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Second Reading Speech Wage Theft Bill 2020

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Sam Hibbins MP
Member for Prahran
2 June 2020

Mr HIBBINS (Prahran): I rise on behalf of the Greens to speak in support of the Wage Theft Bill 2020. This bill is criminalising wage theft, the act of failing to pay or deliberately underpaying workers wages or the other entitlements, like leave, allowances and superannuation that they are entitled to. I would like to begin by acknowledging the long work of Trades Hall in campaigning for action on this issue and congratulate them on their success in seeing the criminalisation of wage theft—well, it is not yet a reality; it has got to make it through the two houses of Parliament, but it has got to the stage. Certainly we will be supporting it in this chamber—and we look forward to continuing to support their advocacy and their campaigns to secure safe and fair work conditions for all workers.

This bill is about recognising that the wilful underpayment of workers is what it is: the theft of a person’s labour.

Whilst we do have rules governing minimum wages and entitlements and a system of civil penalties for breaching those rules, it is clear that this system is failing our workers. Too many employers are continuing to systematically underpay their workers—undercutting awards, failing to pay penalty rates and avoiding paper records by paying cash in hand. These stories are all too familiar and all too frequent: a young barista who has discovered that their salary was below the award rate; a cashier who was entitled to penalty rates that were never paid; and workers who are missing thousands in superannuation contributions that should have been made by their employers.

We have recently heard revelations of wage theft occurring at some of our biggest employers: Coles underpaying its staff by about $20 million; Woolworths stealing $300 million from its workers; and Grill’d underpaying hundreds of staff by pressuring them into lower paid traineeships positions. And of course we had celebrity chef George Calombaris outed for underpaying his employees by a huge $7.8 million. A 2019 KPMG report estimated that around $1.35 billion was withheld in wage theft each year and as much as 13 per cent of the workforce could be affected by stolen wages. This is just unacceptable. A fair day’s pay for a fair day’s work is really quintessential to the grand bargain of employment and how we go about our lives in our society. It gives you the roof over your head—or it should—food on the table and the time to spend with family and friends, and wage theft is just a completely unacceptable antithesis to this grand bargain.

Wage theft is most prevalent in industries like hospitality and retail. Three out of four workers in the hospitality industry have reported being underpaid at one time or another. In the food delivery industry, drivers and riders suffer about $300 a week in wage theft. These are industries where casualisation is rampant and where the rise of the gig economy has stripped workers of their rights. In industries like food delivery big companies are exploiting their workers by classifying them as independent contractors in order to avoid having to provide benefits like leave and superannuation. These are industries that employ high proportions of young people, migrant workers and temporary visa holders. They are often female-dominated and correlated with much lower pay, which reinforces this inequality. These are already vulnerable worker groups who may struggle to speak up for their entitlements in the face of a more powerful employer.

In many cases these workers are often employed via labour hire firms, creating an additional barrier to them accessing information, exercising their workplace rights and addressing potential issues of underpayment. Indeed a recent federal court case found that casual workers who worked regular and predictable shifts with a firm advance commitment to work were not casuals, despite how they were described in employment contracts, and therefore were entitled to be paid annual sick and carers leave. Now, while this might not necessarily be wage theft as defined in this bill and addressed as such, it really does highlight the nature of the power imbalance in some of these industries. No employer, labour hire company or third party should be able to steal wages from their workers and get away with it, but in our current system employers who commit corporate theft are getting off with a slap on the wrist. A small fine will do little to deter big corporations from continuing to exploit their workers by refusing to pay them legal wages and entitlements. That is why we support the measures in this bill to criminalise the act of wage theft.

These new offences are designed to act as a stronger deterrent to wage theft—to make it crystal clear to employers that the theft of employee wages or entitlements is unacceptable and that they will face consequences. In terms of the detail of the bill, it creates three new offences related to wage theft: first, a new offence for withholding employees’ pay or other entitlements like superannuation; second, an offence for falsifying employee records in order to hide or avoid reporting underpayment; and lastly, an offence for failing to keep records at all again in order to cover up wage theft. Companies can be fined a maximum of $1 million, and there is 10 years imprisonment for individuals. The new offences apply to all types of employers, including corporations, individuals and the Crown.

The bill applies a corporate criminal liability model, which means that senior management will be responsible for breaches of other staff where they have either directed other staff to take particular action or created a culture within the company that encourages that kind of action.

This means that senior company officials cannot try and pass the buck and avoid blame. If you as a senior manager have created a culture within a company that facilitates or encourages the theft of employee wages or other entitlements, you will be held responsible under this bill.

The bill creates a new Wage Inspectorate Victoria and gives it powers to investigate and prosecute wage theft offences. The new authority will have the power to enter, search and seize documents from business premises where inspectors believe an employee entitlement offence has been committed. It will also have a special dedicated criminal law enforcement arm which will be able to initiate criminal proceedings for the new wage theft offences.

One thing that is missing in this bill are measures to make it easier for workers to apply through the courts to recover their stolen wages. Workers repeatedly report that recovering their lost entitlements is for them the most important part of wage theft remedy, but the Fair Work system is tricky to navigate and too many claims go unprosecuted. I understand that the government is working on measures to make it easier and cheaper for workers to recover money stolen from them by their employer through the courts and plans to introduce these next year. We look forward to seeing these new reforms brought before Parliament soon to give all workers who have been unable to access their stolen wages and entitlements a faster, easier way to recover them.

I also want to note that many of the industries where wage theft is rampant have also been hard hit by the COVID-19 crisis. As many as one in two hospitality workers have been stood down or lost their job. Casual workers employed for less than 12 months are ineligible for the JobKeeper scheme. That is around 1 million workers across the country, many in hospitality. As the federal government flags an end to JobKeeper and an end to the increased Newstart—which does need to be raised and which is called JobSeeker now, and JobKeeper does need to be continued—it is more important that these vulnerable workers are protected. For those who have lost work due to COVID-19, they need to continue to receive a fair and livable income support payment. For those who are employed, working in safe conditions and receiving a fair and legal wage for their work, we do not want to return to a pre-COVID world where our retail and hospitality workers continue to be exploited and ripped off by their bosses, and we do not want to see wage theft continue to go rampant and unpunished. So we certainly support this bill and support the work of unions and Trades Hall who have done so well to bring this bill before Parliament.

I will make another, final mention on wages. Of course we have noted the debate going on before about whether we should increase the minimum wage or not increase the minimum wage or whether this is the right time. Well, of course it is the right time. But I would point out also that in New South Wales we have seen public sector wages frozen, which is a disgraceful thing for that state to do. I am glad they have not done it in Victoria. It has just been voted down and knocked off by the upper house there in New South Wales. But of course our public sector workers have been under a 2.5 per cent wage cap implemented by this government. And again, this is on the advice of an economist, the governor of the Reserve Bank, who says public sector wage caps have put downward pressure on wages, not just across the public sector but across the private sector as well. If you want to increase wages, if you want to boost wages, well then you really need to get rid of that public sector wages cap. The Greens are pleased to support this bill and we wish it a speedy passage through this house and the other place as well.

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Sam Hibbins MP
Member for Prahran
2 June 2020




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