In late July, Ai Group made a submission to a Senate Committee Inquiry into the Exploitation of General and Specialist Cleaners Working for Retail Chains for Contracting or Subcontracting Cleaning Companies.

Ai Group’s submission, which addresses the terms of reference for the Inquiry, argues that:

  • There are very comprehensive protections in place to protect workers from exploitation, underpayments and workplace injury and that changes are not needed to workplace relations or Work Health and Safety laws to increase protection for workers;
  • “Wage theft” is an overly emotive term widely used by unions to describe underpayments;
  • The current low rate of wage growth is due to spare labour capacity, weak productivity growth and weak inflation, and not due to inadequate union power or worker rights;
  • The Fair Work Ombudsman (FWO) and the Australian Taxation Office (ATO) are very well-resourced and effective regulators with all of the necessary powers;
  • Strong laws are in place to address “phoenixing”;
  • Legitimate subcontracting arrangements should not be interfered with;
  • The accessorial liability provisions in s.550 of the Fair Work Act 2009 provide an effective and adequate means of holding persons responsible if they are knowingly involved in breaches of the Act or industrial instruments. The FWO very frequently pursues actions under s.550, most of which are successful
  • Making major businesses in a supply chain responsible for the liabilities of their suppliers would:
    • Discourage   multinational   firms   from   investing   in   Australia   and consequently reduce employment;
    • Reduce the responsibility upon suppliers for ensuring that they meet their own liabilities; and
    • Impose very substantial auditing, training and other costs upon major businesses, with these costs leading to the businesses needing to charge higher prices for their products and services which would increase the cost of living for consumers.
  • The very longstanding redundancy pay exclusion for ‘the ordinary and customary turnover of labour’ is an important part of the redundancy pay scheme under the Fair Work Act and needs to be maintained.

If you would like more information about wage theft please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like advice regarding employment arrangements for cleaners, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Adelaide, Melbourne or Brisbane or email Ai Group Workplace Lawyers at info@aigroupworkplacelawyers.com.au.

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