Wage Theft

The Hon. R.P. WORTLEY (15:44): I rise today to talk about wage theft. It is a massive problem in Australia, the product of unscrupulous bosses who have been getting away with stealing from their workers for years. It has become so prevalent that we needed to establish a Select Committee on Wage Theft in South Australia to investigate it, and the findings are alarming.

The select committee was initiated and is chaired by the relentless Irene Pnevmatikos, who has made it part of her life's work to ensure that workers receive their fair wages, conditions and hours. Consider that for a moment: if a worker, an employee, stole money from their workplace, they would most likely be charged, fine, gaoled and definitely would be sacked and face court. If the employer does it, for far too long it has been business as usual. It is either a mistake or an administrative error.

The select committee's interim report provides evidence of wage theft presented by exploited workers, trade unions, researchers, community legal services and support centres, multicultural organisations and youth groups. That is a broad cross-section of the community, producing data, case studies and detailed examples emphasising underpayment of wages, unpaid superannuation, allowance penalties and leave entitlements.

The list goes on and on to include the manipulation of hours, time sheets and contractual arrangements. The report found that for some businesses wage theft was the rule rather than the exception. In some cases it was even identified as the basis for a company's business model. In other words, stealing money and entitlements from workers actually allowed the business to be more profitable.

The problem with this abhorrent criminal behaviour for many workers is that for too long it has been up to the workers themselves to identify the anomaly. The anomaly? No, let's call it what it is: the crime. How difficult is it for some workers to complain about having wages stolen by the very person to whom they are complaining? It is a very stressful exercise just bringing the matter up with the boss for a raft reasons. Normal nerves aside, there is the fear of retribution, fear of having their hours cut, even fear of losing their job altogether.

The select committee examined the effectiveness of the current regulatory framework at a state and federal level in dealing with wage theft. Supporting affected workers is central to its terms of reference. The committee found evidence supporting the concern that wage theft occurs across Australia and across industries.

More alarming perhaps is that the data collected from a nationally focused audit by the Fair Work Ombudsman since 2009 shows the general trend of wage theft is worsening over time. While the role of the Fair Work Ombudsman was acknowledged, it was generally accepted that the office was under-resourced and lacked frontline staff to police existing legislation. As a result, there was little chance the majority of businesses would ever be audited.

The McKell Institute provided evidence that between 165,000 and 170,000 South Australian workers were impacted by wage theft in various forms. That is just over 20 per cent of the South Australian workforce that have been ripped off by their employers. On top of that, the report also shows that 29 per cent of South Australian workers have been subject to non-payment or underpayment of superannuation. This superannuation theft, it found, deprived almost three million Australian workers around $5.9 billion of their entitlements. That is stealing from a worker's future earnings and in many cases it may not even be known until years later.

The Fair Work Ombudsman advised that in 2017-18 they completed 28,275 requests for assistance with workplace disputes. This resulted in the recovery of $29.6 million for more than 13,000 employees across Australia. More than 1,300 of those workers were in South Australia.

Submissions to the select committee highlighted a well-disguised lack of information on wage theft. SA Unions noted there was a lack of a comprehensive database because wage theft was carefully hidden by employers deliberately exploiting their workers. This has been done through a range of methods, including confidentiality agreements.

At greatest risk were migrant workers on temporary visas, women on low incomes, young people from refugee backgrounds, international students with limited proficiency in English, labour hire workers, backpackers, gig workers who are contractors rather than employees and refugees on temporary visas.

SA Unions provided data from the National Temporary Migrant Workers Survey to support the claims that showed wage theft is endemic among international students, backpackers and other temporary migrants. Approximately 30 per cent of those surveyed reported that they earned less than half the minimum wage.

Anecdotal evidence suggests that these workers have their passports and visas copied when starting, with the threat of losing their visa should they complain about their pay and conditions.

Time expired.