Trolley collection providers that exploited a dozen overseas workers pushing trolleys at a suburban shopping centre have been fined more than $190,000, stated a Fair Work Ombudsman (FWO) 6 January press release.
The Federal Circuit Court in Sydney imposed the penalties in response to legal action by the FWO.
The 12 trolley collectors – 11 from South Korea and one from Iran – were vulnerable employees who spoke little English, observed the press statement. All males aged between 19 and 32 were in Australia on the 417 working holiday visa.
They were not paid anything at all for 11 days work at the Costco shopping centre at Lidcombe, in western Sydney, in 2011. Collectively, they should have been paid more than $27,000.
The trolley pushers worked up to 105 hours over the 11-day period, including weekend, evening and overtime shifts; and they were short-changed amounts ranging from $1829 to $2830.
The FWO pointed out that Judge Michael Lloyd-Jones ‘took the rare step of issuing the maximum penalty against one trolley collection provider with a history of exploiting vulnerable workers.
‘Businessman Nick Iksidis was penalised $39,600 for his role.’
Also fined were:
* Trolley collecting and cleaning company Jay Group Services Pty Ltd – $109,725,
* Jay Group general-manager Jatinder Singh – $23,760, and
* Jay Group employee Tejinder Singh Sandhu – $17,160.
The FWO said that Jay Group was also ordered to reimburse all workers their outstanding entitlements. Only one has been back-paid to date.
‘It is the third time Nick Iksidis and/or his company Xidis Pty Ltd, which traded as Effective Supermarket Services, have been penalised for exploiting trolley collectors.
‘Each was the result of litigation by the Fair Work Ombudsman and its predecessor agencies.
In 2007, Xidis Pty Ltd and Iksidis were fined a total of $25,000 for failing to pay three Melbourne trolley collectors a total of $3523 in wages and entitlements.
‘And again in 2008, Xidis Pty Ltd was fined $120,000 for underpaying 42 trolley collectors in Albury, NSW, a total of $100,000,’ said the FWO.
The Ombudsman added that Iksidis’ latest penalty comes after Effective Supermarket Services entered into a contract with national supermarket operator Costco Wholesale Pty Ltd in 2011.
Costco paid Effective Supermarket Services a contract fee of $34,633 to provide trolley collecting services at its Lidcombe shopping centre from July 21, 2011 – until it terminated the contract on July 31.
Effective Supermarket Services then sub-contracted Jay Group Services to provide trolley collection services for a fee of $14,800.
Jay Group ultimately hired the 12 overseas workers as trolley collectors, promising them cash payments of $10 to $12 an hour.
After receiving complaints from the employees, the FWO investigated and subsequently commenced legal action because of what the Ombudsman said was the blatant nature of the underpayments and the refusal to rectify them.
‘Iksidis later admitted that he was involved in underpaying the trolley collectors and had breached workplace laws.
‘Judge Lloyd-Jones found that Iksidis’ history of non-compliance warranted a substantial penalty, noted the FWO.
“The person who should have been the best informed and appropriately the most cautious in respect of the appropriate remuneration of employees was Mr Iksidis,” Judge Lloyd-Jones said.
“Consequently, I believe that the maximum penalty for each contravention should be imposed.”
Judge Lloyd-Jones said the employees were “vulnerable to exploitation” and there had been “a total failure to meet minimum standards of the most fundamental kind being a complete non-payment of wages and entitlements”.
“Further, there is a need for deterrence in the trolley collecting industry which is generally a low-skilled industry that often uses sub-contracting arrangements to avoid obligations under workplace law,” Judge Lloyd-Jones said.
Supermarket ‘giants’ warned
In the past six years, the FWO has recovered some $433,000 in underpaid wages and entitlements for more than 500 trolley collectors throughout Australia.
In recent months, the FWO has stepped up its efforts to protect trolley collectors, warning the supermarket giants they can no longer turn a blind eye to the persistent problem of trolley collectors being exploited by sub-contractors.
As part of an Enforceable Undertaking entered into in October 2014, Coles became the first major supermarket chain to publicly declare it has an ‘ethical and moral responsibility’ to join with the FWO to stamp out exploitation of trolley collectors.
FWO executive director Tom O’Shea emphasised that companies are at risk of breaching workplace law if they outsource work to low-cost providers that failed to pay workers their minimum lawful entitlements.
“Companies need to ensure their procurement decisions do not undermine compliance with workplace laws,” he said.
“Companies should take efforts to ensure low-cost contracts are the result of efficient business practices, rather than the underpayment of employee entitlements.
“In cases where we believe breaches of workplace laws have occurred, we are committed to scrutinising the commercial processes behind those breaches and holding any involved parties to account.”