Back to all Articles

A Case Study on the Labour Hire Laws

In 2014 the Fair Work Ombudsman investigated claims of exploitation of foreign workers by a large cleaning company, ISS Facility Services Australia Limited, who were contracted to provide cleaning services at the MCG. 

In 2014 the Fair Work Ombudsman investigated claims of exploitation of foreign workers by a large cleaning company, ISS Facility Services Australia Limited, who were contracted to provide cleaning services at the MCG. 

 

ISS had subcontracted to First Group of Companies Pty Ltd (which is now de-registered) to ‘provide post-event cleaning services at the MCG’ between 2009 and 2014.

LHLpt3

In a night time blitz after an AFL match, Fair Work Australia interviewed 44 workers. It was found that the wages of the 11 workers supplied by First Group of Companies didn’t meet ‘minimum pay and entitlements under the Cleaning Industry Award 2010, including base hourly rates, casual loading, penalty rates, overtime and allowances.’

 

As a result, ISS Facility Services Australia Limited received a $132,217 penalty, even though they had subcontracted to someone else.

 

‘In Court, ISS admitted knowing in 2014 that the rates it paid First Group of Companies were “not sufficient to cover the employees’ entitlements” and that it was aware of the unlawfully low rates First Group of Companies was paying workers. ISS admitted its conduct contravened workplace laws.’

 

Fair Work Ombudsman, Natalie James, made the following statement in reference to the investigation:

 

“The Fair Work Ombudsman has been warning businesses for years: you can’t turn a blind eye to exploitation of contracted workers in your labour supply chains.

 

“The Fair Work Ombudsman will hold-to-account all those involved in exploitation, from head contractors down, and they risk serious consequences if they fail to take steps to ensure that all subcontractors in the supply chain treat workers lawfully.

 

“These responsibilities start with the procurement process.

 

“Price driven procurement that disregards the cost of wages and the dynamics in the market is a recipe for exploitation of vulnerable workers.”

To read more about the investigation, see the 29 May 2018 media release on the Fair Work Ombudsman’s site Penalty against MCG head contractor over underpayments a “wake-up call”.