George Calombaris is the latest money-grubbing boss scrambling to save face after being caught out for wage theft. The hospitality bigwig stole nearly $8 million from more than 500 workers across his Made Establishment group of companies. Calombaris claims to have paid the money back, has agreed to pay a $200,000 “contrition payment” and will go on a speaking tour to talk about the importance of following workplace laws. But in a “you can’t make this stuff up” moment, Calombaris quit as a host of Channel 10’s MasterChef after the network reportedly refused to give him a sufficiently large pay rise.
During an interview on the ABC’s 7:30, Calombaris cried when asked about the personal toll from being exposed as a corporate criminal. “There’s 642 team members that I absolutely adore”, he said. “It’s my job as their leader to keep pushing forward and speaking this message ... and acknowledging that we fixed it.”
However, Orlaith Belfrage, a former employee yet to receive backpay from her time working at Calombaris’ Hellenic Republic restaurant, thinks differently. In an interview with ABC Radio Melbourne, she remarked: “I don’t feel adored ... I feel ignored ... and I haven’t been paid ... I was also a bit taken aback by how much we had to listen to his emotional state, which I have pretty much no interest in ... It should be about the principles and the laws and the fact the he broke them.”
The Calombaris affair is not an outlier. It is an open secret that hospitality and retail bosses regularly flout workplace laws. On 25 July, Fair Work conducted surprise audits of 50 bars, restaurants and cafes in Brisbane’s West End. In the trendy, cultural precinct – where hip posters about ethical consumption abound – more than 100 primarily young and migrant workers complained about being ripped off.
And in May, one in five businesses in the accommodation, hospitality and retail sector were found to have underpaid workers in another Fair Work audit. Nearly 1,000 workers in Victoria, Queensland and NSW were backpaid a combined total of $580,000.
Workers in hospitality and retail already have some of the worst award conditions of any industry in Australia, barely above the minimum wage. Yet bosses still refuse to pay workers properly. Anne Petroulias, co-owner of Barry Café in Melbourne’s Northcote, underpaid workers $5 an hour and traded penalty rates for free lunches. Like Calombaris, she had the audacity to play the victim, telling the ABC in April 2018: “We had no idea about wage rates or anything ... The value of our business is really gone to zero ... It’s really difficult for us”.
Shannon Bennett, a guest judge alongside Calombaris on MasterChef, owns the exclusive Melbourne restaurant Vue de Monde. This is no corner store café; it’s a watering hole for capitalists, the seasonal tasting menu starting at $275 per person excluding drinks. A 2018 ABC investigation found that some workers claimed to be working many unpaid hours a week – one chef said he was working up to 80 hours a week for 40 hours’ pay.
This is not an accident, and wage theft is not a product of “honest mistakes” as its defenders plead. Industry figures argued in Calombaris’ defence that the wages system is complicated and difficult to navigate. But if it was just a matter of complexity, you’d expect just as many examples of inadvertent wage overpayments as underpayments. But that hardly ever happens.
And it strains credibility to suggest that the owners of restaurant empires, people able to manage the real estate deals, marketing and logistics involved in opening and running several restaurants, cannot manage basic payroll. Given Calombaris’ success, he no doubt also has amassed a considerable share and property portfolio, or at the very least some healthy term deposits. Do the complexities of banking also regularly get the better of him?
Minimising payment to workers, whether through legal or other means, is the ABC of running a business. It is necessary to maximise profits, stay competitive and remain in business. For capitalists then, workers are first and foremost things that can be used to make other things; hands to peel potatoes, a voice to take bookings, a smile to greet patrons as they enter a store.
This encourages cost cutting and greed that can be extreme. Take, for example, the bosses at Agri Labour Australia, who were paying migrant workers from Vanuatu as little as $8 an hour on a Shepparton farm.
But even businesses that pay workers their proper legal entitlements are carrying out a con. The premise of economic activity in a capitalist society is to generate profit. Bosses can’t do all the work required to generate valuable commodities – mine iron ore, build office blocks or cook and serve fancy meals – on their own. They must employ workers to do some or all of it for them. But this is only worthwhile if workers can be paid less than the final value of the commodities they are producing. If they can’t, bosses won’t make a profit and the business will be unviable.
This means business only operates when workers are being paid less than the total value they produce. What the boss holds on to is profit, and protecting the God-given right to extract this stolen wealth from other people is the focus of much legal, legislative and bureaucratic time and energy.
Exactly how much profit a boss can extract from a worker’s work is a matter constantly under consideration by the employing class. Whether it’s cutting wages, replacing workers with machines that don’t ask for wages, or making workers work harder or longer, their scheming never stops.
So nice or nasty, the employment contract a boss offers to workers is premised on a rip off, or “good business acumen” from the perspective of the diners at Vue de Monde. This is the exploitation at the heart of capitalism.
The exploitative relationship between workers and bosses is not only lawful, it also forms the beating heart of any capitalist economy, so workers and bosses face off against authority and the state very differently. Hence why so often there is one rule for the rich, and another for the rest of us.
If a worker stole $7.8 million from their employer, for example, they would be swiftly jailed. They would not be afforded the opportunity to cry on national television or be otherwise humanised so that the public identify with them and forgive their transgression. Even when workers are killed in unsafe workplaces, or their lives are put at risk by cost-cutting employers, it is extremely rare for a boss to be jailed. And fines for such conduct are frequently much smaller than those given to unions because of workers taking unprotected strike action, even if it is over safety concerns.
The plight of Indigenous people most starkly highlights the double standard. John Angilitchic, an Indigenous man from Darwin, recently served three months in prison while awaiting sentencing for stealing $25 worth of wine from a Liquorland. One month in prison for every $8.33. If the same standard was to be applied to Calombaris, he would be facing more than 78,000 years behind bars. But, of course, he is not.
Trifling though it is, Calombaris’ punishment is greater than that imposed on most thieving bosses. The idea is to make an example of him to encourage others not to be quite so brazen, and to give the impression of even-handedness by the powers that be. But courts and parliaments can never address the lawful robbery at the heart of the system.
Our side must respond accordingly. As Marx argued in Value, Price and Profit: “Instead of the conservative motto ‘A fair day’s wages for a fair day’s work!’ [we] ought to inscribe on [our] banner the revolutionary watchword: ‘Abolition of the wages system!’”