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Labor demands action on wage theft epidemic

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Woolworths CEO Brad Banducci has apologised for the company's wage theft and vowed to make amends (Screenshot via YouTube)

Labor Shadow Minister for Industrial Relations Tony Burke has called for a comprehensive inquiry into the wage theft epidemic currently plaguing Australia.

The Australian Council of Trade Unions (ACTU) has also called upon the Morrison Government to make amendments to the Fair Work Act (2009) that would give deterrents and punishments to those employers who engage in wage theft.

This two-pronged attack comes in the wake of a voluntary admission of guilt by Woolworths, who, on Wednesday confessed that it is owing in excess of $300 million in underpayments to its employees, over the better part of the last ten years.

It also comes as Burke continues to launch a counterattack against Attorney-General Christian Porter’s Ensuring Integrity Bill, due to come up for a vote in both houses of Parliament by the end of the month.

And Burke emphasises that the demands for deep investigations into wage theft are nothing new:

For half a decade now, Labor has been calling on the Liberals to do something about worker underpayment, whether it occurs as a result of genuine payroll error or deliberate wage theft.

 

But Scott Morrison does not take wage compliance seriously.

 

And by failing to act on this issue, his Government has sent the message to businesses that they don’t need to take it seriously either.

In calling for the Parliamentary inquiry, Burke has outlined a deep ambition for its examinations short of actually performing a royal commission into the matter, to look at the concept of wage theft in its entirety, including:

  • the reasons for wage and superannuation theft;
  • the cost of wage theft to the economy;
  • the best means of uncovering and deterring such theft; and
  • the taxation treatment of those affected.

‘Labor wants a system in which wage theft is uncovered quickly and workers are repaid swiftly,’  says Burke.

Woolworths has vowed contrition in its own confessions to make “interim back payments” to approximately 5,700 staff affected nationwide and complete the reimbursements by Christmas. However, Burke and ACTU Secretary Sally McManus say that acts of wage theft committed by a whos-who of Australia’s retail elite, either unintentionally or as a part of their business model, will not be tolerated in light of a struggling economy.

Burke said:

While Woolworths has today come forward and committed to paying its workers what they’re owed, it should not have taken this long to uncover these underpayments.

 

We also know that many employers don’t come clean. Others have tried to cover up their underpayments — or worse yet have deliberately used wage theft as part of their business model.

McManus adds

Woolworths has systemically underpaid workers for a decade and this has only come to light because they self-reported. Self-regulation just isn’t good enough. This one took nine years to come to light.

 

We need more power for working people and their unions to regularly check the books and ensure that all employers are paying their workers properly.

Woolworths cited recent changes in its enterprise agreement under the General Retail Industry Award (GRIA) that were uncovered during the most recent round of negotiations, with an “inconsistency in pay” exposed from the old agreement.

Those shortcomings can be traced to its salaried employees – such as duty managers and assistant managers – not receiving penalty rates and overtime pay that they were fully entitled to receive on top of their regular pay.

Those managers as salaried employees constitute a majority of those victimised.

Data released last month from the Fair Work Ombudsman (FWO) revealed that workers victimised by wage theft at their workplaces received $40 million in back wages in the last year while employers were fined $4.4 million for those offences. Both figures are all-time highs for as long as the Fair Work Commission (FWC) has been compiling annual records in those areas.

If the FWO and FWC are dishing out penalties and giving justice back to those who deserve it, why are more and more companies in the hospitality and retail sectors partaking in – and getting caught at – wage theft practices?

After all, the partial collective list of Australian enterprises that have committed wage theft and have either confessed to it or have applied it as a business model tactic range from hospitality businesses such as Crust Pizza, Subway, Grill’d, Degani Bakery and Cafe and Muffin Break, to restaurants run by celebrity chefs George Calombaris and Neil Perry.

Also guilty are retail giants such as Bunnings, Supercheap Auto, Michael Hill Jewelers and Sunglass Hut, with the list growing with new revelations and discoveries on a seemingly daily basis.

Perhaps, as McManus says, the current penalties under the Fair Work Act aren’t a strong enough deterrent to prevent them from happening in the first place.

“Woolworths must pay back the money,” McManus said about the Woolworths incident specifically, “but we must also change the system so that underpayments on this scale aren’t met with a slap on the wrist”.

Secretary of the Retail and Fast Food Workers Union (RFFWU Josh Cullinan points out the consequence of what has happened to the Woolworths workers, as having a set of massive real-life significance.

Cullinan said:

“The scale of this so-called mistake is huge. The value that has been lost from these workers, the opportunity to have had that money to have paid their mortgage, to be able to support their families, is a huge impact.”

Meanwhile, Woolworths CEO Brad Banducci, in apologising, has taken the blame squarely on the chin for the wage theft offence of monumental proportions:

“As a business, we pride ourselves on putting our team first and in this case we have let them down. We unreservedly apologise. The highest priority for Woolworths Group right now is to address this issue and to ensure that it doesn’t happen again.”

However, Cullinan disagrees, feeling that the whole situation damaging the public’s faith in a trusted retail brand on the Australian landscape could have been avoided quite easily.

We can’t fathom how the company did not know this was going on. It just beggars belief that they were not aware of what they were doing, with those salaries. 

 

If they didn’t, at best it’s incompetence, and if they did, it just shows a blatant disregard for their workers and is manifest wage corruption that would justify a royal commission.

William Olson is a freelance journalist and hospitality professional. You can follow William on Twitter @DeadSexyWaiter.

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