Motions

Wage Theft

Adjourned debate on motion of Hon. I. Pnevmatikos:

1. That this council establish a select committee of the Legislative Council to inquire into and report on wage theft in South Australia, with particular reference to—

(a) the prevalence and incidence of wage theft in South Australia, with acknowledgement to evidence of wage theft from other parts of Australia;

(b) the impact of wage theft on workers, families, law-abiding citizens, the economy and community;

(c) the various forms that wage theft can take, including through unpaid superannuation and any other statutory entitlements, the misuse of ABNs and sham contracting arrangements;

(d) the reasons why wage theft is occurring, including whether the current regulatory framework and practices are effective for deterrence;

(e) the sectors in which wage theft is prevalent, including industries, occupations, parts of the state, or among cohorts of workers;

(f) the effectiveness of the current regulatory framework at state and federal level in dealing with wage theft and supporting affected workers, including whether conditions preventing prosecution of white collar fraud are fundamental towards supporting the legality of wage theft;

(g) measures to ensure support services are in place to ensure accessible and cost-effective justice to expedite claims;

(h) options for ensuring wage theft is eradicated, including consideration of regulatory and other measures either implemented or proposed in other jurisdictions interstate, nationally or internationally and the role of industrial organisations, including unions and employer registered bodies in addressing and preventing wage theft; and

(i) any other related matter.

2. That standing order 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

3. That this council permits the committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to any such evidence being reported to the council.

4. That standing order 396 be suspended to enable strangers to be admitted when the committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

(Continued from 19 September 2018.)

The Hon. C. BONAROS (17:39): I rise today to speak in favour of the motion by the Hon. Irene Pnevmatikos for a select committee into wage theft in South Australia. As the wife of a small business owner, there are few things more insidious in the workplace than an employer deliberately underpaying their hardworking, loyal employees. Make no mistake, wage theft, which in simple terms is employers stealing money from their own workers' pockets, is rife in Australia. As odious as that is, the staggering statistics paint a disturbing and worsening picture.

A recent study by global workforce management provider Kronos showed that 10 per cent of Australian workers, that is, one in 10 workers or about one million people, have rarely or never received the minimum wage; 11 per cent are not paid for all the hours they work; and 43 per cent have at some point been paid less than the minimum wage. That means that someone we know and/or love, or even ourselves, have been the victims of wage theft over our working life. Releasing the report, Kronos Australia and New Zealand Managing Director, Peter Harte, said:

It's disappointing to learn that even in today's mature economy, a large number of Australians are being exploited in the workplace—at a time when wage growth is slow and many people are working harder than ever.

The practice is also illegal, with significant penalties for those businesses found to breach regulations. The situation is not ideal for building the thriving and intelligent economy Australia needs to compete in the international market place.

But Mr Harte had a disclaimer to his comments:

Given the complexity of workplace regulations and the changes that can occur annually, we understand it is not always easy for businesses to keep up to date.

Yes, it gets worse. A study by a union, United Voice, found that 76 per cent of workers in hospitality are paid under the minimum wage, and according to Industry Super Australia a staggering one-third of eligible Australian workers are being underpaid super. This equates to 2.4 million workers collectively having $3.6 billion a year stolen from them, an issue that will seriously impact their quality of life in retirement.

A good example of this abuse has come to light following the collapse of the Australian arm of the Max Brenner chocolate cafe chain, which announced recently that it had appointed voluntary administrators and will close more than half its 36 stores. It has been reported that an expensive overhaul of the company's head office in Sydney hit the company's cash flow so hard that the company stopped paying their 600 staff their superannuation entitlements for the last six months of 2016.

The company sent a letter to staff advising them that the head office redevelopment is 'unfortunately taking longer than originally planned and is having a temporary effect on cash flow'. As a result, superannuation payments had been delayed, but would eventually be paid in full. It is not known publicly whether or not that has occurred.

If we all know that stealing is wrong, why is it that every year millions of Australian workers are robbed—the victims of wage theft? Wage theft, through employers deliberately underpaying workers and/or refusing to pay mandatory super, is affecting thousands of workers every year and it is affecting those workers who can least afford it, and the situation appears to be worsening.

Sadly, it is the vulnerable members, as I just mentioned, of our workforce who are likely to suffer the worst form of wage theft. This includes those with disabilities, young people and migrant workers, like backpackers. Generally speaking, the worst affected industries include hospitality, retail and agriculture, due to most of the jobs being casual.

The Australian Council of Trade Unions is currently pushing for the government to make wage theft a crime, punishable with up to 10 years gaol. While SA-Best and our Centre Alliance colleagues will continue to consult widely on whether current legislation surrounding wage theft is appropriate or otherwise, it would appear on the surface, given the statistics before us, that the employer versus employee ledger may need some recalibrating.

If a worker is caught stealing at work, there is every probability that police will be called in to investigate, the person charged and made to face the full extent of the law. He or she will also, in all likelihood, lose their job. With that I have no problem: you commit a crime, you pay the consequences. However, reverse that role, where an employer deliberately steals from their worker by deliberately underpaying their wages and/or refusing to pay mandatory superannuation, they invariably escape with a monetary fine, if indeed they are caught in the first place.

While toughening current laws, including increasing penalties for employers found guilty of wage theft, may be a step in the right direction, more needs to be done to ensure employers do the right thing in the first place. Earlier this year, while acting in the role of Fair Work Ombudsman, Kristen Hannah suggested that business owners were becoming overconfident in their understanding of awards and wage conditions. She said:

While these mistakes may be careless rather than malicious, the fact remains that there has never been more freely available information for employers than there is right now, so there are no excuses for making these mistakes.

I could not agree more, and SA-Best could not agree more. For all the reasons outlined, we support the honourable member's motion.

Debate adjourned on motion of Hon. I.K. Hunter.