There are different rules in Australia for theft that takes place in the workplace. If money is stolen by a worker, they are prosecuted to the full extent of the law. Crooked bosses who steal wages from their workers … not so much.

Compare these cases.

Last month, an employee bookkeeper who used false records to conceal $310,000 misappropriated from her employer was sentenced to imprisonment for 13 months. As the criminal law requires, the misuse of her position was regarded as a ‘breach of trust’ that aggravated the offence.

But when a boss uses dodgy bookkeeping and false records to steal wages from their employees, this is not regarded as a breach of trust. It’s not even regarded as a crime by the regulator responsible for policing workplace laws.

Just a couple of weeks back, the Federal Court handed down a penalty in a Fair Work Ombudsman civil prosecution against a boss who systematically stole wages, and used false accounts to hide the truth from workplace inspectors.

Justice Bromwich noted, dryly, that ‘the FWO could not be accused of being heavy-handed or over-zealous’ in its pursuit of civil penalties.

His honour then included an unusual appendix to his judgment: ‘Postscript – observations about the laws proscribing the creation and production of false employee records’.

He commented that the case before him involved relatively minor civil regulatory offences, ‘yet the underlying conduct was essentially criminal in nature, evidently designed to conceal underpayments to 85 employees of … $583,688.68.’

He went on:

The production of the false records to the FWO could have been the subject of a criminal prosecution for the offence of giving false or misleading information to a Commonwealth entity or a person exercising powers or functions in connection with a law of the Commonwealth, contrary to s 137.1 of the Criminal Code (Cth), which carries a maximum penalty of 12 months’ imprisonment and/or a fine of $12,600.

I’m not particularly hopeful that the FWO will take the hint. It’s not the first time this year that its soft-touch approach has attracted judicial comment.

Back in May, Judge Wilson of the Federal Circuit Court went even further, intervening to refer a case for possible criminal prosecution, after the FWO had failed to do so.

After noting that a labour hire boss had invoiced a contractor to cover wages, but the money was used instead for ‘the progressive down payment of the purchase price for an expensive Peugeot motor vehicle’, his honour commented: ‘This smacked of serious nefarious conduct. It had the hallmarks of exploitation. It had the attributes of obtaining a financial advantage by deception, a crime in most states.’

He concluded, ‘In view of my observations that aspects of the respondent’s acquisition of his car using money due to [the employee] might be criminal in nature, I have referred this case to the Commonwealth Director of Public Prosecutions.’

Bizarrely, the FWO issued a press release trumpeting this outcome, though in reality it was a sharp criticism of the agency’s failure to properly assess the evidence and take appropriate action in the first place.

It’s not a judge’s role to refer people for prosecution — or it shouldn’t be.

The FWO has the power to pursue criminal prosecutions. Its own Litigation Policy states: ‘Criminal prosecutions are initiated by the CDPP. Where the FWO becomes aware of offences having occurred it will, in the ordinary course of events, refer a brief to the CDPP.’

This is routine in other agencies. Like the FWO, most of their time is taken up with education, routine inspections, and low-level regulatory enforcement. But when they discover criminal wrongdoing, other agencies turn it over to the prosecutors.

Here’s an example: in an FWO case ruled on in May, the boss ‘was cautioned not to create records if he did not have any, to ensure the records he was going to provide were correct and that it was an offence to provide false or misleading records to the fair work inspectors’.

But even after that warning, ‘he created new time and wage records’ that ‘made it appear as if they were paid higher rates of pay than they were actually paid’.

I can tell you from my own experience as a CDPP lawyer, if a Centrelink fraudster or a tax cheat had deliberately faked records after being specifically warned not to, they would be charged with a crime – and rightly so.

But the FWO takes a different view. Tellingly, it refers to ‘employers with a history of non-compliance’ as ‘Customers’.

And it’s not just about false documents, either.

In December last year, the Federal Circuit Court ruled on the ‘grossly exploitative’ coercion of two workers to return a significant portion of their wages, allowing the boss to ‘in effect, pay them wages as low as $6 an hour.’

The court noted that the boss threatened to withdraw his sponsorship of the workers’ 457 visas, and also ‘used violence, and threats of violence, to obtain the repayments’.

On one occasion, the boss threatened, ‘If anything happens to my business, I will kill you. If you complain to anyone, I will kill you and cancel your visa.’

This is a textbook description of criminal extortion, and yet the FWO took civil action, preferring the euphemisms ‘cashback scheme’ and ‘underpayment’.

Sadly, the FWO’s weak position on crime against workers is implicitly endorsed by the government.

As the tangled web of Michaelia Cash’s latest scandal revealed, the FWO and the controversial Registered Organisations Commission are closely linked. In their shared annual report, the government’s priorities are laid bare.

The aggressively anti-union ROC’s key performance indicators require it to ‘Refer possible criminal offences to the Director of Public Prosecutions or law enforcement agencies’. But the FWO is only required to ‘Litigate, where necessary, to enforce compliance with workplace laws’ – no mention of crime, no mention of the DPP, no mention of the cops.

That’s the root of the FWO’s cultural problem. There is one law for unions in this country, and another for wage thieves.

As Justice Bromwich observed, ‘the FWO could not be accused of being heavy-handed or over-zealous’ — least of all by the dodgy bosses who treat civil penalties into a cost of doing business.

Bosses should fear jail when they systematically steal from workers. It’s time for the FWO to enforce the law, and put criminal bosses before criminal courts.

Image: Boss coffee / Eric Brochu