Legislation passed last week in federal parliament touted as providing national protections for outworkers and sweatshop workers in the textile, clothing and footwear industry threatens to destroy what’s left of the local clothing manufacturing industry.

Although noble in cause, the Fair Work Amendment (Textile, Clothing and Footwear Industry) Bill 2011 passed last week by the Labor government with the help of the Greens and independents means that any person now working from home cannot act as an independent contractor. They must be treated (at the very least) as a permanent, part-time employee with a minimum of 20 hours per week of guaranteed work.

The Textile Clothing and Footwear Union of Australia pushed for this, saying that in the past sham contractor agreements meant that instead of the Awards rate (which independent contractors had to convert their invoices into to show that they were applying the award), outworkers were often getting paid as little as $3-4 an hour.

To back this assertion, the TCFUA (as well as dozens of human rights organisations, church groups and labour academics) used out-of-date research papers to back this $3-4 an hour claim in submissions to the Senate review of the legislation. However the union, which takes dozens of companies to court each year for award breeches, did not produce one example of a case where they had successfully proved anything like this is occurring.

To give you an idea of the absurdity of the claims, China is now claiming an hourly minimum wage in clothing manufacturing of around $2 an hour. If outworker labour is available in Australia for $3-4 an hour, why is around 95% of clothing manufacturing done offshore? This question was never raised at the Senate review — mainly because the only industry organisation (the Council of Textile Clothing and Footwear Industries of Australia) to challenge the assertion was drowned out in the Senate review process and shut out of public hearings.

Why did the union push so hard for this? TCFUA president Michelle O’Neil told me last year she wants local manufacturers to use machinists in factories (of which there are very few left) rather than homes. Her reasoning is that it is easier to monitor that the award and conditions are being met in the circumstance. She forgets to point out it also makes it easier to unionise the workforce (only 6000 of the estimated 40,000 workers in the sector are union members — and membership has dropped by almost 50% over the past few years.

There are two ironies in their pursuit of the end of exploitation in the industry. Firstly, that this legislation will take work away from the outworkers they are trying to protect (due to the cyclical nature of the industry makers can’t guarantee 20 hours minimum ongoing). These are mainly women (most often Vietnamese) who can’t or don’t want to work in a factory situation. They have families and outwork gives them the flexibility of working from home.

And secondly, the argument that this legislation will stop sweatshop labour is true in Australia, but it will also send the work overseas. It will go to Fiji, China, Bangladesh, etc. I bet the factory workers (and outworkers) in these countries would give their left arm for the working conditions of even the so-called “exploited” workers in the Australian industry.

Everything I have written here is supported by industry testimonials from the corporations at the top, to the actual outworkers themselves.

There is an added kicker to this disastrous legislation: the laws apply to anyone who conducts their business from home and as such catches dressmakers, alterations services, fashion graduates, patternmakers, freelance textile designers, even home ironing services. All of these people have had their business model shut overnight. Most of them don’t realise it yet. Some are now desperately trying to fight back.

So what? People can just get clothing made overseas, life will go on. But aside from the 40,000 jobs at risk and the $6 billion industry adds to the economy, the local fashion sector is at threat as young emerging designers rely on local production to get their start. Whether it is sampling, patternmaking or short runs (China doesn’t want to know you unless you have three zeros after your order size), no emerging designer can afford to guarantee 20 hours of ongoing work to one outworker, let alone the several they require to create a range.

Big name companies and designers such as Country Road, Billabong, Carla Zampatti, Sass and Bide, Dion Lee, Alannah Hill and Lisa Ho started as home businesses. This new legislation all but ensures that such success stories are never to be repeated.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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