Hundreds of mushroom pickers allegedly shortchanged $650k

A national inquiry into workplace practices in the horticulture industry has uncovered the alleged underpayment of hundreds of pickers on a Queensland mushroom farm.

The employees were allegedly short-changed almost $650,000 over eight months.

The Fair Work Ombudsman announced it is taking unprecedented legal action in relation to the underpayment of mushroom farm workers at Stapylton, south of Brisbane. The Agency is testing workplace laws relating to piece rates.

For the first time, the Fair Work Ombudsman is alleging that agreements on piece rates did not take effect because the pickers were unable to earn a sufficient wage.

Facing the Federal Court is the former owner-operator of labour-hire company HRS Country Pty Ltd, Ms Tao Hu. The company went into liquidation earlier this year. Also facing Court is Mr Troy Marland and his company, Marland Mushrooms Qld Pty Ltd.

Marland is a Director of the Australian Mushroom Growers’ Association, and his farm supplies produce to major retailers.

The Fair Work Ombudsman alleges it provided Hu and Marland advice about minimum entitlements on piece rates in February 2014, after the Agency looked into a request for assistance from a worker who claimed underpayment.

The Fair Work Ombudsman’s investigation was part of its national Harvest Trail Inquiry aimed at improving compliance with workplace laws in the horticulture industry.

Some 406 workers on the Marland Mushrooms farm, including a number of overseas workers, were collectively underpaid a total of $646,711 between 1 January and 31 August 2014. The workers were employed by Hu’s company that supplied labour for Marland Mushrooms. Workers were allegedly being paid piece rates of between $0.60 and $0.80 a kilogram.

Under the Horticulture Award, pickers can lawfully get piece rates provided an average competent picker earns at least 15% above relevant minimum hourly rate under the award.

The Fair Work Ombudsman alleges its investigation discovered that because piece rates for HRS Country-employed pickers at the Marland Mushrooms farm were set so low at that time, the pickers only got 15% more than the Award rate on only about 3% of all days they worked.

At the relevant time in 2014, the minimum wage for an average competent adult casual pieceworker under the award was between $21.09 and $22.86 – but inspectors allegedly found the piece rates paid to the pickers resulted in them receiving substantially less than the average hourly rates.

The Fair Work Ombudsman alleges that because the workers’ piece-work agreements did not allow the average competent picker to earn the minimum hourly rate under the award, the piece-work agreements did not take effect.

It is alleged the workers were therefore entitled to have been paid the minimum award rate, plus a casual loading.

Fair Work Ombudsman Ms Natalie James says a key factor in the decision to commence legal action was that Hu and Marland failed to take any meaningful steps to ensure pickers’ minimum lawful entitlements were being met after Fair Work inspectors educated them in February 2014.

“The allegedly large-scale underpayment is also a concerning feature of this case,” James said.

Both business owners face maximum penalties of up to $10,200 per contravention, while Marland Mushrooms Qld Pty Ltd faces penalties of up to $51,000 per contravention.

“This case involves us testing laws relating to piece rates by alleging in Court, for the first time, that piece rates paid to a group of pickers were unlawful because they were so low.”

“We hope this legal action will result in greater clarity for employers in relation to their obligation. While many employers want to do the right thing, there are some who seek to gain a competitive advantage by exploiting vulnerable workers, such as visa-holders,” she said.

Inside Small Business