Statement by Professor Allan Fels – criminalisation of wage theft

Statement by Professor Allan Fels – criminalisation of wage theft

Professor Allan Fels, Chair of the Migrant Workers Taskforce, has welcomed the Prime Minister’s statement in Parliament today that the Government is drafting laws to criminalise wage theft.

This follows the Government’s announcement before the election that it would adopt all recommendations by the Migrant Workers Taskforce.

It’s appropriate that the laws about wage underpayment and wage theft are brought into line with the provisions of consumer law.

The Government has accepted our report not only about criminalisation of wage theft in serious cases, but a wide suite of other measures to make law enforcement more effective. This includes much higher fines that will bring them into line with the consumer law provisions, and a range of other law enforcement measures in this field which would make them much more comparable with the long-established law enforcement techniques used by the Australia Competition and Consumer Commission.

Consumer law fines are a $10 million maximum, or up to three times the benefit from the theft, or up to ten percent of turnover.

It’s also important to make it easy to access and use the courts (typically via the Fair Work Ombudsman) to get results, and our recommendations in this regard have also been adopted. One of the problems in this area is that there is often inadequate or zero record-keeping, making proof difficult. And once it’s been determined that the law has been broken, there are further often onerous evidentiary requirements in order to establish the amount of underpayment. The Coalition Government has already enacted through the Vulnerable Workers Act provisions to reverse the onus of proof where the records are absent, and other methods to address poor record keeping.

The 7-Eleven experience is enlightening. 7-Eleven voluntarily made repayments to underpaid workers which have amounted to over $165 million, showing the importance both for wage justice and as a sanction. All measures that make it legally easier to get repayments are highly worthwhile.

The vast majority of employers have nothing to fear from this law. Moreover, it is extremely unfair to employers who comply with their legal obligations to face competition from the minority of employers who underpay.

It is also worth noting that the Coalition Government enacted the Vulnerable Workers legislation a couple of years back which also strengthens law enforcement in relation to underpayment by franchisees, particularly by making franchisors liable where they should have known that breaches were occurring and took no action. I also note that the Coalition Government has announced its adoption of labour hire firm regulatory measures. It is intended that these would apply in areas such as horticulture, contract cleaning, security firms and possibly in some areas of hospitality.

/Public Release.