HON ALISON XAMON (North Metropolitan) [9.59 pm]: After being contacted by a very distressed constituent recently, I felt it was important to rise and again speak about the issue of wage theft. The last time I spoke about this was in response to Hon Kyle McGinn’s motion on modern slavery back in March. Since that time, I do not think a week has gone by in which we have not heard about yet another wage theft scandal. I am really concerned that it seems to be a systemic and ingrained problem. In April, we learnt that the Commonwealth Bank had underpaid more than 8 000 staff, with missed payments going back as far as 10 years. This included wages and superannuation totalling up to $15 million. Of course, there was the public scandal in July about the $7.8 million that George Calombaris’s companies had underpaid workers. In the same month, jewellery chain Michael Hill announced that it would be making $25 million worth of payments to current and former employees. In August, defence manufacturer Thales paid out more than $7.6 million after underpaying hundreds of workers over seven years, including engineers who were earning up to $120 000 a year, other professionals, middle managers and admin staff. That was a really interesting one, because it showed that it is not only low-paid workers who are at risk of wage theft. In September, we learnt that Bunnings had underpaid superannuation for some part-time workers for the past eight years, Wesfarmers had underpaid 6 000 workers a total of $15 million in superannuation allowances and entitlements over the past nine years, and the Fair Work Ombudsman had recovered nearly $82 000 in unpaid wages for workers from 18 Subway franchises across a number of states after finding that Subway had failed to pay them minimum wages as well as casual loading, holiday pay and overtime rates. Subway was also not issuing proper pay slips or keeping proper employment records. That same month, Sunglass Hut was found to have underpaid 620 workers by $2.3 million, and by late September it still had $815 000 to repay. By October, it emerged that Woolworths had underpaid employees by up to $300 million over almost a decade, and we learnt that even the ABC would be paying back approximately 25 000 casual staff members, who had been underpaid as much as $22.9 million in total. Of course, Rockpool restaurants owe staff over $1.6 million in back pay. This month, IBM Australia admitted to underpaying its workers and is now being investigated by the Fair Work Ombudsman. This is by no means an exhaustive list. It includes only the examples that the media has chosen to pick up and alert us to. The annual report of the Fair Work Ombudsman, which was released last month, revealed that $40 million in compensation was paid to 18 000 workers for stolen or lost wages over the past year.
The thing I am most concerned about is that the underpayment of wages is now being described as a business model. The mounting cases suggest that that is not far off the mark. According to research, a quarter of Western Australian workers were underpaid last year by 23 per cent on average. That is potentially costing WA employees $186 million in lost wages each year. This is all happening in an environment in which our unions are being weakened and undermined, which means that the chances of employers being caught underpaying workers is, unfortunately, going to decrease. Wage theft really does impact on individual workers and their families. It also creates an unfair commercial advantage for those companies that choose to do the wrong thing in the hope that they will not get caught. This is happening at a time when workers have not seen a decent pay rise in more than half a decade. Wage theft is associated with low wage growth. When businesses underpay their staff, it undermines the ability of their competitors to give their staff a pay rise. The Grattan Institute has noted that the major risk for an underpaying employer is that it might have to pay a portion of the wages that it should have paid in the first place. In terms of pure incentives, it is rational for many employers to underpay if there is little consequence for breaking the rules. That means that the overwhelming incentive is to cheat, and, unfortunately, to cheat repeatedly.
I know the government has recognised the importance of this issue by undertaking an inquiry, which was held earlier this year. I am looking forward to the release of the report of that inquiry. We need to have action on this, and I hope this is something the government is going to give absolute priority to, because it is really impacting people. I am concerned that complacent attitudes have allowed wage theft to be overlooked for too long. I think it is absolutely unacceptable that we continue to see this sort of exploitative behaviour coming from employers. I acknowledge that there is of course a large role for the federal government, but it is also a state responsibility. We need to ensure that governments of all persuasions, and we need to start here, are sending a clear signal to employers that this sort of behaviour is not going to be tolerated and it is going to be met with serious responses. Even though George Calombaris’s companies had $7.83 million of underpayment, only a $200 000 contrition payment was required. The point made at the time was that if someone deliberately took $ 1000 out of someone else’s bank account, there would be a high likelihood of a criminal conviction for theft, but apparently if someone is a multimillion-dollar restauranteur or a celebrity chef, they can take $7.83 million in wages from their workers and get away with something as simple as a contrition payment. We need to ensure that we are taking a zero-tolerance approach to wage theft in all its forms. We need to make sure that it is not a preferred business model. It genuinely impacts people in our community. The introduction of an easy and timely process to allow workers to get back their stolen wages needs to be part of the solution.