Hair Razing
When I chat with cutters and colourists, their stories are always the same.
Every salon they’ve worked for has either refused to pay their superannuation or merely pretended to pay it.
When an employee leaves, they find their super money has neither been set aside nor deposited into their fund.
Few staff pursue their rights, for reasons that include vague verbal agreements, cash-in-hand pay, contra deals, fierce competition for work, short job tenures, lack of confidence, employer intimidation and relatively small sums.
Yet even when staff do stand up, the results can be disappointing.
Brenda* has spent over four years trying to recover around $1,000 in mandatory contributions from a salon owner who has since run full-page magazine ads for his new salons.
When the Australian Tax Office (ATO) failed to progress Brenda’s case, she appealed to the Tax Ombudsman. This too was unsuccessful.
Worse, when Brenda’s case hits five years, it expires and the salon owner is home free!
This situation seems extraordinary due to:
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The government’s long, strong focus on superannuation.
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The ATO’s formidable power and reach.
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Women’s relative lack of financial security.
So let’s cut to the chase.
Have I swallowed wash basin gossip, or is this problem real?
Is it just a bad hair day, or are young, casual, inexperienced staff being denied superannuation in other industries too?
I’d love to know your views.
* Not her real name.
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Most small businesses, when funds get tight will in this order NOT pay:- Superannuation, ATO, Payroll Tax, Insurance, not essential suppliers, then essential suppliers and then the businesses collapse.
Noting that in ALL instances that the business owner has stripped the business over the years and strips harder and the ends draw nigh.
Two examples come to mind, one a small business, under 10 employees, the boss went on holidays, after he was advised to knuckle down and things would be okay, to come back draw a $10,000.00 cheque to pay ‘his’ wages. Noting that the two weeks away – he drew his living expenses from the company account – This was his second time as a failure.
Just in the last two months, a company that is well-known to most people in Australia and New Zealand, did similiar, was locked out of factory for non-payment of rent. Owner was at trade shows for the 3 months prior. The funding of which I am not sure of.
The private assets of the owner/s protected by family trusts. The employees stripped the assets of the company in leiu of wages.
The rules regarding payment of superannuation is not strict enough to protect the employee.
And on it goes, one big vicious cirle, where the small people lose everytime.
Thank you BTDT. I’m very grateful that you’ve taken the time to share this information. I hope it triggers further debate, from all sides of the fence. Best regards, P.
You raise a good issue Paul, thanks. Casualisation of staff and a corresponding lack of rights for the little folk is a social ill. Super is one part of the pic. I’m interested to hear your readers’ experiences. You know, one thing that astonishes me about super is that the govt mandates it on one hand, and then super funds speculate with it on the open market. How are such disparate notions (mandatory saving … market speculation) reconcilable? It’s a funny old world.
Good points, Ad! Thanks for spending your tupp’orth with us. I totally appreciate the paradox you describe.
Despite the rabid misogyny at Holden’s Engine Company, they did have a phenomenal superannuation plan. Defined benefit, rather than accumulation.
If the fund ever fell short of expected performance, the firm topped it up. And every year you got a statement that was bigger than the previous one. AND they told you what you were going to get at the end!
That super plan was one of the hardest things to leave behind when I pulled the pin on my HR career. Now I only hear about defined benefit plans when they’re discovered in French caves. It’s such a pity that super can’t be … super. Thanks again, Cobber!
There is always DIY super. Easy to track your employer’s contributions in real time and you can decide the exact investments and risk/reward balance you desire. Downside is learning how to do it and the admin overhead.
More info? Googling “DIY Super” will turn up many articles regarding what are generally known as “Self Managed Super Funds”
Nice one, Jason! It never occurred to me to mention that. Thank you for stopping by.