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Claims By Business Groups That Wage Theft Is ‘innocent’ Are Nonsense

Claims by business groups that wage theft is ‘innocent’ are nonsense

Business lobby groups that continually claim that wage theft is not deliberate, but rather the result of ‘innocent’ mistakes made by employers are nonsense, according to industrial relations experts.

“We constantly hear from business groups that wage theft shouldn’t even be called ‘theft’ and that underpayments happen simply because employers don’t understand complex awards, well, quite frankly, that’s rubbish,” Miles Heffernan from Industrial Relations Claims said.

“In many instances, wage theft is deliberate, it’s calculated, and in industries like hospitality, retail, and fast food, it’s systemic, and has become a business model.”

Surprise raids find half of businesses ripping off workers

Mr Heffernan’s comments come after the Fair Work Ombudsman recently raided 489 businesses in Woollongong, Ballarat and Albury-Wodonga, and found that almost half weren’t paying workers their proper wages.

Take away food outlets, cafes, restaurants, retail businesses, and pubs and bars were targeted by inspectors, who found that 47 per cent were breaching workplace laws, with most of them not paying their staff the legal minimum hourly wage or not paying proper penalty rates.

The workplace watchdog recovered a total of $331,386 for 725 unpaid workers.

Wollongong was one of the areas targeted by the Fair Work Ombudsman.

“You cannot tell me that more than 200 business owners ripped off their workers because they didn’t know how to pay wages properly – if they can’t figure that out, then they shouldn’t be in business,” Mr Heffernan said.

“And isn’t it funny that the majority of underpayments happened in hospitality businesses, the very industry that is currently rife with wage theft.

“Like all other forms of theft, wage theft should be a criminal offence, and those who steal money from their workers should face criminal sanctions, including convictions, and even in some cases, jail sentences.”

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Business groups say penalties already tough enough

Innes Willox, boss of the Australian Industry Group, has been the leading voice against the introduction of tougher penalties for wage theft.

“While at first glance, this might seem like a good idea, there are many reasons why this is not in anyone’s interests,’’ he said.

“Implementing criminal penalties for wage underpayments would discourage investment, entrepreneurship and employment growth.”

Mr Willox claimed that criminal proceedings would slow down compensation payments to workers who were owed wages, and that there had already been a substantial increase in financial penalties for workplace law breaches.

“Penalties for breaches of industrial laws were recently increased by up to 20 times and this already provides an effective deterrent,’’ he said.

Innes Willox – Australian Industry Group  (Picture: AAP Mick Tsikas)

‘What utter bullshit!’

Mr Heffernan scoffed at that suggestion.

“What utter bullshit!” he said. 

“If current penalties were providing an effective deterrent as Mr Willox claims, then perhaps he can explain why the Fair Work Ombudsman continues to find wage theft rife in industries like fast food, restaurants, cafes and retail, just as it did during its latest audit.

“In addition, there is absolutely not one scrap of evidence that supports Mr Willox’s outrageous and ridiculous assertions that introducing criminal penalties would discourage investment, entrepreneurship and employment growth – where is his evidence for making such a bogus claim?

“Remember this is the same bloke who said cutting penalty rates would result in increased jobs and economic growth – two years on, he’s been proven wrong on that – we now know that not one new job has been created by cutting weekend penalty rates, and rather than economic growth increasing over the period, we have seen it slowing down.

“I can bet you Mr Willox doesn’t have part of his wages stolen when it comes to his pay day, so why does he expect other workers to put up with it?”

As a result of the recent audits by the Fair Work Ombudsman, the agency issued 35 cautions (Formal Cautions), 37 on-the-spot fines (Infringement Notices) and nine Compliance Notices.

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