becomes a viable pathway, with common sense applied to processes including the onus on employers, the cost, the skills testing, and the time that the visa is valid, creating a worthwhile opportunity for overseas workers.

The Australian and New Zealand Skills Classification of Occupations (ANZSCO) is not a fit for purpose tool, having been developed by the ABS for the purpose of statistical classification. There are many flaws with the current approach to classification of skills and they largely come back to the ANZSCO and the inflexibility that is built into the statistical design. The ANZSCO has been difficult to apply in the measurement of skills for the Horticulture Industry Labour Agreement (HILA) and the Designated Area Migration Agreement (DAMA). Citrus Australia notes the positive outcomes achieved through negotiations for the HILA which allowed new occupations to be included, outside of the ANZSCO.

Issues:

The ANZSCO is not an appropriate tool for assessing skills when it comes to skilled migration. An occupation can only be added to the ANSZCO when 300-500 people list it as an occupation in the Australian Census. However, an occupation must be on the ANZSCO in order to sponsor an overseas worker. Some roles in agriculture may not have as many as 300-500 people occupied in the profession so the role does not appear on the ANZSCO. The rule contradicts itself. This affects all agricultural employment sponsorship opportunities, including use of the HILA and the DAMA.

Occupations on the ANZSCO that are not accurately described or placed in the correct skill category can make it difficult for the applicant to determine if (or prove that) they are suitable for the role. The ANZSCO classification and skill level may be too high and mean that the grower is unable to meet salary requirements of overqualified applicants for the role. Growers have advised that these inaccuracies have led to the applicants turning down the role once it is finally offered.

The process to sponsor a skilled worker from overseas comes at an initial cost of $25,000-$40,000 due to the use of Migration Lawyers. This is to cover not only the nomination, application and sponsorship fees, but the first year of the annual levy to the Skilling Australians Fund ($1,200 per year); a fund established by the Australian Government which supports the training of apprentices and trainees (though there are no traineeships or apprenticeships in horticulture).

The Horticulture Industry Labour Agreement (HILA) was negotiated by industry (with evidence from Citrus Australia) and announced by the Minister for Agriculture in January 2020. In the 18 months following, only one application was approved which is a further evidence the ANZSCO skills testing does not match the skills of the position the grower is trying to fill.

Access to a reliable source of low skilled workers

The Australian citrus industry requires a large and reliable seasonal workforce to harvest citrus each year, both in the orchard and in the packing shed. The peak picking season is from May to October in the southern parts of Australia, however different varieties planted in different regions create this type of work year-round. Workers should be fit, resilient and flexible, willing to relocate when necessary for job opportunities.

Industry requires low skilled workers who are interested in a career in citrus, ideally they would be Australian citizens who would be suitable for traineeships or apprenticeships. An introduction to the citrus industry is often through the harvest season. Many low skilled full time jobs roles can be learnt on the job and over time progress to more skilled  roles or roles with more responsibility, as well as study part-time under employers. This is an important succession plan for creating a skilled workforce in the citrus industry nationwide.

However, increasingly we have witnessed the short-term harvest work is completed by overseas workers, either via Working Holiday Visas or through the Pacific Australia Labour Mobility schemes.

Citrus Australia supports the announcement of the Agricultura Visa and continues to work with government and industry in the development of this, to provide one solution to this long-term issue.

Issues:

Australian citrus growers have had difficulties accessing reliable and resilient seasonal workers in recent years. Since March 2020, the number of Working Holiday Makers (WHM) in Australia reduced from approximately 210,000 to 30,000, and workers from the Seasonal Worker Programme (SWP) reduced from 12,000 to 6,000. This has created a significant labour shortage in Australia which has led to new challenges such as:

• Poaching of workers by unethical contractors and horticulturalists
• Absconding of unskilled migrant workers who believe they can get receive better pay elsewhere, or who want to live permanently in Australia with friends
• Tension between employers as workers move continuously with the offer of better pay
• Growers paying double or triple the normal pay rate
• Workers not adhering to workplace requirements in terms of COVID-19 safety, punctuality, reliability, completing tasks, as growers have no other replacement for them

The announcement of the JobKeeper payment scheme to support employees without work during the COVID-19 pandemic negatively impacted the workforce potential in the horticulture industry. It not only reduced the need for unemployed people to look for work, but industry also reported Australian workers in horticulture dropped tools and walked off farms immediately to receive the JobKeeper payment.

Inexperienced and unprepared workers tend to leave physical horticulture jobs after very short period of time. A high turnover of staff results in significant time taken away from managing the orchard, in order to provide training, inductions and supervision to a continual stream of new staff. Growers are frustrated that they cannot readily employ less skilled but enthusiastic and hardworking people from overseas and train them to fill these roles on an ongoing basis.

The Pacific Australia Labour Mobility (PALM) Scheme is a reliable source of labour for growers, however as an aid program, it comes with significant costs, burdensome administration, requires a long lead-time, extensive welfare, infrastructure, and provides strain on the employer, usually requiring an additional staff member to manage the process.

Whilst there are visas available to work in Australia in horticulture, there is an over-reliance on the Working Holiday Maker (WHM) Scheme. This is not a dedicated work visa, it is for a limited time (88 days), and it provides a workforce that is required to work rather than motivated to work in the sector; this results in high turnover and inefficiencies for producers. The impact of COVID-19 has resulted in a reduction of over 80 per cent of WHMs in Australia, just one year after the closure of international borders.

The Australian Government also approved significant changes to the WHM requirements for travellers from the United Kingdom (UK) in June 2021 when during free trade negotiations the Government altered visa conditions so that 88 days of work in horticulture would no longer be required for UK WHMs to earn their second-year visa.

Minimise worker exploitation in horticulture

It is widely accepted by industry and government that the risk of exploitation of workers is higher when unscrupulous labour hire companies acting alone or in conjunction with employers take advantage of vulnerable workers (i.e. they have limited English, have no work rights, are living on or below the poverty line).

Citrus Australia is calling for a National Labour Hire Licence Authority and uniform labour hire license laws across the country. Currently, some states have a labour hire licencing scheme whilst other’s do not. There are currently differences between the states licencing laws and differing levels of resourcing, compliance and enforcement of the licences. The National Labour Hire Licence Authority should review the appropriateness of accommodation providers holding labour hire licenses as this has been raised as a high-risk area by industry.

Inconsistencies between states and a lack of cohesion between the state and federal departments also impacts the effectiveness of the licenses. Many horticulture businesses operate in multiple states and these differences put the businesses at risk unnecessarily. In states which have licensing laws the onus is too high on growers who are held culpable even when there is evidence the contractor acted alone in exploiting a worker. Citrus Australia has called for a review of obligations on growers who have shown due diligence in ethical hiring.

Citrus Australia is calling for an increase in resourcing of the Fair Work Ombudsman (FWO). Currently there are reported to be long delays in the FWO’s ability to follow up issues as they are raised. This leaves workers vulnerable but also leaves industry vulnerable to unfounded claims by third parties with alternative agendas. FWO should have offices in regional areas to allow issues or disputes to be dealt with quickly. Growers have called for a review of the impact that current penalties have on employers to determine if they provide a strong enough deterrent.

Citrus Australia acknowledges the Modern Slavery Act (2018) and as industry leader has its own internal policy to prevent mistreatment of employees. Some citrus businesses meet the threshold for reporting Modern Slavery Statements.

Anyone employed in the Australian citrus industry has the right to a safe work environment, employers and contractors are legally obliged to pay workers using the relevant Award or Enterprise Agreement they are employed under.

The Horticulture Award

Casual overtime

In April 2019, the Horticulture Award was amended to incorporate overtime for casual workers. This has created recruitment, retention and rostering challenges for growers and packers across all regions in Australia.  In the past the seasonality of harvest provides opportunities for workers to relocate to regional areas for a short time with the incentive that there were opportunities to work long hours. With the introduction of a maximum of 304 hours per eight-week block, growers must now pay significant overtime at a rate of 175 per cent, in order to pick and pack fruit with efficiency to meet retailer deadlines.

The effect has been that growers now have to employ more workers to try to get the work done in a shorter period to avoid the overtime penalty because growers are known as ‘price takers’ in economics terms.  Price takers are unable to set the price paid for their product and must take what is offered to them by the marketplace, therefore increased costs such as higher labour cannot easily be passed on to the buyer. Feedback from growers has been consistent in that they are unable to recoup the cost of overtime.

To meet retailer deadlines, growers instead have tried to increase recruitment of employees; this has been extremely difficult since the onset of the COVID-19 pandemic and brings new challenges such as lack of accommodation and increased human resource and management requirements. Reducing hours has had the added effect of deterring workers who now cannot earn the income they once could under previous arrangements.

Sixty-two percent of horticulture growers surveyed nationally have lost casual workers due to the Award change; interest has waned as workers can no longer earn the same amount on restricted hours. The inability for two-thirds of industry to meet the Award requirements, is an indication that these changes are not suitable to the industry of horticulture.

Citrus Australia’s call for a review of the change to the award is to allow the FWO to assess if a longer period, such as 12 weeks could be used to average the hours worked in the harvest period.

Piece rate

In 2019, Australia had the third highest minimum wage in the world, with Australia’s average wage 30 per cent higher than the world average.  In Citrus Australia’s view, when correctly calculated and applied the piece rate is an efficient and fair method for paying seasonal workers to pick citrus.  It acts as an incentive for workers to improve, it provides opportunity for efficient workers to earn much more than the hourly rate. The piece rate as the advantage that it saves on costs for the grower if workers are inefficient in an environment where efficiency matters due to the life span/cycle of fresh produce. In our view, the answer to preventing exploitation of the piece rate is effective compliance and enforcement of already existing laws, as well as education of workers on what to expect in a workplace.  As long as there are growers and contractors willing to act unethically, and workers willing to accept these standards, exploitation will continue in all forms of award rate until the laws are enforced.

Superannuation and Tax

Superannuation for backpackers on the Working Holiday Maker (WHM) visa is an unnecessary impost on the WHM and the employer. Since the superannuation threshold for casual workers of $450 per month was removed in 2021, and superannuation raised to 10 per cent, an increased amount of super must be paid out by growers. If WHMs must be paid superannuation, they should have the ability to access their superannuation whilst in Australia, providing opportunity to return it the Australian economy. The current situation whereby the Australian Government taxes their superannuation by 65 per cent is unacceptable because they are a deterrent for WHM when compared to other countries with similar work rights for holiday visa holders. This is an additional cst borne by the grower which ultimately 35 per cent is lost the WHMs home nation, and 65 per cent to the Australian Government.  Citrus Australia does not support growers paying superannuation to WHMs, unless this money can be put back into Australia’s economy by WHMs whilst still in Australia, rather than taken by the Australian Government.

In early 2017, the ‘backpacker tax’ was announced whereby, unlike Australians, WHMs are taxed at 15 per cent from the first dollar until $37,000 earned in the financial year.  Citrus Australia calls on the Federal Government to repeal the backpacker tax legislation entirely which is viewed by WHMs and growers as a deterrent to working in horticulture in Australia; WHMs from Europe can also choose to work in Canada or New Zealand under the same program.

Regional accommodation shortage

There is a severe lack of appropriate accommodation in many citrus (and other horticulture) growing regions across Australia. As the transition from reliance on WHM who travelled with their own accommodation to a workforce made up of Australian Agriculture Visas holders there needs to be a rapid ramping up of available accommodation.

The Commonwealth and State/Territory Governments must develop a stimulus package that enables private investment in a wide range of accommodation types, including on farm, hostels in towns and short-term rental properties.

Issues:

Many hostels are no longer available as purely accommodation, and instead insert themselves as the conduit between horticulture businesses and itinerant workers, often leading to exploitation of workers.

There are ongoing difficulties between some State Government and Local Governments, whereby legislation does not appear to align making the construction or establishment of seasonal worker accommodation on farms almost impossible.

The standards of accommodation for the Seasonal Worker Programme as so high, and so inflexible, that many growers cannot access the program, nor can contractors, as there is no suitable accommodation within travelling distance of orchards.

Regional centres report high occupancy rates in rental markets and severe shortage of stock.

Resources

Citrus Australia has composed a Members’ Guide to Farm Labour in Australia, to provide guidance on how to source labour, how to pay workers correctly and how to ensure their safety amongst many other things.

Citrus Australia has also compiled a comparison of visas currently available for growers to sponsor workers, as of February 2020.

Visit our LABOUR section for members, to view the above documents, along with our other resources.

Citrus Australia’s recent news on Labour

1 October 2021 – Citrus Australia commends government for Australian Agriculture Visa

23 August 2021 – Citrus Australia welcomes new Agriculture Visa

28 July 2021 – Prime Minister must deliver agriculture visa this year