Fair Work Ombudsman appeals ruling rejecting bid to hold mushroom supplier liable for underpayment of workers

Fair Work Ombudsman appeals a court decision rejecting its bid to hold a mushroom supplier liable for the $650,000 underpayment of workers.

Fair Work inspectors found 406 workers on the Marland Mushrooms farm, including a number of overseas workers, were collectively underpaid a total of $646,711.

The Fair Work Ombudsman has appealed a Federal Court decision rejecting its bid to hold a Queensland mushroom supplier liable for the $650,000 underpayment of hundreds of workers.

The ombudsman argued unsuccessfully that Troy Marland and Marland Mushrooms were involved as accessories in the alleged underpayment of pickers by labour hire company, HRS Country.

HRS Country, which was contracted to supply labour for Marland Mushrooms, went into liquidation before the ombudsman launched the court action. Workers are still owed the money.

Instead of an hourly rate, the workers were paid a piece rate, a rate for the amount picked, of 60 to 80 cents per kilogram of mushrooms. To earn the required rate, the workers had to pick about 29.5 kilograms of mushrooms per hour.

Given Mr Marland told Fair Work inspectors the employees picked between 25 and 30 kilograms an hour, the Federal Court said it was not satisfied he knew the piecework rate was not high enough.

While the court dismissed the ombudsman’s allegations that Marland Mushrooms and Mr Marland were involved as accessories, claims against Tao Hu, the former owner-operator of HRS Country, remain before the court.

In its notice of appeal, the ombudsman said judge Darryl Rangiah erred in determining that HRS Country only contravened the Fair Work Act at the point in time when the piecework agreement was made with the employees.

It said the judge erred in failing to find that the act was being contravened while the pickers continued to be paid inadequate piecework rates.

The ombudsman said Marland Mushrooms and Mr Marland knew the pickers were casuals. It said the judge also erred in failing to adequately draw adverse inferences from the failure of Mr Marland to give evidence

Fair Work inspectors found 406 workers on the Marland Mushrooms farm, including a number of overseas workers, were collectively underpaid a total of $646,711 between January 1 and August 31, 2014.

Under the Horticulture award, pickers can lawfully be paid piece rates, rather than an hourly rate, but the piece rates paid must allow an average competent picker to earn at least 15 per cent more than the relevant minimum hourly rate under the Award.

This proceedings are a test case as the ombudsman, for the first time, alleged in court that piece rates paid to a group of pickers were unlawful because they were so low it was almost impossible for them to earn a sufficient wage.

The agency believes too many employers are using piece rates to get away with paying vulnerable overseas workers very low wages for picking fruit and vegetables on Australian farms, regardless of how competent or hard-working the pickers are.