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

The Expert's Guide to Understanding Large Bore Steel Pipe Specifications

When it comes to infrastructure, construction, and various industrial applications, the choice of materials is paramount. Among the options availabl...

Preparing for Your First Trip to San Francisco in 2026

San Francisco has long occupied a particular place in the Australian imagination. It is compact yet complex, progressive but historic, and visually st...

Modern Office Painting in Australia - It's the Real Game Changer

Walk into any modern Australian office today and you'll be struck by the fact it's a whole different beast from the ones we grew up with. Gone are t...

How to Choose the Right Suburb for Your Lifestyle

Choosing the right suburb is one of the most important decisions you’ll make when buying or renting a home. Beyond the property itself, the suburb...

Considering Cryolipolysis Fat Freezing? Here’s What You Need to Know

Body confidence can shift over time, and sometimes even good diet and training can still leave a stubborn area of fat that won’t budge. If you’r...

From Local Tradie to Digital Leader: The Strategy Behind Auto Gate Guys Sydney’s Growth

For many small trade businesses, digital marketing still feels like a buzzword, not a necessity. They rely on word-of-mouth referrals, repeat clients...

Electric Automation System: Smarter Control for Modern Electrical Infrastructure

Modern buildings and industrial facilities are increasingly dependent on intelligent control and efficiency. An electric automation system brings t...

The Damp Truth: Why Your Overflowing Gutters Are an Open Invitation for Termites

When it comes to protecting your home, most people think about visible threats — storm damage, cracked tiles, break-ins. But one of the most destruc...

Is Your Inventory a Sitting Duck? 2 Critical Upgrades to Protect Your Business Assets and Your Bottom Line

Imagine this: you finish a long day on the job, lock up your tools, materials, and work vehicle in the garage, and head home. But overnight, someone b...

Electrician in Melbourne: Reliable Electrical Solutions for Homes and Businesses

Finding a dependable electrician Melbourne is essential when safety, efficiency, and long-term performance matter. Electrical systems form the back...

Rims and Tyres for Sale in Sydney: Performance, Safety, and Style Combined

Finding the right rims and tyres for sale Sydney is about far more than appearance. Tyres and rims directly influence how a vehicle handles, brakes...

Why Access to Doctors in Bundoora Is Essential for Ongoing Community Health

Reliable access to healthcare plays a vital role in maintaining physical wellbeing and peace of mind. Having trusted doctors in Bundoora available ...

Pendant Lights: Elevating Interior Spaces With Style and Purpose

Well-chosen pendant lights have the power to transform interiors by combining focused illumination with strong visual impact. More than just a ligh...

What Sets Professional Family Lawyers in Sydney Apart from General Lawyers?

Choosing the right legal support can make a noticeable difference when dealing with family-related matters. This article will explore what separates...

Balancing Teen Academic Expectations and Wellbeing

For many teenagers, school years are shaped by increasing expectations. Academic performance, future pathways, and comparison with peers can create pr...

Why Ceiling Fans Remain One of the Most Effective Solutions for Year-Round Comfort

Creating a comfortable indoor environment without relying heavily on energy-intensive systems is a priority for many households. Installing ceiling ...

Why an Industrial Air Compressor Is Vital for Modern Manufacturing

In many industrial environments, compressed air is as essential as electricity or water. An industrial air compressor provides the power needed to ...

Why Commercial Carpet Cleaning Services Matter for Professional Spaces

Clean carpets play a major role in shaping how a commercial space looks, feels, and functions. Commercial carpet cleaning services are essential fo...