Beyond hopeless: Porter slams Woolworths’ $300m underpayment

Christian Porter warns companies have “rocks in their heads” if they don’t focus on “major problem” of wage compliance.

Attorney-General Christian Porter has slammed Woolworths. Picture: Mick Tsikas/AAP

Attorney-General Christian Porter has declared Woolworths' record $300 million underpayment of employees as "beyond hopeless", backing criticism the company's conduct was emblematic of employers caring only about the interests of shareholders and making staff their least priority.

READ MORE: Woolworths faces big fine and $300m backpay bill | Staff burnt as ‘companies put shareholders first’ | How shelf-stackers’ pay jumped ahead of their bosses

Mr Porter confirmed the Morrison Government would increase maximum civil penalties for employers found to have engaged in the underpayment of workers .

The government is examining legislating maximum jail terms of five to 10 years for deliberate, systemic cases of wage theft, with potential criminal penalties confined to the “most serious types of offending”.

A discussion paper released last month said civil penalties, increased in 2017, would be reviewed as there was a strong case to improve the compliance regime.

“I mean, not only has there got to be a criminal penalty for the most serious types of wage theft, but the civil penalties just have to be higher, because these companies aren’t getting the message and the deterrence needs to be greater. I don’t need a royal commission or an inquiry to tell me that. We know that, and we’re acting on it,” he told 7.30.

He said the big companies underpaying workers were large, sophisticated organisations.

“They’ve got huge HR teams and tax teams and honestly, if they have the time and resources to constantly advertise to tell us how awesome they are; if they’ve got the time and resources to get involved in social issues; if they’ve got the time and resources to sponsor sporting teams and have boxes to the best games in town, then they should have the time and resources to pay their staff properly,” he said

Josh Cullinan, Secretary of the Retail and Fast Food Workers Union, said the 5700 Woolworths were underpaid on average $50,000 each.

He told ABC’s 7.30 that the union had been planning a class action against Woolworths but the company “beat us to the punch”.

He accused Woolworths of “moral blindness” and called for a royal commission into wage underpayments.

Former Woolworths manager Nadine Smith, who worked for the company in Ipswich, told the program she discovered colleagues were working fewer than her but receiving a higher wage.

She said she questioned her salary in recent years because a team member “below me” was on the same salary.

“The people who are responsible for this, the ones at the top that created all this, someone wasn’t doing their job and getting paid a lot of money to do it,” she said.

Fair Work ombudsman Sandra Parker says Woolworths’ lack of transparency was “unacceptable”. Picture: Aaron Francis/The Australian

In an interview with The Australian on Wednesday, Fair Work Ombudsman Sandra Parker attacked Woolworths for a completely unacceptable lack of transparency and accused major employers of putting the interests of shareholders above those of their workers.

Mr Porter backed her comments.

"Good on her,'' he said. "She's doing great work. She's doing the investigation into Woolworths that will now go into full swing and I wish her all the best with that. I won't comment on that investigation. But I have absolutely no reason to diverge from any single one of her comments. Like, it's just not good enough."

He said it was "way past time, that major organisations start auditing, start putting systems in place to make sure it doesn't happen again; start spending money, time and effort to put systems in place to work out whether or not they have actually underpaid staff. And ultimately, at the end of the day we want money to go back to the staff."

Asked what's the consequence, he said: "Well, the consequence is that they go through an investigation by the Fair Work Ombudsman. There are very serious penalties … … monetary, civil penalties that apply if they do it in a fashion which isn't criminal. And the Commonwealth Government is designing a criminal penalty for people who do it with a reckless level of knowledge."