'We won't be shy': Company bosses could face Senate probe into wage theft

Company chiefs could be hauled before a new federal inquiry into wage theft under Senate plans to investigate scandals in a forum similar to a committee that called bank chief executives to account.

The chairman of the new wage theft inquiry, Labor senator Alex Gallacher, said the parliamentary committee "won't be shy" in demanding answers from companies found to have underpaid their workers.

A Senate committee will probe wage and superannuation theft.Credit: Jessica Shapiro

The move comes two weeks after Woolworths admitted it had underpaid about 6000 employees as much as $300 million over several years – an average of $50,000 owed to each worker.

Celebrity chef George Calombaris was forced to apologise to his company's staff in July after it underpaid them by nearly $8 million, a scandal he blamed on "being creative and focused on opening more restaurants" without having proper back-office systems in place.

"We will take the inquiry wherever it can go in the terms of reference," Senator Gallacher told The Age and The Sydney Morning Herald.

"We won't be shy about calling any and all chief executives if they've got a problem.

"We'll shine a light wherever we can."

The Senate voted on Wednesday to refer the matter to the Senate economics references committee, which has three Labor members, two Liberal members and one other member, Rex Patrick from Centre Alliance.

The committee will probe wage and superannuation theft and investigate the most effective means of recovering unpaid entitlements and the tax treatment of recovered entitlements.

Senator Gallacher said the rise of "one-touch payroll" software would be important to the inquiry because employers were blaming complexity for failing to pay proper entitlements.

In some cases, he said, the software systems were making it easier to identify when companies had exploited their workers.

The Morrison government opposed the inquiry, with Liberal senator Jonathon Duniam saying the government had "zero tolerance" when it came to worker exploitation but "having yet another talkfest" was unnecessary.

Senator Duniam told the Senate the government was increasing funding to the Fair Work Ombudsman, boosting the regulator's powers, increasing penalties for worker underpayments, and drafting new laws to criminalise wage theft.

"Action is what's needed and action is precisely what's happening,'' Senator Duniam said.

But Senator Gallacher said the way the media had exposed wage theft proved more action by regulators was needed.

"That good work is further evidence that there are not enough resources to get things fixed," he said.

Investigative journalists at The Age, The Sydney Morning Herald and ABC's Four Corners exposed a wage fraud scandal at convenience store giant 7-Eleven in 2015.

The exploitation of thousands of workers, most of them vulnerable migrants paid $10 an hour or less, outraged the nation, with stores boycotted and social media in meltdown.

Labor's industrial relations spokesman Tony Burke said the inquiry was a "win" for Australian workers.

"Wage theft doesn't just hurt those workers who are underpaid. It also has an impact on our economy, as people put off spending and struggle with stagnating wages," Mr Burke said.

He said by failing to act on this issue, the federal government had sent the message to businesses that they did not need to take it seriously either.