Workers express their feelings about the company's actions. Credit:James Elsby "The fees in our country are very expensive," one worker said, "and if you have kids in school, it's way too much." The federal government's Seasonal Workers Program is meant to be win-win, benefiting both under-employed fruit pickers from South Pacific nations and Australian farmers, who struggle to find local seasonal labour to ensure fruit isn't left to rot on the vine. It's also meant to be Australia's most exploitation-proof migrant worker scheme. It's a fact that might have reassured the workers at Perfection Fresh after the firm – which was formerly known as D'Vine Ripe – was forced in 2015 to sack a labour hire firm caught in a major scandal exploiting Asian pickers. But about a month after the Vanuatu workers began work, they noticed a series of "deductions" were included on their pay slips. Accommodation, transport, airfares and a bond were being taken out. They started querying their rights.

Migrant workers from Vanuatu complained over their treatment by Perfection Fresh predecessor, D'Vine Ripe Credit:James Elsby "I was working five days a week, Monday to Friday, 38 hours, and my pay slip was around $800 a week. But with deductions, I am left with $500", one worker said. "We decided to join the union." Illustration: Matt Golding That decision, and the allegedly unlawful response of the labour-hire agency that employs the workers, has led to a Federal Court application that once again raises questions about the integrity of the supply chains in Australia's horticulture sector. It repeats an increasingly common story in Australia – migrant workers in poorly paid, low-skill sectors are being mistreated.

Affidavits signed by several of the workers allege that labour hire firm MADEC, Australia's largest user of the Seasonal Workers Program, had pressured workers to quit the National Union of Workers. If they did not, they would be denied future employment, and workers from Vanuatu would not be recruited via the Seasonal Workers Program. "If you want to come back [to Australia], you have to leave the union," one worker said he had been told. . "I want to come back. I was scared of his words. So were others and some people resigned from the union that day." MADEC even distributed a pro-forma resignation form to 145 workers that they were to fill in and hand to the union. This is a clear breach of Australian laws that protect freedom of association. Threats to join or quit a union, while sometimes made by employers or unions, rarely involve such brazen activity as the distribution of a resignation form accompanied with threats. The case is also unusual because it involves unlawful conduct in the Seasonal Workers Program, which is administered by the Federal Department of Employment and is held up as the most robust migrant worker scheme in Australia.

Perfection Fresh declined to comment when contacted by Fairfax Media. MADEC's Chief Executive Laurence Burt told Fairfax Media that a "misunderstanding" had led to the distribution of the union resignation forms and that the company had taken urgent steps to assure its migrant workers they could join a union and exercise workplace rights. "We are proud of our record in exposing bad practices in the industry," said Mr Burt of the not-for-profit labour hire firm that has recruited 3000 overseas workers for farmers, including 570 via the SWP in the last financial year. The exploitation of workers by labour-hire agencies was dramatically exposed last November, when Fairfax Media partnered with an undercover Malaysian reporter to expose a major Australia stone fruit grower, Cutri Fruit, knowingly using undocumented and exploited foreign workers. Other major farming companies in NSW and Victoria have also been exposed, leading to raids by immigration and Fair Work Ombudsman authorities and prompting the National Farmers Federation and major supermarkets, Coles, Woolworths and Aldi, to detail their efforts to scrutinise supply chains. Woolworths said on Friday in a statement that its supplier contracts required farmers to treat workers fairly and lawfully and Aldi has previously released similar statements. A Coles spokesman said the company "takes ethical sourcing very seriously and has a pro-active approach to labour standard issues, working closely with our suppliers, key NGOs and stakeholder groups." It worked with authorities to "review and address" claims of unfair treatment at suppliers.

The fact that MADEC, a reputable labour hire agency, is facing allegations of impropriety underscores the intense pressures in a sector where margins are extremely slim. NUW secretary Tim Kennedy claims "systemic exploitation" throughout the agriculture sector is the result of the price wars waged by major supermarkets, which he says is forcing farmers to squeeze labour-hire firms, who in turn recruit the cheapest possible labour. "They [the major supermarkets] say they are doing audits, but the system is broken," says Kennedy. At a recent supplier forum, Coles management said they would not be increasing prices for suppliers because "budget conscious mums" would not support higher prices in the supermarket. The way to respond to the exploitation of low-paid, low-skilled workers is dividing industry stakeholders, with the National Farmers Federation supporting reform, but labelling as draconian proposed laws introduced into parliament and which boost the power of the Fair Work Ombudsman. The laws are aimed at increasing the penalty regime for employers who don't keep records and giving the FWO greater powers to compel evidence from suspects.

"There is no evidence to support the need for new, extreme powers of this kind across the board," NFF chief executive Tony Mahar said. Employer groups are also fiercely lobbying Victorian treasurer Tim Pallas to water down a scheme to license labour-hire agencies being pushed by Victorian industrial relations minister Natalie Hutchins. Similar schemes are being considered in Queensland and South Australia. Union leader Mr Kennedy also blames the union movement for "ignoring workers in the horticulture sector for decades", a phenomenon he is trying to combat in an industry in which less than 1 per cent of workers are unionised. Loading Fair Work Ombudsman Natalie James is moving to finalise a three-year inquiry into the exploitation of workers in the agriculture sector while her agency attempts to increase the use of laws that attach liability to those further up the supply chain. Ms James recently praised Coles for addressing the widespread exploitation of shopping trolley collectors by seeking to directly employ more of them.

But in the farms and regional backblocks of Australia, where margins are tight, oversight poor and many workers undocumented, achieving similar outcomes will be difficult.