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Crims in Suits: the apologists for wage-theft

Written by: Contributed on 4 December 2019


Most organised workers do not need reminding about the levels of dishonesty within business circles, or how downright deceit and trickery can be accompanied with glib terminology about 'best business practice'.
 
A recent parliamentary submission by the Australian Industry Group (AIG), however, has revealed new levels of dishonesty, with the main business organisation seeking to operate openly within a culture of legal impunity.
 
For such an organisation, which has specialised in employing the services of legions of so-called lawyers to find loopholes in Awards and Enterprise Agreements, the move to openly flout legal conventions can best be viewed in a very dim light.

The problem of wage-theft in Australia has been given a great deal of publicity in recent times; some employers have been found to have underpaid their workers. A recent study conducted by the Ascendon payroll company estimated Australian employers were underpaying workers by $1.8 billion a year. (1)
 
The study found four key factors for explaining how the problem had arisen:
 
• declining trade-union membership;
• business organisations banking on workers not knowing their entitlements and therefore not questioning those responsible;
• temporary migration visas;
• difficulty for those underpaid to redress the situation, with legal formalities often being costly.
 
To add insult to injury, while a recent budget allocation of more than $60 million in additional funding was forwarded to the Fair Work Ombudsman (FWO), they managed to secure less than $37 million following 35 cases pursued through the courts. (2) The bulk of the budget allocation was given to lawyers and other people associated with the government-based investigative body, not to workers who had been underpaid.
 
The FWO has also been reticent about pursuing court cases. The recent Rockpool scandal, for example, where a company was found responsible for $10 million underpayment of wages has still not been pursued in the appropriate legal manner. A petition by the trade union movement to publicise the issue has already attracted tens of thousands of signatures.
 
While the Protecting Vulnerable Workers Act was passed in late 2017, it has proved to be a rather ineffectual piece of legislation; for this reason the present federal Department of the Attorney General has called for submissions for possible redrafting of parts of the legislation. With the pro-business agenda of the present Coalition government, the matter has not been given much publicity!  And if the wage theft scandals prove too embarrassing for the capitalist class as a whole, there will be a legislsative temptation to make some of the illegal wage theft practices "legal" by changes to workplace industrial relations.Those around PM Scott Morrison have to be seen to do something about the scandal to safeguard their own credibility, although have no wish to antagonise those within their midst who quite clearly regard wage theft as not a serious matter. 
 
In a paper 'Improving Protections of Employees' Wages and Entitlements: Strengthening Penalties for Noncompliance', circulated by the Department of the Attorney General, however, reference was given to penalties of five to ten years imprisonment for the most serious forms of wage theft. (3)
 
 
The parliamentary submission from the AIG has proved particularly interesting; they suggest prison sentences should not be pursued as they would 'discourage investment, entrepreneurship and employment growth'. (4) The submission also claimed that 'many instances of incorrect payment are the result of misunderstanding or error and employers should not be at risk of being labelled a thief'. (5)
 
Two important legal considerations have arisen:
 
• those guilty of wage theft would hardly be the type of person normally regarded as suitable for directing flows of investment, possessing sound entrepreneurial ability or assisting with employment growth. Whatever happened to the present Coalition government proposed legislation about trade-unions and those of sound character?
• ignorance, in the eyes of the law, is never an excuse, except, it would appear, in the case of AIG legal thinking.
 
Finally, when considering suitable punishments for law-breaking there are two fundamental considerations:
 
• the laws in question with wage theft are supposed to protect the most vulnerable sections of the Australian workforce. At present, they are not effective;
• a punishment is supposed to act as a social condemnation of particular behaviour and to serve as a deterrent to prevent it reoccurring. It is also supposed to serve, in the eyes of the population at large, as justice.
 
If a criminal forced entry into the home of a worker and stole personal possessions, for example, most sensible people would expect suitable legal procedures to be used to deal with the problem and a punishment to be meted out by law courts as a condemnation of the behaviour. With recent AIG legal thinking if an employer stole wages from the same worker, no suitable deterrent would be used.
 
Whatever sort of message is the AIG providing to unscrupulous employers?
 
Or, more to the point, is this the type of business model the AIG are really promoting?
 
The recent AIG parliamentary submission would appear to have completely overlooked the nature of the problem of wage theft and the need for Australia to have proper laws in place, which are implemented. The behaviour of those employers responsible is totally unacceptable!  
 
1.     Employers are underpaying workers $1.8 bn a year, The New Daily, 27 September 2019.
2.     Waging war on organised theft, The Weekend Australian, 5-6 October 2019.
3.     Ibid.
4.     Jail for wage theft not the best option, says business, Australian, 28 October 2019. 
5.     Ibid.

 

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