Wages Large

By Alex Millman and Lindsay Carroll, NRA Legal

With “wage theft” being a hot topic politically, Parliaments around Australia have undertaken inquiries into the matter at a State level since 2018.

Following inquiries into “wage theft” in Queensland, South Australia and Western Australia, the Federal Opposition has established a similar inquiry to be conducted by the Senate Economics References Committee.

Although the State-based inquiries have made many recommendations without the constitutional power to put them into effect, this will be the first inquiry of this kind at a level of government which is able to contemplate legislative change to put the recommendations of the inquiry into practice.

What will the inquiry look at?

The terms of reference for the “Inquiry into Unlawful Underpayment of Employees’ Remuneration” are substantially the same as those for the other inquiries mentioned above.

In general terms, the terms of reference for the inquiry are to examine:

  • how “wage theft” occurs (i.e. the forms that it takes);
  • why it occurs, including whether it has become a “cost of doing business”;
  • the cost of “wage theft” to the national economy;
  • the best means of uncovering “wage theft”;
  • how to provide adequate protection from adverse action for people who disclose “wage theft”;
  • the tax treatment of back pay and those who receive it;
  • whether liability for “wage theft” should be extended down the supply chain to drive compliance;
  • the most effective means of recovering entitlements and deterring “wage theft”; and
  • whether Federal Government procurement practices can be modified so that the Government does not contract with businesses that engage in “wage theft”.

As with most inquiries, the terms of reference also allow the Committee to inquire into “any related matters”.

What role will the National Retail Association play?

The National Retail Association is the only retail industry association to have represented retailers in all State-based wage theft inquiries  and will also be also be advocating strongly on behalf of retailers in the Senate inquiry.

As in previous inquiries, we will advocate a preference for greater education and assistance to help employers and employees navigate Australia’s complex industrial relations system before the imposition of greater penalty regimes.

Our submissions to these inquiries are informed by the feedback provided by you, our members. You can assist us in forming our collective submission by calling 1800 RETAIL (738 245) with our industrial advocacy team.

How can I avoid being a case study for the inquiry?

Senate inquiry or not, life – and business – goes on, and although the inquiry may have come about because of past underpayments it will also be scrutinising any underpayments that come to light during its lifetime.

Here are our top five tips for avoiding becoming a case study for the inquiry:

  1. Check that your employment records comply with the FW Act.

In cases of alleged underpayments, your employment records can make or break your case. Make sure they are compliant, up to date and, above all, accurate.

  1. Check that your part-time employees have all the necessary paperwork and are being engaged in accordance with it.

One of the main risk areas that has appeared in past underpayments is overtime owed to part-time employees due to poorly documented agreed work patterns. Make sure you are familiar with the requirements of part-time employment and the entitlements owed to part-time employees.

The only thing worse than not having complied with these requirements is having complied with them on paper only, as this can render you liable for extensive overtime claims. Make sure you have complied with the terms of employment set out in the paperwork and have not ignored it.

  1. Check that you have correctly applied changes to rates at the correct times.

The General Retail Industry Award 2010 is presently a mess of penalty rates, with some penalties changing every six months until March 2021. Check that you have implemented these at the appropriate time, and develop a process to remind you to update these penalties in your payroll system when the next change is due.

  1. Check that you are not repeating the mistakes of a predecessor.

If you have taken over an existing business, it is incumbent on you to make sure that you are employing your staff correctly.

You are not entitled to assume that your predecessor was operating in accordance with the law – making this assumption can result in you becoming liable for repeating the same mistakes.

If you have simply repeated what your predecessor has done, carefully and critically examine these practices to make sure that they are, in fact, lawful.

  1. Check your processes, procedures and practices with a third party.

The law has changed a lot in the last decade, and practices which were perfectly correct years ago are no longer compliant with the law. The National Retail Association is best placed to assist you to check your practices and processes to ensure that they are compliant with current law. For assistance, call 1800 RETAIL (738 245).