Recouping wage underpayment: increasingly less likely?

Abstract

Corporate collapses in Australia have provided stark evidence that employees do not always secure their employment entitlements, despite having a legal right to do so. There has been an implicit assumption in the Australian industrial relations system that employer evasion of employee entitlements is rare. However, our detailed examination of enforcement within the Australian federal industrial relations system shows, for the first time, that despite awards, industrial agreements, union presence and an official enforcement agency, correct payment of entitlements has always been problematic. This paper examines inspection strategy between 1904 and 1995 and makes two points. The first is that changes in strategy have reduced the probability of detection. The second is that shifts towards individual contracts, lower union density, and increased precarious employment have decreased the likelihood of employees' ability to recover monies owed.

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