The Guardian • Issue #1970

Wage theft laws come into effect in Victoria

Last year, the Victorian parliament passed a law making wage theft a crime. On the 1st of July this year, that law came into effect. The law could not have come sooner –  thirteen per cent of the Australian workforce are underpaid, with the burden falling disproportionately on casual workers. Twenty-one per cent of retail employees and eighty-two per cent of hospitality employees report being underpaid at some point in their career.

Specifically, the law was enacted in response to a series of high profile underpayment scandals in the past few years.

The employers embroiled in these scandals included such high profile names as George Colambaris, Woolworths, the ABC, Bunnings and the Red Cross.

The Victorian law makes it a crime for an employer in Victoria to:

  • Deliberately underpay employees
  • Dishonestly withhold wages, superannuation or other employment entitlements
  • Falsify employee entitlement records to gain a financial advantage
  • Avoid keeping employee entitlement records to gain a financial advantage.

These crimes are punishable by up to ten years’ jail or $218,088 in fines for individual employers or over $1mil in fines for companies. The legislation also establishes the Wage Inspectorate to educate workers and employers about their rights and obligations, investigate and prosecute wage theft, and respond to reports about alleged wage theft.

Victoria is the first state in Australia to criminalise wage theft. A federal wage theft law does exist under the Commonwealth Fair Work Act but the Victorian law has been described by the Victorian Treasurer as much stronger, with “real teeth and greater enforceability” compared to the federal law.

There is a concern that the existing commonwealth law “covers the field” of wage theft, meaning that the Victorian legislation could be deemed invalid under section 109 of the Constitution. Section 109 provides that Commonwealth laws override inconsistent state laws.

Commonwealth laws may “cover the field” in a particular area, meaning that federal legislation on the subject is comprehensive and any state law on the subject will be invalid. However, until a section 109 challenge is brought before the High Court, the Victorian law will continue to have effect.

Critics are also concerned that unstable work and an entrenched culture of intimidation in the casual workforce will undercut the effectiveness of these laws. If workers are afraid that making a report might cost them their job, they are less likely to report wage theft by their employer.

This issue is exacerbated by the fact that the logic of the capitalist economic system depends on labour being a highly interchangeable commodity. This means that workers are easily replaceable because there is always a proportion of the population who are unemployed and seeking work.

This is especially true in the current climate with the uncertainty of the COVID-19 pandemic making casual work more precarious than it has ever been. So if a worker speaks out against wage theft they may risk losing their job entirely. This is a well-founded fear: according to the United Workers Union (UWU), over a third of hospitality workers report some form of retaliation from their employer after questioning their working conditions – everything from having their shifts cut, to harassment and even being fired.

So while the new wage theft law in Victoria is a huge step forward for the labour movement, the law will only be marginally effective while casualisation remains the norm. Criminalisation shows that a cultural shift is taking place, it shows that workers will not stand for being exploited in this way. However, the cultural shift is not complete and more work needs to be done to oppose insecure work so that workers feel empowered to report wage theft. The voice of many workers rings louder than one who stands alone, empowerment comes from the unity of workers against an unjust system.

The Guardian can also be viewed/downloaded in PDF format. View More