Compliance lessons as thousands of jobs return to Australia
One of the most important Federal Senatorial inquiries into the Australian workforce environment in the past 20 years has just concluded that wage theft in Australia is systemic and has called for significant legal reform to make wage theft a crime at the Federal level.
As reported by the ABC, and quoting their story about it, “Wage theft in Australia is systemic, sustained and shameful and workers are often too scared to speak out in fear of repercussions, according to a scathing Senate inquiry report, which calls for new laws to protect employees.”
Should this, and the committee’s major recommendations be adopted, the Federal workforce laws around wage theft would fall in line with the trend emerging around Australian States – it has been illegal in Victoria since July last year to underpay staff, for example.
What does this all mean for the millions of Australians who could potentially be covered by such laws? And what are the implications for employers, and their ability to attract, retain, skilled staff, without being overly restricted or at higher risk of being taken to court in a claim against them for underpayment of income?
The first thing to understand is that while this has a political angle to it, particularly in the lead up to a federal election, our view is not political. Rather, it’s based on our real world, daily experience of working with hundreds of Australian employers, from retail, to agricultural, to mining, banking, and the public sector. For us, as a provider of Australian designed workforce management software specifically created to avoid wage theft and related issues, the lessons from this fundamentally important Senate inquiry are not political – they are far more important than that.
What are the lessons for the millions of Australian employers and employees this may affect?
The most important, and perhaps the most difficult to accept for employers, is that they now have no choice but to act proactively now to ensure they are not underpaying their staff.
This committee’s recommendations, regardless of whether all 19 of them are adopted into law or not, are a clear indication that employers need to act now to safeguard their workforces from underpayment and avoid the risk of being taken to court and losing millions of dollars, staff and customer loyalty, and of course, brand reputation.
This is a multi-billion-dollar challenge, which has affected high profile brands such as Woolworths, Coles, Westpac and others.
If it is affecting organisations of this size and prestige, with highly complex HR and payroll systems, the reality it is that it is likely to continue to be a problem for thousands of other employers well through 2022 and beyond.So, the first lesson?
Act now. Don’t wait and don’t put it off. This issue must be addressed at the CxO and board levels.
The second lesson is that while some industries have been highlighted for their non-compliance, such as horticulture, hospitality, universities and cleaning, the nature of the changing economy means others will soon come under the regulatory spotlight too.
For example, Australia’s contact centre industry is undergoing a significant shift as more organisations bring more contact centre jobs back into Australia following COVID19 and enable Australian based staff to work from home – often in regional areas.
This approach makes sense, economically, and of course, from a PR and customer perspective. It also opens up roles for thousands of staff, who can benefit from the more flexible hours offered by working contact centre shifts from home. With relatively reliable high-speed broadband now available across the vast majority of Australia, it is a real option for brands to have their contact centres in-country.
In fact, the Australian contact centre industry has variously been measured at more than $1.8-2billion and growing at about 8 per cent this year (IBIS World) and employs thousands of people.
This industry, however, is likely to be amongst the next ones targeted by the workforce regulators, because, sadly, it is just as vulnerable to wage and superannuation theft as any other.
Due to the nature of contact centres, they are usually required to operate in a shift format, and some of those shifts will trigger a wide range of complex over time and other payment schedules. In fact, the contact centre industry in Australia is not many outsourcing country models from a regulatory payment perspective. It’s complex, just like the in person, face to face workforce environment.
Organisations which are embarking on in-sourcing or in-country contact centre strategies should be applauded – they are providing jobs and upskilling opportunities for Australians and in some cases, stimulating economic prosperity in regional areas, as well as taking carbon emitting cars off the road.
But they must take proactive action to ensure their contact centre staff are being paid properly – and legally. This includes ensuring they are complying with all Fair Work and other workplace laws – for example, making sure WFH contact centre workers are logging in and out of shifts appropriately and not staying logged in for longer than they should. That kind of issue is a classic example of behaviour which could trigger a wage theft claim.
Otherwise the next wave of wage theft stories and legal cases will impact them. The Senate has warned us. Now is the time to act.