Paying workers less than the industry award is illegal in Australia. High-profile perpetrators have been fined, publicly shamed and forced to close up shop. In some states, they even face jail time. But employers — particularly in hospitality — exploit the gaping loophole in the Fair Work Act known as enterprise agreements to rip off workers legally.
When Emily Barlow took a front-of-house job at a “new, fun venue by the ocean” run by one of Sydney’s dominant hospitality groups she was offered about $21 an hour. As a 20-year-old in 2014, it seemed like a lot of money, and higher than the minimum hospitality award wage for her age group. In exchange, Barlow wasn’t entitled to any late-night, weekend or public holiday penalty rates.
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The business successfully convinced its employees and the Fair Work Commission the moderately inflated pay left everyone better off overall, but Barlow said that wasn’t how she felt.
“Over two years, I worked probably every weekend, [each including] one double shift, a Friday night plus a Sunday 7am to 2pm,” Barlow told VICE.
“They don’t really specify when you offer the job. They’re just like, ‘here’s the rate,’ then they kind of use their name to try and leverage that as a great opportunity to work there.
Of the 30 to 40 staff who worked the floor on rotation, Barlow said just one was full-time and a couple were sponsored migrant workers. The rest were young casuals like herself.
“They argued because they were such a big company they were under this like group award agreement. But it was quite vague.”
Enterprise agreements (also known as collective bargaining agreements) were created close to a century ago as a way for workers to secure better working hours, conditions or regulated salaries. The idea is that the workers — i.e. the collective — approach the employer with a list of requests; there’s a process of negotiation and an agreement is reached.
Today, Australian laws allow the opposite to take place, and it’s very common.
Employers can pen the new rules themselves, go through an unmediated negotiation process for as long or short a period of time as they like, tell workers it’ll make them better off — or simply that they have to sign it — and hold a vote. An approval process through the Fair Work Commission follows, which is meant to check the workers will be better off overall and that the employer can’t undercut the existing industry minimums. If Fair Work gives it the all-clear, that agreement becomes legally effective and binding for up to four years, so any incoming employees may have no option but to sign.
Dario Mujkic, a director at the United Workers Union, said although Fair Work’s better-off-overall test had become more stringent in recent years, and some processes were updated and improved as recently as December, the system still places far too much power in the hands of employers.
“[It’s] a form of legalised wage theft,” Mujkic told VICE.
“It’s a way to get around the laws and pay people less than what they deserve and would otherwise be entitled to.”
Other workers VICE spoke to off the record said enterprise agreements were most common at big businesses, and the businesses that hired them also hired mostly young, casual staff who may be naive about their rights.
“That means the final outcome is all about what the employer wants and needs, not about what the workers want and need. And usually what the employer wants and needs is cost-cutting and flexibility. And this is often the case with things like rosters and penalties,” Mujkic said.
Late last month it was revealed by the Australian Financial Review that hospitality giant the Mantle Group fired all of its 700 casual employees ahead of the January 26 public holiday and immediately rehired them under a different enterprise agreement originally struck in 2019 that said workers were not entitled to public holiday loading.
The move came 10 days after workers won a 22-year battle to be paid full penalty rates.
On Thursday, Mantle’s HF chief was referred to the Australian Federal Police for allegedly lying to staff about the agreement, which effectively denied them thousands of dollars.
“The argument [businesses make] always is, ‘well the worker has chosen to do it,’ so we should assume that they’re benefiting in some way,” Mujkic said.
“But in practice, the choice might have been between that and nothing. You have to work this otherwise you might not have a job tomorrow.”
Eden Dawn* worked under an enterprise agreement at a “bougie establishment” in Melbourne in 2019 and said not signing the agreement was never an option.
“They say, ‘you can sign up to this and like it, or you don’t get to work [here]’,” Dawn told VICE.
“They sell it as like being better off overall. But when you’re working every single public holiday, weekend and doing double shifts, I mean, they’re effectively just using you.”
Dawn was offered a flat rate of $27 an hour, $7.51 higher than minimum wage at the time. She was told it would be a “very relaxed” job, with no late nights and only the very occasional weekend shift. But she ended up exclusively working weekends and public holidays.
“Over the course of four months, I think I had like $2,000 in stolen penalty rates,” Dawn said.
She questioned the agreement with her employer and was told no wrongdoing had occurred under the enterprise agreement.
“It’s cruel and toxic and the fact it’s a widespread practice in Australia is a fucking disgrace,” she said.
“Just for the value of working at a better restaurant or better hours, we’re getting thousands in penalty rates stolen.”
Mujkic said there is a way for collective bargaining to work for everyone.
“What the government needs to do is give employers less control over the bargaining process and give workers more control,” he said.
Collective bargaining should be a worker-led process. That’s the whole concept, right? So collective bargaining shouldn’t be happening anywhere unless the workers themselves want it to happen.”
*name changed for anonymity.
Aleksandra Bliszczyk is a Senior Reporter for VICE Australia. You can follow her on Instagram here, or on Twitter here.
