Australian businesses have had to hand over a record $40.2 million as a result of underpayment of employees, the largest recovery ever recorded for 12 months.
The Fair Work Ombudsman’s latest annual report, which was tabled in Parliament yesterday, revealed more than 18,000 employees had recovered monies in the past financial year.
The report also outlined that more than half of the underpayment cases were detected in the restaurant, fast food and café industries.
Workplace relations experts are saying that regulators can “do more” when it comes to rectifying the situation for employees who have been underpaid.
Industrial relations expert from the University of Technology Sydney, Sarah Kaine, believes the recovery is “the tip of the iceberg”, according to the ABC.
“They issued 563 infringement notices, there were only 23 litigations. We’re not really getting to the wider economy.
“There’s a whole lot of people out there who are potentially experiencing wage theft that aren’t getting recompensed for it in some way,” Ms Kaine said.
The industrial relations expert also added that for every celebrity chef forced to pay back millions due to underpayment of employees, there are hundreds more businesses and employers who slip under the radar and get off scot-free.
Earlier this year, George Calombaris’ MADE Establishment was found to have underpaid workers from 2011-17 and was forced to back-pay workers $7.8 million, and donate a further $200,000 donation to the Commonwealth Consolidated Fund.
“We need to be careful in assuming that we’re doing more than scratching the surface. The Fair Work Ombudsman is doing its job, but it’s only one small institution that’s trying to do this level of enforcement,” Ms Kaine added.
There are more than 60 cases before the courts according to the Fair Work Ombudsman, in which Ms Kaine said “the only way to tackle wage theft is to make sure the workplace regulator is better resourced”.
In a media release earlier this week, Ed Mallett, Managing Director and Founder of Employsure, said the FWO’s figures actually paint a picture of a sector struggling to meet their obligations.
“It would be wrong to assume that all of these businesses are rogue operators. Also caught up in these figures will be small business owners who are trying their best in a very difficult system,” he said.
“Employsure Advisers take thousands of calls each year from small business owners needing help. Wage rates and entitlements are always high on the list of issues they’re struggling with.
“Of course we want a system that eradicates systemic workplace relations breaches. But we also need a system that adequately supports small business owners and limits unnecessary complexity.
“We hope that the Government’s Workplace Relations System Review will address some of the issues that are making it near-impossible for the small business community to successfully navigate Australia’s workplace relations system.
“In particular we’d like to see reforms that limit vexatious unfair dismissal claims, while reducing the amount of red tape that prohibits small business growth.”
The Fair Work Ombudsman’s annual report also revealed that payslips and record keeping are both common problems for business owners showing the complexity of the workplace relations system in Australia.