Farm workers and fruit pickers who are paid on piece rate payments must be guaranteed a minimum wage under the Horticulture Award, the Fair Work Commission has ruled.
A piece rate is where an employee gets paid by the amount of produce they handle when picking or packing, but has long faced criticism from unions over underpayment concerns.
The Australian Workers Union (AWU) had lodged a claim with the commission last December over the payment method, arguing workers should be guaranteed the minimum casual rate of $25.41 per hour.
The Fair Work Commission handed down its findings late on Wednesday determining that the “existing pieceworker provisions” in the Horticulture Award are “not fit for purpose.”
“They do not provide a fair and relevant minimum safety net,” it said.
The commission said it was “satisfied” it needed to add the “insertion of a minimum wage floor” and also suggested there should be “consequential time recording provisions” to monitor working hours.
AWU national secretary Daniel Walton has described the ruling as “one of the most significant industrial decisions of modern times.”
"Fruit pickers in Australia have been routinely and systemically exploited and underpaid,” he said.
“Too many farmers have been able to manipulate the piece rate system to establish pay and conditions far beneath Australian standards.”
The industrial relations tribunal noted that a “substantial proportion” of the season harvesting workforce was engaged on piece rates.
It also said more than half of the workforce were temporary migrant workers with these characteristics together making these workers
The application by the AWU was supported by the state governments of Queensland, Victoria and Western Australia as well as the Australian Council of Social Service.
The National Farmers Federation (NFF), Australian Industry Group and Australian Fresh Produce Alliance were among those opposed to the changes.
NFF chief executive Tony Maher said the group were "disappointed " by the decision arguing the cost burden would impact farmers.
"The provisions will make it harder for growers to get products on the supermarket shelves at a competitive price because the wage costs are going to now increase," he told SBS News.
The Fair Work Commission has now begun a process for submissions to be received around the proposed draft changes.
Agriculture Minister David Littleproud said the government would work through the decision of the "independent umpire".
"What we need to look through this with the cold hard light of day," he told SBS News.
"We'll work with industry and stakeholders to make sure that the implementation is as seamless as possible."
He said the ruling did not amount to evidence of a failure to address concerns over the underpayment of farm workers sooner.
"This is simply taking away much of the complication of the award and making it simpler not just for farmers but workers," he said.
"In any industry there are a small cohort that do the wrong thing they need to be weeded and any in the agricultural industry will be weeded out."
Opposition Leader Anthony Albanese said paying people the minimum wage wasn't "complicated", it was the "right thing to do".
"We need to stop people being exploited," he told reporters. "This decision is a welcome one."
A clause within the agriculture award permits an employer and employee to enter into an agreement for the employee to be paid a piecework rate.
Under the arrangement, piecework rates were supposed to be required to allow a worker to earn at least 15 per cent above the award wage.
But a summary of the Fair Work Commission’s decision noted there had been widespread “non-compliance” around the intended protections within this arrangement.
“The totality of the evidence presents a picture of significant underpayment of pieceworkers in the horticulture industry when compared to the minimum award hourly rate,” it said.
The commission’s findings also said a “significant proportion” of those on working holiday visas in particular had been paid less per hour than the minimum wage.
