A major controversy has been highlighted in heart of Sydney’s construction industry involving the illegal underpayment of both illegal and legal foreign workers.
The Sydney Morning Herald uncovered the issue that saw some illegal workers earning a meagre $3 an hour for services rendered, with Independent Constructors Australia claiming that the issue was overwhelming the industry.
The implications of this issue include the exploitation of foreign workers, a potential disregard for OH&S requirements, the Australian workers inability to compete on cost with cheap foreign labour, and the responsibility of principals and head contractors for the wrongdoings of their subcontractors.
In a section from the Herald’s report, the Construction, Forestry, Mining and Energy Union (CFMEU) warned of the liability that is involved in the acquisition and supervision of subcontractors.
“Some temporary foreign workers, mostly from China and Korea as well as British backpackers, get away with using each others’ safety induction cards because subcontractors fail to check their credentials or turn a blind eye to keep costs down,” the report noted.
If principals or head contractors subcontract work or allow part of their work to be further subcontracted, they may be exposed to a project risks with the sub contractor and a sub-sub contractor who may be cutting corners.
The extent of the risk is demonstrated by the risk to reputation of the principal and head contractor due to subcontractors who employ foreign workers on inappropriate terms and conditions and without legal visas allowing them to work in Australia.
Increasingly prime head contractors are requiring more than the traditional opportunities to influence the behaviour and tenure of subcontractors and sub subcontractors in the interest of insuring compliance of all regulatory requirements.
When relying on subcontractors and sub-subcontractors: be alert if not alarmed as often the attitude on compliance with immigration and industrial laws spill over into poor OH&S practices, which may involve a superior contractor in serious prosecutions. The legal consequences which can come in the form of criminal prosecution and substantial fines, are often not enough to restrain those who seek to profit by breaking the law.
Of course, if for carrying out government work a head contractor needs to comply with the National Code of Practice for the Construction Industry then the head contractor must make provisions for applicable legislation and should ensure that his reputation is not left in the hands of others without appropriate safeguards.