Bosses could be jailed for deliberately underpaying their staff, no matter who is elected in the November state election.

A Labor-dominated parliamentary inquiry on Tuesday recommended making dishonest wage theft a crime, following Premier Daniel Andrews’ announcement that Labor would make it a jailable offence if re-elected.

Speaking to The New Daily on Tuesday, Shadow Industrial Relations Minister Robert Clark would not rule out putting dodgy bosses behind bars under a Coalition government.

“Employers who deliberately rip off their employees should face very severe consequences,” Mr Clark, the committee deputy chair, said.

He told The New Daily the opposition had not formed a view on what their position would be in government, but repeatedly declined to rule out jailing bosses for deliberate underpayment.

Their first preference would be for wage theft to be dealt with by the commonwealth, he said.

“As to whether or not there should be additional laws involving criminal sanctions – jail terms at a state level – that’s not something on which we’ve formed a view.

“My view as Shadow Minister for Industrial Relations is that any employer who deliberately rips off their employees should face severe consequences.”

Shadow Industrial Relations Minister Robert Clark said the Opposition’s preference was for wage theft to be dealt with by the commonwealth. Photo: AAP

Mr Clark made clear that innocent mistakes by employers should not lead to jail time.

Mr Andrews in May announced bosses could be jailed for up to 10 years for deliberate underpayment if Labor is re-elected in the November state poll.

Businesses could also be fined up to $950,000 under the proposal.

Unions have also been campaigning for the change before the election.

The parliamentary committee’s Liberal minority report from Mr Clark and Ringwood MP Dee Ryall did not express a view on inquiry findings and recommendations.

The Liberal members said the inquiry was partisan and a misuse of public funds.

The inquiry focused on issues that were matters for the commonwealth, particularly the Fair Work Commission’s ruling to cut penalty rates in the fast food, retail, hospitality and pharmacy industries.

Fair Work ruling on penalty rates

The committee investigated the 2017 Fair Work ruling and found no evidence the first round of cuts has created new jobs or additional hours for workers, as promised.

The cuts are being progressively rolled out and only began in the past year.

McKell Institute analysis of employment growth in the third quarter of 2017 found the retail industry did not show a significant rise in employment.

The analysis found a slight reduction in employment in the accommodation and food services industry.

Professional Pharmacists Australia told the inquiry there was no increase in opening hours or the number of employees.

Restaurant and Catering Australia, representing the hospitality sector, submitted a survey of 1000 hospitality business owners commissioned before the changes.

It found 52 per cent of businesses would employ more staff if weekend penalty rates were reduced. On average across the sector, about 3.15 staff per day per business would be employed, according to the research.

The survey also said 41 per cent of businesses would open an average extra 5.07 hours on a typical Sunday or public holiday with reduced penalty rates.

John Hart, then-CEO of the group, told the committee it would take at least two to three years for a statistically significant change to be realised.

The Liberal minority report said it was difficult to attract a broad range of witnesses because the committee members were mostly Labor.

Limited evidence was available to the inquiry, the Liberal MPs said.

“During the time of the inquiry, only the first initial stage of the Fair Work Commission’s decision had come into effect, providing only limited actual evidence of the effects of the decision,” the minority report said.

“Thus, witnesses mostly were reduced simply to asserting and re-asserting their predictions and policy positions.”

Reductions to public holiday penalty rates came into effect on July 1 last year.

The first round of Sunday penalty rate cuts came into effect this month and will be staggered over coming years.

Opposition Leader Matthew Guy criticised the Fair Work decision at the time.

The Sunday penalty rate reductions are being progressively cut over years. Photo: Victorian Parliament