(Transcript from World News Australia Radio)
The allegation involves the employment of about 20 Hungarian workers who the union says were underpaid after arriving in Australia in August to work in western Sydney.
The Fair Work Ombudsman has confirmed it's investigating the case, which has again raised questions over the use of foreign workers on temporary visas.
Greg Dyett reports.
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Finding workers to fill jobs in Australia's construction industry is no easy task due to a longstanding skills shortage in the sector.
It's something migration agents and the Construction, Forestry, Mining and Energy Union recognise is a problem but they have vastly different views on whether foreign workers are the solution.
Michael Walker is a migration agent and a former vice president of the Migration Institute of Australia.
He says there simply aren't enough young Australians available to meet the demands for labour in the construction industry.
"We simply don't have young Australians that are wanting to come through and do apprenticeships, where they start off on fairly low wages themselves, and many of them seek to advance themselves academically through universities but not TAFE colleges. I think that's an aspiration that many parents had, they'd rather see their children going to universities and taking on trades and it's simply a fact of life now that we have a major skills gap in the trades area."
The Assistant Secretary of the Construction Union in New South Wales, Rebel Hanlon, says successive governments are to blame for the skills shortage.
"But this is a problem that's been going on for many years. This is a problem that governments have sat on their hands with as far as training and education of our young people of actually getting them intro trades. We saw major training schools with the railways over the years shutdown, the Electrical Commission shutdown and these training schools provided tradesmen for these particular areas. Now we see it's all been privatised and we do not see these young people trained up as tradesmen with inside these particular sectors."
The construction union doesn't believe foreign workers are the solution and says companies are exploiting the 457 visa scheme to try to undercut Australian wage rates.
Mr Hanlon says the Hungarian workers were told they'd be getting 30 dollars per hour but he says when they got to Australia they were paid 15 dollars an hour.
He says the 457 visas used to give the Hungarians Australian work rights misrepresented their qualifications.
"These gentleman came in here on visas that said they were actually mechanical engineer technicians. None of these gentleman have that qualification. These gentleman were riggers. So I've got grave questions on how the gentleman actually came into the country, how the Department of Immigration over in Vienna issued the visas which is a problem with the Department of Immigration."
Rebel Hanlon says the companies involved knew exactly what they were doing.
"Multimillion dollar companies who employ well over four thousand people each in Europe have deliberately gone about to underpay these workers, have got about to a situation where we have skilled workers in Blacktown in western Sydney to do this work, that these workers get paid 30 dollars an hour."
The union says it has now negotiated backpay for the Hungarian workers totalling well over 200-thousand dollars - and their hourly wage will now rise to more than 29 dollars.
Migration agent Michael Walker defends the 457 program saying there are stringent requirements placed on employers.
He says these include evidence that the employer is committed to the training of its Australian workers.
"The benchmark for that training is measured at one per cent of their payroll that is one per cent expenditure on training relevant to their payroll figure and they must evidence that they can't just simply claim it, they must provide third party verifiable evidence before they are approved. You know, I would suggest that any employer who is willing to submit themselves to that kind of scrutiny are not doing it simply because they want to get cheap labour."
Mr Walker says some of his clients who have employed workers on 457 visas have managed to grow their businesses and he says that's led to more jobs for Australian workers.
"It increases employment opportunities for Australians not necessarily in the occupations which the employer has sponsored but in other areas of the business where vacancies have been created because of the expansion in the business."