The Fair Work Ombudsman should have more resources to monitor employers in construction and other industries who employ foreign workers on 457 visas and other visa classes as part of recommended changes to workplace relations laws which a key building industry lobby group criticises as failing to address critical employer concerns.

Releasing its draft report on the framework for workplace relations, the Productivity Commission says factors such as limited English skills and a lack of awareness with regard to basic rights meant foreign workers face special risk of exploitation despite being covered on the Fair Work Act, whilst an estimated 50,000 migrants who were working illegally were particularly vulnerable because of reluctance to report unsatisfactory working conditions to authorities.

It said the Fair Work Ombudsman should be given more resources to conduct investigations and audits and suggested that recommendations from a review of the 457 visa program last year including greater deterrents for employers be expanded to cover all employment related visa classes.

The Commission also said employers who abuse rights of migrant workers be forced to pay a fine equal to no less value than any underpayment of wages or conditions which occurred during a worker’s duration of employment as well as penalties for breaching the Migration Act – a move it said would address a current phenomenon whereby employers could still actually gain financially from hiring and exploiting migrant workers even where they get caught as employers are not required to pay the difference between what the worker was actually paid and the value of their entitlements under the Fair Work Act.

Meanwhile, the Commission made a number of recommendations on other matters which affect the construction sector, including:

• Allowing a limited menu of bargaining options to address the most serious deficiencies of the enterprise bargaining system in terms of greenfields agreements
• Tweaking rules relating to industrial action by simplifying overly complex ballot processes, tightening rules on aborted strikes and brief stoppages and providing employers with more graduated options for retaliatory action other than locking out the workforce
• Recalibrating the test for sham contracting to make it less easy for employers to escape prosecution.

Overall, the Commission said Australia’s system for workplace relations was working well and needed ‘repair not replacement’.

It said whilst a number of deficiencies needed to be addressed, our labour market performance and flexibility was relatively favourable by global standards, with strike activity being low, remuneration levels being responsible to economic conditions and the existence of multiple forms of employment arrangements with flexible options for working.

However, building industry lobby groups expressed disappointment, saying the report failed to address concerns raised by the corporate sector particularly in the area of union-wide pattern bargaining practices.

“The Productivity Commission Draft Report on the industrial relations framework downplays a number of concerns expressed by employers about the capacity of the industrial relations system to deliver improved productivity, competitiveness and business investment,” Master Builders Australia Chief Executive Officer Wilhelm Harnisch said in a statement.

Throughout recent years, the foreign worker visa system has been the subject of significant contention, with unions claiming the system was ripe with abuse but employer groups defending the program as necessary in order to address skills shortages.

Earlier this year, Taiwanese company Chia Tung Development Corporation was ordered to pay more than $870,000 worth of back pay to migrant building workers on sites on the Narrabri and Illawarra.