LAST year, Michael Cunial had a young Estonian couple working in his apple and cherry orchards near Orange in the Central Tablelands. “They stayed four months and during that time, they made enough money for a deposit on a flat in their capital city, Tallinn,” he marvels. “They told me they were each earning more than a doctor would at home. They worked hard.”
Calculating accurate piece rate helps retain good pickers
Michael, like most horticulturalists, pays pickers a piece rate and reckons his best earn $300 a day. He’s built himself a good reputation and has plenty of travellers wanting to work for him.
To calculate payment, Michael uses NSW Farmers’ guidelines, contracts and templates, calculating a rate that allows the average competent picker to earn at least 15% more than the relevant minimum hourly rate under the Horticulture Award.
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To calculate his average, Michael does a regular check, working out how much fruit has been picked then dividing it between the number of pickers. “We up the rate if there’s not good picking and drop it a little bit if it’s really good,” he says.
Pickers who either can’t or won’t learn to pick efficiently have to leave. “If they’re bringing in three buckets a day when everyone else is picking five, the average drops,” says Michael. “You end up working for the people working for you!” He reckons you can’t get fairer than telling workers, “You pick this and I’ll pay that”. As far as he can see, the only downside is it can lead some pickers to rush and spoil fruit.
Court troubles for labour hire companies
Recently, however, a couple of labour hire companies have ended up in court. As a result there has been media, union and legal focus on piece rates. NSW Farmers’ workplace relations manager Gracia Kusuma says this means it’s important to ensure agreements are in writing, award-compliant and take into account changing conditions that could affect workers’ output.
NSW Farmers Workplace relations manager, Gracia Kusuma. Photo by: Nick Cubbin.
Last October, labour hire company HRS Country Pty Ltd was prosecuted by the Fair Work Ombudsman (FWO) for allegedly underpaying more than 400 mushroom pickers by $646,000 over eight months in 2014. “The piece rates of 60c-80c per kilogram were found too low for workers to earn minimum wage under the Horticultural Award,” explains Gracia.
HRS Country admitted the breach but went into liquidation before the case reached court. Allegations of accessorial liability against the owner of the mushroom farm were dismissed. It was found he was unaware of the underpayments, although the FWO is appealing this decision.
In his judgement, handed down in July, Justice Rangiah provided guidance on the relevant considerations for setting piece rates:
- An average competent person should be distinguished from a proficient expert one – pickers are generally level 1 or 2 (see below).
- Assessment of the average worker has to be made in context of the rest of the workforce available.
- Both personal and external factors matter. Personal factors include diligence, aptitude and experience. External factors include harvest quantity, produce size, growing conditions and equipment provided.
How farmers can calculate an appropriate piece rate
“So if you’re picking early in the season and the fruits are not all ripe, the picking rate would be slower because you’d have to look, select and pick. That means a higher piece rate is warranted,” explains Gracia.
“Farmers can use last year’s output as a guideline or they can select a couple of experienced workers and set a base rate from what they pick. Alternatively, for the first week, they can pay an hourly rate then use that as a base to determine the piece work rate.”
“The important thing is that if the piece work rate is queried, farmers are able to show what they’ve done to determine average competent pick rate.”
“Based on that pick rate the person should be able to earn at least 15% more than the award-prescribed hourly rate,” says Gracia.
Under the Wine Industry Award, a piece work rate needs to enable an average competent worker to earn at least 20% more than the relevant minimum hourly rate.
NSW Farmers has been watching another landmark case by workers from Vanuatu against labour hire company Agri Labour Australia. The workers, brought to Australia under the Seasonal Worker Programme, were claiming $10 million, using higher penalties introduced to protect vulnerable workers, and alleging they were paid piece rates that were too low and unlawful deductions were made from their pay. In October, Agri Labour reached an out-of-court settlement with the five workers, paying them a combined $150,000 – more than twice the amount of their alleged underpayments.
Orchardist Michael Cunial is unimpressed with anyone who doesn’t treat workers well. Both the backpackers and Seasonal Worker Programme pickers he uses on his farm have a good work ethic and he’s happy to employ and pay them accordingly. “I just wish the media would realise that and focus on the good stories for a change,” he says.