We’re fooling ourselves if we think George Calombaris’ reparation of millions in previously unpaid wages and his appearance on national television as a voice of contrition and change will trigger an outbreak of compliance in the restaurant sector. On the contrary, recent events might even reinforce entrenched non-compliance with minimum wage laws in less famous businesses.
7-Eleven became synonymous with wage theft after being exposed in 2015, leading to 2017 laws that significantly increased maximum fines. Similarly, recent blanket media coverage of Calombaris has spurred promises from the federal government to increase penalties, including criminalising wage theft.
The government has adopted the union position that a wage-thieving employer should be treated the same as a till-thieving employee. This response makes intuitive sense. It might even be reason enough to change the law. But the real question is, will it encourage non-compliant businesses to comply with minimum wage laws?
And there’s the rub. Without allocating significant additional resources to enforcing laws, we won’t catch more non-compliant businesses nor encourage them to comply, rendering new laws as hollow as our minimum wage standards. Robust on paper but impotent in practice.
Worse still, criminal sanctions require the greater standard of proving perpetrators’ intention to steal rather than the simple fact of underpayment, placing additional demands on investigators. We should not prepare our jails for a wave of employers just yet.
High fines are already theoretically available for non-compliant employers. But the Fair Work Ombudsman lacks capacity to litigate every case, so it must secure agreements with employers to voluntarily repay workers, make contrition payments and undertake ongoing audits.
The Ombudsman’s revenue from government remains lower than a decade ago, even with the government’s trumpeted additional $10 million, and yet it carries the newly added expenses of the Registered Organisations Commission. It employs about 185 inspectors to police every workplace in Australia.
Still, resourcing need not be limited to the Ombudsman. Unions used to be a significant part of the enforcement solution, contributing to ensuring the integrity of our employment laws. However, their membership has declined and the government continues legislative efforts to marginalise unions rather than co-opting them to aid employment law enforcement.
Non-compliant, famous restaurant owners might now have cause for concern they will be caught, named and shamed, but small suburban cafe owners will likely continue to take their chances.
Criminalising wage theft might not effect change if it isn’t practically enforceable, but it does provide the government some plausible deniability. It certainly looks like a tough stance even if it doesn’t address the real problem.
Many other key parties also enjoy plausible deniability, implicitly joining a conspiracy of wilful ignorance contributing to wage theft.
Employers and their representatives blame complex awards for inadvertent underpayment. Even in his televised apology, Calombaris said he was focused on creating and dreaming in his restaurants rather than on legal obligations. But commercial leases, food safety laws and tax laws are complex too. Are they also being breached on this scale?
Instead of excusing employment law breaches, employer associations are potentially a significant part of the solution. They can most effectively ensure a level playing field for their compliant members by acting to remove anti-competitive wage thieves from operation.
Consumers continue to dine out, assuming or hoping their waiter and chef are paid legally. Hospo Voice is starting to address this information gap with its Victorian fairplate.org.au initiative and the Ombudsman is also actively exploring ways to involve consumers. Once consumers are able to make informed decisions, will they avoid non-compliant establishments?
Some workers even rationalise tolerating underpayment in hospitality, albeit without choice in many cases. They don’t report their bosses for fear of repercussions, because they are gaining experience, or because it’s just a short-term job before starting their ‘real’ career. Support services are available for underpaid workers and, if a critical mass stands up, they can achieve change.
Until we cease hiding behind the illusion that someone else is fixing the problem of wage theft, it will not be solved. We need a fundamental change in approach from a range of involved parties to effect real solutions.
Dr Stephen Clibborn is a Senior Lecturer in the Discipline of Work and Organisational Studies, University of Sydney Business School
Extracted from SMH