MasterChef tragic that I am, it was from Wednesday night’s show that I learned about the closure of celebrity chef George Calombaris’ feted Press Club restaurant in Melbourne. George had invited the contestants into his kitchen to prepare its last ever dinner, for very special guests: his restaurant staff.
The Press Club was, George said, “a place seriously close to my heart… a place with total Aussie heart”. But, “like all good things in life, chapters need to come to an end”.
Intrigued, I googled the backstory while the contestants learned about their key ingredients and George emoted for the cameras.
Sure enough, the Press Club, after 12 years and multiple awards, closed on June 29. The media recorded Calombaris’ reassurances that the reasons were not financial.
I felt for George, as he turned off the kitchen lights with one last wistful backward glance. Fortunately, the contestants had done him proud and his staff, one of whom said the restaurant was like a family, had a great last supper.
The following morning brought a dissonant coincidence: Calombaris had reached a settlement with the Fair Work Ombudsman (FWO) after a four-year investigation, admitting that his empire had underpaid 515 of its employees a total of $7.83 million in wages, and agreeing to make all that good as well as cop a $200,000 “contrition payment”.
Calombaris had said back in 2017 that, due to “historically poor processes”, he was estimating that 162 workers had been underpaid some $2.6 million. But there had been no updates in the meantime before the final bombshell, as Calombaris continued on his culinary journey as chef and TV star, teaching the virtues of ethical food and the beauty of simplicity.
As it turns out, the poor processes that had so vexed Calombaris included failure to pay minimum award rates, penalty rates, casual loadings, overtime, split-shift allowances and annual leave loadings. As accidents go, it’s an impressively large, long-running and diverse one.
The law currently treats underpayment of wages as a “civil penalty” matter, not a crime. The Migrant Workers Taskforce report, release in March 2019, noted that “in practice, the amounts of redress obtained under the current avenues are relatively modest in relation to the amount of underpayment that seems to be occurring”. It pointed to the 7-Eleven scandal, where “the amount of underpayment involved dwarfs the amount” of the available penalties.
As a result, the taskforce recommended that consideration be given to introducing criminal offences for underpayment. Industry groups have, of course, said that that is an unnecessary step — why criminalise underpayments, as if they were like, what, theft?
How about because underpayments are, in fact, theft. Not paying a person what they are lawfully owed for something they have given you should be no different in law or principle, from taking the money from them. The increasingly popular term for this practice, wage theft, is accurate.
Historically, law and society have drawn a clear distinction between crime as popularly understood, and crime as perpetrated by people with white collars. Defrauding your employer for millions has not until recent years exposed you to anything near the consequences you’d get for robbing a servo.
The higher up the food chain the theft goes, the wider that distinction becomes. As we vividly recall, the GFC was caused by rampant fraud and other white-collar crime, and yet few people received prison sentences for it. Our own banking royal commission uncovered, yes, institutional fraud, and some bankers lost their bonuses.
In a country that puts people in prison for unpaid parking fines, it may seem incongruous that the owner of a business empire, built on the efforts of hundreds of low-paid workers who, it turns out, were serially and grossly underpaid to the tune of millions, can get away with a $200,000 expression of contrition and no criminal record.
I think it’s odd. Not that $200,000 is nothing, or that Calombaris’ public shaming won’t hurt him. But punishment must also deter others, by the signal it sends all of us regarding the social acceptability of the wrongdoing.
On that score, it’s a fail. As these cascading wage theft cases keep rolling out (there are so many more scandals to come, don’t worry), there has so far been no effective signal from the FWO, the government or the business community itself that this behaviour is not just a consequence of a complicated wage system and a bit of corporate negligence. It’s a crime, and a particularly repulsive one at that.
Stealing money from the very people whose hard work is making you rich. Yuck.
I agree with much of this article, and particularly the scale of Calombaris’ hypocrisy. The article does not however deal with the best argument against criminalisation, namely, difficulties in enforcement. There was a time historically when various industrial law offences were criminal. That approach was abandoned because of the additional degree of difficulty involved in proving a criminal offence – not only in terms of the standard of proof but also having regard to the various protections afforded to a criminal defendant.
Whatever one thinks of the moral dimensions of wage theft, the response must be intensely practical. There is no point having wonderful laws on the books which can never be enforced by workers.
(Ever heard of a restaurant owner copping to “accidentally OVERpaying” staff? Me neither.)
I would say that paying out $7.83m plus $200k would be acknowledgement that if the case were to be prosecuted he would lose. There is no way that someone pays that much without spending a lot of time consulting their lawyer first, and to pay out means that your lawyer has told you that if it gets to court, you’re screwed.
I’d be happier if future changes to the rules resulted in an obligation for media to refer to these people as “admitted thief …”. Just imagine: “And judging tonight’s MasterChef is admitted thief George Calombaris.” It’s not a prison sentence – and it should be, the same as an employee would get if every night for years he dropped a $5 note in the till and “accidentally” pulled out a 50. But it’s a consistent theme in industrial relations law: labour is treated as being of limited to no value when compared with capital. Declare bankruptcy the day before payday and MAYBE your workers will get the money owed them for the past two weeks’ work. If there’s any left over after paying creditors.
I don’t think the issue of proof is insurmountable. You only have to see how easily the Tax Office and Centrelink can apply strong penalties for “inadvertent” infractions.
It is not a question of whether it is insurmountable. It is a question of whether it can readily be met by poorly resources workers suing well resourced employers. Workers are not in the position of the ATO or Centrelink who have virtually unlimited resources.
Enforcement is the government’s responsibility, not that of the workers who have been dudded due to government agencies sleeping on the job.
This is just wrong, respectfully. It’s fine to make these moralising high moral ground statements but they reflect ignorance. If you had any knowledge or experience in the area you’d understand that government will only ever enforce in a tiny minority of cases. Hence why practical ease of enforcement is the most important thing.
“Inadvertant” is nor criminal…
No, it’s not necessarily criminal but it’s penalised anyway. Actually, inadvertently exceeding the speed limit while driving, inadvertently failing to fasten your seat belt or inadvertently having too much alcohol or other drugs in your bloodstream while driving can all be prosecuted. However, I used quotes for “inadvertent” because I don’t believe that most of these underpayments are inadvertent at all.
You only have to catch a few of the bastard and send them to jail for a few years and the industry would pull it’s head in pretty quickly.
The approach now just normalises the behavior and allows people to profit from their own ineptitude and reckless buckpassing.
Unfortunately history and experience suggest otherwise
The real issue is that the penalty is inadequate- in fact in this case the interest saved on the 7.83 million (or investment returns from this) make delaying payment and eventually paying the penalty a rational economic choice. The solution is for the deprived workers to be paid their back pay plus the interest they would have had to pay to borrow sufficient funds to cover the lost wages until they are paid. The penalty to discourage others should then be meaningful and in line with the scale of the offence. In this case it needs to have 6 figures to get the attention needed to discourage this.
Hey Crikey, please fix up your comments section. I can’t reply to other comments and only the first part o the section is accessible.
Gremlins? I even posted a XXXX nonsense post to see if I could get to “Level 3” (2’s probably a waste of time) – it wouldn’t even let me in there.
….. “Pezzullo’s Revenge”?
Have had the same problem all weekend (my best chance to catch up on what I’ve missed thru the week) it’s now Monday morning and still no joy.
Subs go up while service goes down, not good enough Crikey.
Credit where due – it seems to have been corrected and the tek-hamsters recaged.
Now if only something could be done about New Comment email links going to the article rather than the new comment we’d be back where we were, happily in 2017, before the last rejig.
Dreams….
I think you are probably correct. When its a corporation who do you send to gaol; the CEO, the HR manager, the directors? A better approach I think would be to give anybody (competitors, a person off the street, unions. .anybody) the right to prosecute for a hefty fine and orders that the employer pay etc, much like the Trade Practices Act for deceptive or misleading conduct. I know this gives the regulator the excuse of not prosecuting itself, but it’s better as most of our regulators are ineffective/asleep & captured by the very industries they are meant to be regulating. They only play the role of allowing successive governments to bleat that there is a ‘strict’ regulator, knowing too well they’re not much better than none.
Anyone who says we’re a classless society is ignorant (for one reason or another) of the way our laws “operate” (ASIC/APRA?).
Look who’s winning this class warfare?
Agree. How does the old saying go? ‘The law punishes rich and poor alike for sleeping under bridges and begging in the streets.’ Or a more modern version might be, ‘The law punishes employer and union alike for going on to a building site without the employer’s permission.’
Yes, how good is that! The prosecution should, of course, be by the public prosecutor, not the workers, who curiously do not have the deep pockets that have been enlarged by what has been stolen from them. Anyone expecting that workplace laws are anything but a means to disable union action has to think again. Of course, workers must be free not to join unions from which they benefit. Fair laws would require that an agreement should only apply to union members. How good is it that workers, especially those struggling to make ends meet, should have every incentive to free ride on union fees paid by fellow workers. It is capitalism, of course. And how good is neo-liberal capitalism, which absurdly claims that it is best to have private providers supply goods and services? Has anyone noticed the staggering list of corrupt and dishonest providers being slowly brought to account
Agree. But what about an employer who takes out superannuation from an employee’s salary but fails to pay that money to a super fund? Or superannuation compelled by law to be taken out of a worker’s salary but then lost by the super fund with no government guarantee and the worker having less rights than a equity holder in a corporation?
Or the priviliged position of telecomminications companies who inherited a provision of the Commonwealth Crimes Act that makes it a crime to not pay them (when it should be a civil breach of contract) or the provisions in the Telecommuncations Act that allow any telecom provider to deem contact terms and conditions without the agreement of the consumer?
Or even the proposed new laws that are designed to enable farmers to conceal animal cruelty and land clearing crimes but would criminalise those good people (activists) who expose them?
The simple answer is that this is yet another example where corporations’ interests are held paramount by governments and individuals are treated with contempt.
The Greedy Grub Club, of which too many are keen members, stinks; Calombaris should do at east 7.8 years inside a nasty gaol for the theft of 7.8 millions from hard workers, already underpaid.
The Press Club was allegedly a “fine dining” restaurant. However, on the question of class, how can such a label have legitimately been given to an establishment owned by a person who licks his knife on national TV and has clearly never been taught the proper way to hold his cutlery? Just another greedy thief.
Calombaris is a keen member of the conservative Greed and Grub Club. &., So, millions stolen..? so 7.8 years inside for criminality in excess.