Senate approves inquiry Into wage and superannuation ‘theft’

The Senate has approved an inquiry into the causes, extent and effects of unlawful non-payment or underpayment of employees’ remuneration by employers and measures to address this issue.

The successful Senate vote on 13 November 2019, referred the inquiry to the Economics References Committee. This came as a result of successful push by Labor Senators and despite strong opposition from the Morrison-government.

The government argued a new Senate inquiry was unnecessary given wage underpayments have been considered in recent inquiries, including the 2019 Migrant Workers’ Taskforce and the 2016/2017 Senate inquiry into ‘Corporate’ Avoidance of the Fair Work Act.

Recommendations from the Migrant Workers’ Taskforce has led to the government drafting a bill that will propose the criminalisation of serious and intentional wage ‘theft’. However, it is unclear whether this bill will address the systemic causes of wage ‘theft’ that the new Senate inquiry will consider.

What will the inquiry investigate?

  • the reasons for wage theft;
  • the cost of wage and superannuation theft to the national economy;
  • uncovering wage and superannuation theft;
  • tax treatment for individuals subject to wage theft;
  • potential extension of liability and supply chain measures to drive compliance;
  • recovery and deterrence mechanisms; and
  • potential modification of government procurement practices to exclude organisations engaging in wage or super theft.

The inquiry is timely, given the successful vote comes just weeks after leading supermarket retailer Woolworths admitted to underpaying thousands of workers over the past decade, amounting up to $200-$300 million.

Woolworths is but one of the more recent companies to self-report, following a string of other companies self-reporting or being investigated by the Fair Work Ombudsman in recent times.

A bigger pattern is emerging, particularly in the retail sector, with Bunnings Warehouse, Super Retail Group, Dominos, Michael Hill, and MJ Bale all admitting to having underpaid their workers in the last year.

The Fair Work Ombudsman, Sandra Parker, has expressed frustration at the upsurge in large-scale employers admitting underpayments.

“Each week, another large company is publicly admitting that they failed to ensure staff are receiving their lawful entitlements. This simply is not good enough. Companies and their boards are on notice that we will consider the full range of enforcement options available under the Fair Work Act.” Parker said.

This comes after the Fair Work Ombudsman reported over $40 million worth of wages had been repaid in the last financial year.

The report will be provided to the Senate by the end of June 2020.

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