Hansard debates

Mrs McARTHUR (Western Victoria) (17:58): I rise to oppose this bill on wage theft, which seems to me to be yet another piece of legislation introduced into this place because it sounds good, admirable and moral, rather than because it will ultimately achieve its stated aim. Under the proposed laws, employers who dishonestly withhold employee entitlements or authorise or permit others to do so will face substantial financial penalties of up to 10 years imprisonment for individuals. Those found guilty of the proposed offences are liable for penalties—as I said, up to 10 years—and fines of up to $198 000-plus for individuals, including both individual employers and officers of employers within the Corporations Act 2001. Fines of up to $991 000 will apply for body corporates, but fines will be indexed each year.

To enforce the new laws the Victorian government will establish a new regulatory body led by a commissioner of the Wage Inspectorate Victoria, whose inspectors will have the power to enter, search and seize documents from business premises where inspectors reasonably believe an employee entitlement offence has been committed. This is a matter for the commonwealth government under industrial relations referral powers and should be dealt with under the existing national Fair Work regime and any forthcoming commonwealth legislative measures, not by state governments who have no jurisdiction over this area, particularly Victoria, who referred its power over employment law to the commonwealth government in 1996. Hyperbolic comments by some, suggesting that employers actively engage in Dickensian conspiracies to exploit downtrodden workers in cases of underpayments, could not be further from the truth in the overwhelming majority of cases involving underpayment.

Underpayment is complex and driven by diverse factors. Australia has one of the most complex workplace relations systems of any country in the world. In an overly complex workplace relations system there is a fundamental difference between wage theft and accidental underpayment or overpayment of wages and entitlements through unintentional mistakes, misinterpretations or miscalculations. With the best will in the world and substantial investment of money to get compliance right, mistakes can still easily be made across all industries and all sizes of businesses. When organisations such as the Red Cross, the ABC and Maurice Blackburn are caught underpaying, there is clearly something bigger at issue than just intentional wage theft going on.

But I do not oppose the bill simply because I know it will fail to make life fairer for Victorians workers; through its fundamental misunderstanding of the morality and the motivation of business owners it threatens to prove actively damaging to the Victorian economy. There is only so far we can push business owners. In my view this bill follows the industrial manslaughter legislation we adopted earlier this year and the class action enabling justice legislation we are soon to debate in tipping the scales against anyone who wants to do business in our state.

I want to raise my specific problems with this bill in committee, and so here I outline a more general and more fundamental problem I have with this and much of the rest of the government’s approach. Business owners are not a class apart—strange creatures with different morals who seek to enrich themselves and do not give a damn about the health and happiness of their employees. They are real people who work their fingers to the bone, fight hard, take risks—sometimes successfully, often not. These are the people whose enterprise creates jobs and provides livelihoods to families, who offer services to the public and who foot heavy tax and rates bills.

I believe there are two causes of this misunderstanding about business which exists on the left. The first is that too many politicians, political advisers and bureaucrats simply have no experience of business. They have not run a business. They do not mix with business owners. They do not appreciate the day-to-day stresses. They do not see the failures. They imagine that successful and prominent entrepreneurs represent the average, not the exception. Secondly, I think they wrongly imagine that big businesses, national and international corporations, are typical. They do not appreciate the reality of the numbers, which show how far from the truth that is. We might often hear that small businesses are the heart of our economy, but I suspect that very few people appreciate just how small those businesses are. Seventy per cent of businesses in Australia which employ any staff employ fewer than five. In Western Victoria 95 per cent employ fewer than 20, and of the 27 574 businesses in the entire Western Victoria Region just 38 employ more than 200 people. That is 0.14 per cent.

Yet so much legislation treats all employers alike. Those formulating policy and drafting legislation are silent—often, I suspect, ignorant—about the fact that multinational corporations are treated in the same way as mum-and-dad, family-owned businesses, often begun by successful self-employed people. Small businesses employ family, friends, close neighbours. They recognise that often their most valuable asset is their staff. There is no revolving door, no flexible labour market, for rural and regional businesses, nor is there the anonymity of the big city society which might enable evil employers to hide themselves from the communities that they are oppressing. It is just not how small firms or regional and rural towns work.

This caricature and anti-business ideology based on ignorance and prejudice is actually quite dangerous. It is the reason we see legislation like this in front of us time and again, bills which seek to redress the balance in favour of the workforce but in so doing make it harder and harder for businesses to operate and employ people. Why would anyone take the risk, face the stress and put in the hours when the hoops they have to jump through get even higher?

The three criminal offences this bill proposes are not just a constitutional legal absurdity, perhaps invalid, as we have heard Mr O’Donohue so elegantly explain; they are also a real practical harm to businesspeople. Duplication of regulation, the introduction of new liability, the interface with yet more investigative bureaucracy—all of these make life harder. Employers will be deeply concerned by the discussion we have heard today on the level of proof required to demonstrate dishonesty—and this government should know something about dishonesty after the last week.

I look forward to getting into some of the detail on this in the committee, but I want to conclude with a more positive suggestion for how the government could genuinely address underpayment of workers in Australia. It is not rocket science; in fact it is the very opposite. The biggest problem is not dishonest employers; it is the sheer, staggering complexity of workplace relations in Australia. With the best will in the world and substantial investment of money to get compliance right, mistakes can easily be made across all industries and all sizes of business. Many employers are underpaying workers in large part due to fundamental misunderstandings about awards and enterprise agreements, which can operate simultaneously in a workplace and have intersecting legal requirements leading to genuine mistakes and accidental payroll errors. In addition to pay rate and entitlement in one award, employers must navigate employee entitlements and conditions contained in the Fair Work Act 2009, which contains over 214 000 words and over 800 sections.

If this government genuinely sought to reduce wage theft, this is the problem it should first address. It would clearly be a complex process and would involve cooperation with the federal government and negotiation with real-life employers. But ultimately it would be a far fairer, more productive use of time than this employer-caricaturing, virtue-signalling attack on enterprise. I strongly urge members to think of the unemployed, of the young and of all workers of the future who will be denied jobs this legislation will strangle at birth.