Gavin Marshall (Victoria, Australian Labor Party) Share this | Hansard source

I just want to talk about this particular amendment, because I think this debate tries to get a little bit too academic sometimes. If we step back and look at employers who are paying people, first of all, you should know what it is you're going to pay them. You make a decision that you're going to pay at least the minimum legal rate and conditions or you make a decision that you're not. Either way, employers know what they're going to pay their employees, because ultimately they pay them at the end of the day. Every employer knows exactly how long their employees have worked. Again, whether they want to pay them for all of those hours or not is a conscious decision of that employer. Employers that are paying according to their legal minimum requirements or better will have that documented. They know what it is they have to pay; it will be on a pay slip. The employer will know how many hours the employee has worked, as will the employee, and that will be outlined on a pay slip. It will be there for all to see. It is not too much to ask, or expect, that an employer who is paying somebody, knowing what it is they're paying, puts that on a pay slip.

The evidence I've seen around the traps—some of it's hard and physical evidence, some of it's anecdotal evidence and some of it's evidence provided by the Fair Work Commission—is that those employers who have chosen not to pay the legal minimum or above requirements still have records but refuse to make them available. They pretend those records are not there. They pretend they do not exist. We've heard evidence from the Fair Work Commission where they've gone, as a result of a complaint to an employer, that said, 'This employee says they have not received their proper wages and conditions for the hours that they've worked,' and the employer says, 'I don't know who they are. I have no records of them ever working here.' They choose not to provide those records. We know those records are there. If they are there and the employee is being paid correctly, there's no problem; there is no dispute between anybody. But we know it is a business model of some employers simply to pay cash in hand and not pay for all the hours worked—they talk about clean-up time and preparation time and that they shouldn't get paid for that. There are all sorts of different exploitation models that go on, and often these models are part of a structured business plan.

We have heard evidence of some employers who have made the decision that they will underpay people, and they've made the conscious decision that maybe one in 10 of those people will ultimately complain about being underpaid. You then make it difficult for employees to pursue the complaint, and maybe one in five of the one in 10 who actually complained in the first place are able to mount some sort of a case. And then most of those people will take a cash offer less than what they were underpaid to simply go away because 'something's better than nothing' and it's nearly impossible to prove, under the current law, that they are being underpaid when an employer either chooses not to make the records available or pretends there are no records. What's nearly the worst thing that happens to those employers? They have to pay what they were legally supposed to pay for only a fraction of the people they've underpaid. And when they do that they continue on with their business model, very happily stealing wages from those people time and time again.

We know—because they told us—that the Fair Work Ombudsman is frustrated with their inability to go behind some of these business models. It is difficult for them, when an employer chooses not to provide times and wage records, either of legal times and wages or not, to make any case or even to prove that an employee was ever an employee at all. It's difficult to prove that, especially when people are vulnerable and in difficult situations.

I'm not as sympathetic as others because I know that no employer just goes round saying, 'Oh, Jo'—Fred or whatever their name is—'here's $100 bucks for your week's work,' without having any idea of what the hourly rate was or how many hours they worked. It's farcical to think that!

Every employer knows exactly how much they're paying their employees as an hourly rate and how much time they've worked. Whether they choose to pay legal wages and conditions is a completely different matter. I understand that, if someone keeps proper records and is paying correctly, they won't be under investigation in the first place. That's the reality. If you're actually paying by the award or better—the award being the lowest legal minimum wage someone can be paid—or the other entitlements, there's going to be no problem anyway. The problem is only when employers either choose to do the wrong thing by underpaying or choose not to keep official records. And the only reason you would ever do the latter is that you were underpaying; otherwise, as I've already said, of course you would keep your own records. You don't just make up a weekly rate or a daily rate for somebody. You don't pick those things out of the air. There is a formula that you may be using, but of course it simply may be less than the legal entitlement. If there was a fire in the business and all the records were destroyed, fair enough! I think that would be a reasonable excuse. But I really can't think of any other reasonable excuse.

We're happy to pick up the words and hear some of the concerns. I must say, from a personal point of view, as someone who takes an active interest in these matters, I think those concerns are completely overblown. But in order to progress these issues I support the position that we support these amendments and what's been discussed and negotiated with Senator Xenophon, even though the government's not pursuing it, because I think it is important to move forward. If an employee or alleged employee can establish that they did work for a business or an employer, and the employer either has deliberately not kept the records or doesn't want to show the records because they will prove that they were underpaying, it ought to be a reverse onus of proof because the employee is in such a vulnerable position. How do they establish those facts? They can't establish those facts. They're being ripped off in the first place. As if the employer is going to make it easy for them to come and prove that they were going to be ripped off! I know some people say cases where this business model's in place are rare. Well, I'm telling you: they're not rare. They're across industry, and in hospitality in particular.

One of the interesting things that I heard in the debate about penalty rates is that people were saying to me for the first time, 'We didn't know we were entitled to penalty rates.' The fact that we had this discourse about penalty rates raised the issue that they were, in fact, entitled to penalty rates. I had so many employees saying to me, 'I've never been paid penalty rates and didn't know we were entitled to them.'

I think we have to bite the bullet and say that in many respects—in fact, in nearly all respects now—the Fair Work Act is not delivering what it ought to be delivering. The mere fact that we need this protecting vulnerable workers bill actually says that the Fair Work Act in itself isn't working. It's certainly not working for the vulnerable workers. Let's be clear, this bill concerns a very narrow field of vulnerable workers, those dealing with franchisees and franchisors. That is a very narrow protection of vulnerable workers, but they themselves are vulnerable, and I certainly welcome many aspects of this bill. But let's be very, very clear: it is the employees that need protection from unscrupulous and disreputable employers, not the other way around.

So I certainly commend the amendment as it is, but I don't think any of us ought to get too academic in the arguments here. Let's take it back to what we know makes sense on the ground, how what we know actually happens in reality. Let's put a bit of reality into it. But I am certainly happy to support the proposals as they're put.