When Peter Myall’s employer of 20 years wound up last year, he didn’t just lose his job. He was also owed $15,000 in unpaid super. “As far as I’m concerned my super money’s been kissed goodbye – I don’t believe I’m ever going to get it,” he says.
Myall, a timber tradie who makes roofs and trusses, is one of a group of seven employees of Timber Tech Pty Ltd represented by the Construction, Forestry, Maritime, Mining and Energy Union in South Australia who are owed at least $130,000 in unpaid super.
“It’s going to [put] a $15,000 dent in our retirement – that could be the difference between us taking a holiday or not, or being able to live a little better than just the pension, help our money last that little bit longer,” says his wife, Eileen Myall.
“When you retire anything can happen … you may need medical treatment. That’s $15,000 we should have had that we won’t have, let alone what the interest on it would’ve been as well.”
She says her husband’s super was underpaid from 2011 to 2015 and not paid at all from 2015 to 2020. The union negotiated a settlement with a payment plan for entitlements owed by Timber Tech, but it began to miss payments in August 2020. It was wound up in March 2022.
The union alleged Myall was owed $41,380 in entitlements including long-service leave and annual leave. The taxpayer-funded unpaid wages safety net paid most of the money, but the fair entitlements guarantee (Feg) does not cover super.
Myall says he was aware his super was not being paid, but he and co-workers thought the business was “going down hill” and they were lucky to still have a job.
Myall, who is approaching retirement age, says he “wouldn’t get another job” because of his age, lower back and shoulder problems. “We just hoped somewhere along the line they were going to pay us,” he says.
“My wife did everything – [went to the] taxation department … Fair Work [Commission] – it just ended up nowhere.”
The ‘last bastion of wage theft’
Myall and his co-workers are not alone. Industry Super estimated that in 2018-19 employers failed to pay $5bn a year of super, meaning the one-quarter of employees affected are out of pocket on average $1,700 a year. The ATO estimated 4.9%, or $3.4bn, of super was not paid in 2019-20.
David Kirner, the CFMMEU’s South Australia district secretary, says this is “an example in a small timber business of how it goes wrong”. Myall and his co-workers’ payslips claimed that super had been paid but the money was “not going into their accounts”.
“Super is the last bastion of wage theft that can be quite difficult to enforce,” Kirner says. “There’s not a lot of enforcement by the [Australian Taxation Office].”
The ATO declined to comment about efforts to recover unpaid super at Timber Tech, citing “obligations of confidentiality and privacy under the law”.
In September Guardian Australia revealed the ATO had never used its indirect criminal powers to punish non-payment of super. The ATO can issue a direction to pay super, failure to comply with which it punishable by a $15,650 fine or 12 months in prison or both.
Despite the ATO saying it is “serious about collecting unpaid super”, at that time it had never issued such a direction, relying mostly on softer options such as a super guarantee charge requiring employers to pay up to 200% of the amount owed.
In 2022-23 the ATO raised debts of $1.13bn through such charges and recovered $684m in unpaid super.
“The ATO applies a full range of firmer actions including director penalty notices, garnishees, directions to pay and disclosure of business tax debt actions to ensure payment on superannuation debts,” it said.
“The director of a company who fails to meet a [super charge] liability in full by the due date automatically becomes personally liable for a penalty equal to the unpaid amount.
“There are situations where it can be harder for the ATO to recover unpaid superannuation, including if an employer is bankrupt, in liquidation, under administration or deregistered.”
Angelo Colangelo, who was the director of Timber Tech before it was wound up, said the workers were “not owed any money” because the Feg had already paid unpaid entitlements. “It’s all been fixed up,” he said, except for their super.
Colangelo denied that the non-payment of super could be considered super theft, because “it wasn’t intentional”.
Asked about payslips incorrectly claiming super had been paid into workers’ accounts, Colangelo said: “I take responsibility, I won’t say it’s someone else’s fault.
“I didn’t plan to go broke. I’m still trying to get money to pay these people, I’m still personally liable for their super.”
‘Loophole that needs to be closed’
The issue of unpaid super could be key to unlocking crossbench support for the government’s closing loopholes industrial relations bill, which criminalises wage theft but not super theft.
The Australian Council of Trade Unions, the Greens, and the independent senator David Pocock have all called for super theft to be added to the bill. The CFMMEU and Unions NSW want super to be added to the Feg, something which Labor has committed to in its national platform.
Unions NSW is also lobbying Labor MPs to add temporary migrant workers to the Feg, something which the Morrison government promised to consider after the migrant workers taskforce in 2019, but it was never enacted in law.
A Unions NSW briefing note, seen by Guardian Australia, cites case studies such as Sara, a Colombian contracts administrator who received just $2,575 for unpaid annual leave when her employer, a construction company, was liquidated.
“The other entitlements are unpaid and it was suggested that I should claim them from Feg,” Sara says.
“My Feg claim was rejected, as this only covers permanent residents and citizens … We are taxed like citizens but then have no rights.
“To this date I am still owed the outstanding superannuation.”
The Unions NSW secretary, Mark Morey, says “a worker’s visa status should have zero bearing on whether they can access their entitlements”.
“This is a loophole that needs to be closed. Leaving this open is not just a glaring moral failure, it’s also an invitation to unscrupulous employers to try it on.”
The Albanese government hopes the scourge of unpaid super will be reduced by payday super reforms, essentially requiring employers to pay super at the same time as wages.
Unions and industry super funds hope this reform and the inclusion of super in the national employment standards that gives workers more legal options to recover unpaid super debts will fix things. But payday super will not be in place until July 2026.
Eileen Myall says she “would actually really like to see the government pop their finger out and actually do something about this” – including both criminalising super theft and adding super to Feg.
“The workers have forgone their wage rises to get super – and then it’s not being paid. It’s not right. It is wage theft.”
