A-G Christian Porter leads pay charge, but will he be believed?

When it comes to ensuring workers are properly paid, Australia's corporate sector has been asleep at the wheel, has dropped the ball and is running out of excuses. If companies put the same resources into meeting their employees obligations as they did to ensure they don’t overpay tax, the current wave of massive worker underpayments would not be happening.

This is not a soundbite from Sally McManus or the ALP but the public commentary of Scott Morrison’s Attorney-General, Christian Porter, the nation’s chief law officer.

Porter says the conduct of a substantial section of corporate Australia has been “hopeless’’. While arguing it is “monstrously unlikely’’ that major employers were deliberately underpaying workers, he openly acknowledges the current laws are not acting as an effective deterrent.

The government has been examining proposals to criminalise wage theft and has committed to increasing the civil penalties that would apply to companies ripping off staff.

But the raft of underpayment disclosures by big companies with sophisticated human resources departments, which cannot credibly claim award complexity as an excuse, has convinced Porter to go further. He frames the underpayments as a corporate failure. By proposing directors of companies that underpay workers be potentially banned, he wants directors held accountable under workplace law in the same way they should be held accountable for a commensurate corporate failure under consumer or corporations law.

The proposals, if legislated, are designed to hit directors where it hurts. As Porter says: “I suspect the only way you will get board directors who sit on boards and get 180 grand a year for 12 meetings to take this stuff seriously is if there is something on the line for them.’’

Of course, these new laws won’t impact those directors of underpaying companies who have already self-disclosed hundreds of millions of dollars of underpayments. They won’t apply retrospectively, which could prompt even more companies to come clean over coming months before legislation is passed.

Porter does not see the current situation necessarily as a tipping point but more about well-resourced big companies failing in their ability to self-regulate and self-audit to ensure workers are paid properly.

Unions, Labor and perhaps many voters will argue that the Coalition should have acted sooner, that the government itself was asleep at the wheel or didn’t prioritise action to address wage theft. Some will reject his assertion that the underpayments were generally not deliberate.

Porter maintains his action is about deterrence, about trying to prevent underpayments recurring on the scale they have in the past. He is taking more action than many of his political opponents would have anticipated but the community, sick of the corporate misconduct, will ultimately determine whether his position is credible.