Attorney-General Christian Porter says he is prepared to legislate “significant” wage theft penalties – likely to be up to 10 years’ jail – to deter the “unacceptable” practice of persistently underpaying workers, as the government grapples with stagnant wages and a slowing economy.
In a wage theft discussion paper to be unveiled on Thursday, Mr Porter, the Industrial Relations Minister, promises “strong and effective criminal sanctions” while saying his promised legislation must not create “unintended consequences”.
“For example, we do not want employers who make genuine mistakes and move swiftly to rectify them to end up with a criminal record,” Mr Porter said.
The disclaimer will form the crux of debate over the bill, with unions pushing for an unsparing crackdown on widespread underpayment, including by retailers like 7-Eleven – as exposed by The Sydney Morning Herald and The Age.
Mr Porter, who is seeking bipartisan support for his legislation, will release the discussion paper on Thursday when he delivers a speech to the Committee for Economic Development of Australia conference in Canberra.
The paper says the government “believes there can be no excuse for deliberately exploiting workers” and the bill became necessary after a taskforce set up to investigate migrant worker exploitation found “strong evidence of systematic and deliberate underpayment”.
“Wage underpayment and employee exploitation deny employees their legal entitlements and have the further effect that there is not a level playing field for employers,” the paper says.
“The overwhelming majority of employers who are trying to do the right thing are competing against those that underpay or exploit workers.”
It said while “no decision has as yet been made about penalties”, jail terms and fines would need to be “broadly proportionate” with penalties for comparable offences such as the Fair Work Act’s “corrupting benefits” provisions, which impose hefty penalties for union corruption.
These include 10-year jail terms or a $1.05 million fine, or both, for individuals; and $5.25 million fines for companies.
Prime Minister Scott Morrison has said any proposed industrial relations reforms must promote job growth, help boost wages, assist businesses to improve productivity and help grow the economy as a whole, before the government will proceed with them.