The underpayment of employees is a sharp focus across our nation, with several high-profile litigations currently under commencement by the Fair Work Ombudsman. 

On 30 March, the Senate economics references committee tabled the report: Systemic, sustained, and shameful: Unlawful underpayment of employees’ remuneration. The report examined the causes, extent and effects of illegal non-payment or underpayment of employees and made recommendations to address the issue. 

One of the key recommendations of the report stated that federal legislative reform should make wage theft a criminal offence. 

As of 1 July, Victoria legislated for the criminalisation of wage theft, being the second after Queensland, exposing individuals to up to 10 years in jail time. The NSW government has also tabled a proposed scheme to include the criminalisation of wage theft. 

Lawyers Weekly spoke with Mr Amendola to understand if creating criminal offences for underpayment will truly foster greater compliance. 

“In my opinion it doesn’t. 

“Those who have been underpaid just want to get paid,” he said. “The pursuit of criminal provisions does nothing to hasten them getting paid. In fact, it does the opposite.

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“Given that underpayments are also civil penalty provisions, one would not be able to pursue both civil penalty proceedings and criminal proceedings concurrently, because of double jeopardy provisions in the Fair Work Act.”

The criminal offence will only be applicable to those deliberately engaging in egregious conduct — which stands at a high threshold — along with the need to prove the offence to the criminal standard of proof, stated Mr Amendola.

“Those who are inclined not to comply with the law will not be encouraged to do so on the off chance that at some time in the distant future a regulator will be able to make a criminal offence stick,” he said. 

For those employers trying to comply with the law but making mistakes, the criminal professions will have no application to them, Mr Amendola said. 

“Therefore, any criminal provisions will not encourage compliance,” stated Mr Amendola. “The policy objective is not being met. It’s just symbolism.”

A more effective method would be to increase penalties for underpayments, he said, rather keeping wage theft as a civil penalty provision with even bigger penalties, and a capacity for directors of employers found to have breached those provisions to be disqualified being directors. 

“That would make boards pay attention — and foster greater compliance,” he added.