Wages and conditions of outworkers in the clothing industry in Melbourne, Victoria (Part 1)

Wages and conditions of outworkers in the clothing industry in Melbourne, Victoria (Part 1)* June 2014

Christina Cregan** University of Melbourne e-mail: ccregan@unimelb.edu.au tel: 8344-5257

Philip Johnston University of Melbourne

*This study was funded by a Research Grant awarded by the Department of Management & Marketing at the University of Melbourne **Corresponding author: Professor Christina Cregan Department of Management & Marketing Faculty of Business & Economics University of Melbourne VICTORIA 3010

1

Summary

This independent university study, conducted in June 2014, investigated the wages and working conditions of 56 clothing outworkers in Melbourne, Victoria. Outworkers received an average hourly rate of pay of $7.74 in their current (or most recent) job. They worked, on average, for 51 hours per week. Most did not receive regular work and experienced periods of unemployment between jobs. The great majority did not receive benefits, such as superannuation or paid holiday leave. Most suffered a variety of workrelated health issues, both psychological and physical, but received no paid sick leave. There was, however, a very small group who received rates of pay and benefits similar to award terms, following union negotiations with their employer based on legal compliance requirements. In addition, one worker was employed on a wage basis and received award terms.

2 Introduction These are the findings of an independent study of clothing outworkers in Victoria conducted in June 2014 by researchers from the University of Melbourne. As part of a government-funded programme, the Textile, Footwear and Clothing Union of Australia (TCFUA) currently provides training in information technology skills for groups of outworkers. The majority of workers in these classes are Vietnamese. The researchers approached the TCFUA and requested to access outworkers through these classes. A formal written invitation on University of Melbourne letterhead was issued to students and their outworker friends and neighbours to take part in a survey on their wages and conditions. The survey questions were drawn from a previous study conducted by the principal researcher in 2000-2003, with versions in English and Vietnamese. The survey was administered to outworkers by university researchers following five separate classes held in Springvale, Delahey, and St Albans. There was no influence by any union officials or representatives.

The project involved strict academic methods of enquiry and followed University of Melbourne ethical guidelines.

The sample 56 workers completed the survey. There were 52 females and 4 males. Their ages ranged from 19 – 68 years. The average age was 51 and the largest group of workers (6) was also 51 but there was a wide range of representation across the ages. All were born overseas, 54 in Vietnam and 2 in mainland China. They had arrived in Australia between 1979 and 2013, with 80% arriving in 1995 or before. Their ages on arrival ranged between 1 and 35 years and, although the average age was 23, there was representation across the entire range.

For most (44: 79%) their highest level of education was secondary school. A further 7

3 workers (13%) reported they had attended a tertiary institution. A few (5 workers) had received only a primary school education. 86% of respondents reported they had some level of speaking, writing and listening skills in the English language. Only 2 workers were fluent in English and a further 5 workers reported they had no English skills at all. 86% spoke their own language both at home and also outside the home.

At the time of the survey, three-quarters of the sample had been outworkers for at least 14 years; over a half had been outworkers for more than 20 years. The average length of time spent in outworking was 18 years but there was representation across the range of years.

A third of the sample (32%) had worked outside the home before they became an outworker, mainly in manual work, usually factories. Slightly fewer (30%) had held outside work since first becoming an outworker, mainly in manual work.

Outworking consists of a series of separate, sequential jobs. For over half the workers in this sample (57%), jobs were received from a person (agent or another worker) rather than from the factory. 47 workers (84%) reported they wanted regular work, that is, with no gaps between jobs. Only about half this number (25) received regular work. Under current legislation, outworkers are deemed to be employees but 21 (38%) of the sample were required to have an Australian Business Number (ABN) by their employer in their present (or most recent) job. More than half of workers in these sham contracts (12 out of 21) received their work from factories. A sham contract arises when an employer misrepresents the employment relationship by hiring a worker as an independent contractor instead of as an employee.

In over a third (20) of the households, there was a spouse who was also an outworker.

In three-quarters (42) of households, there were children who were supported by outworker wages. On average, there were two children. Almost all these households with children could

4 not manage without the outworker's wages. Around two-thirds of parent outworkers reported that some of the reasons they did outwork were because they wanted to look after the children themselves and also because they could fit the sewing round their family tasks. Parents sometimes called on children to help out with sewing tasks in 31% of these households.

Pay 55 out of 56 workers were paid under a piece-rate payment system. That is, they were paid for the clothes they sewed. One outworker was paid a weekly wage for a 38-hour week.

We made estimates of hourly pay rates in two different ways.

Workers were asked about pay and hours of work in their current (or most recent) job.

Two workers did not provide pay information so the following calculations are based on 54 workers. Individuals were asked what amount they were paid for each garment they were currently sewing (or had sewed in their most recent job) and how long it took them to sew each garment. The amount ranged from five cents (for a buttonhole) to $20. The work took between 6 seconds (for a buttonhole) to two hours. From this information, it was possible to calculate their hourly pay (see Appendix). Wages ranged from $1.50 to $21.00 an hour. Some of those who earned very low rates explained that they shared the work with another person, sewing the part of the garment that required the least skill and therefore being paid a very low rate. The average rate of pay was $7.74 per hour. The largest group at any pay rate (9 workers) earned $6.00 per hour. Nearly 80% of workers earned $10 per hour or less. Half earned below $6.67 an hour. But there were 5 workers currently earning wages in the region of award rates at $14-21 per hour.

5

Outworkers who were hired under sham contracts – that is, those who were required to have an ABN – earned less on average than other outworkers. Their average rate of pay was $6.65 per hour and the highest rate of pay was $10.80. The average rate of pay for those who were not required to have an ABN was $8.49 per hour and the highest rate of pay was $21.00.

In just under a half of the cases (48%), workers reported they negotiated a higher pay rate if the material was more difficult to sew but any increases were very low. The large majority (75%) of workers reported experiences of being paid late. A third reported incidents of unpaid wages which were never recovered. A quarter reported occasions of been paid less

6 than they were promised. For almost all workers, most of these incidents happened "some of the time" rather than" a lot of the time".

Hours of Work Workers were asked how many hours they were sewing each day in their current (or most recent) job. Hours ranged from 2 to 18. Very high numbers of hours indicated "rush" jobs with tight deadlines. The average was 9.2 hours a day, with the largest group (16 workers) sewing for ten hours a day. The next largest group (11 workers) sewed for an eighthour day. Nearly 60% of this sample of outworkers sewed for longer than an eight-hour day.

7 They were also asked to estimate how many hours they worked in an average week.

Estimates ranged from 10 to 100 hours. The average weekly hours of work was 51. The largest group (8 workers) reported that, on average, they sewed for 60 hours a week, and the next largest group (7 workers) estimated 50 hours per week. About three-quarters of respondents reported they worked for more than 40 hours a week.

Workers reported the number of days that they spent sewing in the current (or most recent) job. They ranged from 1 to 7 days. The average number of days worked per week was 5.3. The largest group (22 workers) sewed for 6 days a week. About 60% workers spent more than 5 days a week sewing. Most (80%) sewed for work on public holidays.

8

Time – hours and days -- spent sewing depended on several issues. A major factor was the finishing time or due date for completion. In the large majority of cases (79%), these times were set by the employer. Hours of work were extended if completed garments were sent back for repair. Around half the sample (48%) reported such an event. Slightly more than a half (55%) reported that they had work returned for repair that had been cut incorrectly in the factory.

Workers had little spare time when they were sewing. In addition to their outwork, they spent an average of four hours a day on household chores. They were asked how many hours, on average, they spent on themselves each week, social occasions and seeing friends, etc. Responses ranged between zero hours (6 workers) and 28 hours (1 worker). The average

9 number of hours was 7.5, that is, about an hour a day. The largest group (12) reported 10 hours a week. 90% of workers responded that they had 2 hours a day or less for themselves.

Over 90% did not receive paid holidays. 84% received no superannuation.

Health Issues Outworkers were asked how often they experienced health problems as a result of their sewing work. The issues are ranked below in descending order of importance.

Depression, back-ache and problems with seeing were prevalent for the very large majority of the sample. Depression was widely reported, with only 3 workers not experiencing any and half the sample being depressed "a lot". Back-ache was second-ranked, with the majority of the sample experiencing it "sometimes" and a further fifth experiencing it "a lot". Allergies and general aches and pains were suffered by two-thirds of the workers; breathing difficulties and physical injury by a half. 86% of this sample did not receive any sick pay and the large majority of workers 84% of the sample said it was/would be important for them. ___________________________________________________________________________ FREQUENCY OF WORK-RELATED HEALTH PROBLEMS ___________________________________________________________________________ Not at all (1) (2) (3) (4) (5) (6) (7)

Depression Back-ache Problems with seeing Allergies General aches and pains Breathing difficulties Physical injury

3 5 7 17 18 22 28

Sometimes 27 38 35 29 32 32 26

A lot 26 13 14 10 6 2 2

___________________________________________________________________________

10 Improvements in Wages and Conditions 30% of the sample (17 workers) reported that their wages and conditions had improved in the last two years. For 9 of these workers, this improvement had been achieved by the TCFUA negotiating with the employer on their behalf under the legal compliance requirements of Ethical Clothing Australia. In all of these 9 instances, workers had previously been hired under sham contracts, 7 of them by factories. The improvements received by 4 of these workers included award based pay and benefits, such as paid holidays, sick pay superannuation. The only other outworker who received all these benefits was the person employed on a 38-hour week wage basis. The remaining 8 workers who reported they had experienced improvements had directly negotiated with the employer, 3 of which were factories. None of these 8 workers received a pay rate similar to the award rate, paid holidays, sick pay or superannuation. Outworkers whose wages and conditions had not improved did not receive these benefits.

Conclusions This investigation of 56 clothing outworkers in Melbourne, Victoria demonstrated that, on average, the workers received an hourly rate of pay of $7.74 in their current (or most recent) job. They worked, on average, for 51 hours per week. Most did not receive regular work and experienced periods of unemployment between jobs. The great majority did not receive benefits, such as paid sick leave, superannuation or paid holiday leave. Most suffered a variety of work-related health issues, both psychological and physical. There was, however, a small group of these workers (4) who received rates of pay and benefits similar to award terms, following union negotiations with their employer based on legal compliance requirements. One other worker was employed on a wage basis and received award terms.

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Although the incidence of outwork in the clothing industry has rapidly increased in the developed world in recent decades, very little is known about the wages and conditions of the workers. Outworkers are hidden or invisible. Homeworkers are often migrants and mother tongue interviews or surveys must be employed. As a result, very little academic research has been conducted. The characteristics of outworkers are therefore unknown. Yet this unusual opportunity to conduct an independent university study allowed for the collection and analysis of a small but valuable sample, providing rare insight into the wages and conditions of clothing outworkers in one of Australia's major cities.

12 APPENDIX Hourly pay Frequency

Valid Cumulative Percent Percent 1.9 1.9 1.9 3.7 5.6 9.3 1.9 11.1 3.7 14.8 3.7 18.5 5.6 24.1 3.7 27.8

1.50 1.80 3.00 3.60 4.00 4.50 5.00 5.45

1 1 3 1 2 2 3 2

6.00 6.55 6.67 6.75 6.90 7.00 7.50 8.00 8.40 8.57 10.00 10.80 11.00 12.00 14.67 15.00 15.20 18.67 21.00

9 1 2 2 1 4 1 1 1 1 5 1 1 4 1 1 1 1 1

16.7 1.9 3.7 3.7 1.9 7.4 1.9 1.9 1.9 1.9 9.3 1.9 1.9 7.4 1.9 1.9 1.9 1.9 1.9

Total

54

100.0

44.4 46.3 50.0 53.7 55.6 63.0 64.8 66.7 68.5 70.4 79.6 81.5 83.3 90.7 92.6 94.4 96.3 98.1 100.0