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Wage theft crisis opens gate for graduates who can navigate IR waters

Then there is Australia’s complex tax laws that all businesses must comply with. And of course, businesses aim to hire people with the relevant expertise to navigate these business realities. So why is managing employment laws any different?

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Minimum employment standards exist for a reason. As a society, we recognise that all employees should benefit from certain minimum standards: a safe workplace, annual leave, sick leave and minimum wages. Industry awards enshrine some of these rights while accommodating differences between industries and jobs.

With the Fair Work Ombudsman expanding its corporate enforcement capabilities and public awareness of wage theft rising, large businesses are finally taking industrial relations compliance more seriously. They can no longer just “set and forget” wages and salaries, hoping to satisfy award requirements over time.

Woolworths fell foul of this approach, admitting to about $500 million in underpayment of 5700 employees over ten years. It acknowledged the shortcomings, telling shareholders, “It’s not sufficient to say this is complex. It is complex, but we are a sophisticated retailer and we apologise unreservedly.” A Federal Court judge recently criticised Macquarie Bank for underpayment that arose from a “defective and deficient system designed … without proper attention to the terms of the Act and the Award”.

Businesses like these – and their employer association lobbyists – continue to push for further simplification of the award system at the policy level. The Commonwealth government’s industrial relations reforms presented in December offer a nod to this with potential for loaded rates, but this hardly makes a dent.

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Large firms have also audited past payroll decisions, hired payroll consultants and are taking steps to ensure future compliance. Businesses are now recognising the need for greater investment in expertise to deal with industrial relations laws, just as they already do on other core obligations like supply chain logistics, tax liabilities and food safety laws.

The human resources and industrial relations functions have become increasingly important to achieving legal compliance and avoiding negative media attention. Given this, we can expect rising demand for university graduates with the skills to navigate the industrial relations system.

The good news is these are the skills that universities teach industrial relations and human resource management students. We do this to help protect those same students from underpayment when working in part-time jobs while studying.

Marian Baird is professor of work and organisational studies at the University of Sydney business school.

Marian Baird is professor of work and organisational studies at the University of Sydney business school.Credit: Supplied

Importantly, we also provide a comprehensive degree program so that these students are employable as the managers of the future, to guide businesses successfully, ethically and sustainably. Just as engineering and pharmacy students must gain expertise in their fields, it is necessary to be trained in the unique knowledge of the employment relations system.

If 2020 taught us anything, it’s that the world of work is rapidly changing. While it is also complex, there is great opportunity for developing a career in industrial relations and human resource management. And investing in hiring these experts may just protect businesses from a wage theft crisis.

Professor Marian Baird, AO, is head of the discipline of work and organisational studies at the University of Sydney business school.

Stephen Clibborn is senior lecturer in the discipline of work and organisational studies at the University of Sydney Business School.

Stephen Clibborn is senior lecturer in the discipline of work and organisational studies at the University of Sydney Business School.

Dr Stephen Clibborn is an employment relations scholar at the discipline of work and organisational Studies at the University of Sydney business school.

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