Woolworths has entered into a Compliance Partnership with the Fair Work Ombudsman (FWO) following an investigation earlier this year that uncovered “rampant exploitation” of cleaners in Tasmania.

The FWO’s inquiry into the procurement of supermarket cleaners in Tasmania found high levels of non-compliance with workplace laws amongst contractors providing cleaning services at Woolworths’ Tasmanian supermarket sites.

The inquiry, which commenced in 2014, looked into contracting arrangements for cleaners at all 31 of Woolworths’ Tasmanian sites, as well as seven Coles sites (44 per cent of Coles’ Tasmanian sites) and 17 IGA sites (21 per cent). The focus on Woolworths sites was due to it being the only retailer of the three in Tasmania outsourcing its cleaning.

The investigation uncovered breaches across 90 per cent of Woolworths’ Tasmanian sites, including cases of contractors paying cleaners as little as $7 per hour for training and $14 per hour for work. Cleaners were also often paid in unrecorded cash-in-hand payments with no pay slips provided. Eighty-four per cent of sites’ workplace records were inaccurate or not kept at all.

Fair Work Ombudsman Sandra Parker commended Woolworths for its response to the inquiry findings.

“Our Inquiry into supermarket cleaners in Tasmania unveiled serious workplace breaches that required a serious response from Woolworths. By signing a proactive compliance deed with the Fair Work Ombudsman, Woolworths has committed publicly to monitoring and auditing its network of cleaning contractors at all Woolworths Group sites,” Parker said.

“Woolworths is implementing responsible measures to ensure its cleaning contractors are paying their workers correctly and meeting their workplace obligations.”

The latest partnership follows a similar deed signed last year covering Woolworths’ procurement of trolley collection services.

“The FWO encourages all companies involved in the procurement of services through supply chain arrangements in industry sectors such as cleaning, security and IT to work proactively and constructively with us.

“Good companies take accountability for ensuring workers servicing their businesses are being treated lawfully and their shareholders and customers have a right to expect this of them,” Parker said.

Woolworths has agreed to report regularly to the FWO on its implementation of the following agreed measures under the deed:

• Ensuring employee records are maintained by contractors including through photo identification of employees and improved timekeeping systems.
• Rectifying underpayments by requiring the primary contractor to back-pay substantiated claims or, when this has not occurred within 20 business days, through an ex gratia payment by Woolworths.
• Annual audits of contractors conducted by independent auditors.
• Requiring all contractors to agree to make payments to employees by EFT and not cash, except in exceptional circumstances.
• Investigating and resolving referred complaints in a timely manner.
• Maintaining an Internal Compliance Team to conduct unannounced compliance checks of contractors.
• Promoting accountability at all levels of the supply chain by requiring the primary contractor to enter into a written contract containing prescribed terms with the subcontractor.
• Ensuring contract prices are sufficient to meet minimum employee entitlements.
• Promoting the multi-language Speak Up Service which allows contractors, employees and members of the public to report potential non-compliance.
• Providing ongoing training to ensure all employees and employers on Woolworths sites are aware of their workplace rights and obligations.

The FWO will ensure Woolworths complies with the deed by working with their Internal Compliance Team, which was established under an earlier compliance partnership covering its trolley collection supply chain.

The FWO will meet regularly with Woolworths on the PCD, receive regular progress reports and provide guidance and feedback on the company’s implementation of the measures agreed to in the deed.

The Proactive Compliance Deed was signed on 24 August 2018.