L: Dan Andrews at the Victorian Labor state conference; R: victims of wage theft outside the same event.

Over the weekend, the Andrews government announced that, if re-elected in the upcoming Victorian state election, they will introduce new laws that would send employers who “deliberately underpay or don’t pay their workers” to jail for up to 10 years.

It follows similar announcements by the state Labor parties in New South Wales and South Australia. But, assuming Andrews is reelected, this would be the first time such laws have actually been implemented.

The government said on Saturday:

Wage theft offences will be investigated and prosecuted by the Victorian Wage Inspectorate — a new employment watchdog the Labor government is establishing to promote fair industrial relations practices and better education, compliance and enforcement of state-based employment laws.

The phrase that stands out there is “state-based”. The states in Australia — apart from Western Australia — have all more or less handed their power over employment law to the federal government. Victoria was the first state in Australia to do so, way back in 1996. 

As the statement goes on to state, the Victorian Wage Inspectorate currently mops up the scraps that are still under state jurisdiction:

… New long service leave laws, child employment and owner-driver laws. It will also oversee labour hire licencing and enforcement, and establish portable long service leave for contract cleaning, community services and security industry workers.

University of Adelaide Law School Professor Andrew Stewart told Crikey that if the proposals were limited in this way “it wouldn’t criminalise wage theft at all”.

But the initial reporting suggest the fines will cover conduct such as deliberately withholding wages, superannuation or other entitlements, falsifying employment records or failing to keep them at all. These areas are covered by the federal Fair Work Act, which excludes state industrial laws. 

“We’re in a grey area here, because it’s clearly questionable whether the Victorian government could actually introduce and implement these kinds of laws,” Stewart said. “They would have to either closely collaborate with the federal government, which seems unlikely, or possibly mount a constitutional challenge.”

Previous high court challenges to the federal governments jurisdiction over employment law have been unsuccessful.

“It may well be a drafting issue, they may draft it so as to argue it’s not an industrial law, that it’s just out and out theft and therefore purely criminal,” Stewart said. “They must have received advice that it’s possible. But it’s hard to see that it won’t encounter a challenge as soon as they try to enforce it.”

“Sending dodgy bosses to jail” makes a good grabby headline in the lead-up to the election and gives the impression of responding to the “change the rules” campaign, which has long called for these laws at a federal level. But is it just an unenforceable gesture?

“The Andrews Labor Government is standing up for all workers, particularly our most vulnerable, by making sure they receive the pay they deserve,” a Victorian government spokesperson told Crikey. “The Wage Inspectorate will ensure compliance and enforcement of employment conditions right across Victoria.”

Peter Fray

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