Labor to tackle wage theft in franchise businesses

By Nick Hall | 15 May 2019 View comments

Victims of wage theft in franchise businesses could have claims of up to $100,000 resolved in a day under a new proposal from the Labor party.

Labour leader Bill Shorten is today expected to confirm the party’s proposed establishment of a new jurisdiction to sit alongside the Fair Work Commission (FWC) in order to crack down on wage theft.

The move would usher in a new era of regulation, following a string of reported underpayment issues and wage theft in franchise businesses.

Wage theft in franchise businesses

Franchise chains such as 7-Eleven, Caltex (formerly), Domino’s and more recently Chatime have come under fire for employee underpayment.

Investigations from the Fair Work Ombudsman (FWO) revealed that a vast number of the chains engaging in wage theft, did so at the detriment of migrant workers.

The impending coverage led to the formulation of the Migrant Workers Taskforce report, however Labor believes more action is needed.

“Scandal after scandal has made it clear that workers’ exploitation and systemic wage theft is widespread,” Shorten said in a statement obtained by AAP.

“It shouldn’t be too hard, it shouldn’t be too costly, to get what you are owed for a day’s pay.”

The Federal opposition leader suggested that lengthy and costly legal proceedings too often deterred victims from pursuing underpaid wages.

Terms of the jurisdiction

Labor’s proposed jurisdiction would be able to mediate claims, as well as make and enforce orders for repayment of wages.

Additionally, claims of wage theft in franchise businesses brought forward by a group of workers against a single employer would be allowed.

People in remote and regional areas would also be able to access the new body, through video conferencing.

Shorten revealed that Labor plans on consulting with unions, bosses and others on the final model of the small claims tribunal.

“Our aim is to make it more affordable and accessible to bring claims forward,” he said.

Wage theft policy support

Labor’s strict stance on wage theft in franchise businesses is garnering praise from high places.

Senior law lecturer at UNSW Law, Bassina Farbenblum, and senior law lecturer at UTS Law, Dr Laurie Berg, released the Wage Theft in Silence report late last year.

The report revealed that while more than half of temporary migrants surveyed were underpaid, only a small minority were able to reclaim the wages owed to them.

Dr Berg and Farbenblum today welcomed the opposition’s policy announcement on wage theft in franchise businesses.

“There’s no way to break this cycle unless workers have a quick, cheap and accessible avenue to reclaim the wages they are owed, and can hold employers to account,” Farbenblum said.

Shorten is expected to further outline Labor’s wage theft policy at an event in Western Australia later today.