Australian regulators target Griffith horticulture sector

This isn’t the first of the ATO’s investigations in regional NSW in the last week; the Tax Office recently continued its Operation Protego, with a 33-year-old Broken Hill man being charged for allegedly attempting to defraud the Commonwealth of more than $1.3 million in false GST claims. 

The investigation across Griffith in the Riverina region, under the Shadow Economy Taskforce, has a prominent focus on uncovering employers’ unlawful practices such as underpaying wages, penalty rates and other entitlements, including super, non-compliance with tax and super obligations, failing to withhold and remit pay-as-you-go withholding (PAYGW) tax, and failing to provide accurate payslips to workers. 

Furthermore, the investigation uncovered a non-lodgment of activity statements and income tax returns, incorrect reporting of business income and expenses and breaches of obligations under the Migration Act 1958, including migrant worker exploitation and unlawful provision of immigration assistance. 

The three regulators reiterated that they have zero tolerance for employers who deliberately avoid their obligations. 

Whilst investigations are still ongoing, ATO assistant commissioner Tony Goding highlighted that several individuals and entities were prosecuted in NSW in the last financial year. 

“Last financial year 44 individuals and entities were prosecuted in NSW for shadow economy-related offences, highlighting the result of coordinated compliance action across the state to address these behaviours,” Goding said. 

“We’re seeing labour hire practices that simply don’t stack up; Operation Flint is sparking action to bring those arrangements into line.” 

Speaking to Accountants Daily, Goding emphasised the importance of employers protecting the welfare of all their workers. 

“Employers are responsible for protecting the welfare of all their workers; this includes workers engaged through a labour hire provider,” Goding said. 

“Under Operation Flint, we saw labour practices that simply didn’t stack up, and where we discover deliberate wrongdoing, significant penalties will apply.” 

“Warning signs that should prompt employers to question their labour hire arrangements include offering significantly lower quotes compared to other businesses, requesting payment to an alternative company, and directors who have been involved with liquidated entities.” 

Goding also recommended taking steps to stay protected against phoenix labour hire operations. 

“[We recommend] conducting an online search on the company or director’s name to uncover relevant information relating to their business, run checks on a business and the directors, including confirming any licences required, labour hire registrations, company directorships and ABN details,” Goding said.  

Anna Booth of the Fair Work Ombudsman emphasised that integrated regulatory efforts are a cornerstone of the department's enforcement strategy, with inspectors maintaining consistent scrutiny of growers and labour hire firms across the Riverina. 

“The FWO is back in the Riverina at Griffith, this time with fellow regulators, and we want to see improvement but will be holding to account any labour hire businesses or growers doing the wrong thing,” Booth said. 

“Inspectors will ensure the hard-working people who pick our fruit and vegetables are getting all the pay and entitlements laid out in their award and other workplace laws.” 

The FWO discovered that Riverina was one of the top five regions for non-compliance with workplace laws during its investigations in 15 regional hotspots nationally within its Horticulture Strategy 2021-24. 

During this period, the FWO had found that 83 per cent of labour hire employers it investigated in the Riverina had breached their workplace obligations. 

A spokesperson from the FWO spoke to Accountants Daily about the due diligence processes growers should have in place to ensure labour hire providers comply with workplace obligations. 

“We recommend that all businesses, including contractors and subcontractors, review their workplace practices regularly to make sure they’re complying with the Fair Work Act and the Fair Work Regulations,” they said.

“This is called a self-audit. Doing regular self-audits helps you to plan and run your business better, reduce the likelihood of disputes or costly mistakes, and meet the requirements of a contract (if applicable).” 

The Fair Work Ombudsman noted that it doesn’t yet have results to publish from Operation Flint in Griffith, but emphasised that the agriculture sector would be its priority area.

Tim Thorley, ABF Commander of Field Operations and Sponsor Monitoring, highlighted the importance of maintaining integrity within regional labour markets to protect both workers and compliant businesses. 

“Our officers are focused on identifying and disrupting unlawful labour hire arrangements, visa breaches and migrant worker exploitation,” Thorley said.

“We know regional industries rely on seasonal workforces, and we want to ensure migrant workers are employed lawfully and treated fairly.” 

“Working alongside our partner agencies, we’re continuing to share intelligence, data and operational resources to support on-the-ground compliance activities that detect and disrupt those who seek to operate in the shadows rather than follow the rules.”