Academic journal article Australian Journal of Social Issues

Recouping Wage Underpayment: Increasingly Less Likely?

Academic journal article Australian Journal of Social Issues

Recouping Wage Underpayment: Increasingly Less Likely?

Article excerpt

Recouping wage underpayment: increasingly less likely?

In recent years several significant corporate collapses have provided the Australian public with evidence that employees do not always secure work entitlements, despite having a legal right to do so. Setting aside such catastrophic events, the implicit assumption in the industrial relations arena is that the checks and balances within the system are adequate, and that employers who evade their obligations are rare. Consequently little research has been conducted in the area of minimum labour standards enforcement. However, our examination of the federal industrial relations system in respect of the payment of wages and other entitlements, the first detailed examination to be undertaken, exposes a far more extensive problem. This paper examines inspection strategy in the federal jurisdiction between 1904 and 1995 and makes two points. The first is that changes in strategy have reduced the probability of detection. The second is that shifts towards individual contracts, lower union density, and increased precarious employment have decreased the likelihood of employees' ability to recover monies owed.

To illustrate the issues, broad inspection strategies within the federal jurisdiction between 1904 and 1995 are examined to highlight shifts in strategy. The level of unpaid wages and entitlements recovered by the agency between 1972 and 1995 is outlined to reflect both the extent of non-compliance and the effects of changed inspection strategy on the quantum recovered. Inspection strategy and wage recovery are then analysed within the broader context of changing employment patterns, decreasing union density and decentralisation of industrial relations. By examining the characteristics of complainants and the alleged breaches complained of, it is possible to explore those most vulnerable to shifts in inspection strategy. It is argued that these general changes to industrial relations have the potential to not only increase underpayments for wages and other entitlements, but also render them invisible, thus decreasing employee ability to recover monies owed.

Both qualitative and quantitative research and analysis has been undertaken to provide the data contained in this paper. Historical research methods have been used to analyse a wide range of primary source materials such as Acts of Parliament, government reports, reports of official enquiries, parliamentary debates, and annual reports of enforcement agencies and government departments. Whilst secondary literature has been drawn upon where possible, the paucity of research on this topic has resulted in primary sources providing the bulk of the data. In respect of the federal Arbitration Inspectorate from the 1970s onward, these sources have been supplemented by semi-structured interviews with former arbitration inspectors to clarify, operational and cultural aspects within inspectorates.

Additionally, a comprehensive quantitative analysis of statistics linked to enforcement by the Federal Arbitration Inspectorate has been undertaken. Unprecedented access to the database containing Commonwealth Arbitration Inspectorate statistics was crucial to undertaking this research. These statistics allow the issue of compliance with awards to be examined for the first time. Enforcement data has been collated from official reports of the enforcement agencies and from access to the Arbitration Inspectorate Management Information System (AIMIS). The AIMIS database contains a range of statistics relating to the enforcement activities of the federal Inspectorate for the period 1983-1995. However, the data is incomplete due to initial deployment of the technology, developmental problems and industrial action by inspectors. It also needs to be recognised that only the first 9 months of 1995 are included.

The Inspectorate and Inspection Strategies 1904-1977

In the federal industrial relations jurisdiction, terms and conditions of employment were primarily contained in awards and industrial agreements approved by, and registered with, the Australian Industrial Relations Commission or its predecessors, until 1996. …

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