One business to be named at the inquiry next month has been taken to Federal Court by several staff for underpayment only to reach a confidential agreement each time, Ballarat Trades Hall secretary Brett Edgington said.

The inquiry into the Corporate Avoidance of the Fair Work Act, announced last year, comes in the wake of allegations major chains – including 7 Eleven, Caltex and Domino’s – may have paid their workers as little as half the minimum wage.

Trades Hall has a list of over 30 businesses in Ballarat whose staff have come forward with stories of being underpaid, bullied or harassed. According to Mr Edgington, one of the worst offenders is a Ballarat business which employs between 60 and 90 staff across several venues, and pays more than half its employees “off the book”.

Staff who complained were threatened, told by the business owner “I know everyone in this town … you will never work again”, Mr Edgington said.

The Courier has chosen not to name the business for legal reasons. 

“We need to start seeing that for what it is, it is theft from the individual who has worked those hours and deserves that pay.

“How can you get away with it time and time again?

“That obviously means that the penalties are not a significant enough disincentive to stop this behaviour.”

Many businesses are running “elaborate and sophisticated” cash in hand schemes, pushing underpayment to a crisis point in Ballarat, Mr Edgington said. 

A handful of Ballarat venues are known to run a split system whereby some workers or shifts are “on the book” whiles others are paid “off the book” – at below minimum wage and without legal protections, he said.

“Over the last seven to 10 years it’s become much, much worse. Historically it’s something we would occasionally see but the fact that businesses are now using this as a model, I don’t think we've ever seen that. I know stories of restaurants who have opened in Ballarat and the very first day of trading have based their model on wage theft.”

Ballarat’s so-called black economy goes beyond retail and hospitality. One private residential aged care facility reported to Trades Hall pays staff a flat overnight rate of $100 for shifts as long as 12 hours, often overseeing high risk patients. 

Others have been caught paying adult workers a flat rate of $15 an hour.

Trades Hall’s submission to the inquiry, published last Friday, also lays bare the vulnerability of international students.

One international student was paid just $5 an hour as a delivery driver and sexually assaulted on almost every shift. For the student, the shame of being unable to finish her course, which her parents had worked so hard to save for, meant she was unwilling to report the underpayment or abuse, Mr Edgington said.

Another international student told The Courier nine in 10 international students in her circle were being paid cash in hand and under minimum wage. Most realised they were being underpaid but saw no other way to cover their living expenses, the student said.

Fair Work Ombudsman investigators audited 50 Ballarat businesses in December last year, with a further 150 spot checks planned over the next few months. It is not yet known when those results will be made public.

To make a representation at the Senate Inquiry in Ballarat call 02 6277 3521 or email eec.sen@aph.gov.au.