The labour hire watchdog has stopped short of revoking the licence of a major contractor despite a finding that it procured "substandard" and "overcrowded" housing.
MADEC Australia, which supplies housing for the labourers it hires out to farms, was investigated by the Labour Hire Authority (LHA) after a parliamentary inquiry heard complaints from seasonal workers about their living conditions.
The workers told the Senate Committee on Job Security earlier this year that MADEC allegedly made unreasonable deductions to their pay for accommodation costs and that they were housed in unsuitable boarding rooms, including some without an air conditioner or fan.
It prompted the LHA to conduct compliance checks at MADEC accommodation premises, where inspectors observed breaches of minimum standards, including too many people being squeezed into a room.
In light of the investigation, MADEC was ordered to audit all of its living arrangements to ensure they were compliant, but the LHA chose not to cancel the firm's licence because it had been cooperative and was taking steps to rectify the issues identified.
MADEC also agreed to refund deductions made to each worker's salary for the substandard accommodation and has already repaid close to $70,000.
Safety issues reported in Mildura
Labour Hire Licensing Commissioner Steve Dargavel said workforce providers should view the MADEC case as "a cautionary tale".
"When it comes to providers' legal obligations to labour-hire workers, the legislation is clear: providers must comply or face licensing action," he said.
"A loss of licence is a very real consequence of non-compliance with the Labour Hire Licensing Act 2018."
In a separate matter, Commissioner Dargavel said the regulator was also investigating a number of suspected breaches of the act after inspectors visited farms and boarding rooms across Mildura, in far north-west Victoria.
"Workers were being overcharged for accommodation, and living spaces were overcrowded and unhygienic," he said.
"We found barbecues set up inside houses, which is clearly a very significant safety issue."
At one property, which the LHA believes is linked to a labour-hire provider, inspectors noted "a strong smell of gas" before observing a modified camp stove being fuelled by gas bottles next to an open flame.
The regulator said it was also following up on evidence of non-compliance with other legal obligations, including recent amendments to piece work requirements and alleged failures to withhold tax, pay superannuation entitlements and provide pay slips.
The LHA said it had reported concerns about potentially unregistered rooming houses operating in Mildura to the local council.
In a statement, a council spokesperson said all complaints made about the safety of worker accommodation were "thoroughly investigated" and that the council had "many tools available" to ensure compliance with the relevant legislation.
MADEC has been contacted for comment.
