We knew it would happen again, we just didn’t know it would be so soon.
Days after the revelation of George Calombaris’ MAdE Establishment stealing nearly $8 million from its staff, another celebrity chef, Neil Perry, is facing allegations of overwork and underpayment at his high-end restaurant, Rockpool. As Crikey noted last week, wage theft is rampant in the hospitality industry, whether it’s fine-dining or your local sushi joint.
Crikey takes a look at some of the reasons hospitality is such a hotbed for employee exploitation, and what can be done about it.
Wage theft still hasn’t been criminalised
Currently, wage theft is a civil offense. Fair Work recommends employees who think they’ve been underpaid address their employer directly. But given most hospitality workers are employed casually, with no reason or warning needed to have their shifts slashed, this isn’t always feasible.
When politely sitting down with the person who is building an empire on paying you a pittance doesn’t work, claims can be escalated to federal court. If found guilty, employers are penalised under the Fair Work Act, made to backpay wages, and make payments to Fair Work.
But, as we’ve seen time and time again, existing penalties aren’t high enough to deter illegal behaviour. Savings made from not paying staff properly outweigh penalty costs. The industry is thus built on a business model of wage theft.
In the lead-up to the federal election, the Coalition announced it would introduce legislation to criminalise wage theft, meaning employers who deliberately underpay their workers could face jail time. State-based criminalisation laws have also been proposed, but with most employment law handled federally, these state laws would be virtually unenforceable.
Around the same time, Labor pledged to introduce a tribunal for unpaid wages and entitlement claims. The tribunal would be attached to the Fair Work Commission, meaning costly claims through the Federal Court could be avoided.
Unsurprisingly, employer and industry groups are against the idea. In a parliamentary inquiry in Queensland last year, submissions argued new laws would discourage people from employing staff (how they’d get around hiring staff we’re still not sure). Industry body Air Group jumped straight to hyperbole, questioning what would happen next: “Will misuse of sick-leave become known as ‘time theft’ and also become a criminal offence? Will failure to pay a bill or underpayment of an account become a criminal offence?”
How much of this legislation has been put in place? Absolutely none of it. Months on, no real changes have been made on either the state or federal level to criminalise wage theft.
Fair Work and ‘enforceable undertakings’
Much has been made of the $200,000 “fine” that MAdE Establishment was forced to pay. It’s worth clarifying that this is not a fine, but a voluntary payment made under what’s called an “enforceable undertaking” (EU) — the highest ever negotiated, the FWO was quick to tell us. An EU is an agreement between a regulator and a business that has failed to follow the law in lieu of taking that business to court. In the case of Fair Work, an EU generally has to include:
- An acknowledgement by the employer that the law has not been followed
- An agreement by the employer to do certain actions to fix the breach
- A commitment by the employer to future compliance measures.
It can include (but doesn’t have to) a “contrition payment” like that made by MAdE. The Fair Work website gravely warns that “not complying with the agreed terms of an EU is a serious matter. We can apply to the courts to enforce the terms of the agreement.”
Except… they never do.
Indeed Robert Corr, a former prosecutor at the Commonwealth Department of Public Prosecutions and longtime critic of the enforceable undertakings approach, has pointed out the absurdity of the situation. The EU makes it exceedingly clear that the company knew of the problem, promised to fix it, and didn’t:
On 30 October 2015, in response to [a letter of caution], George Calombaris, on behalf of the Press Club, sent the FWO a letter which stated that the Press Club would carry out reconciliations for each employee engaged on an annualised salary and rectify any identified shortfall. These reconciliations were not subsequently undertaken at the end of each year.
And yet FWO assures us that if they had believed the company had deliberately broken the law then they’d be in court right now.
Visa rules
Within an industry already disproportionately beset with wage theft, the young and migrant workers represent a disproportionately high number of victims.
It’s worth noting that the majority of wage theft affecting migrant workers goes unreported — the most comprehensive study shows nearly half of migrant workers (excluding 457 visas) earned less than $15 an hour. Laws regarding migrant workers more or less guarantees this will continue.
Employers can leverage visa conditions to guarantee a worker’s silence; whether by threatening to withhold sponsorship, firing an employee who complains, or having them engage in work that breaches their conditions (say, having an international student work for more than 40 hours).
There is a memorandum of understanding between Fair Work and Home Affairs regarding these situations. It stipulates that if you hold a temporary visa with work rights and have not complied with your visa conditions due to workplace exploitation, Home Affairs will “generally” not cancel your visa, detain or deport you as long as you have sought assistance from the FWO. For a visa holder who doesn’t have any work entitlements, Home Affairs guarantees nothing but that their case will be considered on merit. This is called the “assurance” protocol.
Unions and academics have long been calling for an amnesty for exploited migrant workers, or at the very least a “firewall” between the agencies so that migrants can report exploitation without fear of being deported or detained.
Dispiritingly, a report from the Migrant Workers Taskforce in March this year acknowledged the fear that prevents migrants coming forward, but concluded that the assurance protocol was apparently just fine.
Why not just formalise the whole immigrant labour cheap wages relationship and start bringing in SE Asians as live-in carers for the elderly who want to stay at home? Full board and a cash payment for them, and a comfortable dotage for Australians. You know it makes sense – the details could be worked out.
If that isn’t already happening, for a while now,I’d be very, velly surprised.
How do we stop them? Short of criminal action can we? About 15 years ago a young bloke from my home town went to work for one of the big time wage thieves in this story, the one from Sydney. His father who was an acquaintance, said he was treated like absolute crap and eventually left to work for a better boss. Since the government will not act on visas or wages you’d near enough have to shoot the mongrels to stop them, which is not really a good solution.
Don’t be so hasty in dismissing that solution, Old Greybeard …
Agree shooting them isn’t the solution. Think of all the risks of lead poisoning. The French favoured the guillotine.
It had/has the advantage of being a spectator friendly, participatory pastime.
Maybe not suitable for the Knitting Nannas of CSG fame.
George Orwell wrote of his experience of working in the hotel industry at the turn of last century in his book ‘Down and out in Paris and London’. Changes have, of course, happened since then but evolution is slow. I’m a retired chef and have experienced the slow changes, but the industry still depends to a large extent on the members of the ‘brigade’ seeing their employment as pay to do the job, not pay for each hour worked. Sure it’s wrong, but in an industry where it acceptable to work a ‘Stage’ (A ‘stage’ is a period of time working for no pay, under a high profile chef in order to advance your knowledge and improve the CV) it is not so surprising that full, fair pay is still relatively less than usual. Chef’s such as Gordon Ramsay represent the tail end of the abusive ‘prima donna’ chef’s from times gone by. Most of us have evolved. But their is still a strong element of the need to be a ‘Débrouillard’.
Quoting Orwell;
“A débrouillard is a man who, even when he is told to do the impossible, will se débrouiller—get it done somehow. One of the kitchen plongeurs at the Hôtel X, a German, was well known as a débrouillard. One night an English lord came to the hotel, and the waiters were in despair, for the lord had asked for peaches, and there were none in stock; it was late at night, and the shops would be shut. ‘Leave it to me,’ said the German. He went out, and in ten minutes he was back with four peaches. He had gone into a neighbouring restaurant and stolen them. That is what is meant by a débrouillard. The English lord paid for the peaches at twenty francs each.”
Anthony Bourdain much later wrote of his experiences and the need to be a ‘débrouillard’ (without using the term) in the industry in the USA. I’m not defending anything, just trying to explain how this abuse comes about, especially in an industry where just about anyone who thinks it would be groovy to open a restaurant can, without much in the way of training, experience or qualification.
Hands up all the Crikey ‘commentators’ on this matter who have ever employed anybody?
hey fisco, I did, and had no problem paying them a decent wage and penalty rates and a bonus if deserved, and in return received dedication and loyalty from them as well as their friendship,and made good profits at the same time, so suck on that mate.
We did, on the family farm. We had no trouble paying the legal wage and they lived in farm accommodation rent free and ate at our table at no cost to them. In those days that was just what you did on a farm.
We’ve probably all employed a tradie.
We have had staff working in our practice for 30 years or so.
We have always paid above award, with a Specialists rooms, our staff need to be able to empathize, whilst making sure something bad isn’t occurring.
And so, currently, our Reception staff, consist of a Biomedical Science graduate, currently undertaking post graduate study in teaching and her part time job share is a Nursing Student.
We also employ a Midwife and a Sonographer.
This coupled with our Obstetrician gives a holistic approach to the care of our pregnant women.
If you can’t pay wages, then, there is something wrong with your business model.
I have to add that we could not pay wages if we completely bulk billed patients.
Currently, the federal government considers the medical care of a patient in labour, which can last 24 hours or so, or a caesarean delivery to be valued at $573.
Please let me know if you can find a carpenter, plumber or painter for that money.
Generous but only to the people who really don’t pay much tax anyway, and a swinging kick in the guts for the down.
All you fools should stop whinging about wage theft, you deserve it, you voted for it, Rupert and news corp gave you your orders and you followed them to the hilt, so shut up and cop your reward, personally I hope they bleed the lot of you dry and work you till you drop, and dont forget to blame labor, that might make your stupidity a little easier to bear you stupid suckers, and if you dont want to work for slaves wages, scomo will just import a few million more 457 slave navies from overseas that will, and you cant just decide to go on the dole now because he`s made that so no one can live on it, so enjoy the fruits of your stupidity and learn to live in the world you created for yourselves at the ballot box.
It doesn’t seem you are employing right now ‘braddybear’, given your current attitude to ‘loyal’ employees.
I have been employing for 33 years, and have employees who have worked with me since 1988 and several more for over 20 years. Maybe you need to hear some of my experiences.
fisco, maybe your just a bad employer, you reap what you sow mate, If you had/have bad staff then maybe its the example you set, if you rob me I`ll rob you, if you kick me I kick you, its not rocket science, bet you`re a conservative, or even worse a self proclaimed christian conservative, lowest form of life, maybe you need a scomo miracle or a personality change, but one thing you dont deserve is sympathy, remember, the worm will turn, scomo and co will get their turn to get the axe, and its only one death/resignation to a hung parliament and political oblivion in a hung parliament. ” as you are, so once was I, prepare yourself to follow me” is written on a headstone in old parramatta cemetary and is good advice for all those hard hearted hypocritical self proclaimed suedo christians in the conservative parties world wide.
I doubt if Iwould have kept loyal employees continuously employed for 33 years and 20 years if I were a ‘bad’ employer braddy bear. The vast majority of established employers treat their staff very well to build loyalty.
Any employee can sack their employer at the drop of a hat – walk out mid-project, and the employer effectively has no remedy. If an employer does the same to an employee, there is an array of ‘unfair dismissal’ law and tribunals for the employee to use.
Your smears and gross assumptions (christian conservatives, really?) only indicate that you might need help with your state of mind. Ring Beyond Blue.
Most of the people getting ripped off didn’t vote for our present masters. Many of them can’t even vote.
BB seems to be a mite perturbed.