A Four Corners investigation has uncovered gangs of black market workers run by labour hire contractors operating on farms and in factories around the country. Courtesy ABC/Four Corners.

MIGRANT workers paid $3.95 an hour. Working 22 hour shifts. Forced to sleep on dog beds. And some even perform sexual favours to extend their visa.

These are the horrific slave-like conditions faced by farm workers on 417 working holiday visas across Australia.

An investigation by Four Corners has uncovered the shocking exploitation of foreign workers that occurs on Australian farms supplying our biggest supermarkets.

Black market gangs of contractors are acting as the middle men and supplying workers to Australian farms and factories where they are routinely underpaid, harassed and abused while working in low skilled jobs.

Coles, Woolworths, Aldi, Costco and IGA are all implicated in the allegations, as are fast food chains KFC and Red Rooster.

“This is very much a country wide problem” says ABC reporter Caro Meldrum-Hanna, who led the investigation. “Our entire fresh food chain of supply is riddled with exploitation,” she told news.com.au.

The national broadcaster is speculating hundreds of millions of dollars in pay that should go to the workers is going missing every year. But one of the most insidious allegations uncovered by the investigation is the targeting and treatment of female workers.

According to the report, women are being targeted and have been propositioned to perform sexual favours in exchange for an extension on their visa or merely some time off work.

The migrants at the heart of the corruption are incredibly vulnerable, often have limited English and remain in these jobs out of fear.

“If they ever speak out or complain, they are sacked or deported” says Meldrum-Hanna.

She says in some cases, workers are being forced to carry out shifts that are 22 hours long and are frequently denied bathroom or water breaks. “There are people who wet their pants and the conveyor belt keeps going,” she says.

In one case at a Queensland farm, a group of workers featured in tonight’s episode were forced to sleep in the dog’s bed. In a separate case, a woman who should have been paid $20.90 an hour was receiving just $3.95.

The migrant workers suffering this systemic abuse have entered Australia legally on a 417 working holiday visa which allows them to travel and work for up to six months at a time.

Australia has 150,000 of these migrant workers coming through each year, and the industry is desperately reliant on their labour. But it is the black market contractors who supply the migrants to the farms who are skimming their wages and enabling the corrupt system to thrive.

These contractors operate in two ways. Some have ties with overseas organisations who promise migrants jobs and connect them with the contractors who are waiting for them upon arrival.

The other way in which these workers are targeted is through websites offering work for 417 visa holders — some of which are so brazen, they actually declare the work to be black market employment.

“Once you translate [the websites] to English, the illegality is breathtaking,” says Meldrum-Hanna.

According to her, it is the lack of oversight from the immigration department that has allowed the exploitation and corruption to become so entrenched and commonplace.

The 417 visas are not monitored by the department and Meldrum-Hanna believes the visa regulations amount to “in-built exploitation” as the government turns a blind eye.

“There is no requirement for immigration to keep tabs on them,” she says.

The migrant workers aren’t the only victims of the corrupt system. The widespread practices of exploitation are forcing ethical farmers out of the market while doing irreparable damage to Australia’s global reputation.

“We will be known as a country that exploits vulnerable people who are looking for a better chance at life,” said Dr Joanna Howe, a labour law and migration expert from the University of Adelaide Law School.

“We would never accept this if it were Australian workers being treated in this way, but because it’s 417 visa holders and we don’t know them, there’s a lid on it, we accept that it’s OK,” she told the ABC.

Federal Member for Hinkler and former cane farmer, Keith Pitt who features in tonight’s episode, believes the damage to our overseas reputation is already done. When asked if he thinks Australian shoppers would buy such products if they knew the horrible working conditions in which they were produced, he said “absolutely not.”

As for those farmers who choose not to use contractors, they are being squeezed out of the market.

Four Corners journalists spoke to the CEO of one of the country’s largest potato suppliers who had been dropped by two major supermarkets for cheaper suppliers using exploited labour.

“They’re cheating the system. They’re taking it from the little guy, from the people on the farm and the people in the pack sheds and using that as their competitive advantage in the marketplace,” Steve Marafioti told Four Corners.

“It’s not the correct thing. It’s not the right thing. It’s actually changing the shape of our industry.”

The problem has been allowed to persist but industry insiders are calling on the supermarket giants to stop shirking their moral responsibility.

“Supermarkets need to ensure they’re sourcing from ethical suppliers,” says Meldrum-Hanna.

While multiple authorities and government agencies such as the Fair Work Ombudsman and the Department of Immigration are responsible for regulating the system, they stand accused of turning a blind eye to the criminal practices of labour hire contractors.

However the journalist who led the investigation believes the problem can be rectified with a few simple changes, including greater oversight and the scrapping of the 417 visa.

But at the moment the extent of the problem remains “breathtaking” and there is little indication the changes will occur.

The full investigation can be seen on tonight’s episode of Four Corners at 8:30pm on ABC 1.