Our borders have reopened. International students and backpackers are returning. Employers who complained of labour shortage can rejoice.
But temporary migrant workers were vulnerable to workplace mistreatment before COVID-19. And there is no reason to think that employers will benevolently pay legal wages where they didn’t before. So, what has Australia’s government done to ensure businesses act appropriately now?
The federal government has regularly touted its two main responses to the wage theft crisis – raising maximum penalties and increasing the Fair Work Ombudsman’s funding.
An overseas student who was allegedly underpaid while working in Sydney. Credit:Anna Kucera
Raising penalties is an easy sell – higher fines equal higher employer compliance, right? Well, not quite, unless there is also increased enforcement. A big stick only changes behaviour if there is a realistic chance of being hit with it. Employers know there’s little chance of being inspected and caught underpaying, let alone being hit with a maximum fine.
Increasing the FWO’s enforcement capacity has been a positive initiative. Indeed, after years of both major parties cutting the FWO’s funding, Coalition governments since 2015 have incrementally restored it to near 2009 levels, although never sufficiently to succeed as the nation’s primary enforcer.
The FWO isn’t uniquely able to change employer behaviour. Government could better enable workers to be part of the solution by facilitating collective action, reducing vulnerabilities created by migration policies, and removing other barriers to recovering unpaid wages and superannuation.
Unfortunately, for each of the government’s big ticket item responses to the issue, it has also introduced counter measures.
First, while potential maximum fines increased tenfold in 2017, they were so narrowly worded as to apply to few employers and demand huge investigation and prosecution resources from the FWO. Additionally, increased civil penalties and criminal sanctions, introduced to Parliament in the 2020 industrial relations Omnibus Bill, were withdrawn despite broad support from Labor and others.
The only part of the Omnibus Bill that the government saw through to legislation helps employers to classify employees as casual. Add to this, recent High Court decisions help to classify workers as independent contractors, potentially increasing the scope for misclassification and entrenched vulnerability.
