No employer operates in a silo – all employers operate in complex systems of interrelated stakeholders including employees, customers, other businesses, and regulators who enforce the laws that apply to the employer and their business.
The actions of employers, therefore, have consequences for those stakeholders. Even decisions that on the surface appear only to concern two parties – the employer and the employee – can have ripple effects on the others.
For example, the conduct of a high-profile hospitality employer in underpaying employees can mar the industry’s reputation and reinforce public perception that it is an industry with poor working conditions. The result may be that customers are reluctant to visit the employer’s establishment and workers may be less likely to seek work in the hospitality industry. The underpayment of wages also has a detrimental impact on competition – an employer who underpays employees has an unlawful competitive advantage in the market.
Usually, the rectification of employment-related issues, like systemic underpayment, is the exclusive domain of regulators such as the Fair Work Ombudsman (FWO). However, a recent article published in the UNSW Law Journal by Stephen Clibborn has shone a light on the influence that other “civil society stakeholders” can play in the improvement of employment standards.¹
Clibborn conducted research in a farming region of Queensland where backpackers looking to extend their working holiday visas would seek farming work.
The region had experienced reputational damage as a result of a number of incidents and media reports. In particular, it was reported that backpackers working in the region were being underpaid and felt they had no recourse because they relied on their employer to certify the time that they spent working in order to stay in Australia. It was also reported that backpackers had been sexually harassed at work in the region and that living conditions, which in many cases were directly connected to work, were overcrowded and unsafe.
The farms of the region relied on the backpackers to meet their labour needs on a seasonal basis. The influx of seasonal workers also improved business for other stakeholders in the region, including accommodation providers, the local supermarkets and recruitment service providers.
The reputational damage suffered as a result of the reports of underpayment, sexual harassment and unsafe accommodation meant that backpackers were less likely to take up seasonal work in the region and hence the community as a whole suffered – the farmers were unable to properly staff their operations during harvest times and the other local businesses experienced a downturn in trade.
To turn the situation around, a number of stakeholders took matters into their own hands to improve the working conditions of the backpackers, having identified the alignment of their interests.
A local harvest recruitment office manager positioned herself as an informal ‘gatekeeper’. She would not provide workers to farms that she considered to be ‘bad’ employers, she provided workers with information about how to report underpayment and sexual harassment, she connected workers directly with the FWO or the Anti-Discrimination Commissioner and she kept a stock of report forms in her office so that workers were able to make reports as soon as they raised issues with her. She also made some reports about farms directly to regulators.
The owners of a local caravan park, who provided accommodation to backpackers, also provided recommendations to workers about reputable employers, as well as buses to transport the backpackers to and from those farms they considered to be good employers.
A local council employee, with no direct responsibility for employment standards within the region, organised welcome barbecues for new backpackers where they had access to information about employment conditions in Australia. The council employee also organised a forum for local stakeholders to come together to address the issues associated with seasonal workers in their community.
The overall effect of the actions of the civil society stakeholders was an improvement in compliance with employment standards in the region, without any formal intervention from a regulator.
What are the lessons?
Employers should be aware that non-compliance can have wider impacts than merely a deterioration of the employment relationship between the employer and the employee. The wider community that an employer operates within can feel the impacts of non-compliance with workplace laws acutely.
Where community stakeholders who are not directly involved in the employment relationship are roused to action, their efforts to redirect business or potential employees away from a non-compliant employer can be highly effective.
In short, compliant employers not only avoid prosecution or enforcement action from regulators, they also retain the best talent and have the support of those other businesses around them.
Employers, and others in their community, shouldn’t wait for the regulator to come knocking before taking steps to improve their employment practices. There are ways for businesses to collectively lift their standards and be the change for the better.
¹Stephen Clibborn, ‘It Takes a Village: Civil Society Regulation of Employment Standards for Temporary Migrant Workers in Australian Horticulture’ (2019) 42(1) University of New South Wales Law Journal 242.
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