A Fair Work Ombudsman Inquiry into the housekeeping services of three of Australia’s major hotel chains has once again highlighted the need for lead businesses in the country to ensure that they have compliant labour supply chain arrangements.
On 20 May 2016, the Fair Work Ombudsman released the findings of its Inquiry into ‘the procurement of housekeeping services by three of Australia’s major hotel chains. The Inquiry found that housekeepers working at 4 and 5-star hotels in Melbourne, Sydney and Brisbane were not being paid their minimum lawful entitlements’.
After their investigation within Starwood Hotels and Resorts Worldwide Inc, The Accor Group and Oaks Hotels & Resorts Ltd, Fair Work inspectors discovered ‘dozens of housekeepers – whose roles included vacuuming, turning down beds, cleaning, restocking consumables and washing – had been short-changed more than $57,000’.
Many of the housekeepers were found to be vulnerable employees; international students and backpackers that had travelled to Australia mostly from China and Korea on working holiday visas.
“It is not acceptable for an employer to take advantage of any worker, especially overseas workers who speak limited English and have limited understanding of their workplace rights,” stated Fair Work Ombudsman Natalie James in a media release published on the Fair Work website.
“We have minimum pay rates in Australia that apply to everyone and are not negotiable. Employers cannot undercut minimum wages, even if their employees offer to accept lower rates – and they must keep accurate time-and-wages records at all times.”
AccorHotels Pacific has since clarified its involvement in the inquiry to confirm that there was no finding in the report of underpayment to its contractors’ employees.
“In 2014, the Fair Work Ombudsman (FWO) found that two of our third party housekeeping contractors providing services to some of our hotels had allegedly not created a regular pattern of work document for their part-time employees and incorrectly named their employer on pay slips,” said Simon McGrath, AccorHotels Pacific chief operating officer.
“There was no finding in the report of underpayment to our contractors’ employees. As soon as AccorHotels was made aware of this, we worked with those third-party operators to rectify this issue. Since then we are not aware of any further allegations and the FWO found that AccorHotels not only cooperated with their enquiry, but that we had lawfully engaged those principal contractors, who in turn engaged the employees in question.”
Mr McGrath also added that as the largest operator of hotels in Australia, AccorHotels has always prided itself on treating its employees fairly, with respect and in full alignment with the employment laws of each state and territory in which we operate.
“As leaders in the industry, we take our responsibility to all employees very seriously and we will continue to strictly monitor our contractors to ensure they comply with their obligations,” he concluded.
The Fair Work Ombudsman Inquiry found that ‘employers had failed to pay applicable penalty rates, reimburse employees for the cost of specialist clothing, provide a regular pattern of work for part-time employees or apply accrual of leave entitlements. They also failed to maintain records of the employment status of their workers and rosters did not have start and finish times, making it difficult to distinguish between ordinary time and overtime’.
Three Enforceable Undertakings, eight Letters of Caution, six Compliance Notices and two on-the-spot fines were issued to non-complying hotels investigated as part of the Inquiry.
“Increasingly, if we find a business underpaying workers and that business is part of a supply chain, we are looking look up to the top, because the business at the top of the supply chain is the price-maker and controls the settings,” said Ms James.
“We will use a range of levers, reputational, structural, environmental and, where necessary, legal, to achieve behavioural change from the top down to ensure the lead businesses step up and take responsibility for what’s happening in their business.”