Prime Minister Malcolm Turnbull is in India attempting — inter alia — to turn around our falling education exports to that country. One effective means might be to better address the impact of the apparent epidemic of wage underpayment in Australia on international students.

Primarily through the hard work of Fairfax’s Adele Ferguson, the extent of underpayment in the franchise sector has been slowly exposed: first at 7-Eleven in 2015, Caltex in 2016, and pizza chains Dominos and Pizza Hut earlier this year, then petrol retailer United Petroleum, where 40% of stores were said to be underpaying staff. Last year, Baker’s Delight was also revealed to be relying on an old agreement to pay workers less than modern award requirements. 

But it’s a problem far beyond franchisees. Exploitation of students is widespread across industries. Foreign workers are exploited and underpaid — sometimes not paid at all — in agriculture; agricultural labour hire firms have been known to vanish to avoid paying workers. Coles and the right-wing retail union SDA were complicit in workplace agreements that resulted in workers being underpaid. Food delivery company Deliveroo might have engaged in sham contracting to avoid paying its delivery staff properly. The company of reality TV figure George Calombaris underpaid its staff millions

[Keane: minimum wage rise wasted on women, says government]

These are in addition to numerous cases of small and medium employers being found by the Fair Work Ombudsman (FWO) to have underpaid workers. It’s noteworthy that some of the worst offenders for underpayment come from retail, where employers have successfully demanded cuts to Sunday and public holiday penalty rates for their staff. 

In March, the federal government finally introduced a bill to hold franchisors responsible when they know franchisees are likely to break the law and failed to prevent it, and to give the FWO greater powers to gather evidence; a Senate committee report on the bill is due in the week of the budget; there are reports the franchise industry is lobbying hard to kill it.

There’s a recurring feature in the revelations of underpayment: international students. In cases such as 7-Eleven, Caltex and United Petroleum, foreign students are a significant group of, or sometimes the dominant, victims of employers underpaying wages. The 7-Eleven franchisees also ripped off 457 visa workers, with reports of franchisees operating “visa factories” for foreign workers who would be paid below award rates.

Unions have been warning of both the exploitation of foreign workers and students and their utility for employers in undercutting wages for years. The much-maligned CFMEU, for example, has long warned about foreign students and 457 visa holders being used in sham contracting arrangements on building sites, leading to safety concerns. Those concerns appear to have been borne out by a confidential report by Safe Work Australia (SWA) that identified higher rates of workplace injury and fatalities for foreign workers in riskier occupations such as construction, agricultural work and food processing. SWA’s work was stymied, it said, by the lack of information-sharing between jurisdictions about 457 visa holders and other workers, preventing accurate data collection.

[Underpayment of migrant workers goes far beyond 7-Eleven: ex-ACCC head]

It’s also hard to know the extent to which student visa holders are being ripped off; all we know is that time and again they recur in stories of employers ripping off their workers. They are a group ripe for exploitation — young workers are already vulnerable in workplaces, but international students often also have poor English skills, work casually, are working in a foreign culture, often without an understanding of their rights, and are vulnerable to claims they have breached their visa conditions (which limit them to 20 hours a week paid work). 

And exploitation of them is, in the long term, bad for Australia — it means they leave our shores embittered by their experience here. Indian students have had a recurring role in underpayment, particularly by 7-Eleven franchisees; such experiences are not going to help Australia recover its reputation in that country, lost when a series of attacks took place against Indians living here several years ago.

There’s an Overseas Students Ombudsman to help international students with problems with education providers. Student unions at larger institutions also offer legal and support services for students, whether international or domestic, who need assistance in employment, accommodation and so on — but smaller institutions and vocational education institutions tend not to have these. And the federal government does provide funding to legal centres (for example, the Redfern Legal Centre in Sydney) to help international students. However, there’s no central agency for assisting with, or even simply maintaining data on, international students with industrial relations issues — especially bearing in mind many international students don’t know their rights or are afraid of having their visas cancelled if they report mistreatment in the workplace.

Given the vulnerabilities of international students, tougher laws for franchisors and franchisees are unlikely to stem the constant stories of young foreign students being ripped off — or worse.

Peter Fray

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