Government backs possible jail time for underpayments

07 March, 2019 by
Madeline Woolway

Employers who deliberately underpay workers could face jail time under new reforms announced by the federal government.

The introduction of criminal sanctions is just one of 22 recommendations made by the Migrant Workers’ Taskforce, which was established in 2016.

Advertisement

The Taskforce, chaired by Professor Allan Fels AO — known for his role as chairman of the ACCC — and Dr David Cousins AM, recently handed its findings to the government.

Minister for Jobs and Industrial Relations Kelly O’Dwyer MP announced on Thursday 7 March the Coalition Government has accepted ‘in principle’ all 22 recommendations.

Advertisement

“The Coalition Government has no tolerance for those who repeatedly and deliberately underpay workers, whether they are an Australian or a worker on a visa,” O’Dwyer said. “For the very first time, we will introduce criminal sanctions for the most serious and egregious forms of deliberate exploitation of workers.

“Only the most serious and egregious cases would be subject to criminal penalties, not employers that accidentally or inadvertently do the wrong thing.”

Advertisement

The Morrison government will work with stakeholders as it considers the circumstances and most appropriate legislative vehicle to give effect to criminal sanctions.

While the Taskforce was set up in response to the widely reported 7-Eleven wage theft scandal, worker exploitation has proven to be a systemic issue in many industries.

In 2017, the Fair Work Ombudsman listed the hospitality industry as one of the agency’s top five compliance priorities.  According to the report, “the most comprehensive academic survey to date on the issue suggests as many as 50 per cent of temporary migrant workers may be being underpaid in their employment.”

The report also found that, while the FWO has recently reacted with strength to systemic underpayment, the scale and entrenched nature of the problem requires a more robust response.

As a resolution, it is recommended the FWO be given the same powers as other regulators, such as the ACCC, when it comes to information gathering.

Subsequently, the Taskforce suggested the government consider the need to provide the FWO with further resources, tools and powers to help it effectively combat underpayment.

Minister O’Dwyer said the FWO had recently been provided with an additional $14.4 million to focus on the protection of migrant workers. The funding is in addition to an extra $20.1 million provided in 2016-17 to help the FWO crackdown on law breaking.

While extra funding will assist the Ombudsman, the Taskforce argued there was need to raise the FWO profile among migrant workers. “The evidence now suggests the organisation is not well known or understood,” stated the report.

Other recommendations from the report include developing legislation to make it an offense to knowingly unduly influence, pressure or coerce a temporary migrant worker to breach visa conditions.

A ban on employing new temporary visa holders for a specific period is also recommended for employers convicted by a court of underpaying temporary migrant workers.

Image credit: Video Blocks