Australia : It's Time for a Royal Commission into wage theft
The Prime Minister loves to hyperventilate about the CFMEU and the rule of law on construction sites. But perhaps it's time he drew breath and had a good look at the
industries in which lawlessness is really flourishing. Fashion modelling, fast food, retail, hospitality, transport and aged care – all are witnessing systemic wage theft on a mass scale.
This demands a royal commission.
Fairfax Media's revelations about Domino's are appalling, but not surprising. They come on the back of serial underpayment of workers at 7-Eleven, Pizza Hut, Caltex, pubs and countless others. And, of course, this is only the exposed tip of the wage theft iceberg.
The Domino's theft exposes the systemic nature of the problem. Domino's managers were told they must keep their wage bill under 27 per cent of total cost, regardless of an individual store's specific circumstance.
In a dynamic market, some managers and franchisees are forced to fiddle with time sheets and penalty rates, retrofitting labour costs to a predetermined model built to meet the needs of shareholders. In the process, wages are stolen from employees.
We should be clear about what this represents: a middle finger to Australia's long-established and hard-won system of wage determination.
In 1907 the momentous Harvester judgment decreed that "fair and reasonable" wages should be sufficient for a "human being in a civilised community" to support a wife and three children in "frugal comfort". In other words, wage levels are built around our capacity to participate in society, not an employer's capacity to pay.
This founding Australian value is under attack.
And while corporate interests are rightly slammed for exploiting students and migrants, it's also worth considering the underlying dynamics that are fuelling wage theft.
Companies such as Domino's, 7-Eleven, Caltex and others face cut-throat competitive pressure from the "gig economy".
Next time any of us order a pizza through Deliveroo or Foodora, consider this: the corporate-logoed cyclist weaving their way through traffic in cracking heat isn't actually an employee of that company. They are a freelancer paid less than the hourly award rate, with top-up fees if they make a delivery.
This phenomenon will not stop at food delivery. In fact, it's already on the march.
The Good Guys last year announced it would enter into an agreement with Airtasker to make deliveries using gig workers who have no job security, enforceable minimum wage, superannuation or occupational health and safety insurance.
These new models smash the concept of a job into fragments. They also significantly drive down labour costs. The individual contractor with the gig provider suffers, but so too does the worker with a permanent job at an established company.
But as a society we have not decided if we are happy to have the world of work atomised, with rights scattered to the wind.
Hence the call for a royal commission on wage theft across the economy. Business should support this. Companies of good conscience may appreciate a broad and objective spotlight on the pressures that can lead to wage theft and unfair practices.
Such a royal commission should consider the viability of introducing tripartite industry taskforces, made up of unions, government and business representatives, to conduct inspections of cash economy shonks. We know there is a strong correlation between labour abuses and informal employment. Exploitation of students and migrants often flourishes in the shadows.
There is also a need for corporate headquarters to take responsibility for the actions of their franchisees through a "chain of responsibility". They may need a legal capacity to take more control, to enforce appropriate behaviour and practices.
Another proposal that should be considered is a national register, where those working in the gig economy have their hours and income logged. An algorithm would quickly identify instances where employees had been underpaid. Clever tech companies are already generating this data – all they would have to do is feed it into a non-public database.
Finally, a system of portable entitlements for workers in the gig economy would go a long way to preserving some of the best elements of our current workplace laws while allowing us to maintain the workplace safety net of superannuation, leave and workplace injury insurance.
Data-driven technology should not be an excuse to dismantle an industrial relations framework that has served our nation so well. Data should, in fact, be a way to bolster transparency, the rule of law, and fairness at work.
Mark Morey is secretary of Unions NSW.