Fair Work Ombudsman says it’s time big business “stopped wiping its hands” of contractor underpayments after trolley collectors for major supermarket underpaid $220,000

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Two businessmen in charge of a company that provided trolley-collecting services to Coles have been fined $188,000 for their role in underpaying 10 workers more than $220,000.

Sydney-based business Starlink, which is now in liquidation, provided trolley-collection services to several Coles supermarkets in South Australia.

Former director Nidal Albarouki and operations manager Clency Ferriere were penalised a whopping $94,000 each by the Federal Court last week for their role in underpaying the trolley collectors over a period of 18 months.

One migrant employee from India was underpaid almost $90,000.

The Fair Work Ombudsman said in a statement it “worked down three levels” of the Coles supply chain in order to achieve a just outcome for the vulnerable workers.

Coles admitted it had an ethical responsibility to the trolley collectors and signed an enforceable undertaking with the employer watchdog back in 2014.

Natalie James says it’s time big business stopped “wiping its hands” of contractor underpayments

Fair Work Ombudsman James said in a statement last week’s judgment brings to an end several years of legal proceedings.

“It was time big business stopped wiping its hands of the problem with the excuse that it was not the employer,” James said.

“We were not going to build a culture of compliance by merely picking off fly-by-night contractors who quickly liquidated – they are just replaced by new entities which behave in the same manner and are often run by the same people.

“It was time to tie all the players in the supply chain to the problem to find a sustainable solution.”

James said it is promising to see Coles now in-sourcing collection of its trolleys.

“However, last week’s penalty sends a clear message to other sectors operating with supply chain and sub-contractor arrangements that they can expect to be held accountable if any part of their labour networks contravene workplace laws.”

“We are not finished with the trolley collection sector, and if major supermarkets are not already having a boardroom discussion about the governance of their trolley collection services, then someone is asleep at the wheel.”

Alan McDonald, managing director of employment law firm McDonald Murholme, told SmartCompany it is unsurprising the Fair Work Ombudsman is cracking down on third-party arrangements.

“It’s not as if it’s unique to employment law,” McDonald says.

“It goes into tax law and it’s very important.”

McDonald also points out that contractors underpaying their staff is harmful to not only the workers involved, but the business community at large thanks to its effects on competition.

“If you are competing with a company that is operating below the law, then it’s very difficult for you,” he says.

“It’s anti-competitive and we as a business community really frown on anti-competitive practices.”

Coles says it now employs around 2500 in-house trolley collectors

A spokesperson for Coles told SmartCompany the supermarket has made significant changes to its trolley collection service since 2010 when the Fair Work Ombudsman first initiated action against Starlink.

“Coles has transformed its trolley collection service across Australia to eradicate underpayment of trolley collectors, and now directly employs around 2500 team members to collect trolleys at more than 520 stores across Australia,” the spokesperson said in a statement.

“Coles is rolling this direct employment model out nationally. This replaces the previous system where Coles had around 30 contractors engaged to provide trolley collection services.”

In 2014, Coles said all of its trolley collectors would be employed in-house by the end of 2016.

The supermarket giant is still working towards that goal.

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Ron
Ron
5 years ago

Pretty easy for a onsite Manager of a business to ask a subcontracted employee to have a look at his pay slip

Justin Tyme
Justin Tyme
5 years ago
Reply to  Ron

I would refuse to show him mine

Steve Skinner
Steve Skinner
5 years ago

Cut out these unscrupulous employers.
Every day I read about someone being ripped off.
Funny thing is most of these employers and employees have names I can’t pronounce.
Sad state of affairs.
Where’s the protection.
Where’s their union. If they are not Maritime, construction or public servants no one seems to care

Justin Tyme
Justin Tyme
5 years ago

Good idea, where do you work? I ink because I subscribe to this blog space I have a responsibility to ensure you are paid correctly. I will come on down there and I want to see your pay slip. Sheesh, who are we kidding?
Sure, what has happened is wrong however, wh o checks the checker and the person who checks them and the person who checks them? There will always be something deceitful occur but there is no way I have the time or the money to check every subcontractor or supplier to my business. I can’t imagine the problems Coles would have.
We once signed up to a regular customer who want to complete these checks, when we advised the additional cost of meeting his requirements they suddenly found they didn’t want to do the checks.. The ombudsman must be a Labor party appointment making such illogical, though desirable but impractical statements. We can’t afford the social welfare regime we have now let alone putting even more strain on it.