Fair Work Ombudsman Natalie James said that the inquiry – which began in 2014 – showed how alarming levels of exploitation can occur where supply chains involving vulnerable workers are not adequately monitored.
The inquiry looked into contracting arrangements for cleaners at all 31 of Woolworths’ Tasmanian sites, as well as seven Coles sites (44 per cent of Coles’ Tasmanian sites) and 17 IGA sites (21 per cent).
The inquiry’s focus on Woolworths sites was due to it being the only retailer of the three operating in Tasmania outsourcing its day-to-day cleaning services.
“Our inquiry found deficiencies in Woolworths’ governance arrangements with regard to its procurement and oversight of cleaning contracts, resulting in serious exploitation occurring at multiple levels of its cleaning supply chain,” James said.
“We uncovered breaches across 90 per cent of Woolworths’ Tasmanian sites, including cases of contractors paying cleaners as little as $7 per hour for training and $14 per hour for work – well below their legal entitlements.”
James said that cleaners were often paid in unrecorded cash-in-hand payments with no payslips provided.
“Overall, record-keeping by contractors engaged at Woolworths’ sites was abysmal: at 84 per cent of sites workplace records were inaccurate or not kept at all,” said James.
“The impact of record keeping failings is exacerbated by the use of cash payments which, while lawful, make it difficult to determine with any certainty the extent of underpayment of wages by the contractors.
“Such blatant and widespread breaches of workplace laws are clearly unacceptable, and echo the findings of our previous inquiries into supply chains employing low-skilled and vulnerable workers.”
The inquiry has so far identified over $64,000 in underpayments, with over $21,000 of these having been rectified.
The Ombudsman entered into a Proactive Compliance Deed with Woolworths last year under which the supermarket giant has committed to monitor and regulate its trolley collection network to ensure workers at its sites nationwide are receiving their correct pay and entitlements. This followed the Fair Work Ombudsman finding similarly serious non-compliance in the trolley collecting supply chains managed by Woolworths.
Following its latest inquiry, the Ombudsman recommended that the deed be expanded to also cover Woolworths’ cleaning supply chain.
“While we acknowledge that Woolworths has since taken steps to improve compliance within its labour supply chain, it is clear from our findings that at the time of the Inquiry a culture of non-compliance was prevalent amongst contractors on its sites,” James said.
“While it is primarily the direct employer’s responsibility to ensure its workers are receiving their proper entitlements, once again I must emphasise that responsibility in a supply chain involving vulnerable workers goes all the way to the top.
The Ombudsman called on Woolworths, Coles and IGA to become members of the Cleaning Accountability Framework, an industry led initiative which promotes the adoption of best practice throughout the cleaning supply chain to improve labour and cleaning standards in Australia.
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