Business Council Announces Support For Wage Theft Law – With Caveats

Published November 08, 2019 (last updated July 17, 2020) -

The Business Council of Australia has backed the Morrison Government’s plans to introduce so-called wage theft legislation, in a submission to the Government’s discussion paper on the protections for workers’ wages and entitlements.

However, the Council cautioned the Government to also introduce a ‘safe harbour’ caveat, that would allow companies to self-report accidental breaches and back-pay their workers without threat of sanction.

“There is a need to modernise the enforcement regime under the Fair Work Act 2009 so that sanctions for the most serious breaches of workplace laws are more closely aligned to those that apply under other laws regulating business conduct,” the submission says (via The Australian).

“The Business Council supports the introduction of criminal sanctions for such breaches.”

The clamour to introduce wage theft has raised recently due to a series of big companies and well-known brands being caught up in underpayment scandals.

Only last week did Woolworths reveal to the stock market that it may have underpaid thousands of staff a total of $300 million over the last nine years.

While Woolworths has issued a mea culpa, their chief executive Brad Banducci has also reiterated that the supermarket giant believed it had paid the correct wages, and that the ‘complexity’ of the General Retail Award played a part in the underpayment.

“This is a very complex issue which needs an industry-level dialogue,” Banducci said.

“At the right time, we’d like to come back and talk about the lack of flexibility in [awards] when interpreted literally.”

The Council’s submission supported such sentiment, suggesting that any new laws or policy tackle the ‘inflexible’ regulatory response to intentional breaches.

“In recent times [the Fair Work Ombudsman has] adopted an inflexible policy in dealing with non-intentional breaches,” the submission says.

“This has resulted in disproportionate remedies being applied to companies who identify their own breaches and self-report, as well as discouraging other companies from self-reporting when such breaches are discovered.

“The priority should be to encourage employers to pay employees correctly, to compensate employees where they may have been underpaid in error and to appropriately punish employers where breaches are intentional and employees have been knowingly underpaid.”

The Council also suggested how any change should be implemented.

“A balanced enforcement regime requires both carrots and sticks. At the one end of the spectrum, this should include criminal sanctions for the most serious wrongdoing,” it said.

“At the other end of the spectrum, it should include the ability for companies to self-report non-intentional breaches and access a ‘safe harbour’ regime in which they can rectify underpayments in a timely manner without the threat of sanction, subject to meeting appropriate criteria.”

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