Underpayment crackdown marks important shift

Ben Schneiders

February 18, 2020

The Age

It would have been unthinkable even a few years ago that a Coalition government would talk about naming and shaming underpaying employers or introducing laws that make wage theft a crime.

But it is a reflection of how brazen and widespread worker underpayment has become at high-end restaurants, on farms, in the franchise sector and at some of Australia’s largest companies.

It is worth noting that Attorney-General Christian Porter’s intervention in this issue is only a discussion paper at this point. The Morrison government will now come under pressure from its natural allies in the business sector to not go too far.

But that does not mean these “reform options” are insignificant. They include disqualifying directors where significant underpayments occur, forcing employers to display notices admitting they had underpaid workers, banning companies that underpay workers from using some forms of temporary migrant labour, and a small claims tribunal for underpayments.

Some of the reform options are almost identical to policy positions of the union movement and ALP. It confirms the shift in the politics around issues to do with wages, the power of big business and of fairness at work.

For many years after Labor’s Fair Work laws were introduced in 2010 the dominant complaint was the laws were too pro-union and there was pressure to change them to favour business. But after years of wage scandals, of ever-declining union density and of tepid wages growth the political climate has shifted. Decisively.

As with any potential change there needs to be caution as we wait for the details of what may appear in legislation. The same is true of the more advanced plans from the Morrison government to criminalise wage theft. Legislation to enact that is to be introduced shortly. If it only applies in the rarest cases – as some expect – it will be more spin than substance.

While the Coalition has adeptly read the hostile public mood towards wage underpayment it remains far from pro-union. The Ensuring Integrity Bill it wanted to introduce before Christmas was an undemocratic interference in the operation of unions, and it still wants to pass a version of that bill.

It is hard to imagine the government being able to pass the integrity bill without making moves to deal with the much more widespread and serious problem of employers underpaying staff.

That is not to say there cannot be honest mistakes by employers. But there has been too much evidence emerge of systemic underpayment and wage theft almost as a business model.

Now there is a reckoning coming.