Push to introduce jail penalty for failing to pay workers’ wages
A push is underway to change the law so dodgy hospitality employers whose companies don’t properly pay their staff could face jail time.
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A push is underway to introduce new legislation so dodgy hospitality bosses whose companies are found to have ripped off workers by underpaying them or withholding entitlements could potentially face jail time themselves.
The practice known as wage theft is rampant in the restaurant and cafe world and has become a standard “business model”.
Advocates say employers have gotten away with industrial scale rip-offs for too long.
The sector has been rocked by a series of high-profile cases in recent years, including the downfall of celebrity chef George Calombaris and his restaurant empire Made Establishment.
Fair Work found his company underpaid thousands of staff to the tune of $7.8 million over a several-year period and fined him $200,000 – a penalty described as “too light” by Attorney-General Christian Porter.
The companies owned by a number of other high-profile restaurateurs have also been accused of systemic underpayment, with several legal cases under way, including a massive class action against billionaire pub king Justin Hemmes’ Merivale Group.
Now, Victoria has become the first state in Australia to effectively criminalise wage theft, with tough new penalties including mammoth fines and jail time.
RELATED: Justin Hemmes’ empire hit with $120m wage underpayment class action
Hospo Voice, the union for hospitality workers, was part of the successful campaign for new legislation, and will now take its fight to New South Wales.
“There is a national wage theft crisis and some of the worst exploitation we’ve found is in Sydney,” Jo-anne Schofield, national president of United Workers Union, which oversees Hospo Voice, said.
“It is ground zero for wage theft. But the NSW Government keeps burying its head in the sand on this issue. That’s why we’re taking fairplate.org.au to Sydney. This site has thousands of reviews by hospo staff, so customers can see what’s going on under the table at their favourite venues.”
RELATED: New research reveals at least $1 billion owed in lost pay to workers in Australia
As venues continue to reopen in the wake of easing of coronavirus restrictions, Ms Schofield said it was the perfect time to “turn over a new leaf”.
The best way to encourage change is with a significant deterrent for ripping off staff, she said.
“Wage theft is the dominant business model in the hospitality sector and that will only change when bosses know that they can either pay workers properly or face time in jail.”
James-Anthony Consilglio, a former Sydney chef who worked on super yachts for “the mega-rich and celebrity set”, said he regularly worked 70-hour weeks but was paid for almost half.
“Every time I checked my pay slip the hours show I worked just 36.5 hours for that week,” Mr Consilglio said.
“The company I worked for was doctoring my pay slips. It was so brazen. They saw it as their right to steal my wages. There was a cone of silence about this issue at the company.
“When I tried to raise the issue, I was reprimanded by HR.”
RELATED: Former chef at Justin Hemmes’ empire Merivale claims he was overworked and underpaid
He took his former employer to court and won back about $20,000 in lost wages, although said he was entitled to “a lot more than that”.
“The company tried to belittle me. They tried to intimidate me with expensive lawyers. That’s how bosses game the system – they know it’s almost impossible for workers to navigate the legal minefield of the current laws and actually win justice.”
Mr Consilglio said he endured an “enormous” toll from fighting for the money that was rightfully his and had to seek professional help to address mental health issues as a result.
“It pushed me over the edge,” he said.
He believes wage theft is just as big an issue in Sydney as Melbourne and accused the New South Wales Government of “pretending it doesn’t exist”.
NSW Premier Gladys Berejiklian has been approached for comment.
RELATED: Kitchen nightmares show George Calombaris’ wage theft scandal is tip of the iceberg, experts say
Hospitality isn’t the only industry to have been sprung for wage theft, with other major companies also found to have underpaid staff.
Woolworths reported a $315 million problem with its payroll, while rival Coles was also found to have underpaid its workers by $20 million.
It’s estimated that the extent of wage theft in Australia across all sectors exceeds $1 billion each year.
After the passage of legislation yesterday, Victoria became the first jurisdiction to impose hefty fines and prison time for employers convicted of underpaying or not paying workers.
Offences include financial penalties of up to $198,264 for individuals and up to $991,320 for companies, as well as a maximum of 10 years’ jail.
“We promised to criminalise wage theft and we have delivered on that promise – employers who steal money and entitlements from their workers deserve to face the full force of the law,” Victorian Attorney-General Jill Hennessy said.
“Thank you to the countless employees who have come forward to bravely share their stories to help achieve this reform and hold employers to account.”
Employers who falsify employee entitlement records or fail to keep proper documentation will also be liable for punishment.
The Wage Inspectorate of Victoria will be established as a new statutory authority with powers to investigate and prosecute wage theft offences, Tim Pallas, Minister for Industrial Relations, said.
The government is also working on reforms to make it easier, cheaper and quicker for workers to pursue lost money through the court system.
Originally published as Push to introduce jail penalty for failing to pay workers’ wages