But migrant workers such as Cong receive nothing. More than 900,000 temporary migrants in Australia with work rights are excluded from the FEG, despite repeated calls that they are among the most vulnerable workers in Australia, at significant risk of exploitation by companies going into liquidation, and should be protected.
Matt Kunkel, the director of the Migrant Workers Centre told the Guardian some companies that employed large numbers of migrants were deliberately using liquidation as a tactic to avoid paying entitlements, or forcing workers into accepting smaller settlements. He said measures to counter phoenix companies – companies created “from the ashes” of another, taking over the business of a company that has been deliberately liquidated to avoid paying its debts – were not working.
“There is no accountability for employers who can shut up shop and open up again the following day with a new name, wiping away tens or hundreds of thousands of dollars of worker entitlements. When caught underpaying staff, some employers have expressly threatened to go into liquidation as a tactic to force workers to accept a smaller settlement. This move is only available to employers because temporary migrant workers have no access to the FEG scheme to recover their unpaid entitlements.” Kunkel told the Guardian the Migrant Workers Centre had seen dozens of cases of migrant workers left with nothing by a liquidated company. “It is not unusual for individual claims to mount into the tens of thousands of dollars if they have a long period of service.”
Migrant workers, often vulnerable already, face the threat of homelessness, relying on charity to feed their families, or being driven into the black economy to survive, Kunkel told the Guardian. The Migrant Workers Centre has seen liquidations across industries, but particularly in those where the rates of migrant employees are high, such as hospitality, construction, labour hire, meat processing and waste recycling.
In March this year, the Migrant Workers Taskforce headed by former ACCC boss Prof Alan Fels recommended the FEG be extended to cover migrant workers, or an equivalent scheme established to protect them. The taskforce found it was “inequitable for migrant workers … to be treated differently to Australian citizens”.
“As taxpayers, they contribute to the cost of the Fair Entitlement Guarantee.”
The taskforce heard extending the FEG to migrant workers would cost about $20m, but that “these costs would be reduced, however, the more successful the government is in dealing with phoenix traders”.
The government accepted ‘in principle’ all 22 recommendations from the taskforce, saying “these workers have been doing the right thing by satisfying their taxation obligations, the government considers it reasonable that they, in turn, be protected by the FEG program”.
However, six months on, the government has not yet begun consultation on the issue.
Adjunct fellow at Swinburne University’s Centre for Urban Transitions, Peter Mares, said the continued exclusion of temporary migrant workers from the FEG was “unconscionable”. He estimates more than 900,000 migrant workers in Australia are potentially excluded from the FEG.
“The principle of the FEG is that a worker, who, through no fault of their own, loses out on an entitlement when a company goes bust, should be protected. There is no reason why a temporary migrant worker should be treated differently to a citizen or permanent resident. They have suffered the same loss...This is an example of what happens when you’re not represented, when you don’t have a political voice. Migrant workers are less likely to be represented by a trade union, at an even more basic democratic level you’re simply not represented, you don’t have a vote, you don’t have a local member. Your interests are going to count less.”
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