Business and Law academic expertise
Dr Betty Frino talks about the growing prevalence of wage theft by employers and who’s most at risk. Dr Frino is a Lecturer in the School of Business.Discover other Business and Law experts at Business and Law LinkedIn
My name is Dr Betty Frino and I'm a lecturer at the University of Wollongong and my area of expertise is around Employment Relations, Human Resource Management and anything to do with motivation at work.
Wage theft or underpayments as they are also known has always existed. Now what is happening here is that it's on the growth. So we are hearing more cases of it but it's not just anecdotal.
Now what is it. It's where employers are not actually paying the wages or entitlements that workers should be getting. It can be in many forms. It's not just the hourly rate of pay or their weekly wage. Could be also leave entitlements. All other things associated with, to do with your money. So, overtime penalty rates and the like. Lawyers, in particular, are arguing that, that's because the system is so complex and it's hard to keep up with knowing what your workers should be paid. This is quite prevalent in smaller organisations, or small businesses whereas the larger employers are not supposedly known to do it. However, the evidence is showing that even the big employers are doing that.
This does seem to be happening in workplace, where the workers are vulnerable. Well what does that mean? Vulnerable workers are people who either don't have the skills or not very well educated in the area, lack the English proficiency, for example, your migrant workers that come in on visas to do some temporary work, younger workers. So, we are seeing a low wage growth at the moment in Australia and it has been continuing for quite some years. Now while there is no one hard or fast reason either, it is a combination of various factors. Economic first and foremost. So, we’re seeing low inflation, low growth or minimal growth in the economy overall and that affects, then of course, the weight increases. However, what we’re also seeing is a change in the structure of the workforce and so we're seeing a lot of workers who are, don't fit that traditional pattern of work or type of work.
The actual system that we work under is also quite different. It always has experimented or experience to change as well. We, in Australia, have a hybrid system. So, part of our workforce is covered by what we call an award and that's our traditional method. A good third of our workforce is covered by an award and that has witnessed a steady growth but still quite flat and that's determined by that the state itself.
The other big trunk, and this is where we’re going flat, is the Enterprise Bargaining System. So, we're seeing less activity or less organisations involved in enterprise bargaining with their workforce. In fact, where they did have an Enterprise agreement in place they're actually even putting a halt to it and effectively reverting back to the award or delaying negotiation and so as a result of that, wage increases are also coming down.
Probably the most topical one as well is that because of the changes in the structure of the workforce, we are now seeing a lot of workers who are no longer part of a union, for example. So, this is, in the past, where they've actually received a lot of their bargaining power and so with low or declining Union membership you’re then seeing employees not best equipped to negotiate for a better wage increase or working conditions.