Wage theft deal good for employers, but who decides on “accidental underpayments”?

Published October 16, 2020 (last updated January 25, 2022) -
IR Wage Theft

A deal between unions and employer groups not to penalise bosses who inadvertently underpay their workers is a welcome idea in principle, but questions remain about who gets to define an ‘honest mistake’.

The Australian Council of Trade Unions has granted the concession during discussions on industrial relations reform. The decision would allow employers to correctly pay back their employees without penalty or legal ramifications.

“Deciding whether an employer simply made an error when paying staff is one thing, but more clarity is needed around the process that would ultimately prove their innocence,” said Ed Mallett, Managing Director of Employsure, Australia’s largest workplace relations advisor.

“If the burden of proof remains on employers, then it will still leave them with the costs and regulatory red tape of dealing with the Fair Work Commission.”

There are more than 120 modern Awards in Australia. Simplifying these awards is the first step in solving the solution, so employers avoid making mistakes in the first place.

This year alone, Employsure Advisors will take 267,000 calls from concerned and confused business owners wanting help to meet their workplace obligations. The number one topic that employers have trouble with is wages, and what their obligations are.

Industrial Relations Minister Christian Porter is in the process of working on a bill of changes to the country’s IR system, which is expected to be revealed before the end of the year.

“The flexibility we’ve seen in the IR sector in responding to COVID-19 is a sign of how complicated and impractical the system was pre-pandemic, and now we have a chance for long lasting reform that will benefit both business owners and their employees”, continued Mr Mallett.

“The real ambition should be to create a system that prevents such wage-related mistakes in the first place.

“Any changes to the process should avoid a ‘guilty until proven innocent’ situation. It will be interesting to see the detail in the full suite of IR changes when they are decided upon.”


Further enquiries:

Matthew Bridges

[email protected]

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