Earlier this week, poultry supplier Baiada and the Fair Work Ombudsman (FWO) announced that they have entered into a 3-year Proactive Compliance Deed to right the wrongs of Baiada’s contractors who have for some time been underpaying their employees.
The Deed comes after the FWO released findings earlier this year which were damning of the treatment of overseas workers at Baiada sites. Many of the effected workers were employed by companies contracted by Baiada to carry out work at those sites. At the time of the FWO’s inquiry, it called on Baiada to take responsibility over the treatment of such workers, even though Baiada was not their legal employer.
Baiada have now announced that they will put aside a fund of $500,000 for current or former employees of Baiada site contractors who were underpaid. If the funds have not been exhausted by May 2016, any remaining amounts will be distributed to charities.
As part of Baiada’s compliance partnership with the FWO, it has further committed to implement a number of changes including a hotline for employees to call if they believe they are being underpaid, independent auditing of contractors for workplace compliance, new time keeping and record keeping systems, and, amongst other things, Fair Work Inspectors will have access to any Baiada work site and access to any documents at any time.
This commitment on behalf of Australia’s biggest poultry processing company is an encouraging move towards ensuring compliance. Things can go terribly wrong for businesses when they are found to have wilfully turned a blind eye to underpayment of workers employed by companies with whom they contract.
The announcements this week come as the push for big companies to take more responsibility for workplace compliance gains momentum. More and more companies sitting at the top of labour supply chains are being called out on their labour hire practices, including Myer which was, this week, the subject of a story on ABC’s 7.30. Cleaners working in Myer stores are alleging that they are being forced into low-paying, sham contracting arrangements with Myer’s cleaning contractor, Spotless. They allege that Myer knows about their circumstances but won’t act.
Where companies contract out work, and contractors then sub-contract, the question of where the responsibility lies can become a tricky legal and ethical question. However, it is clear that theFWO has the issue of the protection of the wages of vulnerable workers front and centre and is putting businesses on notice regarding wage compliance by their contractors.