Spot checks by the Fair Work Ombudsman (FWO) have found that dozens of cleaners in Darwin have been underpaid tens of thousands of dollars, stated a 17 February press release. ’53 cleaners – including young workers and overseas workers – were found to have been short-changed almost $84,000,’ it revealed.
Fair Work Ombudsman Natalie James says the result shows the need for local cleaning contractors to pay greater attention to wage rates.
The results have come from Fair Work inspectors randomly checking 14 Darwin cleaning businesses last year and the findings have just been released.
‘One employer underpaid six workers a total of $38,200 – an average of more than $6300 each – as a result of paying a flat hourly rate of $19. The flat rate resulted in underpayment of casual loadings and penalty rates for weekend, shift and overtime work,’ stated the release.
Inspectors found many businesses were failing to comply with their record-keeping and pay-slip obligations and were not providing a copy of the Fair Work Information Statement to new employees. Only one business out of the 14 audited was fully compliant with Commonwealth workplace laws.
“While it was disappointing to find a number of underpayments, it was pleasing that all employers rectified non-compliance issues and accepted assistance to remedy their mistakes,” said James. “Some employers raised concerns that paying the correct wages made their businesses noncompetitive, particularly when competing for new contracts.
“We assured those businesses that audits like this not only protect employees – but also help to ensure that businesses doing the right thing can compete on a level playing field,” James explained.
“The cleaning industry is very competitive and the responsibility for ensuring workers are being paid correctly is not the cleaning contractors’ alone.
“It is not acceptable for organisations to outsource work to the lowest-cost cleaning contractor without considering whether the low price paid is likely to result in workers ultimately being underpaid.
“Such behaviour is not only unethical, but it may be unlawful. It can also potentially expose managers and their company to financial penalties.”
According to the FWO, ‘Section 550 of the Fair Work Act provides for accessorial liability, a mechanism through which someone other than the employer who is involved in a contravention of workplace laws may be held accountable’.
In a keynote address late last year titled Risk, Reputation and Responsibility, James flagged that the Agency would increasingly use Section 550 of the Fair Work Act to go up and down the supply chain to ‘scrutinise sub-contracting arrangements’.
She warned that companies found to be profiting from underpaying workers faced a “very real risk to reputation and impact on their bottom line”.
“All parties should undertake due diligence when outsourcing work, particularly to lowest-cost providers, to ensure lower costs are attributable to efficiencies in the business and not the potential exploitation of workers on below-award rates,” said James.
The press release also revealed that The Fair Work Ombudsman will shortly release the results of a national campaign on the cleaning industry.