PAYING outworkers as employees will be the "final nail in the coffin" for our locally made fashion industry, according to local fashion designers and manufacturers.
The Council of Textile and Fashion Industries of Australia has been joined by some of Melbourne's leading fashion identities in condemning new fair work laws that give outworkers the same conditions as employed workers, claiming it will force many fashion labels to manufacture offshore and see clothing factories close their doors.
Under the new bill driven by the Textile, Clothing and Footwear Union to weed out unscrupulous sweatshop operators who underpay workers most provisions of the Fair Work Act currently applied to textile employees will be extended to contracted outworkers.
It means these contractors often machinists who run small businesses from home will be deemed employees and entitled to benefits such as leave and superannuation. It also means it will become illegal for manufacturers to use contracted outworkers unless they employ them a minimum of 20 hours a week. Jo Kellock from the council says many manufacturers do not have enough year-round work to make it financially viable to employ outworkers for 20 hours and, unable to use them as contractors, will have to shut down.
The Age spoke to several outworkers also angered by the changes, saying it will rob them of their independence and flexibility to run a small business from home.
Ms Kellock said: "We are all for supporting the most vulnerable in this industry. But this legislation wrongly assumes that every outworker is a vulnerable migrant at risk of being exploited. The reality is most are competent people who run successful businesses but will no longer be able to do so."
Machinist Rita Ly, who has been running a contract business with her husband for 20 years, said: "We have two children. It suits us to work from home and we make a good living. Now we don't know what will happen to us." The couple work for several clothing manufacturers including Gouda Pty Ltd, a Coburg-based factory run by Arthur Thomas, who says he now faces closure "within months". Mr Thomas says he lost 65 per cent of his business overnight because one local label he manufactures for decided it would be "easier" to do it offshore than to try to meet new legal requirements.
However, the union's Michele O'Neil said "reputable companies have nothing to fear from this bill. What it targets is parts of the industry that underpay workers and deny them the most basic of entitlements."
Melbourne Fashion Festival director Graeme Lewsey said the bill appeared to have been rushed through without adequate industry consultation and it could have a "potentially devastating" impact on young designers, who typically rely on outworkers to make samples and small ranges for early collections.
Melbourne designer Lisa Barron, who manufactures her collection here, said: "At this point in time I do not know where I could go to legally get clothes made in Australia."