Eth201: The Legislative Framework for Wage Theft in Australia

This report examines the legislative framework for regulating wage theft in Australia, focusing on a case study involving Woolworths. It begins with an executive summary and an introduction outlining the prevalence of wage theft and its impact on businesses. The case summary provides a detailed account of Woolworths' underpayment issues, the Fair Work Commission's investigation, and the company's admission of guilt. The evaluation section assesses the decisions made by Woolworths' managers using deontological, teleological, and virtue ethical theories. The report then explores various recommendations for addressing wage theft, including public education campaigns, the reestablishment of education committees, and the implementation of national labor-hire licensing schemes. It also discusses the role of corporate social responsibility in combating wage theft, highlighting ethical theories and the importance of accountability. The report concludes by emphasizing the need for strict measures and legislative action to prevent future instances of wage theft and protect the rights of Australian workers.

Running Head : The legislative framework for regulating wage theft in Australia
THE LEGISLATIVE FRAMEWORK FOR REGULATING WAGE THEFT IN AUSTRALIA
Name of the Student
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Author Note

1The legislative framework for regulating wage theft in Australia
Executive Summary
The fair pay for fair work is deeply embedded in labor history and egalitarian standards
in Australia. It is indisputable right that employees are duly remunerated according to the law.
The high profile instances of worker exploitations, academic studies, and federal investigations
revealed that wages theft is prevailing and left unanswered. The commencement of the
provisions of the Workplace Relations Amendment (Work Choices) Act, 2005 held that the
commonwealth uses legitimate corporate powers to extend the industrial relationship to shield all
trading corporations in the private sectors.

2The legislative framework for regulating wage theft in Australia
Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Case Summary.................................................................................................................................4
Evaluation........................................................................................................................................6
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

3The legislative framework for regulating wage theft in Australia
Introduction
The wage theft, which can also be termed as worker’s underpayment is a novel feature in
the context of national employment scenery. It is evident from the historical analysis since the
1970s that non-obedience with the service standard cause significant underpayment of
employees in Australia. It is also determined that wage theft is rising in both prominence and
prevalence (Al-Hadi et al.,2019). In the present years, there is a range of public reports and
scandals regarding the non-obedience that affected numerous high profile companies. The
instance revealed by various media investigations is that there is substantial exploitation of
employees in supply chains of nationally recognized brands like seven-eleven, Woolworth,
Grill’D and others. Wright and Clibborn have opined that media information of case in point of
underpayment raised ten times from 2013 to 2017 (Brodnik & Ross, 2018). Thus wage theft can
be determined as non-payment or low-payment of earnings or privileges to the employee by the
employer put in a nutshell a series of activities that negate the legal rights of the workers (Bai et
al., 2017). It is indisputable fact which is recognized by law that every worker is entitled to get
fair treatment in terms of wages and also get remuneration which is as per their effort. In the
recent studies of high profile instances regarding the significant mistreatment of employees, the
academic research and federal investigation have set up that wage theft is going unsolved (Berg
& Farbenblum, 2017). The paper focuses on the impact of wage theft in Australian businesses
similar to Woolworths and the range of recommendations undertaken to eradicate the issue of
wage theft.

4The legislative framework for regulating wage theft in Australia
Case Summary
The Fair Work Commission inquire about the company of Woolworths and discover that
it is one of the Australian biggest companies in the underpayment of wages. Woolworth admitted
to the stock current staff exchange that it had underpaid about 5700 current staff for nine years.
The Fair Work Commission shocked to see that Woolworth's link with the series of large
companies guilty of the offense of the underpayment which are Commonwealth Bank,
Wesfarmers, Qantas, Michael Hill Jewellers, and Super Retail Group (Hepworth &
Thornthwaite, 2017). Newman, 2019). The inquiry is conducted by the Fair Work Commission
in connection to the self-revelation of Woolworths and uphold that they are responsible for the
infringement of laws relating to the workplace. The confession of Woolworths gives rise to an
extensive parliamentary investigation regarding wage theft. According to Giri Sivaraman who is
the principal law regarding employment at Maurice Blackburn having its issues of
underpayment, said that the underpayment in Woolworths is one the most significant issue he
has seen (Winkler, 2017). He also noted that the underpayment issue in Woolworths is more
significant than what happened in the company of Seven-Eleven who in the end clawed $160m
back from the suitability of the store chain. It had been told by Woolworths that they analyze two
years of information nevertheless the problem could date back to 2010 which the company
presumes to be resulting in one-off remediation responsibility between $200m and $300m in the
first half of February 2010 (Knox, 2015). Even if the Woolworths highlighted that it had
complied with all the difficulties with the FWO but FWO did not inform the matter to the
regulatory body of underpayment until the declaration is made to ASX. The problem of
underpayment generated by complaints of staff after employees checks wage packets following
the outline of the novel enterprise bargaining agreement at the beginning of the year. The

5The legislative framework for regulating wage theft in Australia
company of Woolworths said that by all back payment during the interim period which is
covered by analyzing data would be cleared along with interest (Hepworth & Newman, 2019).
The examination conducted by big four accounting firm PwC revealed that the managers of the
department had to get underpayment since they worked shift under the award by which they are
entitled to more wages than what they get in the annual salaries (Farbenblum & Berg, 2017). The
corporation of Australia exhibit that there is non-effective governance regarding the rights of
employees. Thee should be a strict approach to take legal steps against the issue of
underpayments that are subsisting in more substantial companies which includes Woolworths
(Thornthwaite, 2017). It is also necessary to understand that admission of the guilt is not the
ultimate solution there should be strict measures taken by the legislative body for breaking the
laws regulating the workplace. Gerard Dwyer who is national secretary of the Shop, Distributive
and Allied Employees Association said that massive underpayment revealed that unions required
to give back the powers to investigate payroll records. There should concern about how the
industrial world functions for employees who are salaried and the number of hours they are
working and rational overtime in the attentions of the companies (Knox, 2015). The declaration
outshined the release of first-quarter sales development of Woolworths’ which is driven by the
achievement of Lion King Ooshies and Discovery garden checkout gateways securely beat that
publicized by its ferocious rival coles. The comparable sales of Woolworths supermarket rose to
6.6 easily trumping 0.1 at Coles

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Evaluation
The deontological ethical theories laid down that the people should cohere to the
liabilities when involved in making the decision at the time when ethical theories come into
practice (Filip, Saheba, Wick & Amir Radfar, 2016). This implies that the person should fulfill
his obligations to the society safeguarding one’s duty is regarded as ethically sound. In the
Virtue theory of ethical business, the theorist centered on the character of someone (Herschel &
Miori, 2017). It comprises four leading virtues namely honesty, temperance, courage and justice.
The individual being courageous to uphold what is right. JP Morgan failed to show courageous
by the failure to take steps after the occurrence. They remain silent to the subject in spite of
talking to the shipping company for a feasible solution. JP Morgan has revealed the
representative of temperance which is to have genuine prospects. JP Morgan expects to lease out
the vessel and be given payment. JP Morgan did not have the idea that carriage of the drug is
occurring and have just intentions throughout the situation. According to the theorist, JP Morgan
did commit any offense during the event as JP owner is the owner of the ship and leases the
vessel to the shipping company for usage. Morgan has no knowledge that there is the
transportation of drugs in the vessel. Thus it is regarded that throughout the instance, he acted
ethically. Teleological theory can also be termed as the principle of morality that originates
from moral duties and obligations which upholds that of what is desirable and functional is
needed to be attained (Baumane-Vitolina, Cals & Sumilo, 2016). The theory of teleological is
opposed to the principles of deontology which upraises that the elementary principles of actions
being morally sound are liberated of evil or well produced.
The decision making in leadership is one of the critical factors in management activities
of organizational processes. In the organization, the correct decision making is the spirit of

7The legislative framework for regulating wage theft in Australia
leadership (Taghian, D’Souza, & Polonsky, 2015). The other goal is to establish a scientific
break based on knowledge, skill, and experience with the intention to enhance the quality of
decision making among influential persons and fulfillment of goals and objectives of the
organizations. One of the main drawback in the process of decision making the managers
attempts to resolve the problems which are just a mere symptom. The work aimed at for
implementation of sound decisions influences the management and leadership which includes
managers, leaders, and supervisors who will carry on to attain an effective role in both goals
achieving and performance management in the arrangement.
There are various recommendations conducted by the government of Australia which
involves first holding a campaign for public education to stand against the wage theft including
outlining data from the investigation and the steps taken by the government and procedures that
can be adopted by the affected workers to reclaim lost wages (Finkin, 2015). The second
recommendation is to reestablish the education committee for tripartite industrial relations to
conduct an official visit to TAFE and VET providers. The visit facilitates information that
focuses on entitlements and duties of both employers and employees. It is also recommended
that federal management should introduce the scheme of national labor-hire licensing so that the
welfares of Queensland schemes is applicable across the country. It is also recommended that
federal government should consider steps to advance the accessibility of workers to represent in
working place and guarantee obedience with industrial tools applying the models of The
Industrial Relation Act of 2016(Qld). The committee also recommends the Queensland
government to take actions which ensures the processes for recovery of wages by an employee
becomes quick and low costing (Loo, 2015). Another measure is unpaid superannuation which is
to be included as recoverable rights under the scheme of fair entitlements guarantee and the

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program is stretched to temporary oversees permit workers who are deprived of access. The
federal government should take steps to employ additional fair workers inspectors under the
provision of Fair Work Act, 2009, in Queensland. There is a necessity to establish independent
assessment in the performance of fair work ombudsman which ensures to respond to the issue of
wage theft (Gao, 2018). The fair work commission should give the power to ascertain the
standard of the employment contract under the Industrial Relations Act, 2016. It further
considers to eradicate reckless defense from the crime of sham contracting which is laid down in
Section 357(2) of The Fair Work Act 2009, and also introduces the test of the reasonable person
for ascertaining as to whether the employer engaged in fake contracting.
Corporate Social responsibility relates to the responsibility which the leaders in business
have adapted to attain certain social liability practices. The concept of corporate social
responsibility develops with Bowen, who defined it as social obligations. Brown is known as the
founder of the theory of corporate social responsibility formulates the concept irrespective of
occasional disapproval and hesitations about the welfares of frequent practice for companies that
remain unaffected until now. The concept of Corporate social responsibilities has been termed as
a social obligation, which is mainly aimed to carry out the strategies in making decisions and act
in accordance with the socially acceptable standards. According to many scientists, the main aim
of corporate social responsibility is to safeguard the human standards at shareholder’s benefit in
the interest of the public. The standards and ethical theories in business are the keystone
doctrines of social responsibility. According to Weisband, corporate social responsibility
emphasizes the significance of accountability and learning. The essential guiding principles of
corporate social responsibility are represented by Standard, the standard basis is the
responsibility of organizations for the impact of decisions, the actions in the society which leads

9The legislative framework for regulating wage theft in Australia
towards sustainable progress including social welfare. There are two perspectives of corporate
social responsibility firstly how to conduct morally and second emphasize instrumentalism
(Sierra‐García, Zorio‐Grima & García‐Benau, 2015). The corporate social responsibility is a
healthy relationship among stakeholders and negotiation among the benefits of individuals for
social benefits which ensure social and economic progress. Corporate social responsibility
assures the legitimate involvement of stakeholders quoting the information that organisational
effectiveness demands accountable strategies that reflect the problems in society. The assurance
to stakeholders is one of the crucial factors in the context of social responsibility; however, the
infliction of mechanisms that determines the confidence in corporate practice remains
confronted.
Conclusion
Thus it can be summarized that wage theft is a very common practice in the business of
Australia. According to Industry Super Australia, one-third of workers in Australia ate
underpaid. Wage theft is a deliberate act of employers to underpay the employee and also to
deny compulsory superannuation that affects thousands of employees every year. It can also be
said as stealing money from the employees by employers. There should be strict legislation that
penalizes the act of wage theft and impose severe punishment to one commit the same
deliberately.

10The legislative framework for regulating wage theft in Australia
References
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social responsibility performance, financial distress and firm life cycle: evidence from
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