Alex Boxsell investigates whether legal restrictions are helping or harming the future of the Australian fashion industry
When it comes to the manufacture of clothing garments, there is no question that costs can be dramatically reduced offshore, in countries such as China. And according to one Victorian lawyer, that’s exactly the direction clothing labels are being pushed by excessive outworker litigation in the Federal Court.
The cause of the litigation is a new use of the longstanding Federal Clothing Trades Award and a voluntary scheme that protects outworkers, according to Tony Watson, Middletons partner and veteran of many years of advice to clothing designers in Victoria.
“There had always been an award, but there hadn’t been quite the same use of the award and/or the new voluntary scheme,” he told Lawyers Weekly.
These provisions relate to the way pay and entitlements that outworkers — those who typically manufacture clothes at home — receive. The responsibility is placed on the clothing label to ensure all appropriate conditions are met at every step in the process, regardless of whether the work has been contracted out to other companies.
But had the Government engaged in a more comprehensive education program about the duties designers were obliged to meet, Watson said there would have been less litigation and a healthier future for the industry as a result.
“I’m not blaming anyone per se, but I think there’s definitely a situation where the communication and education has been poor,” he said. “We now have the situation — and I’m not gilding the lily — [where] clients of mine … say that ‘that’s the straw that broke the camel’s back, I’m going overseas’.”
Watson believes the requirements of the voluntary code caught many designers by surprise.
“I think most people who are clothing designers would have had no idea that it was their responsibility to ensure that the people they were using to manufacture complied with the Award, or that they had to have in place manufacturing agreements with these people to ensure compliance,” he said.
But the Textile Clothing Footwear Union (TCFU) was aware of these provisions, and has sought to prosecute about 200 companies in the Federal Court in the past decade, some 100 of those in the last two years.
“That’s not a good state of affairs,” Watson said. “There are not 100 people out there who are all deliberately flouting the laws. There is clearly a breakdown in terms of education and communication. And the process by which the education is being done is through the huge stick, which doesn’t seem to be appropriate.”
But Michele O’Neil, state secretary of TCFU Australia, said the majority of companies the Union prosecutes are longstanding ones that have had every opportunity to know the requirements of the law.
“The basic requirement that clothing labels have a responsibility in terms of the wages and conditions down the contracting chain has been established in federal law for 20 years,” she said.
“The Federal Court has taken these matters very seriously, and has put in place substantial fines against companies that have breached these provisions.”
One criticism Watson made of the TCFU was that it has been quick to promote sensationalist campaigns, such as Fair Wear, and proceedings against major designers in the press.
“And then they quickly move to settle the actions. Now that has caused a lot of consternation in the industry,” he said.
But O’Neil said the Fair Wear campaign is one that the TCFU supports but did not initiate. What is more, it has a good co-operative relationship with companies that are concerned about doing the right thing.
“Our co-operative arrangements are with those companies that are prepared to meet all of the legal requirements and participate in cleaning up this industry,” she said. “[For] those companies that insist on doing the wrong thing, we’ll continue to take action to ensure that they meet Australia’s legal minimums.”
One thing that both Watson and O’Neil agree upon is the benefits of greater awareness of the legal requirements in the industry, facilitated by governments.
“Of course I would support that the Federal Government and the state governments should ensure that people operating in this industry do understand there are legal standards that they must comply with,” O’Neil said.
Through his work at Middletons, Watson aims to “get union, government and industry all to recognise that … we all actually have the same mutual aim, which is to keep a sustainable and viable clothing and manufacturing industry in Victoria,” he said.
“[There has been] not enough education, not enough awareness, and that’s why we thought the Government really needed to do more on that front.”