The ALP’s plan to tackle underpayments

In the Spotlight: The ALP’s Plan to Tackle Underpayments

Representing the nation since 1900, the Australian Labor Party (ALP) has always campaigned on a platform of putting workers first – so it came as no surprise when Bill Shorten and his team launched a steadfast campaign to tackle the national underpayment crisis.

While most workers enjoy the luxury of award wages and official pay slips, not all Australians are in the same boat. In fact, recent statistics from the ABC revealed that in 2014 over 15,500 Australian workers were underpaid more than $23 million. The outlook hasn’t improved over the past three years, with another survey revealing that more than 60% of international students in Sydney are paid less than the minimum wage, with 35% paid $12 or less an hour.

There’s dire need for reform, and the ALP has pledged to spearhead the crackdown.

So, who’s in the bad books?

7-Eleven was one of the first companies to be hit by the ‘wage theft’ scandal, with whistle-blowers revealing that they were either forced to accept half of the $24.50 an hour award rate, or face deportation threats from their boss. A joint investigation into 7-Eleven stores by Four Corners and Fairfax Media confirmed the accusations, and sparked national outrage.

Pizza Hut quickly followed suit, with allegations that underpayment is an ongoing issue within the $170 billion franchise. Not only were drivers being forced into sham contracts, but they were also paid as little as $5.70 per delivery while providing their own cars, petrol, maintenance and insurance. Next in line was Caltex, with a similar Fairfax Media investigation revealing that some staff get paid as little as $13 an hour, which amounts to less than half the legal rate.

One of the latest offenders is petrol giant United Petroleum, which was blasted by the Fair Work Ombudsman for underpaying staff. After a series of raids, it was revealed that staff across its franchise network were being exploited. A huge 40% of stores were found to be breaching workplace laws, and significantly underpaying award wages to foreign workers on visas.

Bill Shorten: a man with a plan

Which raises the question, what’s being done about the national underpayment crisis?

According to the ALP, “Employers who deliberately underpay their workers not only deny working and middle-class Australians a fair day’s pay for a fair day’s work, they also undercut employers who are doing the right thing for their workforce. It’s a distortion of the market that drags everyone down.”

In a nutshell, ALP plans to stand up for Aussie workers, and put people first by strengthening and protecting worker rights. This includes:

  • A fierce crackdown on underpayment offenders, with increased penalties for employers that deliberately and repeatedly engage in wage theft. Under an ALP government, courts could slap employers with penalties equal to three times the amount of the underpayment, or $216,000 for individuals and $1,080,000 for body corporates.
  • Stamping out sham contracts across the nation. Currently, loopholes make it easy for employers like Pizza Hut to escape prosecution for sham contracting. Under ALP rule, the test will be restructured so that employees receive award wages, benefits and access to workplace entitlements.
  • Arming the Fair Work Ombudsman with the powers and resources needed to pursue employers that liquidate their businesses in order to avoid paying wage theft debts.
  • Introducing reforms designed to protect temporary overseas workers from exploitation, and level the playing field for all Australian workers.

Could ‘wage theft’ soon be classed as a criminal offence?

There’s no shortage of support, with national union leader and former ALP vice-president Tony Sheldon calling for the Labor Party to class ‘wage theft’ as a criminal offence. This means companies engaging in underpayment could be subject to prosecution and potential jail terms.

According to Sheldon, Australia has been “gripped by a new crime spree” and it’s not drugs, brawls or break and enters. “It is the plague of billions of dollars in wages and superannuation which employers take from the pay packets of their employees,’’ he explains. “It is wage theft. And it needs to be treated like any other form of theft by making it an offence, with jail sentences.”

Make Australia ‘lucky’ again

In 1964, the legendary Donald Horne gazetted Australia as The Lucky Country. But for the thousands of workers that are forced to swallow wage theft, sign sham contracts and face deportation threats, it’s anything but. That’s why it’s so important that no matter what party is in power, wage theft becomes a national topic of conversation.

Do you think you’re being underpaid? Why not crunch the numbers on our FairGo calculator, which can help you compare your paid wages to relevant awards. Or, if you’re an employer you can use it to make sure you’re giving your employees a fair go, and aren’t breaching any minimum wage laws.

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