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Proposed changes to workplace legislation would place an additional burden on business, says Ai Group chief executive.
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Wage theft law ‘will do nothing to help underpaid’
19 April 2023
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10 minute read
The criminalisation of wage theft and other changes to workplace laws are the wrong measures at the wrong time according to the chief executive of the Ai Group, Innes Willox.
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Mr Willox said the changes would hinder rather than help productivity and see businesses dragged back by more obstacles on top of the economic challenges many already faced.
“At a time when the economy is under increasing stress from rising costs, labour and skill shortages and increasing global uncertainty the last thing business needs is more regulation, more complexity and more rigidity,” said Mr Willox.
“These measures will do nothing to increase productivity which is recognised by all to have flatlined and in fact the measures risk driving productivity backwards across the economy.”
One of the measures the organisation opposed was the introduction of criminal penalties for wage theft.
Mr Willox said the Ai Group did not condone non-compliance when it came to wages, but criminalisation would hinder those impacted more than inflict greater consequences.
“The imposition of criminal penalties does nothing to address the structural complexity of Australia’s workplace laws but simply deals with the issue of underpayments by punishing employers who get it wrong while leaving underpaid workers out of pocket,” he said.
“Exposing businesses, directors and managers of businesses to criminal penalties would operate as a major barrier to employers self-disclosing and rectifying underpayments. It could discourage constructive engagement with the Fair Work Ombudsman.
“In addition, criminal penalties are not designed to recover unpaid wages owing to employees.”
Mr Willox said the criminalisation of wage theft could be considered unfair as general payroll errors often occurred in both directions.
He referenced a report by the Australian Payroll Association that found “almost 70 per cent of businesses it assessed in an 18-month period had uncovered overpayments estimated to cost employers millions, in most cases employees are not asked to give the money back”.
“The FW Act’s prioritisation of criminal proceedings ahead of civil enforcement and proceedings is likely to leave some of the most vulnerable workers without repayment while the courts deal with the alleged criminal conduct of their employer,” said Mr Willox.
The organisation also said the possible same job, same pay legislative changes would hurt businesses, particularly those in the labour-hire industry.
“Ai Group opposes the government’s policy of requiring that labour-hire companies provide the same rates and conditions to their employees, as their clients provide to their own employees,” said Mr Willox.
“We are concerned that there is the potential for such a policy to lead to legislative changes that are unfair and damaging to the interests of employees and employers that legitimately rely on labour-hire arrangements and to the broader economy.
“There is concern among many in industry that the same job same pay policy represents an unfair attack on labour-hire businesses that comply with relevant workplace laws and provide a valuable and legitimate service to other organisations, employees and the broader community.”
Mr Willox also said the Ai Group was against increased discrimination, adverse action, and harassment protections and said the legislation already in place was sufficient.
“Employers are already subject to multiple pieces of legislation directed at discrimination, adverse action and harassment,” he said.
“Ai Group opposes additional regulation in respect of discrimination, adverse action and harassment that would further increase the regulatory burden on employers.
“Instead, the reform that is needed is a consolidation and removal of regulatory duplication that exists across state and territory and federal anti-discrimination laws and the Fair Work Act.”
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