HON KYLE McGINN (Mining and Pastoral) [11.30 am] — without notice: I move —

That this house notes that wage theft is a serious and ongoing concern in Western Australian workplaces because of its impacts on —

(a)  workers, particularly vulnerable workers; and

(b)  employers who do the right thing by their workers; and

commends the McGowan government on the establishment of the inquiry into wage theft that is being undertaken by the former Chief Commissioner of the Western Australian Industrial Relations Commission, Tony Beech.

I am absolutely stoked to be standing here today to kick off what I really hope will be a great debate for workers in Western Australia who have suffered the pain of wage theft. Today’s motion is very broad. I have done that on purpose to ensure that we get a good debate from all sides of this chamber, so that we can get an understanding of what members think wage theft is, what experiences members have had with wage theft, and what members believe we should actually do about wage theft.

[ Further comments from the Hon Kyle McGinn] …………. I used to have to give probably 10 to 15 hours a week of love time to the employer.

Hon Alison Xamon: Love time?

Hon KYLE McGINN: Love time is unpaid hours of work. That is what it was called. Hon Alison Xamon: That is absolutely outrageous.

Hon KYLE McGINN: It is absolutely outrageous. …………..

[Speeches and comments from various members]

HON ALISON XAMON (North Metropolitan) [11.56 am]: I rise to indicate that the Greens absolutely support this motion. It is a really important issue and I am very pleased that the chamber will consider this matter. I also wish to commend the McGowan government on the establishment of the inquiry into wage theft. It is an important inquiry to have. A lot of us have worked with workers, as have I in the union movement. I point out also that when I was working as a lawyer with refugees, I found that they, as vulnerable workers, were often on the receiving end of terrible work arrangements. For those of us who know this, we know there is an endemic concern that is particularly targeting certain parts of the population that needs to be addressed. In the same way that we knew that instances of child sexual abuse were occurring, yet we needed a royal commission to fully expose the depth of the concern, I think it is really important we hold an inquiry that will give people an opportunity to fully explore just how much of a problem this is. I suspect that people will be shocked to discover how rife the issue of wage theft is here in Western Australia.

A critical part of the terms of the inquiry I think we should pay attention to is the final dot point—

whether new laws should be introduced in Western Australia to address wage theft, and if so, whether wage theft should be a criminal offence.

This is not only referring to the breadth of wage theft as it occurs within Western Australia, but also trying to find the solutions to address this. Our current industrial relations laws simply do not enable us to address those entities or employers who choose to engage in wage theft as a form of business model. We have no way of ensuring that those people are seriously held to account.

I want to point out that wage theft takes many forms. It includes the underpayment of wages. It also includes deliberate decisions not to pay superannuation, unpaid penalty rates, unauthorised deductions from pay, unpaid work trials, the misuse of Australian Business Numbers and sham contracting. I note that this started to get a bit of attention recently after some of the intemperate comments made by the CEO of Muffin Break, who was outraged—outraged!—that young people apparently are not prepared to work at a really rubbish job for absolutely nothing, so that that company can make all the profits in the world. I cannot believe it! For the sake of Hansard, I am being sarcastic. I think it is good that this is finally starting to get some attention.

To be very clear: when we talk about wage theft, we are talking about stealing. It is absolutely stealing, despite what some industry groups are trying to claim. I am pleased that there is finally growing recognition of the importance of this issue. The impacts of wage theft are significant, and I want to make some comments about its prevalence. Wage theft has already been identified across many sectors, including franchising; cafes, bars and restaurants; the gig economy, in which it is huge problem; and other red-flag sectors, including horticulture, meat processing, cleaning and security. In fact, it has been reported that Western Australians are being underpaid by more than $1 billion in lost wages every single year. These are people who are working hard and who deserve to be paid. The internal wage repayment program of 7-Eleven alone repaid more than $150 million in unpaid wages to its mostly international student workforce. If we are going to talk about vulnerable workers, these people had their visas hanging over their head—whether they would even be able to stay in Australia. That is the definition of vulnerable—people who are really left with absolutely no recourse and have no choice.

I note that United Voice research has shown that the likelihood of exploitation increases exponentially once additional layers of subcontracting are introduced. A 2016 audit by the Fair Work Ombudsman found that one in three cleaning agencies were paying staff incorrectly. These are not agencies that pay well to start with; these are agencies in which people are working really, really hard in what can be pretty miserable jobs, and they are not getting paid. According to Industry Super Australia, one-third of eligible Australian workers are being underpaid their superannuation. These are the people who are performing the work and who are trying to ensure that they have enough money to support themselves in the future, knowing that many of us have been told not to expect money from government as we get older and to make sure that we build up our super. What do people do if their employer is deliberately not paying them or is underpaying them? We are talking about one-third of workers.

The Migrant Workers’ Taskforce established by the federal government found that as many as 50 per cent of temporary migrant workers may be being underpaid in their employment. That is disgraceful—50 per cent. The task force’s final report, which was delivered this month, focused on the employment experience of temporary migrants who have work rights under international student visas and working holidaymaker visas—otherwise known as backpacker visas. The task force concluded that the problem of wage underpayment is widespread and has become more entrenched over time. The most comprehensive academic survey to date on this issue suggests that as many as 50 per cent of temporary migrant workers may be underpaid in their employment. I note that the federal government accepted, in principle, all 22 of the task force’s recommendations.

Other research into the exploitation of migrant workers found that 31 per cent of fruit and vegetable pickers and nearly 20 per cent of employees in convenience stores earned $10 per hour or less; we are talking less than half of the minimum wage. That is disgraceful; who is supposed to be able to live on that? A parliamentary inquiry was undertaken in Queensland that reported in November last year. I note that 12 of its 17 recommendations were actually federal government responsibilities. That inquiry found that wage theft affects around 437 000—one in four— Queensland workers, and costs $1.2 billion every year. The inquiry also found that the annual loss associated with the underpayment or non-payment of superannuation was estimated at $1.12 billion. The Fair Work Ombudsman told the Queensland inquiry that 49 per cent of hospitality employers statewide—60 per cent in Fortitude Valley—were not paying the correct wages. Wage theft commonly targets vulnerable and marginalised workers, although I note that the Queensland inquiry identified that public servants are also at risk, so that is one for us to be mindful of.

For those members who may not have a background in industrial relations, as I do, I will just point out that recovering wages through the courts is difficult, costly and time consuming. Recovering superannuation through the Australian Taxation Office is even more difficult—very, very hard. I might say at this point that that is all the more reason for people to make sure that they join their union.

Some industries—for example, the Housing Industry Association—have attempted to blame wage theft on the complex workplace relations framework. The Australian Industry Group’s submission to the Queensland inquiry claimed that the term “wage theft” was inappropriate and risked inappropriately branding as criminals employers who mistakenly underpay their employees. My response to that is: absolute balderdash. Absolute nonsense. The Fair Work Commission is perfectly capable of distinguishing between accidental underpayment of wages and a systemic component of business models. The trouble is that, particularly under Western Australia’s current state industrial relations laws, if wage theft is identified as a systemic, deliberate business model, we have no capacity to make sure that the people responsible are prosecuted. For that reason alone, I think it is absolutely essential to find out the scope of wage theft. Those of us who have worked in this area already know that it is a massive problem. We also need to start looking at what laws can be introduced to make people criminally culpable when they deliberately set out to underpay their workers in order to make just that little bit more of a profit.

[Speeches and comments from various members]

Motion lapsed, pursuant to standing orders.


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