ABC Melbourne - Rafael Epstein
E&OE
Subjects: Wage underpayments, AFP raids
RAFAEL EPSTEIN: The latest revelation today is that Coles is putting aside $20 million, $20 million, to pay workers over five or six years. We don't know how many workers, they haven't said. The ABC, of course, has admitted to a similar problem. There is $23 million put aside by this corporation, that one you're listening to right now, to pay back, I think, it's close to 1900 workers. Woolworths is the big whopper. They underpaid staff by $300 million. And then the Commonwealth Bank underpaid its workers by $50 million. The Federal Coalition say they've made significant changes to penalties. It is still not a crime to underpay your workers. Christian Porter has put out another discussion paper, contemplating some other solutions, including the possibility of a streamlined small claims tribunal. So a super-fast, super quick, super easy, and presumably super cheap, way to complain about your worker that isn't the Ombudsman, but that'll actually get you some wage justice. The Attorney-General is in Melbourne though he's a Liberal from the seat of Pearce over in WA. Thanks for coming in.
CHRISTIAN PORTER: Raf, it's a very long and unhappy list and you can add to it Qantas, Michael Hill, Sunglass Hut, Super Retail Group, Maurice Blackburn. Maurice Blackburn is a law firm…
RAFAEL EPSTEIN: Sure.
CHRISTIAN PORTER: …that represents people who've been underpaid and they, themselves, offended in the sense that they were quite substantial under payers of their own staff.
RAFAEL EPSTEIN: So what do you- is it complexity? Is it lack of care? What is it?
CHRISTIAN PORTER: Look, there are some complexities to awards and the Fair Work Commission is doing a good job of work now to work through redraft and try and make some of them simple and more…
RAFAEL EPSTEIN: Yeah.
CHRISTIAN PORTER: …plain English and expression. There are some particular complexities with respect to retail hospitality, tourism, but that is not an excuse here. And the organisations that you've mentioned that I've added to, these are large, sophisticated, very profitable organisations. And, you know, I would imagine that Commonwealth Bank, Qantas, will have pretty substantial teams of people making sure that they abide perfectly with tax laws, but I think it would be an interesting question as to how much acumen…
RAFAEL EPSTEIN: Sure.
CHRISTIAN PORTER: …energy and resourcing is put in to this very basic thing, which is paying people correctly. So, there is technology and platforms and systems and just basic auditing care and attention that hasn't been paid. My view is their eye has been off the ball. It's been incredibly slack. And as I say, a lot of those-
RAFAEL EPSTEIN: [Interrupts] Is any of it your fault? If you'd criminalise things sooner, if you'd ramped up penalties… The story started in 2015 with 7-Eleven. You still haven't criminalised wage theft. This is your seventh year of government. Is some of it the Federal Government's fault, that you didn't take it seriously enough, quickly enough?
CHRISTIAN PORTER: Well, when we first came to government, we made some changes. We increased the essential civil penalties by a factor of 10. We increased the Fair Work Ombudsman's funding by $60 million. So they-
RAFAEL EPSTEIN: [Interrupts] But it hasn't stopped that shopping list of companies [indistinct]?
CHRISTIAN PORTER: [Talks over] No but it has made significant improvements. So like, they've recovered 64 per cent more wages for workers last year than occurred in the final year of the Labor government so-
RAFAEL EPSTEIN: [Interrupts] Can I tell you- I just want to get a, I guess, it's an opinion. I'm asking you to grade your own performance. Is any of it the Federal Government's fault?
CHRISTIAN PORTER: Well, there has been a lot done. There's clearly more to do. But trying to appropriate causality to the fact that the criminal offence is going to be brought forward in a couple of weeks' time rather than two years ago, I'm not sure I would subscribe to that view. And bringing it in place, I-
RAFAEL EPSTEIN: [Interrupts] Can I stop you there?
CHRISTIAN PORTER: Yeah.
RAFAEL EPSTEIN: If you made it a criminal offence four years ago, the ABC wouldn't have done this, would they? Coles wouldn't have done this if you made it an offence four years ago.
CHRISTIAN PORTER: [Talks over] Well, I can't answer that question for you. I mean, I think that the behaviour of some of these organisations has been so hopeless and wilfully blind to this important core part of their business, that it may be that whatever incentives were in place at the time, their culture was bad. Now, the types of things like criminalising the worst types of wage theft, I think, are going to be an important part of changing that culture. But I don't think that I can look back into time and necessarily agree with you. But also, you've got to design and consult properly around what you would determine to be and how you would legally define wage theft because-
RAFAEL EPSTEIN: [Interrupts] Can I ask you about that?
CHRISTIAN PORTER: Yeah, sure.
RAFAEL EPSTEIN: Would any of those cases, the ABC, the MAdE Group associated with George Calombaris', $300 million or Woolworths, they all say: we didn't mean to do this. Because they didn't mean to do it, would any of them come under the definition of a crime?
CHRISTIAN PORTER: Well, it's a difficult question to answer because they haven't-
RAFAEL EPSTEIN: [Interrupts] It's clearly- it's an answer people really want [indistinct].
CHRISTIAN PORTER: [Talks over] Well, but they haven't been investigated by the FWO with a standard-
RAFAEL EPSTEIN: [Interrupts] That's the Fair Work Ombudsman.
CHRISTIAN PORTER: Yeah, the Fair Work Ombudsman - with a standard in mind that didn't exist at the time. But what we are looking to do with the legislation that we will bring forward very shortly is delineate the most serious instances of underpayment. So things where there are large quantums, where it's systemic, where there's a requisite degree of knowledge or intention. And in those circumstances-
RAFAEL EPSTEIN: [Interrupts] So you'd need to have the intention, or you'd just need to be big and bad?
CHRISTIAN PORTER: No. Scale wouldn't be the final determining factor. Like all criminal offences, there'd be both a physical and mental element to it…
RAFAEL EPSTEIN: Yeah.
CHRISTIAN PORTER: … the physical element would be a serious quantum, that it's systemic, that it's repetitive; and there would need to be, and there will be, a mental element that looks like knowledge and intention; and that will criminalise a certain subcategory of underpayment, which is of the most serious type. But you've got to do more than that. And we've done an enormous amount in terms of the civil penalties increasing tenfold. We've properly funded the Fair Work Ombudsman. So for instance, there's been a 500 per cent increase in compliance notices, a 300 percent increase in their litigation, so they're much more robust now, investigating these things.
RAFAEL EPSTEIN: They still only grab back a tiny percentage of the money, they say, is being underpaid. So I appreciate and I've had the conversations with successive people from your Government…
CHRISTIAN PORTER: [Talks over] Yeah.
RAFAEL EPSTEIN: … about ramping up the powers for the Ombudsman and ramping up their resources. They're still only clawing back a tiny percentage of the money they say is being underpaid.
CHRISTIAN PORTER: Well, there are guesses and estimates about what level of underpayment may be occurring.
RAFAEL EPSTEIN: [Talks over] Well isn't the Fair Work Ombudsman estimation is $1.35 billion in unpaid wages each year and they have recovered- I think they recovered $30 million in '17, '18 out of $1.35 billion. So that's the Ombudsman's estimate of $1.35 billion.
CHRISTIAN PORTER: Yes. But that's a snapshot in time and an ongoing tunnel of work. I mean, using the Calombaris matter as an example, all of the money was repaid and it was a very- like millions of dollars …
RAFAEL EPSTEIN: [Talks over] Nine million.
CHRISTIAN PORTER: … And obviously, there was also a contrition payment, and at the time, I voiced a view that I thought the contrition payment was light and it was clearly the case at the time that the Fair Work Ombudsman were looking at the financial stability of that business…
RAFAEL EPSTEIN: [Talks over] Yeah.
CHRISTIAN PORTER: … because they didn't want to contribute to it tipping over in effect.
RAFAEL EPSTEIN: Sure.
CHRISTIAN PORTER: So, they've got a big job of work to do. They're doing a very good job. But ultimately, what you want to do is stop this from happening …
RAFAEL EPSTEIN: Sure.
CHRISTIAN PORTER: … in the first place. And going forward, how do you create and incentivise cultural change so that organisations are paying …
RAFAEL EPSTEIN: [Talks over] Yes.
CHRISTIAN PORTER: … as much attention to payroll as they are …
RAFAEL EPSTEIN: Absolutely.
CHRISTIAN PORTER: … many other things that they do in their business. And so, today's discussion paper looked at further options: banning directors from being directors of a company …
RAFAEL EPSTEIN: [Talks over] Yeah.
CHRISTIAN PORTER: … if they have oversighted these types of quite significant failures; looking at publicity orders; looking at banning orders for other corporate entities who have engaged-
RAFAEL EPSTEIN: [Interrupts] Can't be director again, yeah.
CHRISTIAN PORTER: Correct. And so we are wanting to look at ways in which- there's a suite of options that are available and corps law or consumer law, and seeing if we can use utilise those as the final part to this jigsaw puzzle.
RAFAEL EPSTEIN: I just want to see if we can get a- I guess, a practical answer. I know you've got a discussion paper. I've got a practical example in a text - I welcome your calls as well. The Attorney-General won't take calls, but we will get to them - 1300-222-774. Warwick sent this text in just when I mentioned that you were coming in: I was underpaid, business owner refused to pay, I took it to Fair Work, Fair Work orders that he pays, he didn't. I went back to Fair Work and asked: now what? Fair Work said: I need to take him to court. Toothless tiger. No wonder this goes on and workers cop the short end. How do you address Warwick's problem?
CHRISTIAN PORTER: Yeah, well, it's a fair point and it is a problem that we want to address. So the Fair Work Ombudsman is an investigatory organisation, but it can't compel a payment where circumstances exist that there's no money to pay. And particularly there's an issue that rises with the smaller types of underpayments. So, you know, not a $300 million underpayment from a [indistinct].
RAFAEL EPSTEIN: [Interrupts] Mum and dad's fish and chip shop says we don't have the money.
CHRISTIAN PORTER: Correct. So, one of the things that we've put in our discussion paper today was consideration of how you might use the conciliatory sort of low cost processes of the Fair Work Commission, which deal with unfair dismissals and things of that nature…
RAFAEL EPSTEIN: [Talks over] Workplace [indistinct], yep.
CHRISTIAN PORTER: … to try and use those to create, if you like, a small claims tribunal for people in smaller and microenterprises who think that they've been unpaid.
RAFAEL EPSTEIN: But if I'm listening and I'm thinking, right, this government's been there for seven years. You've known about this problem. By Fair Work's own figures, they're collecting a tiny amount of the money they say is being taken from people; can you really say the government has done enough?
CHRISTIAN PORTER: Well, we have been here for seven years, and when we took government in 2013 the environment around these issues was somewhat different, as evidenced by the fact that the Labor government decreased the funding to the Fair Work Ombudsman in that year by-
RAFAEL EPSTEIN: [Interrupts] Sure, but that's seven years ago. I'm talking about [indistinct].
CHRISTIAN PORTER: But the reason why the reason why is that these- yes, there's been seven years. Yes, we've already gone through a first stage which is increasing the penalties by tenfold, properly funding the Fair Work Ombudsman.
RAFAEL EPSTEIN: Yeah.
CHRISTIAN PORTER: These wage underpayment cases were not as clear and delineated and as large seven years ago- there may have been over the last 18 months to two and a half years. So I think that most observers, and certainly looking at the timeline series of events here would concur that over the last two and a half years or so, we've seen an endemic number and scale of underpayments become known and clearly visible. So I think that if your proposition is that we've not acted fast enough, I think that that has to be considered in the context of when it has become known, the size and scale of the problem. But even before the size and the scale of the problem was apparent as it is now, we were the first government that increased the penalties tenfold. We were the first government that properly got back to funding the Fair Work Ombudsman so it can do its good work.
RAFAEL EPSTEIN: Christian Porter is the Attorney-General. He is, of course, part of the Prime Minister's team. Can I just ask you a question- I don't want to ask you about the specifics on the AFP and the ABC raid, but I just want to explain to people the issues and then ask you a more general question.
CHRISTIAN PORTER: Sure.
RAFAEL EPSTEIN: That story was two years ago, was about special forces soldiers raising concerns about the behaviour of other special forces soldiers; concerns raised by Afghans and their families after they'd been either killed or injured. The two ABC journalists who reported that - I think it's now two years and seven months or eight months since they reported the story - they still don't know if they will be charged with a crime. There are many journalists who will tell you they're reporting less because they don't know the outcome of that particular case. Would you concede that just the length of time has had a chilling effect on reporting?
CHRISTIAN PORTER: Well, I'm enormously frustrated with the length of time that it's taken to have a resolution.
RAFAEL EPSTEIN: You're the Attorney-General.
CHRISTIAN PORTER: Well, I am, and I'm enormously frustrated. I've expressed that frustration publicly on a number of occasions. I've expressed it to the agencies in question. But again, you and other journalists would be quite rightful in your criticism of me or any other minister if we dipped into the processes of the AFP and tried in any way to exert authority and control over them. But I-
RAFAEL EPSTEIN: [Interrupts] Has it had a chilling effect?
CHRISTIAN PORTER: Well- you're in the industry. I can't answer that.
RAFAEL EPSTEIN: But you talked to- you're the profession- you're the one profession in the country that talks to more journalists than any other profession.
CHRISTIAN PORTER: Well, my view is that Australian journalism is so brave and robust that this hasn't had a chilling effect, that government and all parts of our society are under the same scrutiny that they were before these instances occurred, but I would never-
RAFAEL EPSTEIN: [Interrupts] Well, a journalist will say they've not reported things because of this case.
CHRISTIAN PORTER: Well, I can't comment to that because no one has ever said-
RAFAEL EPSTEIN: No one's said it to you? Okay.
CHRISTIAN PORTER: No one's said that to me.
RAFAEL EPSTEIN: Can I ask- I wanted to ask you how many secret trials there are, but that's a silly question because you couldn't answer that, but-
CHRISTIAN PORTER: [Interrupts] It is a catch 22 question.
RAFAEL EPSTEIN: Absolutely. But there is this former intelligence officer - I'm not going to ask you to comment on him, I don't even know if it's him - put on trial, convicted, jailed, released, all without the Attorney-General of the ACT knowing about that. We only know about that because there was some security guards on a court door, and I think the sign said: no one should come in. The journalists investigated that. We now know there's been that secret process. We know again with Witness K that he couldn't prepare his case. Bernard Collaery couldn't see the charges against him for the first twelve months, so therefore couldn't prepare his defence. Your job as Attorney-General is all about defending an open justice system. Do you think it's a problem that we've got secret trial processes?
CHRISTIAN PORTER: Well, can I just say, with respect to the Bernard Collaery matter, that's obviously a live matter at the moment so I won't be commenting on the details of that.
RAFAEL EPSTEIN: [Talks over] Yes, [indistinct].
CHRISTIAN PORTER: But please don't take my lack of comment as accepting what you just put to me as to- as an accurate reflection of the state of affairs as put by Bernard Collaery. But I'm not going to go into [indistinct]-
RAFAEL EPSTEIN: [Talks over] Do you think you've got too many secret trials?
CHRISTIAN PORTER: They are incredibly rare. There are provisions under the National Security Information Act to have a trial essentially and totally in camera and kept from public view. That will only ever occur via decision of the courts on application of the relevant agencies and the government to the court, and only ever occur in the rarest of circumstances where in effect, life, limb or some other- some other very substantial [indistinct]-
RAFAEL EPSTEIN: [Talks over] So no, you don't think there's too many secret trials.
CHRISTIAN PORTER: Well, I can only say to you that they are the rarest of events.
RAFAEL EPSTEIN: Okay. Appreciate your time.
CHRISTIAN PORTER: Okay. Thank you.
RAFAEL EPSTEIN: Christian Porter's the Attorney-General. He's part of the Prime Minister's team.