We haven’t heard a whole lot from BHP about how terrible Labor’s industrial relations reforms are — specifically its “same work, same pay” crackdown on the abuse of contractors — since it was forced to reveal one of Australia’s biggest wage theft scandals last week: the underpayment of nearly 30,000 workers, to the tune of more than $400 million. They don’t do anything by halves at “the Big Australian”.
BHP’s theft from its workers is second only to the one admitted to by Woolworths — the Fresh Food People are now looking at more than $750 million in compensation.
BHP graciously “self-reported” its theft to the Fair Work Ombudsman (FWO), whose website maintains a regular, sometimes daily, drip of examples of employers, usually small fry and often hospitality industry, whom it has busted for stealing from workers. But the phenomenon persists at all levels. A week ago, FWO chief counsel Rachel Volzke ripped into universities, which she said have engaged in “entrenched non-compliance” and systematically underpaid staff.
Then there’s the Reserve Bank, which not long ago had to apologise for underpaying staff, making a mockery (if it needed it) of governor Philip Lowe’s lecture to workers to just work a few more hours to meet higher mortgage payments.
This has been going on for years — it was back in 2015 that the ABC and Fairfax shone a light on 7-Eleven’s outrageous wage theft. Ever since, a steady stream of major employers, including the ABC itself, have either been outed or fessed up that they’ve ripped off their staff. At a time characterised by low wages growth, it was scandalous. Given freefalling real wages, it’s now, well, criminal.
The FWO has consistently shown that it’s migrant workers and younger workers who are at the sharp end of wage theft. The Grattan Institute showed the shocking extent of exploitation of recent arrivals in a report two weeks ago by Brendan Coates, Trent Wiltshire and Tyler Reysenbach. They found that 5-16% of employed, recently arrived migrants were paid below minimum wage. And not by small amounts either: 1.5-8% of recent migrants are underpaid by more than $3 an hour.
Tens of thousands of migrant workers are being underpaid, on top of the persistent level of underpayment of Australian or long-term resident workers, of whom 3-9% are paid below minimum. And as the authors note, despite a ramping up of FWO enforcement activities, bad-faith employers appear undeterred.
The Grattan report offered a dozen recommendations for changes to migration law and migration agencies to curb this systemic abuse, in addition to other legislative changes and a dramatic beefing up and refocusing of the FWO. But the best part of the report is the way in which the authors explore the mindset that seems to enable the persistence of systemic wage theft across employers large and small, private and public.
Compared to other corporate abuses like breaches of competition law or tax evasion, we simply don’t take wage theft seriously as a regulatory issue. The report points out:
The ATO and the ACCC can both require a person to give evidence. By contrast, the Fair Work Ombudsman must apply to the Administrative Appeals Tribunal to issue a notice to give evidence. The Ombudsman has limited powers to issue fines … By contrast, the ACCC can fine businesses for breaches of the Australian Consumer Law, and the ATO can fine taxpayers for making an untrue claim on their tax return (and paying less tax as a result) … The size of penalties the Ombudsman can issue is also much smaller than for other regulators.
The disparity in regulatory tools, enforcement powers and penalties pointed out by the Grattan team sends a clear signal: we simply don’t see wage theft, which in the case of Woolies and BHP can dwarf tax evasion in financial cost, as serious as other corporate crimes.
Labor this week announced reforms to address the systematic exploitation of migrant workers, including criminalising coercion of visa holders, banning wage thieves from hiring temporary visa holders, expanding penalties and strengthening compliance tools. The Australian Border Force will also gain additional funding. Employer groups have already attacked proposals to criminalise wage theft, insisting that, hey, it’s all very complicated and criminalisation is “unduly punitive”. (Criminalisation does indeed tend to be “punitive”, so fair point.)
It’s a good start, but the entire regulatory mindset around wage theft needs to be shifted to the point where employers regard stealing from their own workers as not an embarrassment but a humiliation, and a crime for which there are real consequences, including serious penalties.
Nothing else will shift what is an entrenched feature of how we do business here, and not just in corporations.
Fair enough. Earlier in the week on ABC RN there was someone from one of the business representative groups asked about wage theft. The reassuring explanation was: there is not really any such thing as wage theft, it’s just that paying wages is so complicated — you cannot imagine what a struggle it is — so mistakes are made now and then. Regrettable but nothing to worry about and everyone is awfully keen to fix it once it comes to light. (Peta Credlin would no doubt want to point out that, if you were not there, you could not possibly know what it’s like, operating in the ‘fog of business’, these fine people are corporate heroes… but I digress.) Anyway, it seems there was no time in the interview to ask why it is that these common and persistent mistakes always work in favour of the employers by leaving employees out of pocket. No doubt there’s a highly convincing and innocent explanation that could put this issue to bed once and for all.
I was under the impression that since Pay Packets were done away with and all payments went straight into Banck Accounts, there have been Payroll packages either standalone or integrated ones for large organisations, to do the job for them.
There was a popular saying some time ago:
That still leaves open the question of whether the computer is deliberately set up for that result.
Computer saying “Shit in, Shit out”.
However the payroll is done, the information fed into the system is the one that pays out.
Wages theft takes the entire attempt at reducung Australia’s minimum wage back to parallel the US”s extravagant of 8$ per hour to a predictable low in ethical standards.
Anyone who brings American franchises into Australia deliberately know that the system only works if the pay is $8 per hour max. To sell the franchises ,the business is selling permanent citizenship as part of the deal, both in the US and Australia.
Yes. It’s always in favour of the employer. Were a mistake to occur in the employees’ favour, the overpayment would be recouped by a deduction in the next pay fortnight. Or it would head to the courts.
the shifting sands of wages regulation and employment regulation makes it impossible to be completely accurate. The programmers are not industrial lawyers. The complexity is creating the problem. Simple is now complicated, complicated is now complex, complex is now chaotic.
That is why the cash economy is really propping up small business.
There is no such thing as ‘wage theft’ – is is a myth like all the myths that Australian society is morphing to.. 3% of the the population wants a Voice – where 97% has not a Voice. Thus disenfranchising the 97%
We’re talking about capital vs labour here, right ?
I’m going to assume you’re not being ironic. It’s nonsense. As the comment above yours, by Frank Dee, says, ‘it’s always in favour of the employer’. Why doesn’t ‘complexity’ lead to wage-overpayment? The answer’s too obvious, but you start going on about the Voice – not related – and saying something ridiculous about it to boot.
I am taking this comment to next staff meeting. I keep banging on at work, that we need to stop certain residents from having access to the internet. Turns out I am right.
The awards are actually old, not new and the person/ people who do the pays have copies of them.
A “finger error” does not accumulate to $750,000,000 in a week/ fortnight or month.
Coles self-reported the day before they went to court with the FWO………
Yet, there are productivity bonus’ paid on preventing routine maintenance activities/ reduction in payroll/ overworking staff with unpaid overtime/ bludgeoning staff into accepting dangerous work conditions. The financial imperative allows people to justify their wilful blindness, whilst pocketing the bonus.
When challenged after a incident such as a coal mine blowing up killing 27 because the methane detectors weren’t replaced or a mine wall collapsed/ dam wall/ spill of radioactive tailings into the wider environment they are whisked out of the country or have the big company picking up their legal bills………..
I can see how complex everything is, especially, managing to BS workers on how hard it is to pay them correctly.
I look forward to “Wages Theft” becoming regarded as an anti-social, unethical pass time on the same level as those caught photographing up young women’s skirts.
As for the attempt to muddy the waters regarding “the Voice”.
This is designed as a specific lobbying establishment for the people who owned this great land and which won’t be removed, again.
It is always the “downward envy” of people with a racist chip on their shoulders, revealed for all to see when they give their “Voice” to a fear that the aboriginals may end up with a life span similar to own own.
I wonder how Australians on their River cruises will feel when they are treated as South Africans (Spit in their tea or coffee, not heard until screaming for service ) during their murderous white supremacist regime.
It has been difficult enough working in Europe and the UK whilst we have been running offshore torture camps, this referendum fails and we hang a “Racist” sign around all of our Australian necks.
It is similar to “adjustments ” to utility bills. The adjust is always to the benefit of the electricity/gas/water company
Always. It’s a law of nature. Maybe physics.
Unfortunately, it’s not just the perpetrators who are wilfully blind. I personally know someone who works in the FWO (albeit at a low level), and that person doesn’t like using the term ‘wage theft’ – a bit like the store detective not liking the term ‘shop-lifting’.
Hmm, it’s almost like businesses get to call the tune in this country. Seems improbable in a nation with such an engaged and committed citizenry, but I dunno, maybe the business sector has been working in a very secretive and underhand way the past few decades to undermine democratic principles and shift public policy in favour of business profitability, and we’re only just now noticing. Hard to say.
Sorry, there was nothing underhand or secretive in the way John Howard and his crew set about wrecking the “accord” and safe working rights whilst favoring the employer over the employee, with the creation of the FWO and the dismantling of the Arbitration Court..
The rise of the generic “manager” made it easier for the destruction of workplace enterprise agreements, to be scraped in favour of putting workers back on a 10 or 15 year old award, with bonus’ for the managers.
I know of an instance whereby an entire level of professional support has been removed from Blue Care and so the people (reg nurses) needing a little professional advice have no one to call.
Now that was clever!!
One possibility for helping our poor befuddled manager class to appreciate the seriousness of wage theft would be to get a few in jail and keep the threat of jail ever present in the future.
Lets get started on a few convictions.
Or as Goat Girl said on another thread, bring on the tumbrils…
“Why do we treat wage theft as a minor sin?” Because the poor are seen as peasants, two legged working animals who have no right to complain, and no one interested in listening if they do. (Sorry to harp on a familiar theme). In the past, this has been tempered by unions, but as unions were depowered and abandoned by their potential members, the theft of wages grew, along with the reduction of conditions. The best solution; get compulsory unionism happening – admittedly a blunt tool – or somehow use the egregious contempt that is shown to today’s lesser paid workers to get them to join or form a union.
If these organisations are so financially and legally incompetent that they cannot manage to pay their workers according to the law, they should not be operating a business, let alone a public corporation where shareholders trust them with their investments. Financial competence is essential for business success, so why haven’t they ensure that their staff are appropriately skilled & trained to do the job well?
Interesting to note that Qantas doesn’t train its staff to do their job either. They’re currently seeking overseas pilots, claiming that they need to go overseas because Australian pilots are not qualified for the particular aircraft. Why don’t they train them? When organisations bring in new technology, they usually train their staff in its use, but of course that assumes they want to use the employees they have. They don’t usually hire new staff, unless they want to replace their old ones. Then they may go elsewhere to get trained people at lower pay rates, being really keen to get people who won’t make a fuss if they’re treated unfairly or inappropriately.