Marine building contractor McDermott Industries Australia has been cleared by the Workplace Ombudsman of allegations that it unlawfully underpaid foreign workers on a gas pipeline project 130 kilometres off the Western Australian coast at Karratha.

The Workplace Ombudsman found no evidence to substantiate allegations made from the Australian Workers Union that up to 16 workers had not received their full entitlement.

The investigation, initiated following complaints from the workers’ union, found that the workers all held 456 Australian short-stay visas, which do not attract a minimum wage.

Further, the workers were employed by foreign entities in a labour hire arrangement with McDermott’s.

Workplace inspectors boarded McDermott’s barge – the DB30 – in April 2008 and found up to 16 workers from Indonesia, Malaysia, India and the Philippines working 12-hour shifts on a 60-days on/30-days off roster.

They were being paid between US$3.50 (approx AUD$4.20) and US$8.51 (approx AUD$10.20) an hour under employment contracts constructed in their country of origin. All held subclass 456 Australian short-stay visas issued by the Department of Immigration and Citizenship (DIAC).

Workplace Ombudsman Executive Director Michael Campbell says that, as a consequence, the Workplace Relations Act’s minimum wage rules did not apply to these workers.

The current Federal Minimum Wage is AUD$13.74 per hour.

Workplace inspectors travelled to Karratha again on July 2 this year after additional underpayment complaints that up to 90 foreign workers undertook “de-mobbing” work on the DB30 in preparation for its departure, but the barge had already departed.

“Our investigation determined that because of the nature of the employment and visa arrangements of the foreign workers, we were unable to enforce a minimum Australian wage for these workers,” Mr Campbell said.

The Workplace Ombudsman sought external legal advice from a specialist Senior Counsel which states that when the gas pipeline being laid by the DB30 touched the seabed, workers aboard the barge would be considered to be within the Migration Zone, and therefore require a 457 visa – rather than a 456 visa.

Mr Campbell said foreign workers issued 457 visas were subject to the WR Act and, in the McDermott’s case, his office would have had the power to further pursue matters that fell within the scope of the legislation, including a minimum wage, had such visas been required.

A copy of the Workplace Ombudsman’s legal advice has been given to DIAC.

Mr Campbell said that he was confident that the Workplace Inspectors had conducted a thorough investigation.

“It is a proper and legitimate exercise of power for Workplace Inspectors, in the course of an investigation, to first establish whether they have jurisdiction to enforce federal workplace relations laws. It would be unacceptable if our inspectors merely accepted the advice of one or other of the parties on this important issue without first making all necessary inquiries, speaking to people and witnesses, getting advice and forming a view themselves,” he said. #

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