By Alex Millman and Lindsay Carroll, NRA Legal
In a stark sign of the times, the Victorian Wage Inspectorate (VWI) has claimed its first criminal prosecution under child labour laws, and emphasized that it stands ready, willing and unafraid to prosecute wage theft offences when it gains that power next year.
VWI has flagged a tougher stance on compliance and a greater willingness to exercise its powers to undertake criminal prosecutions.
Macleod (DPC) v Elissa Thomas, K10846028
Child employment in Victoria
Despite its name, VWI is not limited to prosecuting “wage theft” offences; it is also tasked with prosecuting offences against the Child Employment Act 2003 (Vic).
Under the Child Employment Act 2003 (Vic), it is a criminal offence to employ a child under the age of 15 without a permit. Failure to do so attracts penalties up to $15,857 per offence for a body corporate, or up to $9,514 per offence for individuals.
There are also offences for failing to provide records and obstructing child employment inspectors.
As a criminal offence, a magistrate may also record a conviction, which results in the individual having a criminal record. This can have severe consequences for individuals, including the loss of licenses or the inability to renew them, particularly where these licenses are necessary for business operations.
Lost in the paperwork
In this case, charges were brought against a fashion promoter who, in March 2018, produced “Run: Kids Fashion Runway”, an event which ran alongside – but independent of – the Virgin Australia Melbourne Fashion Festival.
The event included 150 children as runway models, however the promoter failed to seek or obtain child labour permits for 129 of those models.
The fashion promoter pleaded guilty to charges of employing a child under the age of 15 without a permit, and also to charges of failing to comply with a statutory notice to produce documents under the Act.
In weighing the sentence to be given, the magistrate was told by VWI that the fashion promoter clearly understood the legal requirements, as they had previously run events compliantly in the past. The magistrate was told by the fashion promoter that the task of obtaining the relevant permits had been delegated to another person.
Notwithstanding this delegation, the fashion promoter acknowledged that the ultimate responsibility lay with them and pleaded guilty to the charges.
The magistrate imposed a fine of $2,000 and did not record a conviction, however noted that if a guilty plea had not been entered then the ultimate penalty would likely have been a fine of $10,000 and a conviction recorded.
State regulator flexes muscles
This is the first major criminal prosecution by VWI as the regulator under the Child Employment Act 2003 (Vic).
VWI has flagged additional prosecutions coming before the courts in the coming months, a distinct change of tack from a regulator which has, historically, advanced relatively few prosecutions.
This is perhaps indicative of how VWI will exercise its regulatory powers under the Wage Theft Act 2020 (Vic) when it becomes the enforcer of that Act on 1 July 2021.
VWI told media that it could do more to ensure compliance with the legislation under its jurisdiction, and indicated that the enforcement agency intended to become a louder voice in Victorian workplaces.
Uncertain providence of wage theft legislation
The Wage Theft Act 2020 (Vic) was passed by the Andrews Government despite strong opposition from industry groups who noted, among other matters, that the legislation may be unconstitutional.
As the first law of its kind in Australia, it remains uncertain exactly how ardent VWI will be in undertaking criminal investigations, and how State courts – that seldom, if ever, have to deal with the Fair Work Act 2009 (Cth) – will handle the intricacies of the claims brought before them.
While the Victorian legislation may well be open for challenge to the High Court if VWI commences prosecutions under it, realistically the first businesses to be raked over coals are likely to be small businesses unable to afford the expense of such a case.
This is deeply unfortunate, as offences against the Wage Theft Act 2020 (Vic) carry penalties of up to $991,320 for a body corporate or up to ten years’ imprisonment for an individual.
The Queensland Government has separately passed its own “wage theft” legislation, with the Queensland Police Service already opening a website to allow for the reporting of “criminal” wage theft.
The NRA will support its members however possible in dealing with compliance issues, and the team at NRA Legal stands ready to assist in either responding to a case or preventing one from arising. To have a confidential discussion about your circumstances, call our Workplace Relations Hotline on 1800 RETAIL (738 245).