Subjects: Leadership presentation to Year 5 students; Woolworths
GARETH PARKER: We've had celebrity chefs, we've had the restaurateurs, we've had Wesfarmers, we've even had the ABC. Now, it's Woolworths. Wage theft: $300 million revealed yesterday, huge issue. What are the Government going to do about it?
The Industrial Relations Minister and the Attorney-General Christian Porter, good morning.
CHRISTIAN PORTER: Morning, Gareth. How you going?
GARETH PARKER: I'm okay. So we will talk in detail about Woolies. But this morning, is this true, you're talking to a bunch of Year Five kids about leadership?
CHRISTIAN PORTER: I am. I did - when I was asked to do it, I did sort of say a bit young for leadership maybe, but they're doing a class in politics and civics and how democracies work and that sort of thing. So, great school in the electorate and happy to do it. You never know quite what to say but …
GARETH PARKER: What are you going to tell them?
CHRISTIAN PORTER: Well, I would tell them a little bit about how – I always find with the younger kids, actually telling them what Parliament physically is and how it works and how people travel to and from it, and how you meet and talk about things, and the type of issues that you decide, like just really sort of the simple mechanics of it is, I think, interesting for adults but it sort of resonates a bit more with kids and they seem to get that. And yeah, so you just sort of keep it relatively straightforward and simple. But sometimes, people don't understand that I fly basically every week over east and then in the days of John Curtin, they were getting trains and boats before that. So it's interesting for them, I think.
GARETH PARKER: I mean it's a sort of an interesting time for kids and politics as well, because there's some people who say that kids shouldn't participate in big debates about climate change and so on. I hope you're prepared for the questions.
CHRISTIAN PORTER: Well, I think there's one thing I have noticed at the schools is that there's clearly a distinction between knowing and wanting to speak about and learning more about issues, whether that's climate change or whether it's wise or unwise to have a budget surplus, or you know these sort of things. But as the basis for all of that, sometimes there's a bit of a leap-frogging over a fundamental structural understanding of how it actually all works. Like quite often, people are racing into the big dramatic global issues of the day without actually understanding how our electoral system works, how political parties operate, how the Parliament actually functions, what a law is, how legislation gets made and how laws become reality, how we have a separation of powers, how our basic rights and freedoms work and operate. So I think that you can never have too much of the preparation, bedrock knowledge before you jump in to the grand issues.
GARETH PARKER: Fair enough. Good luck. In my experience, the kids ask better questions than the adults, so I wish you well.
CHRISTIAN PORTER: They always ask how much you get paid; always a question.
GARETH PARKER: Point them to the Salaries and Allowances Tribunal, I'm sure.
CHRISTIAN PORTER: Exactly, yeah, the independent decision makers.
GARETH PARKER: Speaking of how much you get paid, corporate Australia seems incapable of paying its workers properly.
CHRISTIAN PORTER: They are in a mess, I think is the honest answer to that. And I actually had a visit from a senior management executive at Woolworths yesterday afternoon in Sydney before this was made public. So they provided me, from their perspective, the briefing of what had occurred.
GARETH PARKER: What did they tell you?
CHRISTIAN PORTER: Well, they're a massive business, right? I mean, so they are completely acknowledging that they have a made a very, very serious error. The error has to do with managers at their stores who are, obviously, permanent salaried staff, so it's not an issue that arose with casual staff or anything of that nature, which makes it possibly even more serious. These are permanent senior staff at their stores and they explained that at every store, they'll have five or six managers who will manage different components of the store, whether that's managing what happens at night or managing a section of the store. And they, through their HR department and management made an error. That error has persisted for many years, perhaps a decade. And of course in a business the size of Woolworths, when that error gets repeated across in excess of 5,500 staff, and that error persists over a decade, you have this enormous amount of underpayment that's occurred.
GARETH PARKER: Right. But these errors always seem to happen conveniently in favour of the company. You never hear about workers being massively overpaid to the tunes of hundreds of millions of dollars.
CHRISTIAN PORTER: Well, you don't. But the reality is that we, through the Fair Work Ombudsman - which we have considerably increased the funding of and they have much greater evidence-gathering powers - they're not investigating overpayments, right, they're investigating underpayment as they absolutely should. The scrutiny on the system is making sure that every single worker in every single job gets the money that they've worked for and entitled for.
GARETH PARKER: But these big companies, Minister - I mean, these big companies have massive teams of HR armies, they have compliance teams, they have lawyers, they know down to the very last cent how much tax they're paying, for example, and they come up with all sorts of structures to make sure that they do not pay one penny more than they have to. This, if you believe Ewin Hannan's reporting in The Australian, came about when store managers started to talk to their night fill people and realised: hang on, how come you're getting paid more than I am? They're just not serious about this.
CHRISTIAN PORTER: That explanation is correct. It's the same explanation about how it was uncovered that Woolworth's gave me yesterday. And Gareth, I'm not defending them. It is beyond hopeless. I mean, it's not just Woolworths. I mean, the scale and size of their business means that this is a very, very large amount. But you've had the ABC, Maurice Blackburn, Qantas, Wesfarmers. I mean, Wesfarmers and Bunnings is not an unsophisticated business. Your observation is completely correct. There just needs to be more care, more scrutiny, better systems in place, not merely to uncover previous underpayments but to make sure that this just doesn't happen going into the future. And I think if large organisations with sophisticated HR systems aren't now focusing all of their energy and effort on this and not on any other things, then they have got rocks in their head because they've got a major problem clearly and they have to sort it out and sort through it and…
GARETH PARKER: You…
CHRISTIAN PORTER: …the Government is, as you know, now going through the process of devising a way to criminalise in the appropriate circumstances large, repetitive knowing underpayments of wages. And so, everyone is on notice.
GARETH PARKER: The Fair Work Ombudsman, Sandra Parker, you mentioned her office, but she says that Woolworths is guilty of an unacceptable lack of transparency. Woolworths contacted her office back in August, hinting that they might have some sort of compliance issue. The scale of that issue became apparent yesterday. It's much bigger than she was expecting. She says the behaviour is emblematic of companies caring only about the interests of shareholders and making staff their least priority. She's right, isn't she?
CHRISTIAN PORTER: Good on her. She's doing great work. She's doing the investigation into Woolworths that will now go into full swing and I wish her all the best with that. I won't comment on that investigation. But I have absolutely no reason to diverge from any single one of her comments. Like, it's just not good enough.
GARETH PARKER: You've said that the Government wants to look at criminalising knowing repetitive underpayments, but this isn't, to my understanding of the facts as they've been explained and the investigation will get to the bottom of it, but the facts that have been disclosed to date wouldn't qualify as knowing repetitive underpayment, would it? So what about penalties or incentives or carrots or sticks to make bosses make sure they're doing the right thing?
CHRISTIAN PORTER: Well, those obviously are matters that get determined by the Fair Work Ombudsman after an investigation of all the facts and they take into a range of circumstances into account in determining what those penalties will be. But the penalties that are metered out by the Fair Work Ombudsman have to be serious and significant and reflect the nature of the failure and the nature of the failure, just as the nature of failure has been in other organisations, is just huge.
GARETH PARKER: If you can just self-declare, pay back the workers, perhaps pay a bit of fine or something, it'll just keep happening, won't it?
CHRISTIAN PORTER: Well, it shouldn't just be a bit of a fine and there is capacity to have very significant penalties in these matters, and I'll let the Fair Work Ombudsman do their work with respect to Woolies. But I think, again, the observations come back to the point that these businesses are not unsophisticated…
GARETH PARKER: Yeah.
CHRISTIAN PORTER: …the Wesfarmers, the Qantas. I mean, Maurice Blackburn itself is a law firm, right, that does a lot of underpayment work, represents people who have been underpaid; and yet, it itself has underpaid staff. And the ABC. So…
GARETH PARKER: …..so if this keeps happening, who do we hold responsible?
CHRISTIAN PORTER: Well ultimately, companies are responsible for what they do and how they treat their staff. I mean, obviously, the Government has laws in place to prevent this from happening. Those laws are being improved through the process of creating a criminalised penalty for wage theft. The Fair Work Ombudsman investigates; it doesn't just require repayment; it penalises people who've put themselves in their work and in these types of situations. These things obviously are now coming to the fore because of the scrutiny that's being placed on them and that's exactly how it should be.
GARETH PARKER: So, how many more are we going to see, do you think?
CHRISTIAN PORTER: I mean, no one's got an answer to that question, Gareth, but..
GARETH PARKER: Because it's half a billion - half a billion dollars in wages that have been stolen from people. That's just on the public disclosures and it seems to me that companies are only just starting to go and scratch theirs and going: oh jeez, we might have a problem here.
CHRISTIAN PORTER: Well, again, I think that your observation is a fair one. Like, it's now the time - in fact, way past time, that major organisations start auditing, start putting systems in place to make sure it doesn't happen again; start spending money, time and effort to put systems in place to work out whether or not they have actually underpaid staff. And ultimately, at the end of the day we want money to go back to the staff.
GARETH PARKER: And if they don't, what's the consequence?
CHRISTIAN PORTER: Well, the consequence is that they go through an investigation by the Fair Work Ombudsman. There are very serious penalties……monetary, civil penalties that apply if they do it in a fashion which isn't criminal. And the Commonwealth Government is designing a criminal penalty for people who do it with a reckless level of knowledge.
GARETH PARKER: Okay. Christian, thank you for your time this morning.
CHRISTIAN PORTER: No problem. Cheers.
GARETH PARKER: Attorney-General Christian Porter, Industrial Relations Minister as well.
Look, I don't know. The system is not working. I reckon we brace ourselves for more of these things. That's what's coming.