Karen Maxwell & Richard Phillips
Recent exposures of multi-million dollar wage theft of workers by high-profile individuals and companies underscore the fact that the illegal practice is widespread and expanding rapidly across Australia.
A two-year investigation by the Fair Work Ombudsman into MasterChef television judge George Calombaris’s MAdE Establishment company revealed that its celebrity chef owner underpaid 524 staff in his restaurants a total of $7.83 million, from 2011 to 2017. On average, each worker was underpaid by $15,000 during the six-year period—a massive amount for individuals whose officially classified rate of pay is between $19 and $25 per hour.
Calombaris insisted that the underpayments were a terrible mistake. But the multi-millionaire, who has been agitating for the elimination of weekend and after-hours penalty pay rates for years, is a “repeat offender.” In 2017 his company was forced to back pay 162 employees a total of $2.6 million.
George Calombaris on ABC-TV
While fast-food and convenience store franchises, including 7-Eleven, Domino’s Pizza, Michel’s Patisserie and Donut King, are notorious wage thieves, Calombaris is one of several employers in the high-end restaurant industry who have been exposed for underpaying workers. Others include Neil Perry’s Rockpool Dining Group, which had to back pay staff $1.6 million last October for a single year of underpayment.
Rockpool is still being investigated by Fair Work authorities, as are restaurant outlets run by Heston Blumenthal, Guillaume Brahim, Teage Ezard and Shane Delia, who was previously in business with Calombaris.
Wage theft, in fact, is a deeply-entrenched business model, designed to slash costs and boost profits in the retail, franchising, hospitality, agriculture, construction, food-processing and tourism sectors. Major retail companies exposed this year include Michael Hill jewellery, which underpaid staff for six years, and may have to pay back $25 million, BCF and Rebel.
Notwithstanding occasional denunciations of this practise by the trade unions, and their calls for higher fines and more prosecutions, the unions have helped create the economic climate for wage theft to flourish. For decades, they have collaborated with employers and Labor and Liberal-National governments in the assault on jobs and conditions.
Work casualisation, which the unions have facilitated, is one of the main factors assisting wage theft, and this has spread to the tertiary education sector.
Late last month, the Academy of Information Technology, a private provider of higher education, admitted it “may” have been paying its staff below the award rate. Predictably, the company insisted that the underpayment was “unintentional.”
The National Tertiary Education Union (NTEU) issued a press statement declaring that it knew of about 40 current casual employees in the sector who were not receiving proper pay rates. This included lecturers who were receiving less than 50 percent of the award rate, and others being underpaid between $10,000 and $60,000 each per year. One tertiary worker was estimated to be owed a total of $185,000 over five years.
Like other trade unions, the NTEU’s concerns about underpayment are aimed at covering up its own role. The NTEU has been instrumental in imposing enterprise agreements that have enabled a vast expansion of casualisation in the sector.
Young workers, in particular, bear the full brunt of wage theft, due to high levels of unemployment and the fear of immediate sacking if they speak out.
Nor is it an accident that underpayment is rampant in industries that employ immigrant workers, international students, backpacker tourists or those on 417 and 457 temporary work visas. The 417 visas allow young tourists to work in Australia for up to 12 months, provided they work for six months in specified industries or regional areas. The 457 visas permit skilled workers to be hired for up to four years by employers where there is a shortage of labour.
Introduced in 2005 by the Howard Liberal-National government and continued under the Rudd and Gillard Labor governments, these arrangements seek to expand the exploitation of cheap labour. But rather than fight to unify Australian and international workers against employers, the unions whip up nationalist sentiment, blaming foreign workers for the job cuts that the unions enforced.
Penalties imposed on companies for not paying legal rates are minimal. Employers calculate that the probability of getting caught is low and penalties are tiny compared to the potential profits and competitive advantage they stand to gain against their business rivals.
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