Last week this column dealt with the issue of organised wage theft in the retail and fast-food sector. Feedback from a reader threw out a challenge — if this is real, name names, state facts and figures. Put up or shut up, he said.
McDonald’s opened in Australia in 1971 and there now are more than 980 restaurants across the country, mostly franchised. The organisation is the largest employer of youth in the country, employing more than 105,000 people.
A press release in March said since it first opened here McDonald’s has hired about 1.3 million Australians, more than 5 per cent of the population. Most have been people under 25. By McDonald’s own admission (see graphic below), a certain proportion of its employees are paid less than the award. This graphic was distributed to McDonald’s staff as part of a push for a new enterprise bargaining agreement, which the company has since decided not to go ahead with.
This means the agreement that underpays people will stand. This is typical of how widespread wage theft is, says Josh Cullinan, secretary of the Retail and Fast Food Workers Union. “We know that in 2016 about 65 per cent of (McDonald’s) staff were losing on average $1000 per annum,” Cullinan says. “We believe this is now closer to 80 per cent.”
RAFFWU, a new union, was established after exposing the greatest “legalised” wage theft in modern history. Legalised, or organised, wage theft occurs when the Fair Work Commission (negligently) approves dodgy EBAs. These give some workers pay rises while pushing others into earning less than what they would earn under the award.
FWC approval for these deals has been given freely in the past when a union signature sanctions the document. A union signature will see a deal waved through, whereas deals without them are subject to heavy scrutiny and rigorous “better off overall” testing. The BOOT says employees must be better off overall under an EBA than if on the relevant award.
Both the Liberal and Labor parties have protected big business and the employer-friendly unions that strike these deals. “That racket has not only cost millions of workers billions of dollars but it has pushed small businesses to the wall who had to compete while paying the penalty rates and other conditions big business were protected from,” says Cullinan.
The Coalition has plans to beef-up the penalties for wage theft to a maximum of 10 years in prison. The guns, though, appear to be pointed only at those businesses that commit the crime without union help. If union agreement can be secured and a dodgy EBA slipped past the FWC, then the business “legalises” the underpayment, escapes prosecution and gains a commercial advantage. This situation can’t remain uncorrected. Industrial Relations Minister Christian Porter must draft his legislation accordingly.
Employer groups and FWC staff must not escape responsibility, either. History is being rewritten as some employer groups play footsy with the public. They claim the BOOT is only recently being interpreted differently to apply to every individual worker and not groups of employees.
This claim is rubbish; the BOOT has always applied to every employee. It has never been the design of the system that some workers could be made worse off and paid less than the award as long as others were rewarded.
I asked McDonald’s what was going to happen to the staff being paid below the award — would their pay be adjusted upward to reach the legal minimum? A spokesperson said: “We believe that within the current industrial relations landscape there is increasing uncertainty around the approval of enterprise agreements and for this reason we’ve made the decision to no longer pursue the approval of our proposed agreement. The 2013 agreement applies to McDonald’s employees until the Fair Work Commission decides otherwise.”
Cullinan says it is time big businesses “were held to the same standard as local small businesses” and “well beyond time that those responsible for this are held accountable”.
As things stand, the message from government is this: underpay your staff without a union EBA and you will be prosecuted and face up to 10 years’ jail, but underpay your staff under a union EBA and no one will care. Porter must ensure the legislation to deal with wage theft specifically deals with dodgy EBAs. If small and medium business owners are to face prison, then so must executive staff in big businesses and union officials, too.