Wednesday, 2 April 2025
Bills
Wage Theft Amendment Bill 2025
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Bills
Wage Theft Amendment Bill 2025
Statement of compatibility
Steve DIMOPOULOS (Oakleigh – Minister for Environment, Minister for Tourism, Sport and Major Events, Minister for Outdoor Recreation) (10:41): In accordance with the Charter of Human Rights and Responsibilities Act 2006, I table a statement of compatibility in relation to the Wage Theft Amendment Bill 2025:
In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (the Charter), I make this statement of compatibility with respect to the Wage Theft Amendment Bill 2025 (the Bill).
In my opinion, the Bill, as introduced to the Legislative Assembly, is compatible with the human rights protected by the Charter. I base my opinion on the reasons outlined in this statement.
Overview of the Bill
The Bill will amend the Wage Theft Act 2020 (Principal Act) in order to:
• rename the Wage Inspectorate Victoria to the Workforce Inspectorate Victoria and amend the name of the Principal Act to the Workforce Inspectorate Victoria Act;
• repeal Victoria’s wage theft offences, and the functions and powers connected to the investigation and enforcement of those offences by the former Wage Inspectorate Victoria;
• retain the Workforce Inspectorate Victoria as an independent statutory body with responsibility for administering the Child Employment Act 2003 (CE Act), Long Service Leave Act 2018 and Owner Drivers and Forestry Contractors Act 2005 and as a sector regulator under the Child Wellbeing and Safety Act 2005;
• provide a facilitative function for the Workforce Inspectorate Victoria to give advice and information in relation to workplace entitlements and protections that are prescribed; and
• confer a function on the Workforce Inspectorate Victoria to receive and refer complaints and information relating Victorian public construction projects.
Human rights issues
The following rights are relevant to the Bill:
• right to privacy (s 13).
Right to privacy
Section 13(a) of the Charter provides that a person has the right not to have their privacy unlawfully or arbitrarily interfered with. An interference will be lawful if it is permitted by a law which is precise and appropriately circumscribed, and will be arbitrary only if it is capricious, unpredictable, unjust or unreasonable, in the sense of being disproportionate to the legitimate aim sought.
New function to receive and refer complaints, and information sharing
Clause 36 of the Bill inserts new sections 20(1)(ia)–(id) into the Principal Act, and will provide that Workforce Inspectorate Victoria have new functions to receive complaints or matters, and related information, regarding public construction and then refer these on to other government agencies and bodies, including those of the Commonwealth or another State or Territory. Workforce Inspectorate Victoria may then also receive notifications and information from other government agencies and bodies relating to the complaints or matters it has referred on, and may provide advice and report to the Minister on any complaints, matters, notifications or information it receives or refers.
Clause 37 of the Bill then inserts a new Division 2A into Part 5 of the Principal Act, which provides that Workforce Inspectorate Victoria may request notification or information from a government agency or body regarding any investigation or action the agency or body has taken in respect of a complaint or matter that Workforce Inspectorate Victoria has referred to them. The agency or body must then provide the relevant notification or information within a reasonable time. Clause 38 then inserts new section 77(2)(ab) into the Principal Act to enable the disclosure of information when performing a function or exercising a power under the Act in accordance with the Workforce Inspectorate’s functions under s 20(1)(ib) or (id), that is in relation to the referral of a complaint or matter regarding public construction to another government agency or body, or in relation to providing advice and reporting to the Minister on any complaints, matters, notifications or information that Workforce Inspectorate Victoria receives or refers.
The receipt and referral of complaints, matters and information, as well as information sharing between bodies and agencies, engages the right to privacy, given this may involve the sharing of personal information of individuals engaged to work on Victorian public construction sites.
I am of the view, however, that clauses 36 to 38 of the Bill do not limit the privacy right, as any disclosure of a person’s information would be lawful, in that it would be pursuant to a properly circumscribed law, and is not arbitrary, as any disclosure may only occur in limited and clearly defined circumstances that enable Workforce Inspectorate Victoria to carry out its functions in respect of the receipt and referral of complaints regarding potentially unlawful conduct on Victorian public construction sites.
I note that the purposes of disclosure are consistent with those recognised by the Information Privacy Principles as being consistent with protection of privacy, being where disclosure is a necessary part of investigating unlawful activity or reporting concerns to a relevant authority.
A person acting on behalf of Workforce Inspectorate Victoria is also still subject to strict confidentiality requirements under s77 of the Principal Act, and any disclosure of information that is outside that the current exceptions in s77(2), and new s77(2)(ab) may amount to an offence.
I therefore consider that the Bill is compatible with the right to privacy under s13 of the Charter.
The. Hon Danny Pearson
Minister for Finance
Second reading
That this bill be now read a second time.
I ask that the minister’s second-reading speech be incorporated into Hansard.
Incorporated speech as follows:
Criminal and unlawful behaviour has no place in Victoria’s construction industry.
The Formal Review into Victorian Government Bodies’ Engagement with Construction Companies and Construction Unions, led by Mr Greg Wilson (Wilson Review), has exposed a rotten culture in the construction sector and the Victorian Government is taking strong action to stamp it out.
That is why I am introducing a Bill to implement the Victorian Government’s response to recommendation 1 of the Wilson Review, to establish a complaints referral function within the independent statutory body, Workforce Inspectorate Victoria, to receive and refer complaints relating to public construction.
The Bill will also give effect to the Victorian Government’s decision to repeal Victoria’s wage theft offences, following commencement of the Commonwealth’s offences in the Fair Work Act 2009 (FW Act) on 1 January 2025. The Commonwealth’s offences were drafted to cover the field of criminalising the underpayment of wages and other entitlements.
Background
In July 2024, the Victorian Government commissioned the Wilson Review as part of a range of actions responding to allegations of criminal and other unlawful conduct by the construction division of the Construction, Forestry and Maritime Employees’ Union (CFMEU), to examine how Victorian Government bodies interact with construction companies and unions.
The Final Report was delivered to the Victorian Government on 29 November 2024. The review made eight recommendations about how the powers of Victorian Government bodies can be strengthened to better respond to allegations of criminal and other unlawful behaviour. The recommendations emphasise collective action among employers, agencies and law enforcement to encourage complaints, share information and act on misconduct as well as highlighting the need for a multifaceted approach involving cultural, regulatory, legal, policy and contractual changes.
The Government released its response to the final report on 18 December 2024, accepting all recommendations either in-full or in-principle.
The Review found that most relevant interventions sit with the Commonwealth in industrial relations and the CFMEU administration, but that there are a number of actions Victorian Government agencies can take to enhance oversight and management to deter criminal and unlawful activity.
The measures the Victorian Government is adopting aim to complement Commonwealth reforms and CFMEU changes, as well as actions already taken by the Government, which includes passing anti-bikie laws in 2024 that make it easier to prevent certain individuals from associating with each other.
The Bill will amend the Wage Theft Act 2020 (Act) to repeal Victoria’s wage theft offences and associated compliance and enforcement functions and powers as well as re-name the Wage Inspectorate to the Workforce Inspectorate Victoria to better reflect its role and functions going forward.
The Commonwealth Government introduced amendments to the Fair Work Act 2009 (Cth) in the Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Cth), which makes it a criminal offence in Australia to intentionally underpay wages. The Commonwealth wage theft laws commenced on 1 January 2025, and as a result, the Victorian wage theft laws are largely inoperable and can be repealed.
The Bill in detail
People coming forward with critical information about unlawful or intimidatory conduct on worksites deserve to have complaint processes that meet their expectations and the expectations of the Victorian people.
There are multiple state and federal entities with powers to respond to various issues that may arise on any Victorian worksite including Victorian Government construction sites. For example, WorkSafe Victoria has regulatory responsibility for workplace health and safety, the Fair Work Ombudsman (FWO) is responsible for compliance with Australia’s workplace laws around pay and conditions, Victoria Police are responsible for the investigation of criminal allegations, while the Independent Broad-based Anti-Corruption Commission investigates complaints about corruption in the public sector.
The number of different complaint handling entities with various regulatory responsibilities can make it challenging for people to find the right place to direct their complaint. Some complaints are also multifaceted and fall under the remit of more than one agency. The Wilson Report identified instances of complaints being passed between agencies without resolution. A central agency with relevant referral functions can provide ‘one doorway’ to receive and assess complaints and ensure they are referred to the appropriate regulatory body who can assist.
A centralised complaints referral agency will assist to collect and track complaints data, that could detect emerging trends and inform future changes in laws and policies as well as facilitate appropriate referral pathways.
That is why the Victorian Government supported recommendation 1 of the Wilson Report to establish a central agency to receive and refer complaints relating to Victorian Government construction sites to the bodies who can assist.
The Wilson Review recommended establishing the complaints referral function as part of a new standalone entity or administrative office. However, consistent with the Government’s commitment in the Economic Growth Statement to halve the number of business regulators, it is proposed that the complaints referral function be set up in the Workforce Inspectorate Victoria. Housing the referral function within an established regulator, with existing operational capability and experience in dealing with allegations of unlawful conduct in workplaces, is a more efficient delivery model that can be rapidly set up.
It is preferred that the complaints referral body be established within the Workforce Inspectorate, given its current legislative remit and existing operational capability to receive information from members of the public, refer matters as needed and experience dealing with allegations of criminal conduct.
The amendments in this Bill will confer on the Workforce Inspectorate the necessary legislative functions for it to undertake the complaints referral function, including receiving information relating to suspected criminal or other unlawful conduct from principal contractors on Victorian Government-funded construction projects, as well as providing appropriate information sharing arrangements with the bodies to which it will be referring complaints.
The Bill also enables the Workforce Inspectorate to follow up on complaints and matters it has referred to other agencies, by facilitating a two-way flow of information. The Bill specifically allows the Workforce Inspectorate to request and receive notifications and information about matters it has referred (subject to any confidentiality or privacy provisions within the referral agency). The Workforce Inspectorate will be able to set up systems to enable it to provide information back to complainants to keep them informed of any responses or updates it receives.
The complaints referral function does not require the Workforce Inspectorate to investigate or resolve complaints directly, but rather, act as a clearing house, ensuring that complaints are received and referred to the appropriate agency. The Workforce Inspectorate will be a central point of communication. It will not have powers to require referred matters to be followed up (as this would interfere with the powers of other independent law enforcement agencies), nor is it given powers to take action itself in relation to a referred matter. As recognised by Mr Greg Wilson in his review report, the responsibility for action belongs to the law enforcement or regulatory agency that has the relevant powers. The Workforce Inspectorate will have operational capacity to monitor status and resolution of complaints over time.
These amendments implement recommendation 1 of the Wilson Review.
Recommendation 7 of the Wilson Report, which the Victorian Government supported in full, recommends that contracts for state projects include new requirements for principal contractors to report and manage criminal or unlawful conduct on Victorian Government- funded work sites. The recommendation also requires principal contractors to report any suspected criminal or other unlawful conduct to the new complaints referral body. Failure of contractors to meet their reporting obligations could constitute a breach of contract, providing clearer grounds for enforcement if issues arise in the future.
In setting up the complaints referral function, the Bill also supports the implementation of Recommendation 7, by empowering the Workforce Inspectorate to receive reports from any person, which includes principal contractors. Where these matters are of a criminal nature, they will need to be handled in accordance with criminal procedure laws.
The Bill includes a definition of ‘public construction’ to support the new function. The Wilson Report and recommendations only refer to Victorian Government construction projects, not construction more generally.
The Wilson Report estimates that the demand in Victoria could be in the vicinity of 200 complaints per quarter. The Report noted that demand for Victoria’s referral function could be less or more, depending on whether or not individuals chose instead to directly make a report to the Fair Work Commission (or other responsible bodies) and levels of awareness of reporting options.
The Wilson Report data was sourced and estimated based on the Fair Work Commission online portal, which opened on 31 July 2024 and received 793 complaints and pieces of intelligence as at 31 October 2024. It assumes that complaints in relation to Victoria represents around 25 per cent, which equates to approximately 200 complaints.
We have announced that the Inspectorate will conduct its new functions in receiving concerns or complaints with a special focus on women’s safety.
This Government has a continuing, existing commitment to drive long-term structural and cultural change across the male-dominated construction sector, to increase women’s workforce participation through the implementation of the eight year Building Equitable Futures Strategy, together with implementation of the Building Equality Policy. The policy works towards equal representation by taking steps to attract, recruit and retain women in the industry, break down the barriers to women’s workforce participation and challenge existing attitudes and norms.
The Victorian Government is committed to evaluating the effectiveness of the action taken to acquit the Wilson Report’s recommendations and their impact on managing issues of criminal and unlawful conduct within Victorian Government construction sites two years after the laws commence. The evaluation will also assess whether further reforms may be needed, to make sure our construction industry meets the expectations of the Victorian people.
The Bill will additionally confer a general function on the Workforce Inspectorate to provide information, education and advice in relation to workplace entitlements if prescribed in regulations. This function will allow the Workforce Inspectorate (subject to approval and regulatory prescription) to provide advice and information on workplace matters more broadly, noting its regulatory functions will otherwise be limited to child employment, long service leave, owner drivers/forestry contractors and the new complaints referral function following the repeal of the wage theft offences. The proposed amendment is a facilitative function intended to provide flexibility for the Workforce Inspectorate in the future to provide a broader advice function if deemed appropriate, without acting beyond its statutory remit.
The Bill allows the Workforce Inspectorate to be re-named to better reflect its revised legislative mandate, as well as re-naming the principal Act. The Wage Inspectorate Victoria will be known as the Workforce Inspectorate Victoria and the Wage Theft Act 2020 will be re-named the Workforce Inspectorate Act 2025.
The change of the name of the Act and the Inspectorate will not alter its formal status in any way. The Workforce Inspectorate will continue to be an independent statutory authority led by the Commissioner.
The Bill also makes consequential amendments to the Child Employment Act 2003, Long Service Leave Act 2018 and Owner Drivers and Forestry Contractors Act 2005 to reflect the new Act name and references to the Workforce Inspectorate. The legislative reforms also interact with the Privacy and Data Protection Act 2014 to support the referral of complaints and ensure appropriate privacy protections are in place for the referring entity. They also interact with the recently amended Criminal Organisations Control Act 2012 and regulations, which prohibit members of prescribed organisations from entering certain areas of Victorian Government worksites.
Commencement date
The provisions that repeal the wage theft laws can commence quickly upon proclamation as they are no longer required in light of the Commonwealth’s offences.
The new complaints referral function will commence on a date to be proclaimed to allow time for the function to be fully embedded in the Workforce Inspectorate, including the recruitment and training of staff to appropriately navigate, assess and direct complex complaints within the Commonwealth and Victorian regulatory and integrity landscape as well as set up the necessary ICT systems.
I commend the Bill to the house.
Cindy McLEISH (Eildon) (10:41): I move:
That the debate be adjourned.
Motion agreed to and debate adjourned.
Ordered that debate be adjourned for two weeks. Debate adjourned until Wednesday 16 April.