ISS Facility Services Australia Limited is in discussions with the Fair Work Ombudsman (FWO) following an investigation into one of its sub-contractors at the Melbourne Cricket Ground. (See our previous post here.)
Melbourne-based company First Group of Companies Pty Ltd allegedly underpaid 11 overseas workers $37,000 in 2014. A press release from the FWO states that the employees, who were mostly international students, were allegedly paid flat rates of between $18 and $25 an hour when they were entitled to rates of between $18 and $46 for some shifts.
The FWO also alleges the First Group breached laws relating to sham contracting, frequency-of-pay and pay-slips.
Documents filed with the Federal Circuit Court allege that ISS knew the sub-contract price it paid First Group not enough to enable the company to pay its workers minimum lawful entitlements. Further, ISS was allegedly aware of the unlawfully low rates its sub-contractor was paying workers, but took no action.
However, a press release from ISS says that it ‘took immediate action’ when it heard about the underpayment issue. The release states that ISS terminated the sub-contracting agreement and directly employed ‘all those cleaners that were affected.’
Facing court are ISS managers Patrick Dalton, Brian Scharper and Miguel Rodriguez and First Group’s owner-operators Sharad Patel and Sidarth Luthra. Each of these individuals could be fined up to $10,200 per contravention, while the companies themselves each face penalties of up to $51,000 per contravention.
The FWO is also seeking a court order for First Group to rectify the alleged underpayments in full. To date, only some workers have been back-paid.
Fair Work Ombudsman Natalie James says the Agency is determined to ensure businesses take responsibility for practices in their networks and supply chains.
“We are committed to scrutinising supply chains and sub-contracting arrangements and holding companies accountable for business practices that undermine compliance,” she says. “Cleaning contractors will continue to face ongoing spot checks by the FWO as we endeavour to detect and deter deliberate non-compliance with federal workplace law.”
A directions hearing is listed for 19 February in Melbourne.