Making Textile, Clothing or Footwear products in Australia A guide - - PowerPoint PPT Presentation
Making Textile, Clothing or Footwear products in Australia A guide to your Legal Obligations This presentation is provided in the way of general information. Every effort has been made to ensure that the representations made here are accurate
This presentation is provided in the way of general information. Every effort has been made to ensure that the representations made here are accurate but you should familiarise yourself directly with the obligations imposed by the relevant legislation and Awards or seek independent legal advice. This is not a substitute for legal advice.
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the Textile, Clothing, Footwear and Associated Industries (TCFAI) Award (the Award).
Ethical Clothing Australia (ECA) Guide to the Award The Guide and other documents referred to in this presentation can be downloaded form the ECA website or by contacting the ECA office.
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Almost all businesses in the textile, clothing and footwear (TCF) industry in Australia are covered by the National Workplace Relations System (see pages 3-4 of the Award Guide). This includes the Modern Award, as well as federal and state legislation including:
2010 as amended from time to time.
Standards (NES).
See Award Guide page 29 for these and page 44, clause F.5.1 of Schedule F of the Award.
– State Outworker laws; – Workers Compensation; – Workplace Health and Safety; – Equal Opportunity; and – Anti-discrimination laws.
See page 30 of the Award Guide.
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Each industry or occupation is covered by a national Modern Award. In the TCF Industry, this is the Textile, Clothing, Footwear and Associated Industries Award 2010.
factory workers and home based workers (who are both referred to as workers).
both federal and states clothing awards for decades.
(referred to as ‘workers’ in Schedule F and sometimes called ‘homeworkers’).
See pages 41–53 of the Award Guide.
The Award is designed to make sure workers across the entire industry receive fair pay and work in decent conditions.
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Your key responsibilities under the Award:
(Part 2)
(Part 2.10-11)
(Part 3)
(Part 3.18 and 3.19) and redundancy
(Parts 4 and 5)
(Part 6)
(Part 7)
(Part 8)
(Part 1 and Schedule A)
See pages 5-6 of the Award Guide.
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The National Employment Standards set out the key work-related entitlements for your employees, under the Fair Work Act 2009. There are 10 minimum standards for employment which you must comply with: 1. Maximum weekly hours of work 2. Requests for flexible working arrangements 3. Parental leave and related entitlements 4. Annual leave 5. Personal/carer’s leave and compassionate leave 6. Community service leave 7. Long service leave 8. Public holidays 9. Notice of termination and redundancy pay
See page 29 of the Award Guide for more information.
These entitlements are in addition to your obligations under the Award.
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If your business intends to give out work, there are 3 things it must first do to meet its legal requirements under the Award:
and keep lists of who work is outsourced to.
specification sheet).
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If you intend to give out work the first thing you must do is enter into a written agreement with whoever you are outsourcing work to. These can be with another principal business, or with an outworker, and there are different obligations for each. The first step is to define who you are entering an agreement with. Principals If you are making an arrangement with a:
premises Then you are most likely making an agreement with another principal business. Under the Award they are called a Principal.
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Editable copy of this Written Agreement available on the ECA website
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You are making an agreement with a Worker (outworker) if the person:
someone else’s; or
business premises; or
business premises; or
contractor’, and does the work themselves; or
See Award Guide Schedule F, pages 42–43, sections F.2.3, F.2.6 and F.4. Contact the Textile, Clothing and Footwear Union (TCFUA) for more information about your particular situation. . . . You can also contact the Australian Industry Group or the NSW Business Chamber for assistance.
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Home based workers are entitled to the minimum safety net of terms and conditions which apply in the TCF industry. This includes the conditions in the Award, and most of the Fair Work
Note: You must also give outworkers a copy of the entire Schedule F of the Award when you employ them. Minimum part-time hours for outworkers are 15 regular hours per week (as agreed between the principal and worker) or 10 regular hours per week (as agreed between the principal and worker, and with the consent of the TCFUA). By such agreement, regular part-time hours may be averaged over a period of 4 weeks maximum. Overtime rates must be paid for additional hours. See Award Guide page 39 for checklist for making an arrangement and Award Guide Schedule F pages 44-46 for:
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Editable copy of this Written Agreement available on the ECA website
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You must be registered with the Board of Reference (BOR) unless all of your garments or products are produced solely by your employees at your business premises. This includes any aspect of production being performed outside of your premises, including cutting, making, finishing, trimming, alteration, value- adding (e.g. printing, embroidery), by either outworkers (referred to as ‘workers’ in Schedule F) or other manufacturers.
See Award Guide Schedule F pages 42 and 47 for: – clause F.3.1 Registration – clause F.6 Registration and Board of Reference
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Under the Award, you can only:
with the Board of Reference (unless that business performs all the work within their own factory premises).
employees, at any one time (If your business makes arrangements with more than 10 outworkers you must have written consent from the TCFUA or Board of Reference.). If you give work out without being registered with the Board of Reference, you are breaking the law and may face penalties.
See Award Guide Schedule F pages 42 and 47 for: – clause F.3.1 Registration – clause F.5.9
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Work Ombudsman, and the TCFUA..
TCFUA can help you complete the form if you have any questions).
documents such as Work Records (for queries regarding your registration call the Fair Work Ombudsman helpline on 1300 799 675).
annually (unless there has been some concern about your compliance with the Award or you have not provided sufficient information to support your application, your registration will normally be renewed for another 12 months).
See page 7 of the Award Guide.
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BOR forms available from ECA and the TCFUA
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Along with your Board of Reference registration, you must make lists 4 times a year, including:
make an arrangement, and whether you have a written agreement with each of them; and
You must fax or post a copy of the quarterly list to:
When?
August and November financial quarters.
See page 8 of the Award Guide.
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Each time you outsource work:
called a Garment Specification Sheet). The Work Record must include the time (including sewing time) for the work required and the total make price.
the work before the work begins.
articles or material all the way through the contracting chain, down to the worker who ultimately carries it out.
(clause F.7.2).
See Page 8 and Page 42 (clause F.3.2) Award Guide.
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Your Work Record must include:
number.
articles or material to be worked on (including diagrams where available and details of the type of garment or article, seam type, fabric type, manner of construction and finishing).
(and able to verify how it was calculated).
See Page 10 of the Award Guide.
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Editable copy of this Work Record available on the ECA website
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When making a work record with an outworker, it must contain:
the outworker before work begins, and picked up when completed.
time it took to make the product.
See page 26 of the Award Guide.
multiplying: the number of garments by the make time per garment, article or material, and any additional tasks.
. . . This is to make sure there is enough lead time from the date of commencement, to finish the work.
days.
See Pages 27–28 of the Award Guide for how to calculate an outworker’s pay rate.
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Editable copy of this Work Record available on the ECA website
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minimum terms – Pages 13 and 34 Award Guide.
in the Board of Reference forms – Page 8 Award Guide.
times a year.
registered with the Board of Reference (if applicable) – Page 7 Award Guide.
Pages 10 and 37 Award Guide.
arrangement, before work starts. Note: this includes sampling as this is part of your business.
See Page 40 of the Award Guide for a Checklist Diagram.
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Signed written agreement detailing the hours of work in accordance with the Award – Page 16 Award Guide. Registered with the Board of Reference – Page 7 Award Guide. Keep Lists of this and other arrangements your business enters into with others, using the list in the Board of Reference forms – Page 8 Award Guide. Work Record (including a make time) as specified in the Award Guide – Page 10 and 38 Award Guide. Work Records have the required extra information for arrangements with outworkers – Pages 18 - 22 Award Guide. Time Standard used to calculate the time (including sewing time) for the work required – Page 26 Award Guide. Copy of Schedule F of the award given to the outworker – Pages 41 - 53 Award Guide. Correct minimum Award conditions being provided – Pages 18 - 19 Award Guide. Paying the outworker on a weekly basis – Page 17 Award Guide Making sure that all materials, trimmings, threads, products, garments or articles are delivered to and collected from the outworker at no cost to them – Page 15 Award Guide. See Pages 39 of Award Guide for Checklist Diagram and Page 30 for other laws employers need to comply with.
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Refer to the TCFAI Award 2010 (Schedule B – Classifications/skill levels and Schedule C – Definitions). Skill levels are set out under Schedule B in the Award: B.1 Trainee B.2 Level 1 B.3 Level 2 B.4 Level 3 B.5 Level 4 B.6 Level 5 Definitions of tasks, skills, activities and methods relating to skill levels, are set out in Schedule C of the Award. If you are unsure about your employees’ skill level, contact the TCFUA for assistance.
To read these Schedules online, visit the Fair Work Commission’s website at www.fwc.gov.au/documents/modern_awards/award/MA000017/default.htm.
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The table below sets current wage rates under the TCFAI Award as of 1 July 2015 Skill level Weekly rate Hourly Minute rate* (= weekly rate/2280) 1 $675.90 $17.79 n/a 2 $701.80 $18.47 n/a 3 $725.90 $19.10** 31.84 cents 4 $764.90 $20.13 33.55 cents 5 $812.80 $21.39 35.65 cents
** Skill Level 3 is the minimum wage for outworkers. * The minute rate only applies to outworkers.
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To calculate an outworker’s pay rate: a) calculate how many minutes it takes to do the work (including ancillary tasks). b) factor in any work to be done on a Saturday, Sunday and Public Holiday. c) calculate the total amount to be paid.
Refer Pages 27 – 28 of your Award Guide.
The weekly rates may increase each year. Always check the current version of the Award for the most up-to-date rates.
Visit the Fair Work Commission at www.fwc.gov.au to register for Award Updates (‘Quick Links’ – ‘Subscribe to updates’).
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When working out the ‘make price’ for a garment or product, overheads should be included in the calculation. The make price must be enough to make sure that
Principal, as well as
maker/contractors (including outworkers) receive correct wages and conditions under the Award. The make time covers all processes of the manufacture or value adding of an item or garment. On top of that allow the operational costs of the maker. Principals are liable for underpayments to workers in their supply chain so it’s important to make sure you get these right.
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Workers at Skill Level 3: Skill level 3 is the classification under the Award for a worker responsible for the construction of a finished garment or working unsupervised. Remember that Skill Level 3 is the minimum wage for outworkers. You must allow a minimum of $0.43* per minute to make sure you are covering the worker’s Award wage and entitlements (which include personal and annual leave, public holidays, Super). In addition: A principal giving work to a maker/contractor should also cover overhead costs and a profit for the maker/contractor in the make price. These amounts will vary depending on a number of factors: The location of the business; business rental/utilities costs, city/regional costs differences, scale of operations, intellectual property and volume of garments/products being produced.
See page 26 of the Award Guide for how to calculate the time (including sewing time) for the work required. *This amount may change as Award rates of pay can change each year.
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The Make Price is: The make time x the total cost per minute*: Cost of employing someone (at Award Skill Level 3 it’s 0.43 cents per minute) + Cost of contractor overheads including profit margin (0.XX cents per minute) = Total cost per minute (i.e. the ‘make price’) (0.XX cents per minute)
See page 26 of the Award Guide for how to calculate the time (including sewing time) for the work required. *This amount may change as Award rates of pay can change each year.
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The entitlements are the items that a business must factor into their costing process. This ensures the business recovers the costs involved with the minimum legal entitlements.
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EXAMPLE: White Tee Shirts Pty Ltd makes an arrangement with Tommy Tees Pty Ltd to get 200 T-shirts printed. Tommy Tees agrees to do the work on their own factory premises.
Single arrangement between 2 principals (you and another principal)
EXAMPLE 1: Etty Betty Kids Pty Ltd makes an arrangement directly with an
sewn onto 10 children’s frocks, 15 hoodies and 30 tees.
Single arrangement between a principal and a worker (outworker)
EXAMPLE 2: : : : Paul, a dressmaker, enters into an arrangement with Molly’s Fashions to produce and finish 20 dresses in 3 days. Molly’s Fashions is run by the Rose family at their home and is a registered company with an ABN. NOTE: Mrs Rose does the work at home, sometimes with the help of her husband. Because they do the work from their home (i.e. non-business premises) Mr and Mrs Rose are legally classified as ‘workers’ i.e. outworkers.
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When your business needs a range of services to meet production needs or more capacity, you may enter into multiple arrangements with other principals and/or outworkers. The principals may in turn make their own arrangements with other principals or other outworkers to get the work completed. Note: You can still be held responsible for the correct Award wages and entitlements. This diagram shows the owner of Old Kent Road Fashions making arrangements with makers Adam, Bob and Carla, and outworker Penny. The owner of Old Kent Road Fashions is responsible for paying enough to the makers Adam, Bob and Carla to allow them to pay the relevant Award obligations to their in-house employees,
paying the correct Award wage and entitlements to Penny the outworker. This is important: Under the Outworker Provisions in the Award, your business is responsible even if you don’t directly engage outworkers.
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Jane is an outworker that Lucy (the subcontractor) has made an arrangement with. However, Jane knows she is making garments for Old Kent Road Fashions because of the label she sews into garments. Jane has not received her correct Award wages and entitlements from
Fashions of her underpayments, Under the Award, the owner of Old Kent Road Fashions can withhold payment from Carla (Principal D) until Jane (outworker) receives her correct pay and entitlements. Carla may also withhold payment to Lucy (Subcontractor) until correct payment is made to Jane. Alternatively, Old Kent Road Fashions, Carla and Lucy may enter into an agreement to share the underpayment amount. If the above options are not utilised, then Old Kent Road Fashions will be held responsible for the correct wages and entitlements owed to Jane (outworker). By keeping your supply chains shorter, your business is more likely to keep its making costs down and comply with the Award. See pages 23–25 of the Award Guide.
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What happens if I don’t meet my legal obligations? Businesses may be fined up to $51,000 for each breach of the Award. However, the courts have imposed significant fines on businesses found to have committed multiple breaches of the Award, even where those businesses haven’t directly engaged any external workers. Businesses also risk adverse publicity and reputational damage if they are found to be involved in unlawful practices.
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Award and Fair Work Act information
www.fairwork.gov.au / Infoline 13 13 94 Information about Australia's workplace law, conditions, dispute resolution, and wage rates and skill levels
www.fwc.gov.au / 1300 799 675 TCFAI Award, Fair Work Act and registering to receive TCFAI Award updates
Industry Contacts
www.aigroup.com.au
www.nswbusinesschamber.com.au
Textile, Clothing & Footwear Union of Australia (TCFUA)
www.tcfua.org.au
Translating Services
The Fair Work Ombudsman website also has information sheets in many languages
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Head Office 03 9419 0222 info@ethicalclothingaustralia.org.au www.ethicalclothingaustralia.org.au Facebook EthicalClothingAustralia Twitter @EthicalClothing Instagram @ethicalclothingaustralia