Small business accuses Morrison government of ‘political bastardry’ over wage theft

Small business has slammed the Morrison government for dropping plans to criminalise wage theft.

Council of Small Business of Australia chief executive Peter Strong says his members were ‘livid’ that competitors were getting a commercial advantage by underpaying workers. Picture: AAP

Small business has accused the Morrison government of an “act of political bastardry” by dropping plans to criminalise wage theft, saying the Coalition would be “morally bankrupt” unless it made a new bid to legislate tougher penalties for underpaying bosses.

Sparking fresh brawling among employers, the Council of Small Business Organisations Australia chair Mark McKenzie said the Coalition should revive the higher penalties as stand-alone measures, given they attracted broad support when part of the government’s industrial relations omnibus bill.

Mr McKenzie, chief executive of the Australasian Convenience and Petroleum Marketers Association, said his support for tougher penalties might seem odd given fuel retailers were the “poster child of wage underpayments” but ripped-off workers and businesses operating on lean margins were being hurt by dodgy companies.

He said a failure by the government to act “would be a complete abrogation of responsibility to all employees and businesses who are doing the right thing and have been undercut by a small number of businesses doing the wrong thing — to not do that would be morally bankrupt, in my view”.

The government’s decision to drop the wage compliance schedule “was an act of political bastardry, I think is the only way to describe it”.

COSBOA chief executive Peter Strong said his members were “livid” that competitors were getting a commercial advantage by underpaying workers, and the government’s decision to pull the measures from the bill “looked like payback”.

Jenny Lambert. Picture: AAP

Rival employer groups attacked COSBOA’s position, saying they would accept the government reviving the wage compliance measures only if they were part of a package that included the original bill’s proposed changes to awards, enterprise bargaining and greenfields agreements.

Acting Australian Chamber of Commerce and Industry chief executive Jenny Lambert said it was “unbelievable that any business organisation would argue for higher fines and jail terms for businesses, especially small businesses, separate from the package of other reforms contained in the bill”. “In the negotiations that preceded the IR omnibus bill, employers accepted the schedule on compliance as part of a package of give and take, even though there were many concerns about what was proposed,” she said.

“If the government was in any way inclined to reopen discussions on IR, we would strongly encourage them to look at the other matters that were on the table, such as reversing the terminal decline in enterprise bargaining, which supported productivity improvement and job creation.”

Australian Industry Group chief executive Innes Willox said employers would understand the government reintroducing the wage compliance measures if they were part of a new bill that included changes to awards, enterprise agreements and greenfields agreements.

He said it would be unbalanced and extremely unfair on small and large businesses to be subject to new stand-alone “harsh criminal and civil penalties” for wage underpayments. “Ai Group does not support employers who deliberately underpay their staff but the reality is that the vast majority of underpayments are the result of genuine payroll errors, typically caused by Australia’s overly complex workplace relations laws and awards,” he said.

“A few years ago, the penalties for underpaying employees were increased by 10 times and the penalties for record-keeping offences were increased by 20 times.

Innes Willox

“Exposing small business owners and other employers to jail terms of up to four years for underpayments is not the answer.”

ACTU secretary Sally McManus said “wage theft has become a systemic issue under this government, and employers who try and do the right thing are unable to compete with employers and businesses which steal huge amounts of money from working people”.

“The government caved to the most extreme elements of the big business lobby by scrapping the wage theft element of the IR bill, which had broad support from ¬unions and employers,” she said.

“We would welcome any action on wage theft which builds on existing state legislation and holds employers accountable for their actions. We cannot continue to have a legal system which treats theft by working people as fundamentally different to theft from working people.”

Australian Mines and Metals chief executive Steve Knott said “if COSBOA wants to act like a fully owned subsidiary of the ACTU, that’s an issue for them and their small membership base”. “The beating up of employers for underpayments of wages won’t create a single job, but those other reform areas would create thousands,” he said.

“As a stand-alone issue, we see no merit in the penalties and compliance part of the IR omnibus bill. However, we’d support the government packaging it up with the other areas if necessary to get real, job-creating IR reforms.”

A spokesman for Industrial Relations Minister Michaelia Cash said the government was ¬“already leading the way on action for workers who have been underpaid”, with the Fair Work Ombudsman recovering $123m for underpaid workers last financial year. “The Coalition recently introduced laws to strengthen wage theft laws in Australia, and it is disappointing that Labor chose not to support these important changes,” he said.

ACTU secretary Sally McManus says ;wage theft has become a systemic issue under this government’. Picture: Getty Images