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The Case for Criminalising Wage Theft

Updated: May 19, 2019

"The attitude on the part of many business owners is that any civil penalties following an investigation or complaint are merely a cost of doing business."

Emily Jones and Nicholas Simoes da Silva discuss a wage theft case they dealt with at Canberra Students for Fair Work.

  • 30% of international students earn less than $12 an hour[1]

  • 50% of hospitality workers in Australia earn less than the minimum wage[2]

  • Workers were not paid $5.9 billion in superannuation in 2015-16[3]

In early 2019, Sienna, a former employee at a cleaning business, approached Canberra Students for Fair Work after realising she had been a victim of wage theft. We worked with her over the next month of negotiations to get her backpay, which amounted to over a fifth of her income. The employer stonewalled, lied, threatened to prosecute us and generally resisted any attempts to rectify the wage theft and failure to pay superannuation.

It is understandable why the employer cared so little. There are few consequences for such conduct, even where the employer is fully aware that they are in breach of the Fair Work Act. Relative to the size of the problem, the Fair Work Ombudsman rarely brings civil penalties. It is easy for an employer to outlast most employees, who rarely have the resources or knowledge to pursue the matter beyond a complaint. We now expect Sienna’s case will end in court.

Ironically, Sienna is one of the lucky ones: she will likely get her pay in the end. But for too many workers in modern Australia, work does not pay. For them, the minimum wage is nothing more than a number on paper. Workplace entitlements such as superannuation, breaks, overtime and penalty rates are empty promises. For dodgy employers, wage theft brings few consequences. For good employers, it represents a race to the bottom that presents a serious competition concern.

Wage theft is creating an underclass of overworked and underpaid workers who form the basis for many of the industries on which modern Australia is built. Successive governments have tinkered with the Fair Work Act, increasing some penalties and strengthening the Fair Work Ombudsman’s powers. It has not worked. The problem is too vast, the risks of being caught too low. The attitude on the part of many business owners is that any civil penalties following an investigation or complaint are merely a cost of doing business.

An almost Orwellian language surrounds this issue. For employer groups and many business leaders, behaviour such as that described above represents merely ‘non-compliance’ with relevant workplace laws. This is akin to saying an assault represents ‘non-compliance’ with the Crimes Act. Not paying a worker their entitlements is theft, and has very real effects upon livelihoods. It should be a crime, and not merely because that would better deter employers in situations such as that Sienna is facing. We are under an obligation to call this behaviour what it is: theft. We must punish it as such.

The ACT Government can do this, just as state Labour oppositions in other Australian states have promised to. They should.

If you have been a victim of wage theft or workplace exploitation, or know a business that relies on such practices, you can confidentially contact Canberra Students for Fair Work at Look for us on Facebook to support the fight against workplace exploitation.

[1] Laurie Berg and Bassina Farbenblum, Wage Theft in Australia: Findings of the National Temporary Migrant Work Survey (Report, 2017), 5.

[2] Senate Standing Committees on Education and Employment, Corporate Avoidance of the Fair Work Act [6.5]

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