Wage thieves don’t like new legislation

Written by: (Contributed) on 27 August 2023

Plans by the Albanese government to introduce wage theft legislation have already met with opposition from employers' organisations. It is not difficult to establish the extent of the problem of wage theft and the urgent need for effective legislation to protect workers from unscrupulous employers. Many employers, however, continue to hide behind facile excuses: their chosen business model has served their financial interests well for many years, they see no reason to accept criticism or accept change.

A McKell Institute study based on International Monetary Fund (IMF) analysis examining the Fair Work Ombudsman business audits from 2009, has established Australian workers have been subject to massive wage theft. The report estimated workers were being underpaid by at least $847.25 million per annum. (1) It also noted that the total amount of wage theft was likely to be much higher, with other cases being well-hidden and difficult to calculate accurately. (2) Large numbers of 'zombie' agreements, long out-of-date, still exist, whereby employers merely pay their workforces small annual wage settlements without reference to other entitlements and obligations.

When taking the fact Australia only has a workforce of approximately 13 million, with about a 66 per cent participate rate, the active section of the workforce only amounts to about eight million workers.

Assessed on the state-by-state basis, the problem of wage theft has been calculated to amount to $306 million in NSW with more than 500,000 workers. Sydney, the capital of NSW, had 41,106 workers subject to $25 million wage theft. In Melbourne, 28,500 workers
missed out on $17.5 million. (3) When measured across the whole of Australia an estimated 269,728 businesses were, therefore, collectively robbing more than 1.3 million workers of $847.25 million. (4)

The analysis found an estimated forty per cent of businesses were not complying with the Fair Work Act, while more than a quarter were in breach of monetary obligations including award rates and agreements. Government departments, which are supposed to police the legislation, appear little other than toothless tigers, composed of faceless office-workers trained to turn a blind-eye to a major problem in fear of compromising their own career-pathways in the eyes of managers who form part of elite patronage systems.

Employers' organisations have continued to complain about 'the supposed complexity of the award system', although the legislation was written in standard, technical English and interpreted to the word. There are no 'grey areas' in industrial law. The facile excuses by the business-classes would tend to indicate the failure of business and management educators to provide adequate and suitable training for their students.

The report did, in fact, draw attention to the problem of what was recognised as 'ingrained negligence'. (5) The silence, on the part of the legal profession, has been duly noted, as has their 'professionalism'. A similar explanation could also be directed toward employers' organisations generally, which tend to specialise in the provision of 'help-lines' for their clientele for use to undermine existing legislation and regulations. There is a common tendency for them to parade 'legal' services on glitzy websites with free-phone facilities.

So much for the privileged education of the Australian middle- and upper-classes and the ethical standards to which they aspire and the facile nature of their hand-wringing excuses.

It should be noted as highly relevant that most Australian trade-union representatives and delegates have no difficulty reading and studying existing awards, agreements and legislation despite the fact many have failed to even finish secondary education or to have tertiary qualifications.

The findings of the McKell Institute study of wage theft highlight the urgent need to criminalise wage theft to destroy the chosen business model of the supporters of economic rationalism. Such legislation would be a major assault upon the Australian business-classes and their supporters in the corridors of power in Canberra and other provincial cities.

And, in conclusion, the opposition from the business-classes is evidence that the proposed government legislation has some positive features for workers,

The evidence is there, for all to see!

1.     Wage theft an $847 m-a-year hit, Australian, 22 August 2023.  
2.     Ibid.
3.     Ibid.
4.     Ibid.
5.     Ibid.

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