Modern Australian
Men's Weekly

.

No, a 'complex' system is not to blame for corporate wage theft

  • Written by Anthony Forsyth, Professor of Workplace Law, RMIT University

Is Australia’s award system so complex major corporations capable of handling millions of customers and billions of dollars can’t manage to pay employees properly?

That’s the spin flowing freely in the wake of Australian supermarket behemoth Woolworths admitting it had underpaid about 5,700 staff by up to A$300 million.

Woolies joins a conga line of companies this year admitting to shortchanging employees, from household brands Qantas, Commonwealth Bank, Bunnings and the ABC to the fine-dining empires of celebrity chefs Neil Perry and George Calombaris.

Read more: Shocking yet not surprising: wage theft has become a culturally accepted part of business

The head of the Business Council of Australia has suggested these “inadvertent payroll mistakes” are due to an overly complex industrial relations system, with “122 awards, multiple agreements, multiple clauses”.

The head of the Australian Retailers Association agrees there’s a need to “simplify the system”. Woolworths’ chief executive, Brad Banducci, has chimed in with his desire “to come back and talk about the lack of flexibility in awards when interpreted literally”.

No, a 'complex' system is not to blame for corporate wage theft Woolworths CEO Brad Banducci. The average Woolworths supermarket stocks more than 20,000 different products but the company has had problems tracking employee entitlements. David Moir/AAP

Here’s why this blame-shifting is wrong.

The system is not as complex as employers claim

Australia’s workplace relations system has already been significantly simplified in the past 15 years.

We used to have an interlocking web of federal and state industrial relations laws and tribunals. The system had evolved without much logic over a century, from the creation of the Commonwealth Court of Conciliation and Arbitration in 1904. For a national company, it meant workers in some states might be covered by state awards and others by federal awards, with differing pay rates and conditions.

In 2005, however, the Coalition government of John Howard tackled this problem with its Workplace Relations Amendment (Work Choices) Act. The Work Choices “flexibility” agenda was bad news for workers, but it did implement a national workplace relations system.

The benefit of this was recognised when the Labor government of Kevin Rudd repealed Work Choices but kept the national system with the Fair Work Act in 2009.

The national system covers companies around the country. State industrial relations laws now mostly cover state public-sector workers. Several thousand federal and state awards have been reduced to just 122 federal awards applying to specific industries and occupations.

Businesses have made things more complex for themselves

The real problem highlighted by a lot of these cases isn’t that there are so many awards with different allowances that it’s hard for someone in the payroll office to keep track. Rather it’s a problem of employers’ own making: the use of annualised salary arrangements.

No, a 'complex' system is not to blame for corporate wage theft Neil Perry’s Rockpool restaurant chain has been accused of cheating workers out of A$10 million through tampering with time sheets. Daniel Pockett/AAP

Annualised salaries roll up the overtime and penalty rates workers are entitled to under an award into an annual sum. This is often done for convenience. It’s lawful only if employees are paid the same or more than their award entitlements. So it requires regular checking and monitoring.

Read more: Myths about penalty rates and those who rely on them

It is now clear many businesses caught underpaying employers were not doing this.

In the case of Woolworths, the 5,700 underpaid staff were mostly department managers placed on annualised salaries (of about A$73,000). Their salaries were supposed to cover their ordinary working hours, overtime and any other payments they were entitled to under the General Retail Industry Award. But when the actual hours being worked were calculated, it turned out the salaries amounted to less, not more, than the award.

Paying workers properly not a top priority

The central problem is that, despite all the talk of how much “we pride ourselves on putting our team first”, the need to ensure staff are paid what they are owed apparently just didn’t rate highly enough.

I’m not saying the system is devoid of intricacies. But there are many other “complex” dimensions to running a large business. Woolworths, for example, encompasses a thousand supermarkets and about 30 million customer transactions a week. The logistics of procurement, distribution and storage are immense. Imagine what it takes to keep track of use-by dates to comply with food safety regulations.

If Woolworths can do that, it’s hard to believe, with all the lawyers, accountants and professional advisers at its disposal, it couldn’t ensure it complied with industrial relations laws.

Read more: How to stop businesses stealing from their employees

The fact the federal attorney general, Christian Porter, hasn’t shied away from describing these underpayments as wage theft indicates how flimsy he thinks the case is for blaming underpayments on award complexity.

Accusing corporate Australia of being “asleep at the wheel”, he has suggested directors of companies that underpay workers might be disqualified from sitting on boards. His department has also released a discussion paper about criminal penalties for the most egregious forms of underpayment.

Clearly there is an insufficient level of deterrence. Too many businesses think they can underpay with impunity.

When a chief executive complains about having to interpret awards (which are legal documents) “literally”, it’s clear we also need a major shift in corporate culture.

Authors: Anthony Forsyth, Professor of Workplace Law, RMIT University

Read more http://theconversation.com/no-a-complex-system-is-not-to-blame-for-corporate-wage-theft-126279

How External Consulting Can Guide Enterprise IT Strategy and Procurement

Internal IT teams carry deep operational knowledge, but that familiarity can create blind spots in strategic decisions. An external IT consultant br...

Why Sports Nutrition Australia Is Important for Performance and Recovery

Athletes and fitness enthusiasts place significant demands on their bodies during training and competition. Maintaining energy levels, supporting mu...

Common Mistakes to Avoid in Family Law Matters

Family law proceedings are inherently complex, and the decisions made in the early stages can have lasting consequences for all parties involved. Wh...

How Body Contouring Bundoora Helps Improve Shape And Confidence

Modern aesthetic treatments have made it possible to refine body shape without the need for invasive surgery. One of the most popular non-surgical o...

Why Plantation Shutters Are a Stylish and Practical Choice for Modern Homes

Window coverings play a major role in the comfort, privacy, and overall design of a home. Homeowners often look for solutions that provide both visu...

Why a Retractable Hose Reel Is Essential for Efficient Water Management

Managing hoses efficiently is important for both residential and commercial environments. Whether watering gardens, cleaning outdoor areas, or maint...

Best Ways to Trade In Your Old Tech for Cash in Australia

Upgrading your mobile is exciting, but many Australians are left wondering what to do with the device they no longer use. Instead of leaving it in a...

Why Doctors in Bundoora Play an Important Role in Community Health

Access to quality healthcare is essential for maintaining a healthy lifestyle and managing medical conditions effectively. Visiting experienced doctor...

Backyard Aesthetics Decoded: Mediterranean, Coastal, Retro, Rustic, and Beyond

Backyard design has come a long way from a patch of lawn, a barbecue in the corner, and a few chairs chosen purely for practicality. Today, outdoor ...

What Stops a Home From Feeling Flat-Pack Generic

There is nothing wrong with convenience. Flat-pack furniture, fast styling decisions, and online checkouts have made it easier than ever to furnish ...

5 Best Dental Clinics in Beecroft, NSW

The best dental clinics in Beecroft, NSW are Beecroft Smiles Dental Surgery, Beecroft Elegant Dental Clinic, McConnell Dental, Dentistry for Life, a...

Executive Recruitment: Finding Leadership Talent That Drives Organisational Success

Hiring the right leadership team can significantly influence the direction and performance of any organisation. Strong executives bring strategic thin...

Understanding the Importance of Abrasive Blasting in Industrial Surface Preparation

Surface preparation is an essential step in many industrial processes. Whether preparing metal structures, removing old coatings, or cleaning equipmen...

Farm Machinery Costs Set to Rise

With steep rises in fuel prices and the need for specialised maintenance, farm machinery costs are set to rise across Australia. The need for transpor...

Why an Employer Recruitment Agency Helps Businesses Build Stronger Teams

Finding the right employees is one of the most important responsibilities for any organisation. Businesses rely on skilled professionals who can con...

Why Quality Trailers Are Essential for Transport and Trade Businesses

Transportation plays a major role in industries ranging from construction and landscaping to logistics and agriculture. Businesses that frequently m...

Why Professional Car Removal Services Are The Best Way To Dispose Of Unwanted Vehicles

When a vehicle reaches the end of its useful life, owners often face the challenge of deciding how to remove it safely and responsibly. Old vehicles...

Why Professional Commercial Carpet Cleaning Matters for Modern Workspaces

Clean office environments influence how employees work, how clients perceive a business, and how long workplace interiors last. Carpets in commercia...