Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the chair of the Education and Employment References Committee, Senator Marshall, I present the report of the Education and Employment References Committee on the exploitation of cleaners working in retail chains, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I attended all of the hearings of this committee. The committee came about as a result of a Senate estimates hearing where I was questioning the Fair Work Ombudsman about its report on Tasmanian cleaners, where it was clear that there was systematic exploitation of cleaners employed by Woolworths in Tasmania. During that questioning, Senator Molan interjected to defend Woolworths' position. I thought that was appalling—when I was defending some of the lowest-paid workers, workers that had been exploited—that a coalition senator would intervene and try and defend Woolworths for their part in this exploitation. I then determined that I would try and get to the bottom of what happened. That resulted in the Senate approving the references committee to inquire into the exploitation of cleaners in the retail sector. We've named the report Wage theft—what wage theft? What we basically had was employers coming along and arguing that they had no responsibility for the wage theft being put on low-paid workers, because they had contracted their responsibilities out to a contractor and it was the responsibility of that contractor. Yet companies like Woolworths actually set the terms and conditions of the contract that can be entered into, then these contractors further subcontract across a number of subcontractors. It's what's described as pyramid subcontracting, where workers get less and less wages as it goes down that pyramid, to the extent that workers have their wages stolen and the companies don't meet their legal obligations. We see a position where workers are living in abject poverty.

What we've come up with is not only recommendations in relation to that, but during the course of the hearing it became clear that the contractor that Woolworths were using, their principal contractor, was the same contractor that the Department of Finance had used to contract out the work of the cleaners in Parliament House. You remember the issue there. The department contracted the cleaners' work out and the cleaners ended up with a six per cent wage cut because of the position. This is exactly what's happening with companies around the country and with the departments under the guidance of this government: contract the work out, then deny any responsibility for those workers' wages and conditions because the contract has been signed and the company or the department don't employ these workers. It's all care and no responsibility. It's an outrageous proposition.

What this reminds you of is exactly the same position that workers found themselves in at 7-Eleven and Shell. Remember all the exploitation that took place there? Mainly migrant workers, workers who had no great command of English, were subject to exploitation because Woolworths took the position that they would contract out to a company called Broadspectrum and then Broadspectrum contracted out to other companies such as a company named Pioneer, who had been found to have breached workplace laws over a period of time. This is how this government is allowing departments, under the auspices of the government, to treat workers. It is absolutely unacceptable.

So we've come up with 22 recommendations. I'll just go briefly to some of them. We've said, firstly, that the Migrant Workers Taskforce should immediately release the report, along with the progress report, within a month so that the work of the Migrant Workers Taskforce can be set beside the work that this committee has done to deal with the issues. We've said that the government should take into account the evidence and recommendations of this reference committee report in relation to wage theft and the exploitation of workers. We have recommended that the Fair Work Ombudsman stop negotiating compliance deeds that only go back a certain period of time, when the workers are being ripped off.

What we saw in this report was that the workers in Tasmania had been ripped off since 2010. Yet the Fair Work Ombudsman had only gone back a set period of time for those workers to recover their wages. It's an outrageous position that is being adopted by the Fair Work Ombudsman. The Fair Work Ombudsman should be ashamed for putting that position forward. They are allowing companies to rip workers off, with impunity. What are the sanctions if you're caught breaching the award? Even by the Fair Work Ombudsman's standards, they are very little. You can be sure that the Fair Work Ombudsman will only go back a certain period to recover the wages of those workers and will not go back the full period of time that the workers were ripped off. It was an outrageous position that the Fair Work Ombudsman took, only matched by the outrageous position of Woolworths.

Woolworths are now the only big retail company in the country that don't employ cleaners directly. And they couldn't give us an answer as to why they would not employ directly so that workers get decent wages and conditions and are employed directly by the company—other than that there was some specialised work to be done. You can make your own mind up about how 'specialised' it is to actually keep a place clean and work to proper instructions in Woolworths. Every other company in Australia can do it, but Woolworths claim they can't. They still try and push their responsibilities for workers out, back to contractors, and claim there is no problem.

They actually set up some recovery process for these workers and they advertised in the Financial Review and The Australian. What cleaner is going to read the Financial Review and The Australian? And they put out notices that were so complex it was difficult for the committee to comprehend what they meant in these notices. This is an absolute disgrace. Woolworths is one of the biggest companies in this country, yet their workers are being ripped off. Even as late as today, we got correspondence from an accountant in Western Australia, who has indicated that they have gone through some of the cases of exploitation in other states and that Woolworths are not calculating the wages of these workers properly. They're leaving it up to the contractors to calculate the wage theft, and they are not taking a strong position to deal with this issue. It is absolutely ridiculous.

I want to congratulate the company Adam Hunter Pty Ltd in Western Australia, who are looking after workers—doing what the Fair Work Ombudsman should have been doing but not doing properly. Adam Hunter Pty Ltd have outlined that, even after this report, even after we've seen this—and when Woolworths and the contractors are saying that the only problem is in Tasmania—this is a problem nationwide for Woolworths. Woolworths should get off their backside, look after workers, employ them directly and stop allowing wage theft under their watch. It is a ridiculous proposition.

I'll just go back to where I started: for any coalition senator to intervene on behalf of a company like Woolworths when I'm questioning them about stealing the wages of workers is an outrage, and Senator Molan should be absolutely ashamed of himself. It is outrageous, what he did. The only good thing about it is that it allowed this report, and I will speak to this report more in an ongoing position. I'm not sure whether I need to seek leave to continue my remarks.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Cameron.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I just want to take a few minutes today to talk about the same issue as Senator Cameron did. And Senator Cameron, I would like to thank you for leading this inquiry. He's just outlined the conclusions and the recommendations of the report more generally. I also want to focus on some of the issues outlined in chapter 3. Chapter 3 really relates to the Fair Work Ombudsman. The fact that this issue happened in Tasmania, my home state, is of quite some concern to me. A Fair Work Ombudsman investigation was commenced in November 2014 into the compliance of cleaning contractors engaged by supermarkets in Tasmania. The Ombudsman's report released in February 2018 found noncompliance with legal obligations by cleaning contractors at 90 per cent of Woolworths sites in Tasmania. The Fair Work Ombudsman's report highlighted that the majority of cleaners who were interviewed by inspectors during the site visits in Tasmania were unable to provide details of the nature of their engagement, were unwilling to advise how much they were being paid, hadn't received payslips, were paid a flat rate for all ours hours worked, were unaware of the applicable penalty rates under the award and were unable to provide a clear indication of the business that employed them, except for a first name and sometimes a mobile number of the person they reported to—and that's because, as Senator Cameron spoke about, there's a 'chain of uncommand', if you like, whereby Woolworths basically subcontracts the work out and it keeps going on down the line until nobody wants to take responsibility—and a majority of them were from overseas or of a non-English-speaking background.

The Fair Work Ombudsman uncovered underpayments of around $64,000 as well as multiple breaches relating to rostering, payslips and record keeping. They estimate that the underpayment was greater than $64,000, but they were unable to fully quantify the workers' entitlements because of poor record keeping, false and inaccurate records and a lack of cooperation from the workers, possibly owing to the fact that they were worried that if they cooperated they would probably lose their job. So, while it was the contractors who were primarily responsible for these breaches, the Fair Work Ombudsman also observed that Woolworths contributed through the cost and time pressures they placed on contractors. That inquiry also found that Woolworths had contributed to the culture of noncompliance through deficiencies in procurement and oversight of its cleaning contractors. They failed to ensure that cleaners complied with their visitors-book protocol and often signed in and out with a different contractor's name. They also failed to issue identification cards. So, who knows who would have been in there doing what in the supermarkets. Some cleaners advised Fair Work Ombudsman inspectors that they'd not completed any sort of induction. This led to difficulties identifying which cleaners were on which sites, which obviously contributed to the difficulty in quantifying their workers entitlements, and exposed workers to unacceptable health and safety risks as well.

On 24 August 2018 Woolworths entered into a proactive compliance deed with the Fair Work Ombudsman. A proactive compliance deed is a mechanism used by the FWO to formalise compliance partnerships with businesses to ensure that their systems and processes are working effectively to build a culture of compliance. Through the inquiry we heard from the law firm Maurice Blackburn and the cleaners union United Voice that there were significant limitations in the compliance deed.

Firstly, the deed only required Woolworths to ensure that employees receive their full entitlements from 1 July 2014, so, if you hadn't been paid properly previous to that, too bad. The time limit was pretty arbitrary, and we did note that a similar deed for 7-Eleven was not time limited. The committee noted that the language in advertising material promoting Woolworths's Speak Up service—that's where workers can report suspected misconduct—was complex, particularly for workers from non-English-speaking backgrounds. The deed also put the onus on workers to come forward and claim entitlements instead of Woolworths proactively determining repayments. The deed also had inadequate processes to ensure responsible contracting, going forward, such as safeguards to minimise the risk of noncompliance and maintaining safe productivity levels to avoid risk of occupational injury. United Voice and Maurice Blackburn referred to the deed as 'a missed opportunity to reset the relationship between Woolworths and the cleaning workforce and initiate new arrangements to ensure that the cleaners that work in these stores are employed on fair and lawful terms in the future'.

I was pretty disturbed about this exploitation happening in Woolworths stores. Tasmanians pride themselves on being a fair and decent type of people, and for it to happen in my beautiful home state of Tasmania was quite disturbing. In the absence of any nationwide investigation, I do wonder whether there are not similar scenarios playing out across the country. As far as I'm aware, no management staff in Woolworths have been disciplined over the shortcomings in their contracting processes. As the report notes:

… the committee views the actions of Woolworths in managing its cleaning arrangements for its Tasmanian stores as a highly indicative case study highlighting the 'all power, no responsibility' mindset that plagues some businesses under the current legislative framework.

The committee, as Senator Cameron said, made a number of recommendations to improve future compliance deeds negotiated by the Fair Work Ombudsman, and I hope the ombudsman gives these serious consideration.

The poor treatment of cleaners by Woolworths contractors in my home state of Tasmania is symptomatic of the high rates of exploitation in this industry, and we must do more to ensure that vulnerable workers, such as those in the cleaning industry, are protected from exploitation and that they receive their full pay and entitlements. I seek leave to continue my remarks later.

Leave granted.