Lowest paid workers ripped off

Lowest paid workers ripped off

Low-paid cleaners working for subcontractors in the commercial cleaning industry across Australia have been ripped off for thousands of dollars in wages and entitlements, workplace investigations have found.

The short-changed cleaners have been employed to work at several major big business sites by subcontractors who pay them flat hourly wages and deny the payment of overtime or penalty rates.

The Fair Work Commission steps in

Australia’s industrial watchdog, the Fair Work Ombudsman, has uncovered illegal underpayments spanning many large businesses. For example the Myer stores in Knox City, Highpoint, Fountain Gate and Altona were found to be at fault after an unannounced site visit last year.

Myer-lowest paid cleaners ripped off

Fair Work Ombudsman inspectors interviewed some of the cleaners, employed by cleaning services firm A&K Saana Services, which had been subcontracted for the work by Pioneer Facility Services.

Nine cleaning staff were found to be short-changed about $6300 in a month. Individual underpayments ranged from $225 to $1009.

Myer management said it had previously raised concern about cleaning provider Pioneer Facility Services. It has since severed ties with the company after it failed to prove compliance with workplace law or the compliance of its subcontractors.

Senior Fair Work Ombudsman officials have pressed the importance of ensuring companies in a business’s supply chain are compliant with workplace obligations, especially minimum wage rates.

Companies must take their duties as responsible Australian employers seriously, and ensure that all of their suppliers and their subcontractors are complying with workplace laws.

Investigations now show lowest paid workers ripped off by Australia’s biggest businesses

Nationwide, workers at McDonald’s – Australia’s second largest employer – appear to be out of pocket by at least $50 million a year. Those affected include young workers who earn as little as $10.08 an hour.

How can McDonald’s underpay its Australian workers tens of millions of dollars a year? It’s because of a deal made with Labor’s largest union affiliate that excludes weekend penalty rates. The union is the Shop, Distributive and Allied Employees Association (SDA) which negotiated a 2013 agreement under which some McDonald’s employees are paid nearly one-third less than the award – the minimum pay and conditions safety net.

The union is separately locked in a similar controversy surrounding its deal with Coles – the nation’s third largest employer. The supermarket chain has since admitted tens of thousands of its casual workers have been underpaid.

Duncan Hart, a student who works part-time at a Coles supermarket in Brisbane, took action in the Fair Work Commission last year.


He claimed the enterprise bargaining agreement between Coles and his union, the Shop Distributive and Allied Employees Association (SDA), left thousands of workers worse-off than they would be under the award, and should therefore be deemed invalid.

In a decision published on Tuesday 31 May 2016, the Fair Work Commission sided with Mr Hart and ruled that the Coles EBA, which covers some 77,000 employees, failed what is known as the better off overall test (BOOT).

Mr Hart said the decision was a victory not just for Coles employees, but for workers more broadly.

Interestingly, the union’s agreement with the country’s biggest employer, Woolworths, is almost identical to the Coles deal.

This recent decision will increase scrutiny of similar workplace deals that come before the commission in the future.

Read the full story here.

Increase of 2.4% for annual national minimum wage

The Fair Work Commission has ruled that the national minimum wage be lifted by 2.4%. Therefore the minimum wage has risen from 656.90 an week ($17.29 per hour) to $672.70 per week ($17.70 per hour). This will mean a $15.80 per week increase for Australia’s lowest paid workers from 1 July 2016. This will affect 1.8 million workers who are on the minimum wage.

Using subcontractors? What does this mean for you?

This wage increase means that all employers must ensure that all of their suppliers and their subcontractors are complying with the annual minimum wage rates. If not then Australia’s industrial watchdog, the Fair Work Ombudsman, will uncover illegal underpayments for which the employer may be held liable. Any employee can make a complaint to the FWO if he or she believes the employer is not paying the correct minimum wages and conditions, such as annual leave or personal/carer’s leave. The matter is then referred to a workplace inspector who will investigate the complaint on the employee’s behalf. The employer may face penalties of as much as $6600 per contravention for an individual and $33,000 per contravention for a body corporate (Source: WorkplaceInfo).

Is there a time limit for recovery of wages?

Yes! Absolutely! FWO can prosecute for offences that occurred up to 6 years ago.

Under s545(5) of the Act a court must not make an order in relation to an underpayment that relates to a period that is more than 6 years before the proceedings concerned commenced (Source: WorkplaceInfo).

FWO promotes Dob in service

The employment watchdog has urged workers and companies to take advantage of a new anonymous tip-off service to dob in businesses that rip off their staff.

Fair Work Ombudsman Natalie James has said that she will make a plea for greater assistance from the community in reining in wage fraud in the wake of celebrated cases such as 7-Eleven and Baiada. This should discourage the practice of our lowest paid workers ripped off.

Read more at Sydney Morning Herald: Business Day

For Strata Managers and Body Corporate

To avoid problems, only deal with companies who offer open disclosure. This is the only way that you can be absolutely certain of payment of award (or above) wages by your suppliers and therefore no financial or punitive risk for you or your company.Havencab has been campaigning for fair workers’ wage rights in the commercial cleaning industry for years. We offer complete and open disclosure about wage rates and we do not employ subcontractors. If you need advice or a confidential consultation please contact us here.

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