A fundamental overhaul of Commonwealth tenders to protect vulnerable cleaners is among the key recommendations of a parliamentary inquiry into cleaner wage theft released this month.
The Senate report titled “Wage theft, what wage theft?” called for major reforms including a national licensing scheme for labour hire companies and changed laws to address ‘pyramid sub-contracting’.
Senator Doug Cameron, who led the charge to establish the inquiry, told INCLEAN that he agrees with the key recommendations of the enquiry.
“The recommendations address the legislative and other changes that are required to provide fairness for workers and accountability of companies who contract out cleaning services and then turn a blind eye to exploitation and wage theft,” Cameron said.
“The breakdown of the traditional employer/employee relationship whereby companies seek to distance themselves from direct responsibility for employees is contributing directly to the exploitation of workers.
“These workers could easily be employed directly and avoid pyramid subcontracting that leaves them exposed and with limited capacity for wage and employment justice.”
The report recommended an Australian National Audit Office audit of Commonwealth departments’ compliance with ethical procurement rules and new laws banning companies or their associates found guilty of breaching employee entitlement laws from tendering for Commonwealth contracts.
The inquiry called for a Federal Government review of collective bargaining – where workers across industry groups can negotiate collectively for better deals – as a way of addressing stagnant wages and “bargaining power imbalances”.
The inquiry accepted arguments put by cleaners’ union, United Voice, that industry-wide collective bargaining should be examined as a way to address flat lining wage growth.
It also accepted evidence showing the Department of Finance had entered into a contract through multi-national contractor Broadspectrum that left cleaners at seven Department of Jobs sites in the ACT “worse off than under their previous contract”.
The inquiry condemned the Department of Finance for working with a sub-contractor and recommended a renegotiation of the department’s current cleaning contracts with Broadspectrum to address the cleaners reportedly left worse off in the new deal.
“The Department of Finance has shown a total disregard for the ethical responsibility it holds in its role of ‘price maker’, demonstrating no care for the welfare of those individuals performing the cleaning services,” the report stated.
“The committee is deeply concerned that the government, through head contractor Broadspectrum, have chosen to engage and associate with companies such as Prompcorp that are closely linked to individuals who have shown blatant disregard, on more than one occasion, for their legal workplace obligations.”
Building Service Contractors Association of Australia (BSCAA) national president George Stamas said the BSCAA wholeheartedly supports proposals.
“One of our most fundamental principles as the peak industry body is that competition be fair,” Stamas told INCLEAN.
“Businesses who employ the tactics of phoenix arrangements and pyramid or sham contracting have no place in the cleaning industry. We want fairness for the thousands of cleaners that our members employ every day across Australia and we want fairness for our members. Wage theft is the enemy of fairness and for this reason BSCAA welcomes this report.”
Cleaning Accountability Framework (CAF) CEO Poonam Datar said CAF welcomed the inquiry into retail cleaning, noting the recommendations for significant reform.
“The report lists its first recommendation calling on government to protect vulnerable workers subject to wage theft and exploitation. Government certainly has a role to play here, as do business, employers, employees and unions,” Datar said.
When releasing the inquiry’s findings, Senator Cameron said: ‘We basically had employers arguing that they had no responsibility for the wage theft being put on low-paid workers, because they had contracted their responsibilities out to a contractor and it was the responsibility of that contractor.
“This is exactly what’s happening with companies around the country and with the departments under the guidance of this government: contract the work out, then deny any responsibility for those workers’ wages and conditions because the contract has been signed and the company or the department don’t employ these workers. It’s all care and no responsibility. It’s an outrageous proposition.”
Cameron said he would like to see changes implemented so cleaners and their union have access to collective bargaining that levels the industrial playing field and ends wage stagnation and exploitation.
“We need to ensure statutory authorities act independent of government and in the best interest of exploited workers.”