Menu

Q E A S

Queensland Economic Advocacy Solutions

header photo

Imprisonment for mistakes in payrolls is a step too far

“Employers found to be deliberately or recklessly engaging in wage theft could find themselves in jail, after the Palaszczuk Government accepted in principle making wage theft a criminal offence following a Parliamentary Inquiry.”

Source: Queensland Government Media Release

This is one hell of a big development in the industrial relations landscape in Queensland on late Friday last week. 

The Palaszczuk Government has tabled its response to the parliament’s Education, Employment and Small Business committee inquiry into wage theft in Queensland. In its report, the committee made 17 recommendations aimed at eliminating ‘wage theft’ and the government has accepted, or accepted in principle, all of the recommendations.

Six of the recommendations are within the Queensland Government’s jurisdiction and deal with providing better public information and education, and procurement policies that allow for action to the taken against employers that have underpaid workers.  The Committee also recommended that wage theft in deliberate or reckless cases be criminalised at a state level.  The Palaszczuk Government has indicated it will now consult with stakeholders to determine the best way to make good on this recommendation.

The inquiry found that wage theft is affecting around 437,000, or one-in-five, Queensland workers and costing more than $1 billion every year..

I do not condone the deliberate underpayment or exploitation of employees but over the best part of two decades I have seen that for every case of intentional non or under payment of an employee there would be a dozen non-intentional ones.

Many instances of incorrect payment are actually a result of misunderstanding or error.  Types of non-deliberate errors that are regularly seen are:  the application of the wrong modern award, misclassification of employees under a modern award and employers not understanding the circumstances when allowances, loadings and penalties are to apply and be paid.

The difficulty in all of this is what is considered “deliberate” or “reckless”.  This is a very poor course of action for many additional reasons as well including:

  • Last year the Federal Government introduced the Fair Work Amendment (Protecting Vulnerable Workers) Act which, amongst other thingss, increased penalties for the contravention of workplace laws tenfold;
  • The Fair Work system is ‘’highly complex’’ with workplace awards of over 100 pages that are undoubtedly challenging for small business;
  • This represents a break-away from the national Fair Work system that provides consistency across the country; and
  • Placing employers at risk of imprisonment for mathematical errors imposes a serious disincentive on setting up or continuing to run a business and employing staff.

The lot of a small business is a difficult one and the risk of imprisonment for a mistake in payroll is a step too far.

The key objective of governments in this space should be to make it as easy as possible for employers and employees to know their rights. Global evidence favours education, raising awareness and resourcing for existing enforcement mechanisms than introducing additional layers of enforcement and criminality. 

The Queensland Government would be better off working with other governments to improve the current compliance system rather than creating another ad-hoc state regime.

It is lacking in logic that the Queensland Government are indicating they are prepared to look at education and awareness initiatives subject to ‘impact on budget’ yet are prepared to reach straight for making incorrect wage calculations a criminal offence and the significant drain that frivolous cases will have on our legal system.

I would strongly urge this issue to be permanently placed on the back-burner of Government priorities.

A full copy of the State Government response to Inquiry recommendations can be found here.

 

Go Back

Comment