Skip to main content

More options needed to prevent wage underpayments

Media Release

The Morrison Government is continuing to take strong action to ensure corporate Australia lifts its game when it comes to paying its workers properly.

Legislation will be introduced in the coming weeks that will criminalise the most serious forms of deliberate worker exploitation and wage underpayments and introduce significant jail terms and fines.

To complement that work, the Government is also considering options to strengthen the existing civil compliance and enforcement framework within the Fair Work Act 2009, to help deter other types of wage underpayments and non-compliance that do not meet the threshold of criminal conduct.

A discussion paper outlining a range of reform options has been released today, and submissions are now being sought from all interested stakeholders to help inform any future policy changes.

The discussion paper was informed by the report of the Migrant Worker Taskforce which recommended equipping the workplace regulator, the Fair Work Ombudsman, with the necessary tools to ensure compliance with the Act and the ongoing effectiveness of Australia’s industrial relations system.

The paper also asks whether the courts should be given greater powers to:

  • disqualify directors of companies where significant underpayments occur;
  • issue banning orders to prevent companies doing certain things such as employing workers on certain visa types; and
  • issue adverse publicity orders that force companies to disclose or publish their offences.

Speeding up the recovery of unpaid wages for employees is also a high priority. The discussion paper asks whether existing mechanisms such as the small claims processes available through the Federal Circuit Court and State and Territory courts could be streamlined to encourage greater participation and at reduced costs.

The paper also asks whether a formal role should be conferred on the Fair Work Commission to help mediate and conciliate in disputes between employers and employees, as a way of delivering faster and cheaper outcomes.

"Like most Australians, the Government has been appalled by the number of companies that have recently admitted short-changing their staff - in some cases by hundreds of millions of dollars," the Attorney-General and Minister for Industrial Relations, Christian Porter, said.

"While it’s understood the vast majority of these underpayments were not deliberate and were rectified swiftly, they are incredibly serious and border on negligence given we are talking about sophisticated organisations that should be capable of meeting their obligations under workplace law.

"The Coalition has already increased some civil penalties by a factor of 10, but it is clear to me that more still needs to be done to motivate companies to improve their performance, such as disqualifying directors of organisations that continue to get it wrong."

A separate discussion paper has also been released today which invites submissions on ways to improve the operation of the Building Code.

The Code aims to improve fairness, efficiency, safety and productivity and sets higher standards of conduct for businesses that wish to carry out work on Commonwealth-funded building and construction projects.

This paper focuses on ways to:

  • reduce unnecessary red tape associated with compliance with the code;
  • create safer and more harmonious workplaces;
  • reduce unlawful activity across the building and construction industry; and
  • boost productivity and grow jobs.

The discussion papers can be viewed at the Attorney-General’s Department website.

The closing date for submissions on both papers is 3 April, 2020.