With much recent debate at the Federal and State level about criminalising employee underpayments, on 16 June 2020, the Victorian Parliament passed the Wage Theft Bill 2020.
While there is significant overlap between the jurisdiction of the Victorian Wage Inspectorate established under the Wage Theft Bill and the Commonwealth Fair Work Ombudsman, particularly in respect of the requirement to pay employee entitlements and the requirement to keep accurate records regarding employee entitlements, these obligations can form the foundation of criminal offences under the Wage Theft Bill. Further, the Wage Theft Bill defines "employee entitlements" and "employee records" broadly, and so will also encompass employment obligations under long service leave and superannuation legislation.
With the Commonwealth Government reviving its "wage theft" agenda in the COVID-19 IR roundtables currently underway, it is possible that similar legislation will be passed by the Commonwealth Government, which will likely override the Wage Theft Bill to the extent of any inconsistency. Further, various employer groups have publicly announced a potential constitutional challenge to the Wage Theft Bill.
The Wage Theft Bill creates new offences relating to employee entitlements:
- Dishonestly withholding employee entitlements that are owed to an employee, or authorising or permitting another person to withhold entitlements.
- Falsifying records in respect of an employee entitlement, or authorising or permitting another person to falsify such records, in order to dishonestly obtain a financial advantage for the employer or another person, or to prevent the exposure of a financial advantage that has been obtained.
- Failing to keep required employee entitlement records, or authorising or permitting another person to fail to keep required employee entitlement records, with a view to dishonestly obtaining a financial advantage for the employer or another person, or to prevent the exposure of a financial advantage that has been obtained.
Officers of an employer may be directly liable, or liable by complicity in the offences, but employees who act under direction and who are not officers of the company are not complicit.
A company will be liable for an offence conducted by an officer of the company, or directly through imputed knowledge of employees of the company, and notwithstanding that each element of the offence was conducted by different persons acting on behalf of the company.
In general, given the nature of these new offences, the elements of the offence will need to have been undertaken in Victoria, or the conduct comprising the offence may occur outside Victoria but affect an employee in Victoria, in order for liability to arise.
Penalties for these offences are a maximum of 6000 penalty units for a body corporate (currently $991,320), and a maximum of 10 years imprisonment for an individual. The penalty for a body corporate may be reduced if it is dealt with summarily in the Magistrates Court, in which the penalty is a maximum of 2500 penalty units (currently $413,050).
The Wage Theft Bill will commence on 1 July 2021 if not proclaimed earlier.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.