Farmers have had a win in a landmark court battle run by the National Farmers’ Federation (NFF) and financed by the Australian Farmers Fighting Fund (AFFF), in regards to the use of piece rates in the horticulture sector.
Piece rates are a system by which employees are paid on the basis of the amount of work completed, such as kilograms of fruit or vegetables picked.
They have been used in horticulture for many years to reward workers who have become particularly proficient at certain tasks or complete those tasks more efficiently.
Since 2017, the NFF, with the backing of the AFFF (a charitable organisation run for the benefit of all Australian farmers) has represented the horticultural sector’s interests in the matter of Fair Work Ombudsman (FWO) v Tao Hu & Ors (also referred to as the Marland Mushrooms case).
The FWO charged Marland Mushrooms’ owners for breaching the Fair Work Act and alleged the labour-hire company it was using had significantly underpaid workers contracted at the farm.
The NFF, with the financial support of the AFFF, intervened because it believed the case was “fundamentally defective” and the challenge threatened the widely-used payment system of piece rates.
The current award provides that rates must be set in such a way that the average, competent worker will earn at least 15 per cent more than if they were paid at the hourly minimum wage for the same amount of work.
When they’re managed the way they should be, piece rates benefit both employers and employees because they encourage workers to earn considerably more than they would if they were paid on an hourly basis,”National Farmers’ Federation General Manager, Workforce Relations, Ben Rogers
In the initial proceedings in June 2018, the FWO argued that when an employee does not earn 15 per cent more the payment defaults to the hourly rate. In the appeal, the court ruled that the original decision was wrong.
The NFF believes this would make the piece rates system almost inoperable and unfair to both employers and employees.
“While the ramifications of the majority judgement are still being determined, the dismissal of the appeal is a big victory for hard-working Australians in horticulture.”