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Read all the latest news from Brendan O'Connor MP

E&OE TRANSCRIPT DOORSTOP SYDNEY WEDNESDAY, 15 MAY 2019

May 15, 2019

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Thanks very much for coming. It’s really important that we deal with wage theft in this country. It’s an epidemic and it’s so wide spread that we see workers in every sector of the labour market suffering as a result of the failure to access justice because of wage theft. What we do know of course is we do have a government currently and Scott Morrison and the Liberal Party want to see a continuation of cutting penalty rates. We saw recently, in fact this morning, the Member for Page, Liberal Party Member for Page Kevin Hogan coming out and saying cutting penalty rates is good. And in fact supporting cuts to penalty rates. Now he says it’s because it will improve the opportunity of jobs. Well that’s not what COSBOA said. COSBOA only last week, or two weeks ago, said that there’s no evidence that there’s been more jobs as a result of cutting penalty rates for pharmacy, retail, hospitality workers, and yet the Liberals, of course, want to continue the cuts.
The question we need to put to Scott Morrison is this – who else will have their penalty rates cut if he were to prevail in the election on Saturday? And why does he continue to support the ongoing cuts to those workers I just mentioned? But beyond that issue there’s also another problem, and that is even when you are to be paid pursuant to the law, there are thousands and thousands of workers who are not paid their fair due. They are not paid their wages. Too many employers are not complying with the law to pay them what is legally owed to them.

And there is not access to justice. There is not sufficient capability. Workers don’t have the wherewithal to get their money which is owed to them because of this wage theft that is systemic in sections of the labour market. For that reason Labor wants to see a much better way for workers to access their rights. And most importantly to access the money that’s owed to them. For that reason we have announced we will create a small claims tribunal which will be co-located with the Fair Work Commission. It will allow for remote advocacy to deal with workers in the regions. And we want to make sure we keep it accessible, that it is not in any way expensive, that it’s not an impediment to getting just their fair wage.

What we do know of course is so many workers, even when they know they are underpaid, do nothing about it because they just don’t have the money to fight it in the courts. And we also know that only some workers, sometimes supported by unions, sometimes supported by legal aid or community legal centres, can find any way to get that money back.

There are employers who know they won’t be penalised for not paying their workers properly. And they do so knowing that it’s very likely that the employee, or employees, won’t take this matter up. Now that’s really unfair to those workers. And I’ll tell you who that’s also unfair to, it’s unfair to the majority of employers who do the right thing, because they are competing against an employer who is cutting labour costs by breaking the law.

I’m here with Thomas Costa who is the Assistant Secretary of Unions NSW who has firsthand experience of the difficulties that workers have navigating the system just to get  the money paid to them that is owed to them. I might just turn to Thomas, if you don’t mind, who just wants to make a contribution to this matter, and then happy to take questions after that.

THOMAS COSTA UNIONS NSW ASSISTANT SECRETARY: Thank you Brendan. Unions NSW welcomes this decision. And I can talk from personal experience as a union official and also as a former industrial lawyer and employment lawyer about just how difficult it is for workers who have been underpaid to run underpayment claims in the courts. It’s often not just a difficult jurisdiction for them to access, but even if they do access it, it is expensive and it is a lengthy process. For example if you are underpaid $40,000 you will need a lawyer to go to the federal court or to a local court to run that case for you. Often it will cost almost the same amount of money in fees to run those claims. This is something that is just too big a hurdle, especially for vulnerable workers like young workers, migrant workers, and predominantly women who are in the sectors where we are seeing these underpayments occurring.

So we welcome this decision. And we think it is a necessary policy from the opposition and something we hope if the opposition is elected to government on the weekend that they bring into practice so that these workers can get the justice that they deserve.

O’CONNOR: Thanks. Any questions to Thomas or myself?

JOURNALIST: When it comes to superannuation, Industry Super Australia says I welcomes these amendments but it stops short of necessary reforms to ensure that super is paid to workers accounts at the same times as wages and that a lot of people are being robbed of their super entitlements. How will you address that? Can you legislate by changing the law and requiring companies to pay super at the same time as salaries?

O’CONNOR: We can. We can legislate. In fact we have already indicated that if elected a Labor government would enshrine superannuation in the National Employment Standards that is contained within the Fair Work Act that will then bring superannuation where it rightly belongs, in the industrial realm, which will make it clear that it is an employment condition. And therefore workers will be able to, in pursuing debts owed to them, will be able to claim wages owed but also unpaid super. That’s an enforceable right we want to have happen. It can only happen, firstly if Labor wins. It can only happen if we change the Act to ensure that the National Employment Standards refers directly to super. And that will give then that right for them to enforce that under this small claims tribunal.

JOURNALIST: Will you be able to make claims for things like back pay if you’re a casual in line with that case where the truck driver had that back pay entitlement, he had to go to the Supreme Court, will you be able to make those sort of claims?

O’CONNOR: Nothing we are announcing today will of course deny the rights of workers or others for that matter, to pursue that through the courts.
 

JOURNALIST: But could you make a claim like that through this tribunal?

 

O’CONNOR: What we have done is put a threshold of up to $100,000 for each employee. I have been asked about groups of employees and we are happy to talk to stakeholders, to unions, employers and others about what threshold the small claims tribunal would have if there is a collection of workers, in other words what would be the total sum of the debt and would that be able to be able to be pursued through the small claims. At the moment we’ve got a threshold cap on the individual worker but we are happy to talk to employers, unions about what should be the collective threshold if there is a group claim of workers underpaid.

 

I just want to make the point, of course people can pursue their rights through the Federal Court or other courts. This small claims tribunal is not about denying rights. This is just about making sure that on simple matters where it is clear where there is an underpayment under the law, they have access to justice and access to that money. What happens is people are aware they are being legally deprived of money they are owed but do not have the wherewithal to pursue that debt and we need to make it easier for workers and only a Labor Government will do that.

JOURNALIST: Is this part of a plan to drive up union membership? If it’s an individual small claims thing effectively it’s sort of doing a job that unions should be doing.

 

O’CONNOR: This is a plan to make sure workers get their fair due. This is a plan to make sure that workers who have been ripped off in workplaces across the country can find easy access to justice. Right now we have workers, even when they know they are being underpaid, can’t do anything about it. That’s just unacceptable. As I said earlier, it’s not just about those workers, you have reputable employers who are paying their workers lawfully, they are competing against other employers who are ripping off their workers. There is another issue about taxation. There is also situations where, of course we are not getting revenue because of the manner of some arrangements between employers and employees that occur at workplaces.

 

The biggest concern I have, the greatest victims are of course workers but good employers are victims here too. We need to make sure we fix the system so that people don’t get just to game the system knowing that people don’t have the ability to access wage justice.

 

JOURNALIST: Would you need this tribunal if the Fair Work Ombudsman was better resourced?

O’CONNOR: I think it’s a combination. I think we do need to provide better focus and certainly make sure we’ve got sufficient resources for the Fair Work Ombudsman, we do need to do that but this is complementary, it’s not instead of. If you look at the amount of monies that has been claimed back as a result of actions taken by the Fair Work Ombudsman, I welcome anything they have done but it is still too small a reclaim given the information we have about the breadth of wage theft. So I think we need a better role, a complementary role, the rights of workers to take the action when they are being denied, not just wait for a government agency to make a decision on the resources they have as to where they dedicate those resources to tackle breaches of the law.

JOURNALIST: Will Labor be making appointments to this commission or tribunal or will you be shifting Fair Work members to it?

O’CONNOR: Look, we’ll consider how we make appointments. Obviously we are talking about judicial appointments and we would be looking at what we do there. But we have obviously budgeted for it and we believe that co-locating this tribunal in the Fair Work Commission is really important because you can have the Commission make orders but they are not enforceable and we want to make sure the small claims tribunal enforces an order. So we want this sort of one stop shop approach where people do not have to either be delayed by the inability to have representation, delayed by the cost or denied by the cost. We think this is a very important reform that will provide the rights of workers and provide the rights for them to claim money owed to them.

JOURNALIST: The court won’t be able to make penalty decisions or anything like that?

O’CONNOR: No, look we’ve confined this to underpayments. Of course the small claims tribunal, like others, can refer matters to other courts for penalties, but our focus here is making sure workers who are ripped off in this country have a simple way of making sure they can get their money back. That’s the way in which this tribunal would operate.

JOURNALIST: Sorry I just want to clarify this. Is this too complex a situation for the tribunal-say you’re a casual for all intents and purposes an employee because of your pattern of work, you go in and you claim you’re underpaid you accumulated annual leave, you’re granted that claim, you get that money back then does the employer make a cross claim to get back anything they’ve paid in terms of casual penalties or that kind of thing or is that too complex?

O’CONNOR: Well I don’t understand the question-

JOURNALIST: Well the Skenes case where the guy was called a casual but was really an employee so he successfully claimed back his annual leave. Could somebody else make that kind of a claim in this tribunal?

O’CONNOR: I’m not going to use the basis of another matter before the Federal Court inside a policy announced by Labor. I’ll say this, obviously when seeking a claim, the employer has every right to rebut the claim, rebut the argument. And if they have evidence to show that they have not broken the law and in no way have underpaid a worker, of course they have that right to make that statement and argue their case. They have rights like everyone else.

The problem is, it’s the actions of some employers that are denying people their wages that leads to people being deprived of their income. We need an ability for the workers to be able to access justice. Of course, we will not deny the rights of natural justice to employers that might want to argue for example that they’ve paid an amount in another way and if they are able to successfully argue that, of course that will have a bearing on the outcome of the Tribunal.

JOURNALIST: What about things like the gig economy? For example, Uber drivers, Deliveroo operators, how will they fit in? Is this something, basically set up for them?

O’CONNOR: Now, that’s a broader question. I think that goes to different policy pronouncements of the Labor party where we’ve said we’ll examine the way in which independent contracting works for those workers who are deemed to be contract workers rather than employees. We believe that there is a need to define workers more broadly so that people that are being shifted across to a so called independent contracting arrangement when they’re clearly not independent contractors needs to be fixed.

But, it needs to be fixed by defining and delineating between employees and contractors, until you do that, it’s going to be very difficult for a tribunal to operate on that basis. If it’s clear though, that the worker is an employee paid under an award, that’s simpler. But, I think that’s a more complex issue, but we’re looking to redress that by having a clearer cut between contactor and employee.

JOURNALIST: So, really, it’s just really straightforward - employee related underpayment issues that are clear cut, and you can just go in and get your money back, is that it?

O’CONNOR: Yeah, if you provide evidence that you have been underpaid, pursuant to the industrial instrument that your wages are paid under, then you should be able to get access to your money and to justice.

JOURNALIST: Sorry, I was just going to ask if the fair Work Ombudsman can help you make that claim or is this just for people going it on your own?

O’CONNOR: Well, the Fair Work Ombudsman can take up actions on their own, on their own motion or by referral. But this is about workers and maybe unions, it might be others and other advocates, but it’s about workers getting the right to go to a tribunal and not being impeded because of the cost and then the time it may take.

So, this is an action that an employee or employees can take, and it may well be a union being an advocate and I think that’s as likely as anything. But, we need to make sure that workers can have their rights recognised, respected and remedied when they’re underpaid.

JOURNALIST: The Business Council says that it supports the idea, but what’s needed is a more comprehensive plan to raise wages, what do you make of it?

O’CONNOR: If the Business Council wants to see wages rising, I support the Business Council. Look, I did notice the Business Council of Australia said something about productivity; they want to see productivity improve. What’s happening in many big businesses I’ve noticed in recent times is they’re sacking thousands of workers. When they factor in productivity when you sack 5000 workers out of a bank, clearly there’s a massive increase in productivity. If they’ve just sacked 5000 workers but they’re still undertaking similar work for their clients, where is the dividend for the employees there, when they sack these workers? Do they measure productivity then, when they shed 5000 staff?

We’ll want to talk to the BCA and all employer bodies about a whole range of things. But of course if any employer body wants to see wages rise, because we know we’re going through low wage growth, the lowest wage growth on record, then I welcome it. We want them to be supporting it, because, only by lifting wages responsibly, but in a real way are we going to see the economy recover. We’ve got an anaemic economy and we’ve got the Wage Price Index that came out today, according to the ABS, we’ve got sluggish wage growth. It is a real problem, the Reserve Bank Governor says so, the experts say so. We had a hundred experts recently write a public letter saying we need to lift wages. Labor believes we need to lift wages. That’s why, yesterday we talked about replacing the recommendation of a Commonwealth submission if we’re elected, immediately after the election if we’re in Government, to say to the Fair Work Commission we need to see real wages grow - 2.3 million award employees should see real wages growth. We need to lift wages; we need to see wages growing again and if any employer body wants to support that contention then I support them in supporting that.

JOURNALIST: Is that figure 6 per cent though? It’s what the unions are calling for from the Fairwork Commission.

O’CONNOR: We made it clear yesterday and I’ve made it clear ever since, we make our own submissions. We’ve made four in the last five years, we’ve argued for more wage increases on every occasion. We are the Federal Labor Party, we make our own submissions. We respect the right of course, of the ACTU to make its own submission and quite understandably, they’re seeking to lift wages of their members, who are denied proper wage increases. But, Labor has its own submission. It’s clear we’re the only opposition in history to make formal submissions to the Annual Wage Review and we want the Commission to determine the quantum but we’ve said it should be real. A real wage increase for 2.3 million workers, we hope it flows onto other workers in the labour market.

JOURNALIST: So, you’re saying 6 per cent  is a modest increase, is that -

O’CONNOR: I didn’t say that at all.

JOURNALIST: No, no so the unions are saying it’s 6 per cent.

O’CONNOR: And the unions have every right to argue their case. They should make their submission as they have. The employers should make their submissions and guess what, the Commonwealth made their submission  - Scott Morrison and he of course hasn’t called for a real wage increase - but if we’re elected we’ll be calling on the Fair Work Commission to consider the authority of the Commonwealth saying we want to see wages rise in real terms. That’s what we’ll be doing. Straight after the election, if we’re so fortunate to win this election.

JOURNALIST: With inflation so low, isn’t the call for a real wage increase really not that big a deal at all. In fact the employers are asking for a real increase. They’re asking for a 1.8% or 2%.

O’CONNOR: Not all employers -

JOURNALIST: Well ACCI and Ai Group are and inflation is 1.3% according to the latest figures so doesn’t Labor really need to say at least a constant about what it wants?

O’CONNOR: Just to give you an indication of the thinking we have. When Australia’s economy is doing well, wage growth is always outstripping CPI that’s the truth of it. And in fact all of the years of uninterrupted economic growth even though it’s always been skewed towards the top more than the middle and the bottom, the reality is people’s wages grew in real terms. That has not happened in the last six years under this Government and even though there’s an anaemic inflation figure coming out in the last little while we had a zero inflation rate for the last quarter. That’s not sufficient for me to believe that we only have to see an increase of 2.3 per cent for wages and we don’t think that’s reasonable at all. It’s not just Labor saying that. The Reserve Bank Governor has said that and many eminent economists have agreed with us. It’s one of the biggest problems in the economy and I think that is the orthodox view of everybody it would appear other than some employer bodies and Scott Morrison.

JOURNALIST: Would you say 2.3 per cent for a minimum wage increase wouldn’t be enough either?

O’CONNOR: That’s entirely up to the Commission and I’ve said that but I said in the context of what’s happened over the last five years we want to see the real increase occur and that’s for the Commission to determine. The difference between us and Scott Morrison and the Liberals is, they don’t want to see an increase in real wages otherwise they would have said so in the Commonwealth submission. The hundreds of pages that they wrote in that submission, not once do they talk about a real wage increase. While Labor wants to see a real wage increase but it would be for the Fair Work Commission to determine.

JOURNALIST: Can I just ask? With the pay rise for childcare workers, is there a way other than sort of enforcing that through an EBA process to implement that? Are there other ways of doing that? Or is there a likely way of implementing that through the EBA process?

[Last question]

O’CONNOR: Look I think, as we’ve made clear, we’ll sit down with unions and employers to talk about how we lift wages for some of the most discriminated workers in the country. We have workers in this country that are qualified to look after our children, to educate pre-schoolers and they are paid very, very low. As a result of that, we have massive churn in a sector that is critical for the education of this country.

This is an education issue and an economic issue. The best economies in the world have 14 years of education before tertiary education. We need to have universal pre-school education for three year olds and of course only Labor supports universal education for three years olds that's 15 hours a week for 40 weeks a year to give our young the best opportunities to gain the best education possible. And the best economies in the world are doing exactly that.

Now to do that we have to have a very professional workforce and we need to make sure that we attract and we retain highly capable people to look after the future of this country, namely our children. For that reason, we’ll sit down with employers and unions to talk about how we work that wage increase through. We’ve made that very clear but we want to make sure it happens. We’ve also made clear, we will not allow one cent of that to go to private operators and we’ll deploy the ACCC if required and we’ll even look at caps on fees if providers seek to take money that should be going to their workforce.

I believe that providers will welcome it because they’ll get to attract and retain staff. We also of course want to ensure that more money goes to parents. That’s why we’ve provided a very significant subsidy for up to $2,100 per child for families that are struggling with the cost of living pressures. So this is a very comprehensive policy that goes to relief for parents, which is critical, making sure that providers can attract and retain great staff and make sure that we introduce universal pre-school education for three year olds and that we do so in a way that is going to ensure a first class pre-school education.

JOURNALIST: So an option for how to do that is through an EBA?

O’CONNOR: I think that’s the question after the last question. I’ve said of course enterprise agreements would be one of the vehicles we’d examine to determine that matter. We think that’s certainly an option but we’ll listen to the parties to work our way through that. My view is to welcome this. It’s good for parents, it’s good for the workforce and most importantly it’s good for children. Thank you.


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