The Fair Work Ombudsman (FWO) has announced that it is taking legal action after finding four cleaners at Woolworths supermarkets in Tasmania were allegedly short-changed more than $21,000 as a result of contractors and subcontractors flouting workplace laws.
The FWO has been investigating Woolworths’ arrangements for cleaners at its Tasmanian supermarkets since September, 2014 and the findings are expected to be published late this year.
The Ombudsman is taking Federal Circuit Court action against major national cleaning company Pioneer Facility Services Pty Ltd, which formerly held contracts with Woolworths to provide cleaning services at numerous supermarkets throughout Australia.
Also facing court is Sung Gun Hwang and his company OzKorea Pty Ltd, who formerly subcontracted to provide cleaning services at supermarket sites in Tasmania at Deloraine, George Town, Riverside and Mowbray.
Mr Hwang and OzKorea allegedly directly employed and underpaid the four workers, including three Korean nationals, between January, 2014 and January, 2015.
The underpaid workers, including young international students, allegedly received flat rates of $14 to $15 an hour.
Under the Cleaning Services Award they were allegedly entitled to be paid $22 to $23 for normal hours and penalty rates ranging from $26 to $47.
The findings come just weeks after FWO released the findings of its inquiry into the procurement of trolley collection services by Woolworths. Fair Work inspectors visited 130 Woolworths’ sites across Australia and found some trolley collectors were being paid rates as low as $10 an hour.
When the inquiry commenced, the minimum adult hourly rate was between $18.01 and $22.51, depending on whether the workers were full-time, part-time or casual employees.
More than three in every four sites visited had indications of some form of non-compliance with workplace laws.
When the inquiry commenced, Woolworths engaged directly with 33 contractors to provide trolley collection services at its supermarkets and BIG W, Dan Murphy’s and Thomas Dux stores.
“Outsourcing is a legitimate business arrangement, but, in my experience, in highly competitive markets for low-skilled work,” Fair Work Ombudsman Natalie James said in a statement. “It also increases the risk that workers will be underpaid, sometimes quite deliberately.”
In an editorial opinion, Ms James compared the situation at Woolworths with the investigation into 7-Eleven earlier in the year.
“Once again we find a big, established company at the top of a chain that involves worker exploitation, reaping the benefit of underpaid labour while failing to keep sufficient watch on what its contractors are paying the workers,” she said. “It’s time for Woolworths to show us all that it means it and to commit to action.