It is strange how companies big and small can work through the very fat tax act and many tax regulations and tax policies to maximise their advantage to pay as little tax as possible, but they cant work their way through a much smaller set of awards and determinations to ensure their employees are not underpaid.
Companies also seem to know the often wordy remuneration and allowance contracts of their senior executives as there is never any complaints by senior executives about being underpaid.
Using awards and determinations as justification for underpaying staff is just poor form by company owners and senior executives.
Shareholders also need to wake up and demand better performance as their offspring might be working for one of these underpaying companies.
If an employee steals $1000 from his/her employer then that is called theft. If the employer steals $1000 from his/her employee, then that is called a mistake.
On one hand that is inarguable. However having been in management having only a few scores of staff, even at the small scale the multiple awards, enterprise agreements, and so on affecting âhim or her or themâ are not as crisp as tax laws, and all the tax laws are one âbookâ while each set of awards and agreements are each âbooksâ unto themselves.
Employers will, and especially public companies, go with the lowest wages to maximise their profits. Some even think they pay âabove awardâ but eventually discover they were underpaying against the award they should have been using.
It is not difficult to get it âhonestlyâ wrong.
That so many are being caught out could be that our employers are all rorting their employees, or it could be a confusing set of rules they have to work in, and the âpersonnel and OHS departmentsâ are sometimes seen as costs without benefits to the bottom line, and so it goes. It is probably a mixture of both, but with less credibility regarding the latter for larger companies since they should and do have âpersonnel and OHS departmentsâ led by a C level executive.
Some of the recent high profile cases highlight industries that have long rorted their employees under a wink wink nudge nudge, and they have been getting much of what they deserve in comeuppance. Many of their business plans were likely built on the premise they would never get caught out or have to change.
This is more around multinationals and some Australian companies (e.g. mining) that have used their foreign interests to charge unrealistic royalties/licences/commissions to reduce the profit made in Australia and taxes paid. These monies usually end up in a subsidiary somewhere in the world where company taxes are less than that in Australia, so that net profit to the company can be increased.
The government/ATO has been cracking down on such avoidance practices and has imposed penalties (either through the courts or settled out of court) with many multnationals.
Many other countries are also taking a similar stand to reduce tax bleed by multinationals.
In relation to Australian owned and operated businesses, many who have been the subject of the underpayment problem, they have little opportunity to minimise tax being paid. They generally take up most of the weight in relation to company/corporate taxes paid in Australia. If one is concerned, then supporting Australian companies (rather than fully foreign owned multinationals) is one way to ensure that taxes paid are maximised and profits stay in Australia.
Stealing is the incorrect word as the problem is generally not intentional (most likely an oversight or misinterpretation to a change), but results from the Australian workplace agreement system. Stealing would then apply if one forgot to pay a bill (unintentionally) as they have in effect taken something without payment.
I was also reading an article about some of the larger companies which have been subject of the underpayment problem. Some of these companies have 50+ wage agreements in place for their staff. The agreement can be based on whether they fit under the state or federal award, how long they have been with the company or what level within the company they are employed (esp. managers and above). Historically government of all persuasion have created a highly complex systemâŠwhich is very difficult to manage and administer. I do feel for the payroll teams in these companies as any change by government they need to review each and every agreement, determine if it impacts on the agreement and then determine what the impact is. They then have to roll out the changes to those employees impacted.
Somehow employers can manage individual employment contracts, consultants contracts, professional service contracts et al but canât manage a set of employees covered by an award.
Of course stealing is the correct word. By taking your line, an employee stealing can use âit was unintentionalâ as a defence and get off just like you are saying employers can use unintentional as a get of of goal card?
Take a moment to think about the consequences of wage theft on someone - may mean less going into their superannuation, less opportunity to purchase a house, less opportunity for their children - the impacts go on and on.
There would be a swift end to wage theft if a CEO, senior executive, owner, franchisee faced criminal penalties. Whatâs good for the goose is good for the gander.
It is employers who have made the system complex. Think how complex managing individual employment contracts must be - but thatâs what the employers wanted.
The usual practice in big companies is for a company to decide on how much to budget for wages and salaries. Then the HR people use that budget to dole out the money to staff. It doesnât operate the opposite way.
