ABC 24 – Patricia Karvelas
E&OE
Subjects: Wage underpayments, secondary boycotts, St Kevin’s, AFP raids.
GEMMA VENESS: Supermarket giant Coles is the latest major retailer to be caught up in an underpayment scandal, the company expecting a $20 million hit?
PATRICIA KARVELAS: Yes, and this is on the same day that the Attorney-General Christian Porter, who's also the Industrial Relations Minister, released a discussion paper looking at options to essentially deal with worker underpayments. Now, he says the case was another very large instance of systematic underpayment of wages, and the Attorney-General has said he will introduce legislation within weeks to criminalise the worst cases of worker exploitation and underpayment, and more than that, that corporate Australia now has got to get the message that they need to get their house in order. The Attorney-General and the Industrial Relations Minister joins me now in the studio. Christian Porter, welcome.
CHRISTIAN PORTER: Patricia, thank you.
PATRICIA KARVELAS: Just today we saw Coles underpaying its staff by $20 million. Why can't you say whether criminal penalties would apply to a case like that- in cases like that in the future?
CHRISTIAN PORTER: Because I don't know all the details that surround the underpayment, and obviously those details will be part of what the Fair Work Ombudsman does in its investigation to sort through those details and determine what they are. But the types of scenarios that we would be looking to criminalise - and as you say, that legislation will be available very shortly - large amounts, which this clearly is, systemic underpayment, repetitious underpayment and a degree of knowledge or intention. So there has to be a mental element, like every criminal offence, I just can't tell you whether or not all those types of criteria are present in the Coles matter. But of course, Coles is not the only one. There's been a long and very sad list of organisations that have significantly underpaid their staff. Australians are sick of it. The Government is absolutely sick of it. And corporate Australia, simply, as I've said, has to get their house in order. And as I noted today- I mean, it would be a very interesting thing to count the number of people in a large organisation like Coles or Woolies or Qantas who are engaged to ensure the tax laws are understood and abided by, and then compare that to how many people have been employed over the last decade in the area of ensuring that staff are paid properly.
PATRICIA KARVELAS: Okay, so in terms of that bar, it's a very high threshold to establish a criminal penalty, essentially, particularly intent. I mean, it seems that a lot of these high profile cases wouldn't fall in.
CHRISTIAN PORTER: Well, criminal penalties always have a high bar attaching to them in a relative sense. I can't tell you whether or not matters that have occurred in the past would meet the legislative standard that we are about to deliver, but the other- and secondary point is the criminal penalty isn't the only penalty. So when we first came to government, we increased the civil penalties by a factor of ten. We better equipped and resourced the Fair Work Ombudsman, increased their funding by $60 million - they now undertake more investigations, more litigation, return more wages than they ever have in the past. We've also, as you noted today, discussed other options besides the tenfold increase, besides the criminal penalty - other options so the message can get through and the proper incentives exist for corporate Australia to pay their people properly.
PATRICIA KARVELAS: Do you have a favoured option on penalties that aren't criminal? What are the options that you're favouring at the moment? I mean, there's a discussion paper; there are options, signs on a door even, but what are the options that you're favouring?
CHRISTIAN PORTER: Well, we've already asked for consultation and received a range of submission on options about increasing the more serious civil penalties, so that you can do what occurs in other contexts. Peg those penalties to the amount of the underpayment or peg them to the profit of the business - they're certainly live options. Today's discussion paper talked about a range of further options still, including options that exist in corporations law and consumer law, that do- that deal with banning directors from sitting as directors if they've been part of the culture and decision making that's allowed this to happen. As you've noted, in consumer law and health and safety matters, there are orders that compel businesses to acknowledge widely - advertise, in effect - that they have breached their obligations. That's another option that we can consider. But it has to be a full suite of options. We've already come some distance, but there clearly are other things that need to occur here because the message has been very slow in getting through. And businesses appear unable to self-regulate in this respect.
PATRICIA KARVELAS: Okay, why are they unable to self-regulate? I mean, some of them are blaming- I see the retailers, for instance, the award system, the actual laws themselves. Do you have sympathy for that view?
CHRISTIAN PORTER: I don't accept that view. I mean, there is a process that the Fair Work Commission has gone through to simplify, particularly in drafting, of the awards. There are complications in some of the awards, particularly in retail, tourism, hospitality, but we're talking here about businesses that are very large, sophisticated, profitable businesses: Coles, Woolies, Qantas. I mean, the ABC's one. Maurice Blackburn is an organisation that represents people in court who have been underpaid, and yet they themselves underpaid their staff. Now, that says to me-
PATRICIA KARVELAS: [Interrupts] So if they've all done it, what does it say, exactly? Does it demonstrate that there is something deliberate about it?
CHRISTIAN PORTER: Well, it demonstrates that their eye has been off the ball. Now whether they intended it or not, what is absolutely clear is that they have not done enough to prevent these things from happening. And these types of businesses at this scale spend an enormous amount getting advice on taxation matters, self-promoting themselves, advertising campaigns, marketing campaigns, involved in sponsorship, involved in social issues. If they have the time, energy, acumen, and resources to do those things, then they must, by definition, have the time and energy and resources to do basic things right, like payroll. And I think that there has been an underinvestment, under-attendance to, and a slackness that has been applied with respect to basic core issues like ensuring that awards are properly calculated and abided by, and people are paid what they're entitled to at law.
PATRICIA KARVELAS: Would you like- are you calling on all businesses to self-audit immediately?
CHRISTIAN PORTER: Well, I think the businesses clearly are doing that. But you'd be very-
PATRICIA KARVELAS: [Talks over] But there are probably [indistinct] that aren't, given what you're saying.
CHRISTIAN PORTER: Well, you'd be very unwise if you were a business and you weren't self-auditing. I mean, surely if you've seen all of these businesses fall into this unforgiveable error of not paying their people properly, and you're not looking at your own systems and you're not ensuring that audits go on, and you're not thinking about how you invest in the human resources, and how you invest in the platforms, systems and technologies to make sure that you get payroll right, I would have thought as a business you'd have rocks in your head. And if you can't get the message through the public issues that have arisen, then as a government we are absolutely committed to making sure that the legislative framework is such that there is a penalty that is appropriate at every level, from knowing and intentional underpayment, through to inadvertent but still unacceptable underpayment.
PATRICIA KARVELAS: You're also looking at whether you can use government contracts to target environmental boycotts, secondary boycotts. How would that actually work? That's in your discussion paper, you opened that conversation up.
CHRISTIAN PORTER: Well- yes, indeed. And the Commonwealth business code (the Code for the Tendering and Performance of Building Work 2016) - the Commonwealth is one of the biggest purchasers of construction in Australia, and so there is a thing called the Commonwealth business code, which is a tool which the Commonwealth uses to try to ensure best practice in the construction industry. At present, that business code that already requires the reporting of secondary boycotts. So where a union, for instance, says to a company that they won't deal with them based on their involvement with another company, that has to be reported. And we think that that - and it has been long at law a very frowned upon process and unlawful. Now, where that occurs, there's a requirement to report it. We're asking organisations involved in this industry - could the code do more to prevent it from happening rather than just reporting it?
PATRICIA KARVELAS: [Talks over] Okay, so at the moment you just have to report; what more could you possibly do to stop it?
CHRISTIAN PORTER: Well that's what we're asking. That's what we're asking.
PATRICIA KARVELAS: Well, what could be on the table? What are the options available to you?
CHRISTIAN PORTER: Well that's what we're asking people to provide to us. But if I give you an example. There was a business that was targeted by an environmental activist group I think called Galilee Blockade. And they were just a business who were providing services to the Carmichael coalmine. And that particular activist group was imploring people to ring up the business and waste their time on the phone. Trying to set a record for how long they could keep hard working people in this small business engaged on the phone to commercially damage their business. That's the type of thing that we don't want to see.
PATRICIA KARVELAS: But how could you change the code to ensure that doesn't happen? That sort of scenario.
CHRISTIAN PORTER: Well, if codes are used to compel companies and businesses to report secondary boycotts, it is quite conceivable that there are ways in which they could be used to prevent secondary boycotts.
PATRICIA KARVELAS: Could you make it illegal?
CHRISTIAN PORTER: Well, what you could do is, you would not allow companies who acquiesce to or fail to report secondary boycotts to get Commonwealth work.
PATRICIA KARVELAS: Okay. So you would ban Commonwealth money going towards those companies if they acquiesce?
CHRISTIAN PORTER: Well, that's one potential option.
PATRICIA KARVELAS: Is that one that you favour?
CHRISTIAN PORTER: Well I'm asking people who are involved in the industry, both in employee and employer groups, to give us ideas and examples about how we can better use the code to ensure lawful, proper, appropriate conduct in the construction industry.
PATRICIA KARVELAS: How about the democratic process? Obviously, these kinds of boycotts, lobbying on these issues, is part of the way that people conduct their campaigns. What do you say that you're essentially using the Commonwealth funding to try to stop people exercising their democratic rights?
CHRISTIAN PORTER: Well, firstly, we would be using Commonwealth funding to stop unlawful activity, which in many instances secondary boycotts are, secondly, in an instance where activists use web pages to incentivise and incite people to ring up a business to commercially damage a legitimate business by keeping sales staff on the phone for hours on end with bogus inquiries, whether that's lawful or unlawful is a question about law reform. My view is it shouldn't be lawful and that is something that we would look at. But whether it's behaviour that the Commonwealth would not take reasonable steps to prevent through its purchasing power is a second question. And my answer to that second question is yes, the Commonwealth should use its purchasing power to stop that sort of behaviour from happening, because whether it's lawful or unlawful, it's totally unacceptable, totally unfair and goes well beyond the bounds of legitimate democratic protest.
PATRICIA KARVELAS: I just want to go to a few other issues. Jacqui Lambie has been talking to you, I understand, about the Ensuring Integrity Bill, but she wants the head of PM&C's report to be released in relation to the sports rorts affair. Are you willing to do that?
CHRISTIAN PORTER: Well I'm not the head of PM&C …
PATRICIA KARVELAS: [Talks over] No, no you're not in charge but you're part of the Government.
CHRISTIAN PORTER: … I don't make those decisions. But that is a document which was a Cabinet deliberative document and there has been a long history, dating back in excess of 100 years, that those types of documents when they informed Cabinet decision making, are Cabinet in confidence and not released. Now obviously Jacqui's got views about that and that's an issue that will play out. But my conversations with Jacqui Lambie have been constructive. And what we're talking about is her amendments that she has offered up to the ensuring union integrity bill and ways in which we might be able to agree on an appropriate drafting to the principles that she's [indistinct].
PATRICIA KARVELAS: [Talks over] And what's your timeframe for trying to get this to a vote?
CHRISTIAN PORTER: Well the time frame is to talk with Jacqui Lambie until we can resolve our positions.
PATRICIA KARVELAS: How long may that take?
CHRISTIAN PORTER: I can't tell you how long that piece of string is.
PATRICIA KARVELAS: There's a few other things I'd like to get to before I let you go. Sorry, I'm monopolising your time. But this story on Four Corners in relation to the St Kevin's School, all of this happening during the royal commission. You were the minister responsible for the royal commission. What do you make of that - that this sort of behaviour was going on, a reference written like this, during that context?
CHRISTIAN PORTER: Well, royal commissions are incredibly effective bodies to understand what reforms would be needed to highlight the devastating effects on victims in the circumstances of institutionalised child abuse. But there is a requirement for vigilance after royal commissions, during royal commissions. This is not something that ends with the royal commission. I'm astonished and find it deplorable that something like this was going on, of course, during a royal commission, and there were clearly shocking judgements made by senior officials at that school during that period.
PATRICIA KARVELAS: Should the principal remain in that job?
CHRISTIAN PORTER: That's not a matter for me to resolve. That's a matter obviously for the state government, the state education department, and indeed I would have thought the board of the school. But I think that any sane person would think that offering a reference to the individual in question was deplorably bad judgement.
PATRICIA KARVELAS: Just finally, on another issue. The ABC managing director says that yesterday's ruling on the AFP raids proves that laws need to change. Do you accept that this judgement and the current laws are having a chilling effect on journalism?
CHRISTIAN PORTER: Well, the decision yesterday was based on an application by the ABC to set aside the warrants and the court determined that that wasn't appropriate in the circumstances. There have been a number of reforms that have already occurred in this area. There are other reforms that are being discussed and these are around the way in which warrants are executed, the way in which we have already provided directions to the AFP in that respect, public interest disclosure act reforms. So there are a range of reforms. But I don't accept, if this is the proposition, that there could never be a set of circumstances where it was appropriate to have a warrant executed against a third party where there's been a very serious offence that has taken place, even if that third party is a journalist. They will be very rare - thankfully - occasions, but I don't accept a proposition that that should never happen.
PATRICIA KARVELAS: Okay. But what we've seen here is News Corporation journalists, the ABC journalists, and the ABC journalists are literally hanging, waiting and waiting and waiting. This has been a very prolonged process. Does that make you uncomfortable, Minister?
CHRISTIAN PORTER: I am very frustrated about the time that it is taking to resolve this matter, as are other senior ministers. That is a frustration that has been voiced.
PATRICIA KARVELAS: You're frustrated but it's still going on.
CHRISTIAN PORTER: Well …
PATRICIA KARVELAS: They dealt with the Angus Taylor matter, it seemed very quickly, and this looms large over these journalists' heads and has a chilling effect on public interest journalism.
CHRISTIAN PORTER: Well what would you have me do, Patricia?
PATRICIA KARVELAS: I'm not going to tell you what to do but you can change the laws, Minister.
CHRISTIAN PORTER: No, but the inference is that somehow you wouldn't have been complaining if the executive government had interfered with the AFP's time or decision-making processes in the Angus Taylor matter.
PATRICIA KARVELAS: [Interrupts] I don't think anyone is calling for you to interfere but the laws are broken, aren't they?
CHRISTIAN PORTER: Well, these are two different issues. The time that it takes the AFP to resolve whether there are charges to be laid and against what parties is a different question, and I share your frustration about the time that has taken. But that is a different question as to whether or not, as it appears is being proposed, that it should never be lawfully possible to execute a warrant on the premises of a third party, even if that third party is a journalist. And I think that they are two different questions. I share your frustration on the timing.
PATRICIA KARVELAS: Okay. They are two different questions.
CHRISTIAN PORTER: But I'm not sure that I accept the law reform proposition.
PATRICIA KARVELAS: But on the issue of public interest journalism, isn't there a certain protection that public interest journalism like this, around this story, that it deserves a certain protection?
CHRISTIAN PORTER: Well, I wouldn't disagree with that proposition, but that protection may come in a variety of forms. But if what is being suggested is that the law be changed so that it is no longer in the future legally possible to execute a warrant on a third party's house, even if that third party is a journalist, even if the warrant pertains to the retrieval of information on a very, very serious criminal matter, then I'm not sure that I accept that that is the starting point for law reform in this area.
PATRICIA KARVELAS: Attorney-General, thank you for coming in.
CHRISTIAN PORTER: Thank you, Patricia.
PATRICIA KARVELAS: That is Christian Porter. He's not only the Attorney-General, Gemma, but he is also of course the Industrial Relations Minister, talking to us about the overhaul of the wage theft laws. But also those raids on the ABC and that court judgement yesterday, a range of issues traversed there.