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Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra

For the first time, employers committing “egregious” wage theft would face the threat of federal criminal charges, under the Morrison government’s proposed industrial relations omnibus legislation to be introduced on Wednesday.

The maximum penalty would be $1.11million or four years imprisonment, or both, for individuals and $5.55 million for a company.

But it is clear the application of the criminal penalty would be very rare. The government says the offence would apply where a “national system employer dishonestly engages in a deliberate systematic pattern of underpaying one or more of their employees”.

The offence wouldn’t apply to one-off underpayments, inadvertent mistakes or miscalculations.

ACTU secretary Sally McManus said while the ACTU welcomed any laws that would address wage theft, the bar the government proposed was too high.

“It is unlikely any employer will ever be caught and it will wipe out stronger and better laws in Queensland, Victoria and the ACT,” McManus said.

For less serious cases, the legislation would increase the present civil penalties.

For most wage underpayments, the maximum penalty would rise by 50%. This will take it from $13,320 to $19,980 for an individual. and from $66,600 to $99,900 for a body corporate including small businesses.

For larger businesses, maximum penalties would be based on the higher of either twice the benefit obtained or $99,900.

Penalties for “serious” wage underpayments by bigger businesses would be based on the higher of either three times the benefit obtained or $666,600.

Industrial Relations Minister Christian Porter said that “overwhelmingly there was a view amongst the business groups that there shouldn’t be a criminal offence of wage theft at all”. But he stressed the criminal offence was different from “inadvertent underpayment”.

Asked on Sky whether he could give examples of instances that would meet the criminal threshold, Porter could not.

But he did point to the 7-Eleven scandal as “the most egregious and blameworthy example of the underpayment scenario”.

The Fair Work Ombudsman reported in October: “Between September 2015 and February 2020, 7-Eleven Stores Pty Ltd have back-paid $173,610,752 in wages, interest and superannuation to 4,043 current and former franchisee employees.”

The FWC said it had “brought 11 litigations against 7-Eleven franchisees resulting in courts awarding more than $1.8 million in penalties against them, including for operating unlawful cash-back schemes, paying unlawful flat rates to workers, and falsifying records.

The Australian Industry Group said it opposed criminal penalties for wage underpayments but if the legislation was to include them they must be fair and balanced, applying only to “deliberate, dishonest and serious conduct”.

ref. Criminal penalties for wage theft for ‘egregious’ cases only – https://theconversation.com/criminal-penalties-for-wage-theft-for-egregious-cases-only-151597

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