Christian Porter has promised criminal penalties of up to four years in prison to crack down on serious wage theft and new civil penalties of two or three times the amount of underpaid wages.
The attorney general revealed the next plank of the government’s industrial relations reforms in question time on Monday, after announcing an improved path to permanent work and plans to wipe out billions of dollars of potential claims for misclassified casual employees.
Porter will introduce the industrial relations omnibus bill on Wednesday, proposing legislative fixes generated in employer-union roundtables on casuals, award simplification, workplace pay deal making, deals for new worksites and compliance.
Both the Coalition and Labor focused on industrial relations in question time, with the government claiming the changes to casual employment will boost jobs and the opposition highlighting loopholes in workplace laws.
Asked if he could guarantee no worker will be worse off as a result of reforms, Scott Morrison replied the government is focused on “getting Australians back into jobs … and if you are a worker who is not in any job, you are worse off”.
The shadow industrial relations minister, Tony Burke, said the answer should send a “shudder down the spine” of workers, because the prime minister could not guarantee they would be no worse off.
Labor also asked Porter about a McKell Institute report commissioned by the Australian Workers Union that found blueberry pickers were being paid as little as $3 an hour.
“I am aware of that report – it shouldn’t happen, it’s disgraceful,” Porter replied.
He said the industrial relations bill will “for the first time ever create in this country at the commonwealth level an offence of wage theft”.
Guardian Australia understands the new offence will only apply for the most serious breaches – where an employer dishonestly engages in a deliberate and systematic pattern of underpaying one or more employees. The criminal offence will not apply to one-off underpayments, inadvertent mistakes or miscalculations.
The new offence will carry a maximum penalty of a $1,110,000 fine, imprisonment for up to four years (or both) for individuals, and $5,550,000 for a corporation. Individuals would also be disqualified from managing corporations for five years.
Civil penalties for breaches of workplace laws will also be boosted by 50%, with fines up to $19,980 for individuals and $99,000 for corporations.
Bigger businesses will be subject to penalties based on two times the benefit obtained, or up to three times for serious breaches.
The maximum penalties for serious breaches will remain $666,600 for small businesses and $133,200 for individuals.
The Australian Council of Trade Unions secretary, Sally McManus, welcomed increased penalties but warned the bar for criminal offences had been set too high.
“It is unlikely any employer will ever be caught and it will wipe out stronger and better laws in Queensland, Victoria and the ACT,” she said.
Burke welcomed the stricter penalties “in principle” but said the government had taken “many months” after the Fels taskforce on migrant workers called for it to criminalise wage theft in 2019.
Stephen Clibborn, the co-director of University of Sydney’s employment relations research group, said “merely increasing maximum penalties won’t change employer behaviour” and called on the government to boost funding to the Fair Work Ombudsman.
Labor and the ACTU have argued the sections of the bill so far revealed would deprive misclassified casual workers of backpay and that when employers refuse to convert them to permanents they will have no recourse.
On Monday Porter also appeared to confirm the government will extend jobkeeper flexibilities that allow employers to changes workers’ duties and location of work, telling reporters the bill would prevent a “cold flip” when the powers are due to expire in March.
The Greens will introduce amendments to the omnibus bill, creating a presumption that every job will be permanent unless an employer can demonstrate the need for casual work, and to extend entitlements of employees to gig economy workers.
On Wednesday the government will also introduce a separate bill to facilitate union de-amalgamations. Under the status quo, unions which have merged can seek to de-amalgamate after two years but before five years, after which the merger cannot be reversed.
The withdrawal from amalgamation bill would allow de-amalgamation after five years, freeing the mining, energy and manufacturing divisions to leave the CFMMEU.
The ACTU and Labor have reserved their position until they see the bill, but Burke has suggested the opposition could support it if it “doesn’t tie every union up in red tape”.
Mining and energy union boss, Tony Maher, has confirmed his branch will seek to use proposed demerger provisions to exit the troubled Construction Forestry Mining Maritime and Energy Union.
The CFMMEU has been bitterly divided over the leadership of Victorian construction secretary, John Setka, who was ejected from the Labor party in 2019 over comments Anthony Albanese said had brought the party into disrepute.
Despite McManus asking Setka to also step down from his union position, he has instead consolidated power, prompting the resignation of national secretary Michael O’Connor in November.
In an update to members, Maher said the construction division “has made it clear that they will use their numbers to steamroll smaller divisions, force decisions in their favour and run the CFMMEU as a construction union” – including by poaching members and “tearing down” O’Connor.
Maher said the bill fixed “highly restrictive demerger laws” and could help address “the current state of dysfunction within the CFMMEU”, outlining a process for members to vote on de-amalgamation by March 2021 if the bill passes.
But Porter has poured cold water on the prospect the bill could be more narrowly targeted at the CFMMEU, arguing that freedom of association should apply to all.
