September 18, 2020

Traditionally, as clients have presented with disputes over unpaid wages, unreasonable deductions or insufficient entitlements, legal advice has been tailored towards civil claims in the Industrial Court jurisdiction. Offenders now have further potential consequences to consider when deciding to pinch the pockets of their employees.

On 9 September 2020, the Queensland parliament took a stern position on wage theft by passing the Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (‘the Bill’). The Bill criminalises the act, meaning that employers can face fines and even imprisonment for their indictable behaviour.

 

WHERE HAS THIS COME FROM?

You don’t have to look far to find an article about the latest chapter in “Australia’s wage theft epidemic”. Only last year, popular television reality TV show host, George Calombaris, was famously caught for underpaying his employees up to $7.8 million.

In Queensland alone, the rate at which workers are ripped off is a multi-billion dollar issue, annually. This led to a 2018 report by the Queensland Parliament’s Education, Employment and Small Business Committee, who provided a range of recommendations. 

At the forefront of those recommendations was the criminalisation of wage theft and the simplification of the wage recovery process.

 

WHAT DOES THE BILL DO?

The Bill amends numerous legislative instruments including:

  1. The Criminal Code Act 1899;
  2. The Magistrates Courts Act 1921;
  3. The Industrial Relations Act 2016; and
  4. The Queensland Civil and Administrative Tribunal Act 2009.

Changes to the definition of stealing, among other amendments, mean that perpetrators of wage theft can now be prosecuted for stealing under the Criminal Code.

As a result of the changes, convicted employers will also be viewed through a different lens to the everyday pickpocket. Those found guilty of stealing or fraud will be subject to increased maximum penalties, with sentences potentially ranging up to 10 years’ imprisonment.

The criminal jurisdiction is not the only one to experience a change. Some other amendments to be aware of are: 

  • The broadening of the Industrial Magistrates Court jurisdiction to hear civil claims for unpaid wages; and
  • Additional processes for claims brought by employees that are part of the Fair Work System.

 

WHAT IS WAGE THEFT?    

Wage theft can come in many forms however generally pertains to the deliberate underpayment of wages and entitlements to employees. The novel offence will seek to protect employees from:

  • Unpaid hours, penalty rates or superannuation;
  • Withholding of entitlements;
  • Intentional misclassification of workers which results in underpayment; and
  • Unreasonable or misapplied deductions.

 

WHAT IF IT WAS AN HONEST MISTAKE?    

At first glance, the changes may be alarming to employers who inadvertently partake in one of the above. However, they can rest assured that the offence will not capture those acting honestly. Courts will still need to be satisfied that the accused has acted with an intent to deprive the person of the lost wages.

That is not to say employers who ‘cast a blind eye’ will not fall foul of the offence. Those that do, and are shown to be aware of the entitlements that are being withheld, may pay the price.

If you think that you might have a claim for wage theft, or are potentially at risk of falling short of your obligation to pay certain entitlements, please contact a member of our offices.