Foreign Workers Being Exploited in the Minimum Wages in Australia

This article discusses the exploitation of foreign workers in Australia, including insufficient wages, long hours, and lack of safety in the workplace. The article also explores the impact of this exploitation on the workforce and what can be done to prevent it. The research question for this research includes “why are foreign workers being exploited in the minimum wages in Australia?”

Running head: AUSTRALIAN INDUSTRIAL RELATIONS
Foreign Workers Being Exploited in the Minimum Wages in Australia
Name of the Student
Name of the University
Author note

1AUSTRALIAN INDUSTRIAL RELATIONS
Introduction
Exploitation of workers can be defined as the action of treating an employee in an
unfairly and unethical way in order to obtain additional benefit from them for which they are not
being appointed and paid. Unsatisfactory compensation, excessive workload due to unscheduled
work and workplace discrimination all falls under the term Workers exploitation. Exploitation
also implies that it is not voluntary but is preferably achieved through pressure, threat and act of
violence by the workers. In Australia, exploitation of foreign workers by wages has got increased
in a commendable level in the past decade. Migrant workers are treated like slaves by a good
number of organisations in the mentioned nation. Organisations even disagree to practice
internationally agreed labour rights when it comes to foreign workers. The major exploitations
performed on immigrant workers in Australia includes obtaining insufficient wages, working
long hours, the absence of standard safety in the workplace, insecure employment, sexual
harassment as well a discrimination and lack of verbal freedom. These unethical acts are
imposing a negative impact on the workforce of Australian organisation and as a result,
employee attrition rate and conflict within the organisations have increased to a commendable
amount of time. The research question for this research includes “why are foreign workers
being exploited in the minimum wages in Australia?” Considering the fact that qualitative
data analysis will b performed in order to conduct the research, the scope of the research includes
in-depth analysis of the research topic with the help of relevant literature as well as theories.
However, one of the major constraints of the research is the lack of primary data which could
have enhanced the authenticity and validation of the research to a great extent. Exploitation of
foreign workers is a burning issue in Australia and this act is imposing a huge negative impact on
both the reputation as well as the revenue of the organization. Hence this research will help the

2AUSTRALIAN INDUSTRIAL RELATIONS
management of the organization which acts are causing employee exploitation and how these
acts are adversely affecting the company in the long run.
Discussion
Body part 1
In this portion, a brief description of the theory, as well as literature use in order to
answer the research question, has been discussed. According to the exploitation theory of
sociology, exploitation takes place when one social group posses the ability to take for itself
what is produced by another group. The mentioned socialist theory is from Marxist perspective
and the concept is central to the idea of social operation. According to this theory, profit of the
industrialists and the employers results from the exploitation of the wage earners. The socialist
theory also known as the exploitation theory rests on the labour theory of value that claims that
value is intrinsic in a product with respect to the amount of labor that has been spent on
manufacturing the product (Fuchs 2012). Thus the worth of a product is created by the labours
who have manufactured the same and reflects its finished price. The profit obtained from selling
the product should ideally be divided among the workers and the employer. This theory includes
both economic as well as non-economic forms like sexual exploitation of women. The mentioned
theory is highly relatable to the research topic since it states that the wages received by the
worker do not demonstrate the employers take the full value of the work since some of the
economic value. The socialist theory states that taking away a majority of the value created by
the workers by the employers are known as capitalist exploitation (Tomba 2014). The theory of
Eugen Von Bohm-Bawerk has highly argued this theory. He argues that instead of exploiting

3AUSTRALIAN INDUSTRIAL RELATIONS
workers, capitalists actually help the same to earn by providing them with job and salary in
advance of the revenue from the goods produced by them.
According to Larrain (2013), “Labour cannot increase its share at the expense of capital.”
The capitalist theory argues that the theory of exploitation has ignored the dimension of time in
the process of production. As per the theory of Bohm-Bawerk, since the workers do not produce
the whole value of production, the labour should only be paid at the present value of any
foreseeable output. According to (Watson 2013), The Australian labour-hire companies are
highly exploiting vulnerable workers in order to reduce their investment cost and thus enhance
their revenue. All over Australia, labour-hire organizations are hiring mainly casual as well as
temporary workers on behalf of big companies. Majority of the casual and temporary workers
are migrants and foreigners. According to the Fair Work Commission, a casual worker is defined
as an employee who is not liable for providing service to the company at regular working hours.
The company, on the other hand, posses the authority to terminate a casual worker without any
prior notice. However, in Australia, casual workers are made to work more than their stipulate
work period. Excessive work pressure not only destroys their work-life balance but also results
in stress, anxiety and other physical and physiological diseases.
Body part 2
In this paragraph, the critical evolution of the theories and literature discussed in the
previous section will be performed. According to researchers, the theory of sociology points out
the discrimination faced by the workers from time immemorial. The exploitation theory, also
known as the theory of labours assets that the institution of private property allows the fewer
number of privileged to reap off the benefit of the labours without contributing anything on the

4AUSTRALIAN INDUSTRIAL RELATIONS
basis of effort, labour or ability. Here the term “ privileged few” has been referred to the
industrialists, capitalists an landowners (Harrod and O'Brien 2012). One of the major strengths of
this theory includes its intention to create a system of equality. The theory emphasises on human
rights along with equal gender role, healthcare as well as access to education. The followers of
the theory of labours believe that the industrialist should keep a minimum amount of the profit
and labours should be paid the majority portion of the same since they are responsible for the
production of the product or services. Underpayment of labours is considered to be one of the
most crucial topics that the socialist theory and the exploitation theory deals with. Several
examples of employee exploitation an underpayment can be pointed out when it comes to
Australia (Robinson 2012). Especially when it comes to foreign workers, the degree of
exploitation on the basis of the underpayment is even more. One of the major examples of
exploitation of the foreign worker is the 7 eleven wage scandal. Seven Eleven is a recognized
Australian company which has obtained several negative publicity.
In Australia, the seven eleven workers are given profoundly low amount of remuneration
and are threatened by the supervisors to be deported or terminated if being asked to enhance the
wage. The hourly wage that was paid to the 7 eleven workers is as less as 24.50 dollars
(Anderson and Shutes 2014). When it comes to the migrant labour, the exploitation is even more.
According to researchers, the chief reason behind this is the dependence of the migrant labour on
visas. In 2015 August, The ABC's Four Corners, as well as the Fairfax Media, found out about
the employment rules of certain 7 eleven stores located at Australia. They found out that a good
number of the employees working at 7 eleven were being paid from 10 Australian dollars to 14
Australian dollars per hours without adding tax whereas as per the Australian regulation, an
employee should be paid a minimum wage of 24.69 dollars per hours (Petri 2012). The worst

5AUSTRALIAN INDUSTRIAL RELATIONS
part of the scandal is that the management maintained a record that recorded half of the total
number of hours worked by the employees. Employees were paid on the basis of these records.
Thus, in order to stay safe legally, the company not only used to pay the full amount to
the employees initially and then used to take half of the amount back from them. Along with
that, employees were often not paid for things they are legally entitled to. They are forced to
work overtime without incentives, during weekends and holidays. All these are an example of
labour exploitation since these acts of the management of 7 eleven had not only taken a toll on
the health of the employees by enhancing their stress level but has also deprived them of their
right. These unjust acts of the company had resulted in high employee attrition. While native
workers were able to leave the company, migrant workers found it difficult for them to move out
of the company due to various reasons (FOLEY 2016). According to researchers, the socialist
theory has the potentiality to solve the issue of labour under-payment. However, one of the major
issues of the mentioned problem includes that it does not recognize the contribution of the
investors. Another issue is that inputs are heterogeneous. They have to be valued in dollar terms,
and that requires imputation, a'la Friedrich Wieser, and that in turn needs information from the
insist side. Price determines the cost of manufacture at least as much as the cost of production
determines the price.
When it comes to the capitalist theory, the major strength of this theory is that the theory
supports private property rights, focuses more on the individual and less government control.
However, the major disadvantages of the mentioned system include its nature of
competitiveness. Moreover, the mentioned theory does not show any empathy towards the
labours and are solely focused on profit instead of social welfare (Faccarello 2015). Another
mention-worthy example that demonstrates the exploitation of foreign labour at Australia

6AUSTRALIAN INDUSTRIAL RELATIONS
includes the recent wage scandal of Woolworths. Woolworths is one of the most popular retail
organizations in Australia. Recently the company has gained high negative publicity since the
management was paying low remuneration to the contract cleaners. According to researchers,
poor governance by Woolworths contributed to the serious exploitation of the contract cleaner.
Majority of the contract cleaner appointed by the company are foreigners or migrant at Australia.
The management of the company took benefit of their job vulnerability and paid them below the
legal minimum wage. The amount of money provided to the contract cleaner by the management
of the company ranged from 7 Australian dollars to Australian dollars whereas the company is
liable to pay at least 24.69 Australian dollars on the regular basis (Bahn, Barratt-Pugh and Yap
2012). Like 7-eleven, the mentioned organization also kept false record where cash payments
and a lack of co-operation from workers impeded the probe so the amount underpaid was
estimated to be much greater. According to researchers, the lack of management can be
considered as the chief reason behind this unethical act of management. Being on of the most
recognized organization in Australia the Woolworths is very much aware of its reputation.
However, due to several numbers of layers in the management discrepancies and scandal takes
place. (Hawthorne 2016) stated that alarming level of exploitation can take lack when the supply
gain involving venerable employees are not adequately monitored. Deficiency in the company’s
governance arrangements with regard to its procurement along with oversight of the cleaning
contracts has resulted in serious exploitation taking place at multiple levels of its cleaning an
supply chain.
Body part 3
From the above discussion, it can be clearly understood that one of the chief reason
behind the excessive exploitation of migrant workers in Australia includes the fear o getting

7AUSTRALIAN INDUSTRIAL RELATIONS
deported or visa being cancelled. According to (May, Peetz and Strachan 2013), migrant workers
on seasonal contracts in Australia are afraid to report the exploitation they experience. Not only
that being from another totally different country with different rules and regulation altogether,
they know too little about their rights I the foreign land. In the following paragraph, the chief
reason behind the operation faced by the migrant workers in Australia is discussed.
The first reason behind tolerating the exploitation faced by the foreign workers includes
fear of being deported. According to (Piracha, Tani and Vadean 2012), the abuses suffered by the
migrant workers are still not reflected in the legislation and this is a major concern. The foreign
workers are afraid to report abuses due to their fear of being deported as well as back-listed from
their own country. Along with this difference in language and culture is also considered to be the
barrier for the accessibility of information. (Tan and Lester 2012) stated that there no specific
policy or procedure of educating the migrant workers about their rights. Majority of times,
migrant workers are made to believe that that they eligible for no special rights since they are
outsiders. The only choice they have is to perform the task, which they have been told.
According to a survey of more than 63 per cent of the migrant workers, possess limited
knowledge of the English language since it is a foreign language to them. Moreover, since n
information about the method o approaching the legal institution about the regular abuse and
exploitation are shared with them, the workers are left with no choices but to either leave the job
or keep silence. However (Bonin and Putterman 2013) stated that few organizations like
Wesfarmers posses the policy where employees from different cultural background are eligible
for the equality act where any discrimination based on the race of an employee is a crime and
action is supposed to be taken in order to eradicate the crime. However, the information about

8AUSTRALIAN INDUSTRIAL RELATIONS
rights and obligations that the migrant workers receive, prior to their departure, is often
incomplete.
While the above stated reason behind the exploitation of foreign workers is stated from
the perspective of the workers, inefficient management can be pointed out to be another reason
behind the exploitation of the employees. In organizations like 7 Eleven and Woolworths, the
organization posses two or three layers of managerial posts. This makes the whole system of
managing highly complex and enhances the chances of corruption within the managers. This, in
turn, results in the exploitation of workers in order to lower the investment cost of the
management and enhance the profit of the organization (Robertson 2014). Besides that, lack of
government intervention and loopholes in the regulations can be considered as another major
reason behind the enhancing rate of employee exploitation. According to (Piracha, Tani and
Vadean 2012), there prevail several loopholes in the invigilation conducted by the government.
For instance, several disreputable labour hiring contractors of Australia, those who supply
workers to the farm sector are found to be using the technology in order to avoid detection of
underpayment as well as unlawful practices. In several instances, they are found to post an
advertisement on the internet and avoid operating through registered business as well as
corporate entity. However, in several developed nations these breaches are detected efficiently
by the management, for instance in UK, effective monitoring and enforcement of the licensing
scheme and the imposition of substantial civil and criminal penalties for non-compliance.
Considering the fact that Australia is an ageing population, it is highly crucial for the
organization as well as the government to eradicate the above-discussed issue in order to
maintain and enhance the productivity (Long 2013). The first step that needs to be taken be taken
is to create awareness of the rights possessed by the workers. In order to enhance the working

9AUSTRALIAN INDUSTRIAL RELATIONS
conditions as well as inform the migrant workers about their rights, AHRC has initiated a new
project. The aim of the project is to support the capacity building of National Human Rights
Institutions from the specific where the majority of the migrants comes from.
Apart from enhancing the awareness of the migrant workers it is also important to amend
the actions taken by the government of Australia to ensure that all the migrant workers are safe
from exploitation. For this, amendment or removal of s235 of the migration act needs to be done
(Berg 2015).
Section 235 of the Migration Act must change in order to confirm that the
undocumented workers have the same minimum employment rights as a common citizen of the
nation. In this current situation the interaction between this offence and protections under the
Fair Work Act are steel distorted and unclear (Long 2013). This type of offences can deprive the
eligible workers of enforceable labour rights by leaving a large sector of the workforce
completely vulnerable to exploitation. Unfortunately, this loophole can effectively cover-up the
unscrupulous employers (Chan 2016). Amendment or removal of this act would put beyond
doubt that the Fair Work Act applies to all the migrant workers regardless of their visa/migration
status. Consequently, it would enable the operation to be at the forefront of the national response.
Endorsement and engagement of independent research that measures the impact of the
modern slavery disguised under the act of unfair employment practice. In the past five years
some significant independent research has been done on this topic, however the number is not
adequate to assess the whole picture of the social dilemma in employment practice. More
research will help to uncover many truths and can ensure the enforcement of justice across the
nation.

10AUSTRALIAN INDUSTRIAL RELATIONS
Conclusion
As per the above discussion, it has been clear that, in Australia, exploitation of foreign
workers on the basis of wages has got increased in a commendable level in the past decade.
Unsatisfactory compensation, excessive workload due to unscheduled work and workplace
discrimination all falls under the term Workers exploitation. All over Australia, labour-hire
organizations are hiring mainly casual as well as temporary workers who are migrants and
foreigners with underpayment and even with low compensatory advantages. These unethical acts
are imposing a negative impact on the workforce of Australian organisations resulting high
employee attrition rate and increased internal conflict within the organisations. The socialist
theory states that taking away a majority of the value created by the workers by the employers
are known as capitalist exploitation. From the above analysis, it can be concluded that
amendment or removal of s235 of the migration act needs to be done by the government of
Australia to ensure that all the migrant workers are safe from exploitation.

11AUSTRALIAN INDUSTRIAL RELATIONS
References
Anderson, B. and Shutes, I., 2014. Migration and care labour: theory, policy and politics.
Springer.
Bahn, S., Barratt-Pugh, L. and Yap, G., 2012. The employment of skilled migrants on temporary
457 visas in Australia: Emerging issues. Labour & Industry: a journal of the social and
economic relations of work, 22(4), pp.379-398.
Berg, L., 2015. Migrant Rights at Work: Law's precariousness at the intersection of immigration
and labour. Routledge.
Bonin, J. and Putterman, L., 2013. Economics of cooperation and the labour-managed economy.
Routledge.
Chan, A., 2016. China's Workers Under Assault: Exploitation and Abuse in a Globalizing
Economy: Exploitation and Abuse in a Globalizing Economy. Routledge.
Faccarello, G., 2015. Labour theory of value. The Elgar Companion to David Ricardo, pp.245-
255.
FOLEY, D.K., 2016. What is the labour theory of value and what is it good for?. In Economic
Theory and its History (pp. 384-398). Routledge.
Fuchs, C., 2012. Dallas Smythe Today-The Audience Commodity, the Digital Labour Debate,
Marxist Political Economy and Critical Theory. tripleC: Communication, Capitalism & Critique.
Open Access Journal for a Global Sustainable Information Society, 10(2), pp.692-740.

12AUSTRALIAN INDUSTRIAL RELATIONS
Harrod, J. and O'Brien, R. eds., 2012. Global unions?: theory and strategies of organized labour
in the global political economy. Routledge.
Hawthorne, L., 2016. Labour market outcomes for migrant professionals: Canada and Australia
compared.
Larrain, J., 2013. Theories of development: Capitalism, colonialism and dependency. John Wiley
& Sons.
Long, K., 2013. When refugees stopped being migrants: Movement, labour and humanitarian
protection. Migration Studies, 1(1), pp.4-26.
May, R., Peetz, D. and Strachan, G., 2013. The casual academic workforce and labour market
segmentation in Australia. Labour & Industry: a journal of the social and economic relations of
work, 23(3), pp.258-275.
Petri, F., 2012. On recent reformulations of the labour theory of value. Department of
Economics, University of Siena.
Piracha, M., Tani, M. and Vadean, F., 2012. Immigrant over-and under-education: The role of
home country labour market experience. IZA Journal of Migration, 1(1), p.3.
Robertson, S., 2014. Time and temporary migration: The case of temporary graduate workers
and working holiday makers in Australia. Journal of Ethnic and Migration Studies, 40(12),
pp.1915-1933.
Robinson, W.I., 2012. Global capitalism theory and the emergence of transnational elites.
In Global Elites (pp. 54-73). Palgrave Macmillan, London.

13AUSTRALIAN INDUSTRIAL RELATIONS
Tan, Y. and Lester, L.H., 2012. Labour market and economic impacts of international working
holiday temporary migrants to Australia. Population, space and place, 18(3), pp.359-383.
Tomba, L., 2014. Paradoxes of labour reform: Chinese labour theory and practice from
socialism to market. Routledge.
Watson, I., 2013. Bridges or traps? Casualisation and labour market transitions in
Australia. Journal of Industrial Relations, 55(1), pp.6-37.