This article is more than 2 years old

This article is more than 2 years old

Unions want the Fair Work Commission to be given new powers to award compensation for underpayment of wages, saying Australia needs a “tough cop” to battle wage theft.

The Australian Council of Trade Unions secretary, Sally McManus, will outline the latest tranche of union demands, including more power to lift minimum wages and award conditions, in a speech to the Per Capita thinktank on Friday.

The speech follows calls for equal rights for gig economy, casual and labour hire workers and a return to industry-level bargaining, which prompted outrage from employers and applied pressure on Labor to adopt an ambitious industrial relations agenda before the next election.

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In a preview of the speech, seen by Guardian Australia, McManus cites the cases of underpayment at franchises of 7-Eleven, Dominos and Caltex to argue that it is “difficult to enforce rights” and workers are “not even [being] paid the minimum wage” as a result.

She argues that working people cannot afford to take their employers to court and fight cases that take up to 18 months. Even then, workers face victimisation if they do.

Tenancy and consumer complaints are dealt with by tribunals, she says, so the industrial commission should similarly be able to provide “quick, simple, [and] accessible justice” for workers.

The Fair Work Ombudsman is “under-resourced and conflicted”, McManus says, because it has 200 inspectors to check payments to a workforce of 12 million workers and has other roles including prosecuting breaches of industrial law by unions. “We need a tough cop back to deal with wage theft,” she says.

“If there is a dispute over pay at one 7-Eleven store then the commission should be empowered to summons not just the store owner but the franchisor.

“If there is a dispute over entitlements on a building site then, where appropriate, the commission should be able to make orders against not just the subcontractor but also the head builder.”

McManus argues that the FWC can review awards but the law requires new terms to be “necessary” to meet a list of objectives set by parliament rather than the simpler test of whether a claim is “fair and reasonable”.

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As a result, she says, the FWC has cut penalty rates in the retail and hospitality industry but has rejected union claims for paid domestic violence leave in awards in favour of five day’s unpaid leave.

“We still have an industrial commission but it can’t do much.”

When the industrial umpire had arbitration powers to grant claims on merit, unions were able to win the eight-hour day, paid annual leave, paid sick leave, superannuation and retrenchment pay, she says.

The ACTU secretary also wants to lower the bar for awarding minimum wage rises.

She says the FWC can only award increases when they are justified by a lift in “work value” and the commission itself acknowledged in 2017 that its $22-a-week increase was not enough to lift all full-time workers out of poverty.

“An arbitrated minimum wage that was decided on the basis of what is fair and reasonable would lift workers out of poverty.”

McManus also wants the FWC to regain arbitration powers so it can “knock heads together” and “help parties reach agreement” when employers refuse to agree to a collective pay deal.

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Labor has given considerable ground to the ACTU’s Change the Rules campaign, with promises to scrap perceived anti-union regulators the Registered Organisations Commission and the Australian Building and Construction Commission.

The party has signalled a move towards allowing industry-wide bargaining, particularly for low-paid workers, giving the FWC powers to arbitrate intractable disputes and changing the way the minimum wage is set to ensure bigger pay rises.

When the ACTU released polling showing a high level of support for increasing the minimum wage and restoring penalty rates, a spokesman for workplace relations minister, Craig Laundy, told Fairfax Media the Coalition would develop “sensible reform that will not cost workers their jobs or destroy small business”.

“The government will continue to proactively pursue workplace relations reform where it makes sense.”