Federal Government plan could stop directors of companies exposed for wage theft from sitting on boards
A new federal government plan would stop company directors exposed for underpaying workers from sitting on boards, as the Attorney-General backed calls for a simpler system to help staff retrieve wages. HAVE YOUR SAY
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Directors of companies who have underpaid their workers could soon be banned from sitting on boards, under legislative changes being considered by the Morrison government.
Attorney-General Christian Porter wants to beef-up the FairWork Ombudsman’s powers after a series of high profile cases, arguing corporate Australia has been “asleep at the wheel”.
Under the plan, the watchdog would be able to recommend directors responsible for wage theft be banned from sitting on boards.
The proposed laws would not be retrospective, with companies already caught out exempt from further action.
While Mr Porter accepted some employment awards could be complicated, most of the underpaying companies were large businesses with huge human resources divisions.
“These organisations have a massive amount of time, energy and resources devoted to ensuring they don’t pay a cent more tax than they have to,” Mr Porter told The Australian on Thursday.
Mr Porter also agrees with calls from the Australian Council of Trade Unions for workers to be able to complain to the FairWork Commission about underpaid wages.
This would allow workers to recoup their wages quickly and efficiently, the attorney-general said.
MASSIVE BACKLOG IN UNDERPAID WORKER SAGA
More major companies might find themselves with unpaid wage problems while transitioning to a new system for reporting salary payments to the ATO.
Big businesses were required to use the digital Single Touch Payroll (STP) reporting system from July last year. Through the STP, employers are required to send information on wages, salary payments and superannuation to the ATO at the same time as their normal pay run, The Australian reports.
A chief financial officer of a major company told The Australian said the business was using the transition “to dig deeply into our payroll calculations to ensure our system is set up correctly”.
“It is identifying there are things that have not been set up correctly for the change to the new system and in the process finding other errors,’’ the executive said.
Andy Hutt, director in the economics and tax centre at accounting giant KPMG, said some clients had found salary and wage-payment issues while transitioning to the new system.
However, the STP reporting system was not a factor in the revelation this week that Woolworths had underpaid more than 5000 staff.
Last week, the supermarket giant said it owed 5,700 staff as much as $300 million in underpaid wages dating back over nine years.
Fair Work Ombudsman Sandra Parker told the ABC she was shocked by the scandal, but while the government was still considering introducing criminal charges for such an act, she said
“This is a company that’s very sophisticated, these are people that are turning to up work everyday, and they should have every expectation of being paid their correct amounts,” she said.
“We’ll be working closely with them and expect them to cooperate.”
Parker described the underpayment as a breach of Australia’s workplace laws on a “massive scale”.
“Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough,” she said.
The underpayment of salaried staff was uncovered by Woolies in a review triggered this year by the implementation of a new enterprise agreement covering its supermarkets and Metro stores.
Woolies said it had only analysed two years of data but that the issue could date back to 2010.
It expected returning the cash plus interest to staff will result in a one-off remediation charge of between $200 million and $300 million in February’s first-half results.
The company said a review would now be extended to all its Australian businesses, which include Big W department stores and Dan Murphys liquor.
“As a business we pride ourselves on putting our team first, and in this case we have let them down,” group chief executive Brad Banducci said in a statement.
“We unreservedly apologise.”
The company said interim back payments covering the data analysed so far will be made before Christmas.
It said the majority of the staff affected are current and former salaried department managers at store level, with none of the 145,000 people covered by an enterprise agreement affected.
The announcement overshadowed the release of Woolies’ first-quarter sales growth that, driven by the success of its Lion King Ooshies and Discovery Garden checkout giveaways, comfortably beat that announced by fierce rival Coles.
Comparable sales at Woolworths’ supermarkets rose 6.6 per cent on the same period a year ago, easily trumping the 0.1 per cent from Coles. Shares in Woolies were worth $37.73 before Wednesday’s open, up 28.25 per cent this calendar year.
The company said retrieving and reviewing rostering, time and attendance, and payroll data across all businesses is expected to take at least until September 30 to complete.
Repayments will be made as soon as each respective year of the review is completed.
The company has reported the matter to the Fair Work Ombudsman. Woolies entered into a new compliance partnership with FairWork last year after it was discovered that three cleaning companies and a former sole trader were underpaying Korean cleaners at Woolworths’ sites in Tasmania. In 2014, Fair Work took legal action against two sub-contractors operating at several Coles sites for underpaying 10 trolley collectors over $200,000.
WHAT TO DO IF YOU BELIEVE YOU HAVE BEEN UNDERPAID
1. CHECK YOUR NUMBERS
Visit the Fair Work website via fairwork.gov.au to access free resources including a Pay Calculator.
2. TALK TO YOUR BOSS
If you still believe you are owed money, talk to your manager. It may be a simple mistake that is easily rectified.
3. CONTACT THE FAIR WORK OMBUDSMAN OR A LAWYER
Employees can call the Fair Work Infoline on 13 13 94 for free assistance.
An interpreter service is also available on 13 14 50.
Workers who do not wish to be identified can report an employer anonymously via fairwork.gov.au/tipoff
Workers have six years to make a claim for lost wages and can make a claim whether they are currently employed by the company or not.
Originally published as Federal Government plan could stop directors of companies exposed for wage theft from sitting on boards
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