Systemic wage theft, usually involving migrants, continues to pervade across the Australian economy.
Over the weekend, we got another dose, with a Melbourne company and two individuals fined $335,664 for underpaying Chinese workers at a Melbourne 7Eleven franchise and Japanese restaurant. From Human Resources Director:
Xia Jing Qi Pty Ltd, which operated the 7-Eleven outlet until March 2017, was penalised $154,225 for requiring three international students to repay part of their wages in an unlawful cashback scheme.
The company was penalised a further $145,800 in the Federal Circuit Court for underpaying a migrant worker at an Ajisen Ramen franchise in the Melbourne Central shopping centre…
The three workers underpaid at the 7-Eleven store were from China and aged between 21 and 24…
After the public exposure of 7-Eleven underpayments in 2015, Lin tried to disguise underpayments of three employees by requiring them to pay back thousands of dollars in wages.
Lin told the three employees in late 2015 they would be paid through the payroll system but then specified a weekly sum for each of the workers to pay back via a safe drop box in the 7-Eleven store or to Lin’s bank account.
After returning this portion of their wages, the employees were left with hourly rates ranging from $8.53 to $26.52…
The worker underpaid at the Ajisen Ramen restaurant was also from China and in Australia on a 462 working holiday visa. She was underpaid $9,616, after being paid $11.50 per hour between May and October 2016 and then amounts equating to just $3.98 per hour in her final week of work…
Judge Norah Hartnett said the use of the cash back scheme at the 7-Eleven store was “particularly egregious”.
In 2017, the Fair Work Ombudsman (FWO) revealed that foreign workers are involved in more than three-quarters of legal cases initiated by the FWO against unscrupulous employers. Whereas last year it was revealed that nearly three-quarters of businesses in the hospitality industry audited by the FWO across Melbourne, Sydney and Brisbane had breached workplace laws.
The issue was also highlighted in all of its hideous glory in the Senate Education and Employment References Committee’s scathing report entitled A National Disgrace: The Exploitation of Temporary Work Visa Holders, which documented the abuses of Australia’s visa system for foreign workers.
Similarly, the book, The Wages Crisis in Australia, released late last year by a group of academics dealt specifically with the great Australian migrant wage rort (summary here), with the below paragraphs capturing the essence:
Scarcely a day goes by without another headline of wage theft involving temporary migrant workers…
Put simply, temporary demand for migrant workers often creates a permanent need for them in the labour market. Research shows that in industries where employers have turned to temporary migrants en masse, it erodes wages and conditions in these industries over time, making them less attractive to locals…
…It is the third point concerning underpayments and predatory business models that seems richest in implications. This point suggests, first and most obviously, added drag on wages growth in sectors where such underpayments and predatory business models have become embedded. If they become more widely practised, underpayments pull down average hourly wages. If a substantial number of firms in a specific labour market intensify strategies of labour cost minimisation by pushing wage rates below the legal floor, it can unleash a dynamic of competition around wage rates that foreshadows wage decline rather than wage growth for employees…
Increases in labour supply allow employers in sectors already oriented to flexible and low-wage employment, such as horticulture and food services, to sustain and extend strategies of labour cost minimisation… The arguments and evidence cited above suggest a spread of predatory business models within low-wage industries. They suggest an unfolding process of degradation in these labour markets…
That’s a key driver of Australia’s low wages growth right there: the systemic rorting of Australia’s visa system, which is undercutting local workers’ bargaining power, pay and conditions.
Think about it from an employer’s perspective: why would you grant a pay rise when you can easily replace a local worker with a migrant willing to work for less? You wouldn’t. Nor would you bother to train-up a local.
The problem of low wages growth won’t be solved until the avenue for cheap foreign labour is closed-off via restricting immigration – both temporary and permanent.
