Shocking yet not surprising: wage theft has become a culturally accepted part of business

Australia’s Fairwork Ombudsman found wage theft in 45% of its audits In food services. www.shutterstock.com

Sarah Kaine, University of Technology Sydney and Emmanuel Josserand, University of Technology Sydney

Many Australians are shocked by celebrity chef George Calombaris being caught for underpaying employees A$7.8 million. It didn’t help, of course, that the television personality was also reported to be seeking a huge pay rise for appearing in the television program MasterChef Australia.

But what should not be a surprise is the prevalence in Australia of wage theft – typically underpaying award rates and entitlements such as overtime, superannuation and penalty rates.

Calombaris is not alone. In recent years there have equally large cases of wage theft involving household brand names such as Caltex, 7-Eleven, Pizza Hut and Domino’s Pizza.

The Australian Taxation Office estimated that in 2014-2015 Australian workers had been short-changed A$2.5 billion on superannuation payments alone .

Workplace audits by the federal Fair Work Ombudsman over the past decade suggest wage theft is rising. Most vulnerable are the young, the low-skilled and temporary migrants.

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Read more: We've let wage exploitation become the default experience of migrant workers

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And the sector where wage theft appears most common: food services (evident in more than 45% of audits).

Structure, culture, enforcement

The evidence points to wage theft being more associated with certain types of business structures. In particular, franchise operations, outsourcing, insecure work and the gig economy.

Calombaris has had a hard time denying he knew what happened in his companies. Bigger brands have gotten away with minimising costs through supply-chain arrangements where there’s exploitation somewhere along the line. It’s the very same problem that enables modern slavery to flourish around the world. These companies can deny responsibility because they have no direct legal obligations.

The problem isn’t just structural. It is also cultural.

Wage theft seems to have become accepted as a fact of life, maybe even a necessity, in certain sectors and workplaces. As a result, employers have developed a sense of impunity, while workers have become resigned to underpayment as unavoidable.

More than three-quarters of international students and backpackers, for example, know they’re being underpaid but accept it because they believe it’s standard treatment for anyone on their type of visa.

Cultural acceptance translates into weak enforcement rules. Wage theft is not considered a criminal offence, in the same way as stealing money from a company. Those caught face low penalties. Calombaris, for example, has to pay his employees what they are owed, but his penalty is limited to a $200,000 “contrition payment”).

Finally, a reform agenda

In this context – practices and attitudes making wage theft rampant – the only positive thing about Calombaris’ case is that, combined with other high profile cases, it has triggered enough outrage to make politicians get serious about reform.

The federal government has indicated it will propose new laws to make wage theft a criminal offence, punishable with prison time.

Along with tougher laws, more resources for enforcement are also needed.

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Read more: Five myths about the informal economy that need debunking

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Other reforms could help too. Supply chain certification, similar to the schemes used to guarantee fairtrade coffee or sustainably caught fish, are an example. The Fairwork Ombudsman has partnered with business and unions to create a pilot certification scheme for the cleaning industry.

Modern slavery legislation now requires large companies to report on their efforts to keep their supply chains slave-free. Acceptance of such reporting obligations could pave the way for the expectation that companies more attention to stamping out all forms of worker exploitation.

Community responsibility

There is one other notable point to make about the Calombaris case. It is about our own responsibility.

As a community we have collectively accepted wage theft for too long.

Collectively we seem to have higher tolerance for the mistreatment of workers at the fringes of the labour market – such as migrants, young workers and the low-skilled.

It is time to take stock. Work will change drastically in coming decades. More of us face the prospect of being among the vulnerable, with the jobs we do now being taken over by AI and automation.

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Read more: Artificial intelligence-enhanced journalism offers a glimpse of the future of the knowledge economy

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Technology has also facilitated “uberisation” and the growth of the gig economy, in which companies minimise their obligations by denying workers are employees.

Considering the breadth of change to come, we need more than ever to reflect on what we accept and enable.

Sarah Kaine, Associate Professor UTS Centre for Business and Social Innovation, University of Technology Sydney and Emmanuel Josserand, Professor of management, Director of the Centre for Business and Social Innovation, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Dangerous anti-worker bills have just been introduced to Parliament

Scott Morrison’s IR Minister Christian Porter has just introduced two bills to attack working people – the Ensuring Integrity Bill that I wrote to you about last week – that would give Scott Morrison, big business and their lobbyists power to interfere with how unions are run, to disqualify union officers, to shut down unions, and stop unions from merging.

They have also introduced another bill the Proper Use of Workers Benefits Bill that would make it illegal for workers to run funds for things like insurance cover, redundancy protection, and training, just to name a few.

This is a serious attack on working people and the trade union movement.

Scott Morrison does not have a mandate to introduce these laws.

These laws will undermine workplace safety, increase wage and superannuation theft, and make it harder for workers to get pay increases and be represented when they need help.

They want to make it harder for unions to do our job of standing up for working people. When unions are under attack, all working people suffer. These bills must be stopped.
Because working people and unions have made contact with Senators about this, crossbench Senators have pushed for a Senate inquiry. That Senate inquiry is expected to report back in October, so the government can’t simply ram these laws through right now.

The inquiry buys us some time to build our campaign, but it’s not a lot of time.

I need you to join the campaign to stop Scott Morrison’s anti-union laws. 

We will need everyone to take action again in coming weeks to stop these anti-worker, anti-union laws in their tracks. 

Can I count on you to be part of it?

In unity,

Michele O’Neil
ACTU President
http://www.australianunions.org.au/

Tech innovators start to see old-fashioned benefits of collective bargaining

After a long industrial campaign, Amazon workers in Italy have persuaded their employer to reach an agreement with them. FILCAMS CGIL

Michael Walker, University of Technology Sydney
Disruption has been a defining buzzword of this decade, as companies in nearly all sectors find themselves challenged or supplanted as a result of the impact of technology. The beneficiaries of this disruption have mostly been newcomer enterprises – the Ubers and the Amazons – which have quickly grown to become part of everyday life.
Policymakers, reluctant to quash innovation, have taken a hands-off approach. But these innovators’ employment practices don’t appear to be so innovative. In recent times, however, some tech innovators have shown they aren’t allergic to bargaining with their workforce after all.
What’s driving this shift? It might be convenient for consumers but the gig employment model, with its arm’s-length relationship with its workforce, struggles to build organisational culture and relationships with customers. We see evidence of this in ongoing strife in companies such as Uber and Deliveroo.

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Read more: Gig economy businesses like Uber and Airtasker need to evolve to survive

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Now, though, major firms have begun to negotiate collective agreements with their workers.

Amazon in Italy

For the first time anywhere in the world, it was announced in May that Amazon had made an agreement with unions. The breakthrough took place in Italy, where Amazon and the FILCAMS CGIL union negotiated an agreement. It was endorsed by 70% of employees who voted on it.
The deal came into effect on June 17. It ensures fairness in scheduling and allocating weekend work, and reduces mandatory night shifts.
Amazon workers now get four consecutive free weekends out of every eight. Shifts alternate between Saturdays and Sundays, and they get 25% higher pay for working at night.

The Amazon warehouse and distribution centre in Piacenza, Italy, is now covered by a collective agreement with workers.

Digital media in the US

A growing number of digital news outlets have signed collective agreements with their writers over the last few years. The list includes Vice Media, ThinkProgress and the Huffington Post. All are now signed on to union contracts with the Writers Guild of America East.
In addition, Slate, Salon, MTV News and Fast Company recognise the Guild as a negotiating partner. Vox is negotiating its first union contract right now.
These contracts establish minimum salary and future pay rises, and set agreed payment for derivative republication of writers’ work. They also limit the power of management to fire employees at will.

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Read more: Why HuffPo and other 'new' media journalists are choosing unions

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A gig employer in Denmark

We have heard a lot about Uber, Deliveroo, Foodora and Airtasker and the problems created because they don’t treat their workers as employees. This means, among other things, they don’t provide the minimum wage or other basic employment standards. Airtasker has sought to address this by making undertakings to the peak union body in New South Wales.
By contrast, Danish employment platform Hilfr recently signed a collective agreement covering its workers, who provide cleaning services. Under the agreement, Hilfr’s workers will receive:

• a minimum wage equal to A$30 an hour
• pension contributions
• holiday pay
• sickness benefits.

The agreement was negotiated with Danish union 3F (United Federation of Danish Workers) and comes into effect on August 1.

Winds of change in Australia?

After years of decline, collective bargaining coverage in Australia has stabilised over the past 12 months.

These figures don’t include new agreements being made in the retail sector. These are set to add another 200,000 employees by the end of this year.
Meanwhile, the gig employment model faces the likelihood of increased regulation. The federal Labor Party has stated its intention to regulate gig employment if elected. Labor governments have starting doing so at state level.

• The Victorian government recently announced on-demand deliveries would be brought within the Owner Drivers and Forestry Contractors Act and couriers given the ability to bring claims before the Victorian Small Business Commission and the Victorian Civil and Administrative Tribunal.
• In New South Wales, the shadow minister for industrial relations, Adam Searle, announced that Labor intends, if elected, to introduce even broader protections for gig workers to “fill gaps” in the Fair Work Act.
• The Queensland government is considering options to extend workers’ compensation coverage to gig workers.

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Read more: Workers' compensation doesn't cover gig workers – here's a way to protect them

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Gig employers have a strong incentive to sit down and talk – it could make for an uncomfortable ride for them if workers’ entitlements continue to be imposed through political agitation followed by legislation.
Perhaps it won’t be long until we see one of these tech innovators put in place such an “innovative” agreement with its Australian workers.
Michael Walker, PhD candidate researching worker voice, University of Technology Sydney
This article was originally published on The Conversation. Read the original article.

Members meeting to endorse the UTS Professional Staff Agreement

Summary

Despite a concerted push from Management, the new Agreement will see no loss of existing entitlements.  Positive gains for UTS Professional Staff include:

• ·         2%pa pay increase (paid twice-yearly as 1% in May and 1% in November)
• ·         Twice-yearly consultation meetings with University Management
• ·         20 paid days of Domestic Violence Leave
• ·         17% Supperannuation for all fixed-term staff from 2020
• ·         Reference to Working From Home Policy captured within the EA
• ·         Improvements to fixed-term and casual conversion
• ·         Extended Redeployment for Professional Staff HEW 7 and below (now 20 weeks)
• ·         Commitment to ongoing employment as the preferred mode of employment captured in EA
• ·         New post-restructure implementation review process added to Change Management
• ·         Increased Union training leave (now 10 days)
• ·         Non-gendered Primary Carer Leave replaces Maternity Leave
• ·         New Social Justice Leave category added to FACS Leave
• ·    Additional $500,000pa held in a central fund for “next-level” Professional Staff training and      development 

Why union members earn higher wages than their non-union colleagues

Craig MacMillan, Macquarie University; Daehoon Nahm, Macquarie University, and Michael Dobbie, Macquarie University
Over recent decades in Australia union membership has fallen from 40% of the workforce in 1990 to 15% in 2016 and so unions might seem less relevant in making a difference to what we earn. But our research finds that union members do earn higher wages per hour than non-union members.
This is because union members have more experience with their current employer, in their occupation and in the labour market generally, than non-union members.

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Read more: The benefits of job automation are not likely to be shared equally

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The study used data from the Household, Income and Labour Dynamics in Australia (HILDA) survey from 2001-2013 with a sample of 80,000 workers. It showed that male union workers earned 12% more than male non-union workers per hour and female union workers earned 18% more per hour than female non-union workers.
We explored whether these pay differences could be explained by whether or not the two groups had different characteristics such as formal education levels and various forms of labour market experience. In economics, the more knowledge and skills a worker has, the higher productivity and higher wages they’ll have.
However formal education didn’t seem to factor in as a decider of differences in wages between unionists and non-unionists in the study. Rather, these findings suggest that when unions negotiate collective agreements for members they are concerned about employment security, as well as wages and this is a deciding factor.

How unions add to workers’ experience

The study also revealed that unionists received a lower wage increase for each year of additional labour market experience. But because they accumulated more expertise their overall earnings were higher than their non-union counterparts.
These findings can be explained by unions’ willingness to trade-off wage increases for improvements in employment security. For example, during collective bargaining a union may propose that the employer impose no forced redundancies on the workforce for the life of the agreement. However, this will be costly for the firm as it will have to commit more resources to redeployment. As a result the employer may agree to this provision if the union agrees to a reduction in wage increases.
This could be because unions are interested in more than just higher wages, but also in employment stability and training opportunities. In fact, they may be willing to trade-off some short-term wage growth in return for employment security and training opportunities and accordingly higher wages in the longer-term.
This idea was confirmed in an earlier study we conducted. That study, also using HILDA survey data, found workers covered by a collective agreement (the majority negotiated by unions) had more workplace training (approximately 5% more). This is compared to workers covered by an individual agreement, which are mostly negotiated without any union involvement.

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Read more: They're the voice: how workers can be heard when unions are on the wane

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This finding is also consistent with data from the federal government about collective agreements formed between 2007 and 2009. This data found there were training initiatives in 80% of union negotiated agreements, compared to 52% of non-union agreements.
From our findings we think workers might be financing training opportunities by trading-off potential wage growth under collective agreements. But these workers can accumulate more skills and accordingly increase their productivity, giving them higher wages in the long-term.
Taken together these studies suggest that unions can get higher wages for their members, despite having less industrial muscle than they did in the past. It shows that unions need to focus on negotiating for improved employment security and training opportunities for workers and not simply for higher wages during bargaining for new collective agreements.
To remain relevant to Australian workers, unions need to have an effective voice on these matters.
Craig MacMillan, Lecturer in Economics, Macquarie University; Daehoon Nahm, Senior Lecturer - Department of Economics, Macquarie University, and Michael Dobbie, Senior Lecturer in Economics, Macquarie University
This article was originally published on The Conversation. Read the original article.

Send Malcolm a message in the Bennelong by-election

The by-election on 16 December in your electorate presents an opportunity to recalibrate the direction of our country in terms of its values and priorities.
The whole nation’s eyes will be on Bennelong on Saturday as the ramifications of the result could be immense and historic.
This is why the PSA has gotten behind Union NSW’s “Send Malcolm a Message” campaign.
We know governments only listen through the ballot box. What we want them to hear is:

1. Cease your attacks on workers and their organisations through cuts to penalty rates and a raft of anti-union legislation
2. Fix the NBN
3. Fund universities and TAFE, and redirect subsidies and money being wasted on the private sector providers
4. Take action on energy prices and climate change
5. Keep their hands off our industry superannuation funds.

On behalf of the PSA’s membership across the state, who are all being impacted adversely by their policies, I urge you to send a message to Canberra by not voting for the Liberal Party on Saturday.
Troy Wright
Assistant General Secretary

CPSU Professional Staff 19.10.17

UTS Update on Academic Strike 19/10/17

Members of the academics’ union, the NTEU at University of Technology, Sydney are taking industrial action on Thursday 19 October over issues such as teaching only roles for academics.
CPSU NSW members (and staff who are not members of a union) are not protected to take industrial action under the Fair Work Act.
Only members of the academics’ union are entitled to take protected industrial action for that day.
This means all other staff, including CPSU NSW members, are required to either report for work on Thursday 19 October or to have reasonable grounds for not attending work that day.
Please contact your local CPSU NSW delegate or CPSU NSW Industrial Officer to find out more about this.
CPSU NSW members have not yet voted for protected industrial action and therefore CPSU NSW members are required to report to work.
Your CPSU NSW bargaining team will continue to aggressively pursue the bargaining agenda as decided by CPSU NSW members and will report back to members on the progress of bargaining.

Three reasons why the CPSU NSW is not taking industrial action now

1. CPSU NSW members are committed to our Log of Claims.

The CPSU NSW conducted extensive consultation with members to develop our Log of Claims that details professional staff priorities for UTS. This has lead our bargaining strategy and the CPSU NSW remains committed to it.

2. Negotiations are progressing

CPSU NSW members have not yet voted for protected industrial action and therefore CPSU NSW members are required to report to work.  Your Professional Staff Bargaining Team continues to negotiate in good faith, and while progress is slow it has not yet come to stalemate.
The University has already agreed to maternity leave for the primary carer, regardless of gender; 5 days of leave for NAIDOC week and paying trainees under the Professional Staff Enterprise Agreement.
The University has also agreed to consider a working from home clause and an allowance for Health and Safety Representatives. Your Professional Staff Bargaining Team is working hard to progress members’ claims and will be in discussions with members over the coming weeks to see if members’ are interested in industrial action at this stage.

3. Unprotected Industrial Action is illegal

CPSU members, along with the entire trade union movement, successfully campaigned against WorkChoices because it threatened our rights at work. Unfortunately, the WorkChoices era industrial action laws are retained in the Fair Work Act. This means that unless you were part of the vote on protected industrial action then you are not protected in taking industrial action, meaning that the full weight of industrial relations law and University disciplinary action can be used against you.

Authorised by Stewart Little, State Branch Secretary, Community and Public Sector Union (SPSF Group), NSW Branch
Please do not reply to this email address. The PSANews email account is not monitored.
For membership inquiries, please email membership@psa.asn.au