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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2022-02-10 Daily Xml
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Wage Theft

The Hon. I. PNEVMATIKOS (11:57): I move:

That this council—

1. Notes the considerable number of high-profile wage theft cases reported in the media that have highlighted the deep-rooted inequality in our current industrial landscape;

2. Notes the harm wage theft causes to both workers and law-abiding employers;

3. Recognises non-payment of superannuation in South Australia is likely costing South Australian workers around $270 million per year in lost retirement savings—that is compounded further over time from loss of investment earning;

4. Recognises that combined losses of superannuation and other income in South Australia due to wage theft is estimated to be between $360 million and $560 million per year;

5. Recognises the unjust and unfair conditions that up to 170,000 South Australian workers experience their wages and benefits stolen; and

6. Condemns the Marshall Liberal government for not endorsing the Parliamentary Select Committee on Wage Theft in South Australia's recommendations and taking no action to rectify the wage theft crisis.

Today marks 10 weeks since the Select Committee on Wage Theft in South Australia tabled its report in this chamber. Over the three-year investigation, the committee worked to collate evidence from a range of workers, unions, employee groups, community organisations, non-government organisations and employer associations. It became obvious early in the investigation that wage theft is perverse, widespread and rampant in our state—not too dissimilar to the pandemic.

Just after the investigation opened in March 2019, the McKell Institute published a comprehensive report on the economic impact of wage theft in South Australia. The report detailed the substantial economic loss that South Australian workers have endured as a consequence of wage theft. It detailed that nearly 170,000 (or one in five) South Australian workers are impacted by wage theft, and 29.1 per cent of South Australian workers are likely subject to the non-payment or underpayment of superannuation. This underpayment or non-payment of superannuation entitlements is likely costing South Australian workers around $270 million per year in lost retirement savings.

The combined loss of superannuation and income in South Australia due to wage theft is estimated to be between $360 million and $560 million. As a direct result of wage theft occurring within the state, it is estimated that South Australia loses between $31 million and $60 million per year in GST revenue. These figures should come as no surprise. Instances of egregious wage theft litter the media and the Fair Work case load. As described by Adele Ferguson in the Sydney Morning Herald:

The Fair Work Ombudsman continues to issue press releases like confetti, outing companies every few days for questionable workplace practices. In the past month alone 10 security businesses, Chatime bubble tea, restaurants, medical centres, a toy retailer and an IT services business have been pinged by the regulator for short-changing workers.

Just to highlight a few cases since September last year, Eudunda Farmers Ltd, who own supermarkets on the Limestone Coast, are accused of underpaying staff upwards of $1 million; more than 370 current and former workers are accusing McDonald's of wage theft by deliberately denying employees paid rest and drink breaks; Japanese restaurant Gyoza Gyoza was fined more than $78,000 for underpaying workers and subverting inspectors; and after a class action by current and former staff members of the Romeo's Foodland supermarket chain, Romeo's Retail Group agreed to pay $1.55 million in unpaid wages.

These are just a few of the hundreds of underpayment claims the court deals with, not to mention the thousands that never see the light of day. These cases will be dealt with, in some cases with some sort of remedy for workers. Unfortunately, many cases either do not see the light of day or court proceedings are stopped with the phoenixing of businesses. A business going into liquidation before settling underpayment claims, otherwise known as phoenixing, is common.

We saw how phoenixing can leave workers with nothing in the very public Fun Tea case. Nearly a year after the initial assault and underpayment of Fun Tea workers, Fun Tea went into liquidation. Like any other business that goes into liquidation, the company's remaining assets are sold to cover outstanding costs to suppliers and creditors. Unpaid wages usually sit very low in paying out other creditors. Workers are a low priority.

This is a common issue that was discussed during the wage theft committee's deliberations. The committee made several recommendations in regard to this, including allowing the South Australian Employment Tribunal to have powers consistent with the Family Court to prevent those responsible for wage theft from hiding their assets, as well as giving the tribunal the jurisdiction over phoenixing. This is just one of the many issues intertwined with wage theft that workers are facing. It is one of the many issues to do with wage theft that the state government is ignoring.

There is no doubt that the Treasurer nor any other members of the Marshall government have any intention of fixing this crisis. They made it blatantly obvious through their dissenting report. How can a government stand idle while injustice on this scale continues? Even worse, how can the government so blatantly deny that it happens? In fact, in May 2020, Premier Steven Marshall, the member for Dunstan, was asked about the issue of underpayment in relation to the On the Run case. I quote him:

Obviously, we want to make sure that all employees get their full entitlements, but I have no evidence to suggest that anything other than that is being observed here in South Australia.

Just prior to the Premier making comments, the Fair Work Ombudsman recovered more than $40 million in unpaid wages for 17,000 workers, which is just the tip of the iceberg. Obviously, there was evidence of wage theft, but the Premier just did not want to know about it.

Unlike the Liberal Party, the Labor Party will act on wage theft. If elected, Labor will introduce wage theft legislation to create criminal penalties for persistent and deliberate underpayment of workers, including wages and superannuation. Court processes will be streamlined to make it easier to collect money once a court makes an order. Labor will work with government agencies on improved compliance and investigation.

Education and enforcement are equally important. To ensure that businesses and workers are operating on a level playing field, Labor will implement a coordinated approach across government, regulators and agencies to ensure that workplaces are not only understood but followed and enforced.

Unlike the Marshall Liberal government, when we see a report that outlines so clearly the deficits in our system, we work to fix it. It is not fair for business doing the right thing, it is not fair for workers doing the right thing, and it is time South Australia had fair and accessible processes to recover stolen wages. Labor will make that happen.

Debate adjourned on motion of Hon. N.J. Centofanti.

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