SMART THINKING

Some of Australia’s biggest companies have been accused of underpaying their staff. More may admit wrongdoing in 2020.

Some of Australia’s biggest companies have been accused of underpaying their staff. More may admit wrongdoing.

The plight of underpaid workers has been in the spotlight for many years. Recently Australian businesses have been caught out exploiting workers with unpaid wages, overtime and superannuation. From the Commonwealth Bank claiming “errors in the systems” as the reason for underpaying more than 8,000 staff, to the Super Retail Group admitting to not paying managers overtime to the tune of $32 million, the growing list of businesses at fault reveals a serious problem with corporate Australia. A number of high-profile companies have found themselves in the headlines, either accused of, or admitting wage underpayment. Many companies are coming forward and declaring their wrongdoing.

One of Australia’s leading employment lawyers predicts more brands will admit to underpaying workers this year in an effort to dodge severe penalties. Andrew Jewell, principal lawyer at employment law firm McDonald Murholme, says while getting on the front foot is good for brand image, there are also huge financial incentives. “There’s a potential penalty for each breach of the Fair Work Act,” says Jewell.

“One of the key things when you assess a penalty is contrition, so [businesses will want] to go before the court and say, ‘As soon as we found out about it, we found what was owed and we rectified it. Please limit the penalties’.”

The maximum penalty for each individual breach of the Fair Work Act is $54,000, although Jewell believes this could soon change.

“Regulation always lags a little bit, but I think you’re probably going to see some increased penalties come in from a federal level,” he says.

“I don’t think it’s going to be so drastic that you can’t run a business, but I think they’ll look at some harsher deterrents.”