Fair Work rules every farm worker on every farm entitled to take home a minimum rate of pay

The AWU argues workers on every farm should get the minimum casual rate of pay. (ABC Rural: Eliza Goetze)

The Fair Work Commission has ruled that workers picking fruit on a piece rate must be guaranteed a minimum wage under the Horticulture Award.

A piece rate is when a worker is paid according to the amount of produce they harvest, so the more fruit or vegetables harvested the more a worker is paid.

The Australian Workers Union (AWU) lodged its claim with the commission in December and argued that every worker should be guaranteed a minimum casual rate, currently $25.41 per hour.

In its finding delivered late yesterday, the Fair Work Commission's full bench "expressed the view that the existing pieceworker provisions in the Horticulture Award are not fit for purpose".

"They do not provide a fair and relevant minimum safety net as required by the Act," it said.

Under piece rate, a workers' total pay is determined by the amount of fruit or vegetables they pick. (ABC Rural: Eliza Rogers)

AWU national secretary Dan Walton described the ruling as one of the most significant industrial decisions of modern times.

"I believe this decision ranks among the great victories of our union's 135-year history," Mr Walton said.

"Fruit pickers in Australia have been routinely and systemically exploited and underpaid.

"Too many farmers have been able to manipulate the piece rate system to establish pay and conditions far beneath Australian standards.

"Now it will be easy for workers — even if they don't have good English language skills or Australian connections — to understand if they're being ripped off.

Potential for higher prices at checkout, minister says

The National Farmers' Federation had opposed the changes, arguing piece rates promote productivity and that any change to the award could drive farmers out of business.

Federal agriculture minister David Littleproud said he was working through the ruling. 

"The Fair Work Commission is an independent umpire. It's a statutory authority independent separate from the federal government," Mr Littleproud said.

He suggested the ruling could mean Australians will be asked to pay higher prices for their produce.

"Farmers have to be paid for their produce, and the cost of producing that produce should be reflected at the checkout," Mr Littleproud said.

Opponents will have an opportunity to appeal the ruling before the end of the year.