Enterprise Industrial Relations Report: Australia Wage Crisis Analysis

This report examines the state of enterprise industrial relations in Australia, focusing on the impact of wage theft and stagnant wage growth on employers' social license to operate. The analysis draws on research by Thornthwaite and Sheldon (2018), Boxall and Purcell (2016), and others, exploring the factors contributing to wage theft, including the gig economy, casual work conditions, and labor hire practices. The report highlights the role of employer associations like the Queensland Council of Unions and the National Retail Association, and discusses their responses to wage theft and the Fair Work Act. The report concludes that stagnant wage growth and wage theft negatively impact the social license to operate and suggests that employers and associations must work together to ensure fair practices and maintain public approval. The report also references the 'Wages Crisis in Australia' book and the Productivity Commission Inquiry Report.

Running head: ENTERPRISE INDUSTRIAL RELATIONS
Enterprise Industrial Relations
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Author Note

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Social license, also known by the key phrase, the social license to operate, is a term that
describes the ongoing acceptance on the part of a company, or the standard business practices
that are adopted by the industry in which this company operates, and or the operating procedures
via which the general public, stakeholders and employees of a firm are addressed (Wilburn and
Wilburn 2019). The social license to operate is seen to exist when a project that is undertaken on
the part of a business or a professional organization is one that acquires the ongoing approval of
the stakeholders of the organization, be they employees of the organization or clients or
investors. When the stakeholders of a company give their nod towards the implementation of a
project, the situation comes to be known as the social license to operate (Boxall and Purcell
2016).
Thornthwaite and Sheldon (2018) have argued that the social license to operate on the
part of an employer is something that has been severely thwarted in the country of Australia due
to the occurrence of what may be termed as wage theft or stagnant wage growth. Wage theft is
seen to occur in a business organization when the workers of that particular organization are not
given their dues, when they are not paid their remuneration in a timely manner or in a consistent
way, or if they are denied of their payment altogether. Wage theft is accompanied for the most
part by stagnant wage growth, a situation where the wages of workers are not appraised or are
not appreciated leading them to work for the same wage for years and months on end, which in
turn contributes greatly to the discontentment and dissatisfaction among such workers. In the
view of Thornthwaite and Sheldon (2018), some of the factors that have contributed to stagnant
wage growth and wage theft in the country of Australia are the existence of the gig economy, the
introduction of largely casual work conditions, the matter of labor hire and numerical flexibility,
among others. Public discontentment with the ways by which businesses are seen to operate in

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the country of Australia, is something that has further contributed to the social license to operate
being linked with wage theft and a stagnant wage growth. The social license to operate on the
part of a business enterprise in Australia is something that has significantly escalated as the
Australian public continues to grow more and more dissatisfied with the way by which
businesses are seen to operate in this part of the world. Thornthwaite and Sheldon (2018), have
analyzed the issue of stagnant wage growth and wage theft in Australia and the relation that this
is seen to have on the matter of the social license to operate. The particular role that is played by
employer associations in coming to the aid of workers who are being unscrupulously denied of
their wages by their employers is also a subject that has been discussed by the researchers in a
significant amount of detail.
The Queensland Council of Unions and the National Retail Association in Australia are
two prominent employer associations that are seen to work directly towards the matter of
employee being (MacDonald et al. 2018). In recent statements that have been made before the
press by both of these employee associations, it has been mentioned how employers rarely to
take into account the illegal and unethical act that they commit by denying their workers of their
rightful wages, In spite of a legislation like the Fair Work Act being in place in the country of
Australia, which outlines all of the duties, the standards and the work ethics that employers are
expected to adhere to, the provisions of this Act are being regularly flouted. As argued by
Thornthwaite and Sheldon (2018), employers are engaging in wage theft in the most rampant
sense of the term and there is little that has been done by the employer associations in Australia
to address the matter. It is stated by the scholars that associations like the National Retail
Association have set up a website or an online platform where workers are being asked to come
and express their feelings, thoughts and emotions upon being denied of their rightful wages, bur

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that this is the maximum that is being done by employer associations. Workers now to wait
indefinitely in order to get their salaries in hand, and the hardships that they are suffering as a
consequence of having to do so, are unbearable to say the least (MacDonald et al. 2018).
A number of employer associations have come out, not so much in defense of employers
who are engaging in wage theft, but in defense of the occurrence of wage theft. For some
employer associations like the National Retail Association, to expect wage theft not to occur is
something that is unreal and a mistake, given the fact that there will always be some or the other
employers who is without scruples and who will consequently not think twice about denying the
people who are working under his authority or his supervision, their rightful wages (Boxall and
Purcell 2016). The Queensland Union of Workers has also come out in the open stating that
while it has not been able to do much to eradicate the tendency on the part of Australian
employers to engage in wage theft, it has set up online platforms that are allowing workers to
vent their feelings and their emotions to a considerable extent. Both the employer associations,
namely, the Queensland Housing Association and the National Retail Association are working
actively towards the rehabilitation of workers, but are not holding employers to task. In certain
instances as mentioned by the National Retail Association, it has been stated one of the reasons
for employers to engage in the act of age theft, is the establishment of competitive rivalry. If
business organizations in the country of Australia are to be ahead of their rivals and competitors,
one of the key ways by which they can be so in by partaking in wage theft and ensuring stagnant
wage growth (Boxall and Purcell 2016).
Some employer associations such as the Housing Industry Association and the Australian
Industry Group are of the view that the underpayment of workers, which is often referred to as
wage theft, is not something that ought to be perceived in such a harsh manner. In the view of the

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representatives of both associations, underpayment of workers in the Australia business scenario,
is but a natural affair and that it should not be regarded as wage theft, the conditions that prompt
the employers to underpay their workers are dire and difficult work conditions, to say the least.
While some businesses in Australia have wanted to come forward and raise the problem that is
associated with wage theft, they have not been able to do so for the most part as raising the issue
of wage theft is something that is likely to allow certain unscrupulous competitors to get ahead.
Boxall and Purcell (2016) have argued in detail about how employers need the social license to
operate in order to ensure that they experience business growth and development in the most
positive sense of the term. In the view of Boxall and Purcell (2016), social license to operate will
give employers in the country to conduct their operations in a manner that will not be looked
askance at. If employers in Australia want to attain respect for the work that they do, and if they
are to command the loyalty and the commitment of their workers, then they are going to need the
social license to operate, something that they are now being denied considerably of as a
consequence of wage theft and stagnant wage growth. The Housing Industry Association and the
Australian Industry Group are two employer associations in Australia who see no wrong in the
underpayment of workers and who believe that this is an act that can never be equated with
either the act of wage theft or the act of wage stagnation. On the other hand, the National Retail
Association and the Queensland Union of Workers having been agitating for the rights of
workers to be recognized by employers so that wage theft is no longer the reality, and so that
employers may acquire the social license to operate that is necessary to conduct business
operations in a less controversial manner in Australia, over the short or long term (MacDonald et
al. 2018).

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In conclusion, one cannot but help agree with the statement that is being made by
Thornthwaite and Sheldon (2018), that the social license to operate for employers in Australia is
impacted negatively by stagnant wage growth and wage theft. Furthermore, as argued by Boxall
and Purcell (2016), this stagnancy needs to be overcome, and employers together with the help
of employer associations in the country of Australia, need to come together and work
collectively, to exercise social power and social legitimacy, so as to keep their workers happy
and conduct business operations in way that is in keeping with public consent and public
approval.

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References
Berg, L. and Farbenblum, B., 2017. Wage theft in Australia: Findings of the national temporary
migrant work survey. Available at SSRN 3140071.
Boxall, P. and Purcell, J., 2016. Strategic HRM and sustained competitive advantage. Strategy
and Human Resource Management, pp.82-103
Macdonald, F., Bentham, E. and Malone, J., 2018. Wage theft, underpayment and unpaid work
in marketised social care. The Economic and Labour Relations Review, 29(1), pp.80-96
Thornthwaite, L. and Sheldon, P., 2019. Employer and employer association matters in Australia
in 2018. Journal of Industrial Relations, 61(3), pp.382-401
Wilburn, K. M., & Wilburn, R. (2011). Achieving social license to operate using stakeholder
theory. Journal of International Business Ethics Vol, 4(2), 3-16.