Three months ago, a nurses’ union suggested reviving an idea that died decades earlier.
The Australian Nursing and Midwifery Federation proposed to Parliament the creation of an industrial relations court for workers to take legal action against unscrupulous bosses.
The idea was seen as so old fashioned — using judges to settle workplace disagreements was mostly phased out in the 1980s — that it received one paragraph in a long parliamentary report about fighting wage theft.
On Thursday, Anthony Albanese declared that he would bring such a court into existence.
“There are still too many of the most vulnerable workers in this country being illegally underpaid,” the prime minister told the Labor Party conference in Adelaide. “That’s just wrong and we’re going to fix it.”
How the government reached the decision is unclear. Even the Australian Council of Trade Unions, which leads the union movement, wanted the Fair Work Commission given more powers to get workers’ back money they are owed. Going to the courts is a second-order solution, according to the ACTU.
After Mr Albanese’s promise, employer groups asked: is this a solution looking for a problem?
Of the major underpayment cases exposed in recent years, including by the ABC and the Department of Employment and Workplace Relations, all were mistakes voluntarily rectified by the organisations. There is no published data showing Australian employers are regularly and deliberately stealing from their employees.
“We have to be realistic,” Australian Industry Group chief executive Innes Willox told The Nightly.
“There is behaviour on both sides that needs to be called out and dealt with but there is no evidence of widespread criminality from the employer side.”
Master plan
So why is the court being created? It looks like the latest stage of a plan by Mr Albanese and his ministers to reverse the de-regulation of the industrial relations system that began under the reformist Labor prime ministers Bob Hawke and Paul Keating.
Since the Labor Party was elected in 2022, new laws include restrictions on the use of fixed-term contracts, casual workers, contractors and members of the “gig” economy, responsibilities on employers to prevent sexual harassment, the right to be free of work communications outside regular hours and to more flexible working conditions, and the ability of unions to negotiate single agreements across industries.
Last year the deliberate underpayment of employees became a criminal offence carrying ten year’s imprisonment. Among the targets were sweat shops exploiting migrants who don’t speak English.
The Fair Work Ombudsman has not prosecuted anyone for wage theft in the year-and-a-half since it was given extra resources to administer the new law. On Friday a spokeswoman said five matters were under investigation.
One of the possible reasons is that most employers caught underpaying staff were not stealing, including Australia Post and National Australia Bank, both of which have large human resources departments.
They were caught out by one of the world’s more complex industrial relations systems.
Looking for simplicity
The Australian Chamber of Commerce and Industry calculates there are more than 1000 wage permutations possible in a week under the general retail award. The official list of pay rates stretches to 24 pages of tables and allowances.
“If you had a simpler system this kind of problem would not occur and it would be more obvious which employers have a deliberate strategy of underpaying workers,” said Liberal Senator Maria Kovacic, who chaired the inquiry into wage theft.
As for the new Fair Work Court, nobody knows exactly how it will operate. Mr Albanese said it would be staffed by lawyers experienced in workplace relations “with the aim of supporting faster, simpler and more accessible dispute resolution”.
The decision seems to ignore the fact a similar system is already in place for people ripped off at work, the small claims court. The court is designed to make it cheap, quick and simple for people to get money out of dodgy businesses.
Although it operates under the supervision of the Federal Circuit and Family Court of Australia — an association that makes it sound expensive and formal — decisions are usually made by a court official in one hearing rather than a judge.
Workers can complain about any kind of pay discrepancy, including superannuation, of up to $100,000 in the previous six years.
To keep costs down, both sides require special permission to be represented by a lawyer. In some states, the service is offered by local courts.
The informal approach is reasonably popular. In 2024-25, the latest year figures are available, there were 452 applications to the service. By the end of the financial year, 165 were waiting to be resolved, according to the court.
AI in the workplace
Disgruntled employees prefer the Fair Work Commission, which has much greater scope to penalise employers even though it can’t force them to repay underpayments.
Artificial intelligence is driving a deluge of applications to the commission.
The figures have not been finalised, but last financial year there was expected to be 50,000 to 55,000 applications to the Commission, up from 30,000 in previous years.
In a case decided this year, an earthmover driver resigned after he was shifted to another role because he refused to work past 5pm. The worker used an AI program to write a complaint to the Commission citing non-existent clauses in his workplace award. He admitted using AI and lost the case.
Faced with a claim to the Commission, many employers agree to make a payment to their ex-employees to avoid the cost and expense of attending hearings, people involved say. Struggling to keep up with the number of cases, Commission mediators encourage both sides to cut deals, they say.
As for the new Fair Work Court, the details are going to be sorted out over the next year.
The Nurses Federation, which did not respond to a request for comment, proposed in April a structure similar to the existing small claims system.
“Ideally, such a court should be set up in a manner that is generally informal, not strictly bound by the rules of evidence, and able to inform itself of any matter in any manner it sees fit, similar to existing arrangements for the FWC,” its submission said.
The was one big difference. The union said responsibility for prosecuting allegations of wages theft should shift to the new court.
Which raises an important question: why would an informal court that does not respect the rules of evidence be allowed to judge crimes that carry jail sentences of 10 years?
No doubt Mr Albanese will find an answer to that.
Get the latest news from thewest.com.au in your inbox.
Sign up for our emails