The Fair Work Ombudsman has said that cleaning contractors at 90 per cent of the Woolworths Tasmanian supermarket sites were not complying with workplace laws.
Ombudsman Natalie James said that the inquiry showed exploitation has risen to alarming levels. It can occur where supply chains involving vulnerable workers are not adequately monitored.
The inquiry, which began in 2014, looked into contracting arrangements for cleaners at all 31 of Woolworths’ Tasmanian sites, seven Coles sites (44 per cent of Coles’ Tasmanian sites) and 17 IGA sites (21 per cent). It focused on Woolworths sites as it was the only supermarket out of the three operating in Tasmania that outsources its day-to-day cleaning services.
James said that cleaners were often paid in unrecorded cash-in-hand payments and no payslips. The inquiry has identified over $64,000 in underpayments, with over $21,000 of these rectified.
“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. 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.”
“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 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. They found 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 supermarket giant’s 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 register as 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.
