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Workplace Safety and Consumer Affairs - Wage Theft

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Wednesday, 8 September 2021

Tags: Wages, State Budget

Dr WOODRUFF - Thank you. Minister, Victoria passed the Wage Theft Act 2020 and in last year's Estimates we asked the Minister for Small Business, Hospitality and Events if your Government intended to pass wage theft legislation. She refused to answer the question and instead said that she would expect businesses to comply with the law. Since then, there have been reports of serious, high levels of wage theft in Tasmania. There was also a Senate committee on unlawful underpayment of employees' remuneration that has yet to report; however, a range of submitters in that space claimed that wage theft is becoming increasingly common, and the ACTU has claimed worker exploitation has become a business model.

In Tasmania, the Fair Work Ombudsman in April this year reported almost $600 000 in unpaid wages for workers and businesses across the popular food precincts of North Hobart, Salamanca, Battery Point and Constitution Dock. Of 45 businesses that were ordered, 78 per cent were breaching workplace laws. Minister, will you commit to investigating the Wage Theft Act 2020 in Victoria, and commit to introduce a similar bill to protect workers' wages in Tasmania?

Ms ARCHER - I appreciate the finding of the Fair Work Commission.

Dr WOODRUFF - It was reported as the Fair Work Ombudsman.

Ms ARCHER - The reason why we have the Fair Work Act and the Fair Work Commission is so that these matters can be dealt with, and employers who are underpaying or not paying sufficient wages are called to account to do that.

I have not seen the Victorian bill, and I am not quite sure what the purpose would be or whether or not that is necessary, based on the statistics here in Tasmania. If the problem is rife, and it was a state jurisdictional matter, fine, but we have a Fair Work system for a reason, and I am a little confused as to what the Wage Theft Act in Victoria does. Maybe they have a different system to us, but all employees in the private sector come under the Fair Work Act.

Dr WOODRUFF - The issue is that whatever we have got, it is not working.

Ms ARCHER - It is working, because in that case the employer was held to account, and they would have been ordered to pay the wages that they should have. That is the Fair Work system, and penalties that the act requires.

Dr WOODRUFF - There is a question of whether the penalties are high enough to provide a disincentive.

Ms ARCHER - Have you seen the Fair Work Act? It is pretty heavy. I can't commit to something that I don't think is necessary. At this point in time I would need convincing, because the Fair Work Act is thorough. It changed our industrial relations laws, certainly in our private sector here. It is a massive act. I used to practise in this area to do with enterprise bargaining agreements and all sorts, and the only thing that sits outside of the Fair Work Act is State Service employees.

Dr WOODRUFF - I asked whether you would commit to examining the Victorian law.

Ms ARCHER - I said I am not convinced there is a need at this point in time, because the Fair Work Act is very comprehensive, and I would need to gain an understanding of why Victoria has that act in the first place. My understanding is that the Fair Work Act covers the field already.

Dr WOODRUFF - It's manifestly not, which is why there is a senate committee into unlawful underpayment, and the ACTU is so concerned about it. It is rife. I have read one newspaper example, but there are so many more I don't have time to read.

Ms ARCHER - I can certainly look into what the Wage Theft Act does and what its purpose is, but I can't commit to doing the same thing when I don't know at this stage what it deals with and it is a bit of a hypothetical for me. The Fair Work Act is very comprehensive, but we will take a look.

Dr WOODRUFF - Minister, I want to return to the conversation we had about wage theft. The important distinction between what Victoria is offering and what we currently have in Tasmania is that Victoria criminalises wage theft. The ACTU has made the very important point that a Victorian person who steals money or goods from another person can face imprisonment of up to 10 years.

However, a Victorian business that currently steals millions of dollars from their employees does not face the prospect of a custodial sentence. You would have to agree - and certainly I think a reasonable person would accept - that having the possibility of a custodial sentence as the penalty is a far greater weight and does exert more incentive for employers to do the right thing. I would like to hear your thoughts on that.

Ms ARCHER - It's important that people don't break the law and don't commit the wage theft. The only hesitation I have here is that I know that the Fair Work Act is very comprehensive. I know that the federal government has been handed this responsibility. I'm having trouble determining why it is that the state needs to get involved in something that was handed back under the Fair Work system, and whether or not it's more appropriate for the Feds to be putting something in the Fair Work Act rather than creating another separate standalone act.

I'm speaking off the top of my head in relation to that. Not knowing and having specifically looked at that Victorian act myself, I can't shed any further light on it. I don't dispute the fact that employers should always meet their obligations to employees by paying them and paying them appropriately, and that appropriate penalties should apply. But it's my belief that that system applies under Fair Work so I'd need to investigate further.

Dr WOODRUFF - We're finding that in general terms, there seems to be a greater appetite for employers to be prepared to underpay or incorrectly pay their employees. I was shocked when I read the evidence from looking through some of the recent articles in the newspaper, only in the last couple of years, how many cases there have been.

Ms ARCHER - There might be a number of reasons for that. It may well be that Fair Work investigators are attending more workplaces or there's been more reports that previously they were reluctant to make a minute on. I'm trying to be broad with this because it may well be that, with a bit of education, more people are coming forward, thankfully so, and availing themselves of the rights that exist under the Fair Work system, which is exactly what it was put in place to do.

I hear what you say and we all want the best outcome for employees so that they're not ripped off, basically. At this point, I'm not convinced that outside the Fair Work system is necessary. I'll look at that act and see if it achieves any additional outcome.

Dr WOODRUFF - I'd be happy to pass to you the ACTUs very excellent submission which gives a very good summary of it, if that would be useful.