Labor’s wage tribunal plan could end the pay rip-off problem

super underpayment untouched.
New Labor tribunal plan aims to stop wages theft. Photo: Getty


Labor’s pledge to introduce a tribunal for unpaid wage and entitlement claims could be a game-changer for underpaid workers in Australia, according to legal experts.

Labor leader Bill Shorten announced the move on Wednesday saying “we’ve seen too many examples of systemic wage theft but lengthy and costly court proceedings prevent and deter workers from recovering wage underpayments”.

The plan would see a new tribunal attached to the Fair Work Commission that workers could call on to investigate their complaints.

“It’s an excellent idea,” said Giri Sivaraman, employment law principal at lawyers Maurice Blackburn. “At the moment, if a worker wants to pursue a breach of award they have to go to the Federal Court or Federal Circuit Court which is slow and costly.

“The tribunal would be fast and practical, more industrial and less legal [because it would be attached to the existing Fair Work Commission],” Mr Sivaraman said.


Bassina Farbenblum, a law lecturer at the University of NSW, said the proposed tribunal could dramatically affect wages law enforcement.

“A key element would be that it’s cheap and easy to access and assists workers in putting claims together.

“It could be a game-changer for vulnerable workers,” Ms Farbenblum said.

Currently, along with the courts, workers can take their underpayment claims to the Fair Work Ombudsman (FWO). However, Ms Farbenblum said while the FWO had done some good work highlighting rip-offs, its role “is not to reclaim lost wages for individual workers”.

The FWO “is an Ombudsman. It can investigate or pursue claims, but it has no adjudication powers,” Mr Sivaraman said. “It doesn’t have to pursue complaints; it can decide not to,” he said.

The extent of wage theft has been uncovered by a number of investigations in recent years. Ms Farbenblum’s research into vulnerable migrant workers –predominately overseas students or backpackers – found massive levels of underpayment.

“We estimate that migrant workers have been underpaid by $1 billion,” she said. “Half the workers we surveyed had been underpaid, but only 10 per cent had taken action over it,” she said.

7-Eleven had to recompense underpaid workers by more than $150 million,” she said.

The proposed tribunal would be restricted to small claims of $100,000 or less, but it would cover the majority of underpayments revealed in recent years. While the 7-Eleven claim is big in total, it applied to claims that averaged $39,000 and so would fall within the powers of the tribunal.

Bosses approve

Some employer groups gave support to Mr Shorten’s proposal.

“I think it is a sensible idea. People should be paid what they’re entitled to and I really urge businesses, large and small, to make sure people are being paid what they’re entitled to,” said Jennifer Westacott, CEO of the Business Council of Australia.

“We support the proposal as long as it’s fair,” said Peter Strong, CEO of small business lobby group COSBOA. “Compliance [with awards] is not a choice, it’s a requirement so we support our regulators.

“But we don’t want employers to walk in an be considered guilty with the onus on us to prove the claim is wrong.” Mr Strong said.

Sally McManus, secretary of the Australian Council of Trade Unions, supported the move saying: “Wage theft is widespread and systemic … it has been turned into a business model for everyone from celebrity chefs to multinational pizza chains. The ALP’s proposal will make it fast and easy for workers to claim back money which has been stolen from them.”

While superannuation underpayment wasn’t specifically mentioned, Labor’s pledge to add super to the National Employment Standards would likely give the tribunal power over it.

The New Daily is owned by Industry Super Holdings