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Issue #1906      March 9, 2020

STOP THE WAGE RORTS!

Wage theft is the business model of the 21st century with many companies ripping billions of dollars out of the pockets of workers. It is no accident that this has occurred. It is the result of government policies, laws designed to facilitate theft, loss of trade union rights and failure of government agencies to enforce legal minimum standards.

Every dollar an employer steals from a worker is a dollar extra in profits. That is the aim of wage theft – boosting profits.

Wage theft is the non-payment or under-payment of wages, superannuation, leave accruals, and other entitlements. It is most prevalent in franchise setups, low paid jobs, horticulture, construction, and cleaning.

Varying estimates put the amount workers lose at around $1 billion or more a year. Underpayment of superannuation at an estimated $3.6 billion per annum affects 2.4 million workers according to Industry Super Australia.

Caltex, 7-Eleven, Domino’s Pizza, Pizza Hut, Brumby’s, Michel’s Patisserie, Donut King, Chatime, Woolworths, KFC, Rebel Sport, MacPac, Coles, Target, SupercheapAuto, and Officeworks are just some of those caught out. The individual amounts in some instances run into the hundreds of millions of dollars.

The theft might involve false record keeping with cash-in-hand payments, unpaid penalty rates, unpaid overtime – all in breach of the relevant industrial relations laws. Or it might be outright underpayment taking advantage of workers who do not know their rights or fear the consequences of speaking up which could include deportation in the case of visa workers.

Employers who do the right thing by meeting their legal obligations towards their employees are put at a disadvantage. They cannot compete with the corporate thieves. They also turn to theft.

ATTACK ON TRADE UNIONS

Over the past four decades collective bargaining has been undermined. Trade union density and militancy has declined as a result of anti-union legislation introduced by successive governments and employer offensives. Industrial action is now to all intents and purposes outlawed with unions, their organisers and workers subject to hefty penalties if they dare to defend their rights.

The cumulative outcome is a massive decline in trade union militancy and density. This is reflected in the Australian Bureau of Statistics data. In 1985, there were 1,876 new disputes compared with 154 in the twelve months to September 2019. That is a reduction of more than ninety per cent.

That reduction is not because capitalists suddenly became generous and gave workers and their unions everything they wanted!

There have also been equivalent declines in the number of workers involved in industrial action and the number of days lost. Strikes cost employers money, not just the workers involved.

Intense exploitation of migrant, visa workers, international students, backpackers has also occurred.

The Integrity and Employment Bill, currently before Parliament, will only intensify the exploitation of workers and make it even more difficult for trade unions to recruit and defend their members. They face the threat of deregistration and interference in their affairs by government and the Fair Work Commission.

RIGHT TO INSPECT BOOKS

Prior to the Howard government trade union representatives had rights to inspect the employment records of all workers in a workplace where they had coverage. For example, the Metal Trades (General) Award stated:

“8.2 – RIGHT OF ENTRY TO INVESTIGATE BREACHES

“An authorised representative may enter any premises during working hours where relevant employees work to investigate any suspected breach of the Act, the Minimum Conditions of Employment Act 1993, the Occupational Safety and Health Act 1984, the Mines Safety and Inspection Act 1994 or an award, order, industrial agreement or employer-employee agreement that applies to any such employee in accordance with section 49I of the Act.”

Thanks to the Howard Coalition government, this right no longer exists, facilitating wage theft and non-payment of other legal entitlements.

CONTRACTING OUT

One of the most insidious forms of wage theft occurs through the use of contractors and subcontractors. Big corporations and government departments increasingly outsource work to private contractors. The work is done for the corporation but not by “employees” of the corporation which legally carries no responsibility for breaches of employment law.

The lowest price gets the work. That price dictates the wages and conditions. There can be layers of profit – all ripped out of worker’s pockets. When it comes to making a claim for underpayment in the Commission the “employing” company has no assets and folds up.

Such practices with complex contractor and subcontractor structures are prevalent in the construction sector and in outsourcing by government departments.

Labour hire and franchising are other areas where responsibility is at an arm’s length from the lead company for whom the work is done.

FACILITATING THEFT

Under Australia’s visa provisions backpackers can work full-time but only for up to six months. This must be with one employer. International students are limited to forty hours work per fortnight.

This gives employers incredible power over these workers who have the threat of deportation hanging over their heads if they lose their job or work too many hours. Backpackers, in particular, working in horticulture, are subjected to harassment, oppressive working conditions, and sub-human living conditions.

There have been cases of farm workers, such as from Vanuatu, being paid wages as low as $8 per hour, and experiencing abuse and subjected to appalling working and living conditions.

CONSEQUENCES

In the mid-1970s, labour’s share of gross domestic product (GDP) was around fifty-eight per cent. By 2017, it had declined to just forty-seven per cent. (The Australia Institute – TAI)

GDP is the total income in any year.

“The loss of labour’s share of GDP translates into the redirection of over $200 billion in income per year from workers to other groups in society (mostly corporations).” (“Workers slice of Australian economic pie gets smaller”, TAI)

“Almost the entire decline in the labour share has been reflected in a corresponding increase in the share of GDP going to corporate profits – especially the financial sector.”

After all that is the aim of wage theft.

Restore trade union rights

A range of measures are urgently required to restore workers’ rights and end this theft. They include:

  • ripping up existing industrial relations laws, including abolishing the ABCC, and replacing them with new ones recognising trade union and worker rights
  • the unfettered right to take industrial action when the union sees fit
  • right of entry of representatives of the union to workplaces to recruit and talk to members
  • right to inspect employers’ employment records
  • making wage theft a criminal offence punishable by personal as well as corporate fines and jail sentences, disqualification from being a director
  • reintroduction of centralised system of collective bargaining and trade union negotiated agreements across an industry or occupation
  • making lead companies or government departments ultimately responsible for wages and conditions
  • changing visa rules so that workers can change employers and students work more than twenty hours per week.

“Under the current oppressive laws, any trade union could at present be deemed unlawful for carrying out legitimate activity. The only way for unions to represent the interests of their members legally is for the anti-union laws to be repealed,” Communist Party of Australia national president Vinnie Molina told the Guardian.

Next article – Editorial – “LEFT-WING TERRORISM,” A Peter Dutton disorder

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