Yes, it is OK to pay piece rates where the employee has agreed to them. However, it is important to be aware that individual ability varies greatly and the intent of the law is that “the average competent employee (can) earn at least 15 per cent more per hour than the relevant minimum hourly rate in the award”.
Piece rates for seasonal farm workers employed in the apple and pear industry come under the Horticulture Award 2010. The Fair Work Commission summarises piece rates under the Horticulture Award 2010 in the following way:
“An employee can enter into a written agreement to be paid pieceworker rates under the Horticulture Award. This agreement has to be genuinely made without coercion or duress.
A pieceworker isn’t guaranteed a minimum hourly or weekly rate that applies to the type of work they do, or the national minimum wage.
The piecework rate has to allow the average competent employee to earn at least 15 per cent more per hour than the relevant minimum hourly rate in the award. Casual employees also get a casual loading.
There are many factors that affect what an average competent employee is. There’s no standard across the horticulture industry.”
For growers in Victoria, Fruit Growers Victoria (FGV) publishes a piece rate guide for its members each season. To set these rates, FGV meets with key growers and analyses the bins picked, taking into consideration the length of time it takes to pick bins of fruit and environmental conditions. The price per bin that it publishes is a guide and growers are encouraged to keep productivity records to allow them to show how their rates have been calculated. Any changes must be agreed in writing by each worker.