When a labour hire organisation approaches you to supply workers at $25 per hour regardless of the time of day, you might have reason to be suspicious.
That is especially the case when calculations reveal that the minimum which a part time worker employed during regular business hours under award conditions would cost an employer once relevant on costs such as leave, superannuation and workers compensation are taken into account was in fact $28.64 – and that’s before any allowance for penalty rates or business running costs likely to be incurred by the labour hire company in question.
So when one building services contractor in Cairns was approached with such an offer, he naturally asked questions. No problem, the labour hire representative promised him. This rate was feasible because the workers in question were in fact paid only twenty dollars per hour and worked for ten hours per shift but were in fact paid for only eight. As to whether the workers – almost all of whom were South Koreans visiting Australia on student visas – were likely to complain, the representative assured the contractor that all were ‘happy’ with the arrangement.
The above example was outlined in the Building Services and Contractors Association of Australia submission to a recent inquiry into the labour hire industry in Queensland. Unfortunately, this was not an isolated case. In Cairns alone, the BSCAA was indicated in its submission that it was in fact aware of seven such companies operating in a like-minded manner.
Whilst the above example referred to labour hire, this is just the tip of the iceberg in terms of problems with labour practices within Australia’s cleaning services industry. Underpayment of wages is widespread, as is non-payment of leave entitlements and penalty rates. Training is often rudimentary or non-existent. Safety is often substandard. Cases of workers being paid as little as $7 per hour are not uncommon. Unpaid trial periods (illegal except under very specific circumstances) have been known to extend for days, weeks or even months. Workloads are often unrealistic: whereas ten years ago, you might have had thirty people cleaning a building, nowadays, you might have only fifteen who are now required to perform twice as much work without receiving more pay. Extra hours worked due to unrealistic workloads are often unpaid. Sham contracting - where workers who are really employees in substance are misclassified as contractors and therefore denied rights such as sick leave, annual leave, long service leave and superannuation – is rife.
Often, these types of arrangements occur through subcontracting arrangements, whereby commercial building owners contract out cleaning services to a reputable head contractor, who in turn subcontracts some of the work to an often shady smaller subcontractor who in turn employs the actual person who performs the work in a further subcontracting arrangement.
Nor is the problem new. Indeed, in audits of several hundred businesses within the cleaning services industry conducted by the Fair Work Ombudsman in 2011/12 and 2012/13, almost four in ten were found to be non-compliant with their obligations under the Fair Work Act in some way. A follow up audit of 54 businesses which had been identified as being non-compliant in these previous audits in 2014/15 found that one-third of these were still not paying workers properly. In the Melbourne CBD, a report published by property services union United Voice in 2013 found that underpayment rorts involving cleaning services were occurring in one of every four office buildings.
Stories of what goes on are shocking. Take the case of ‘Preeta’, an international student employed part time on a subcontract basis cleaning offices within the Melbourne CBD whose story was outlined in the aforementioned union report. Upon commencing work for just $18 per hour, she discovered a two-tiered system whereby Australian nationals employed by the main contracting company received faster payment and higher rates of pay compared with workers from Asia and from less wealthy countries, who were employed by a subcontractor. On occasions during visits from union representatives, Preeta was instructed not to speak with them and to remain out of sight - lest her supervisor become angry. Even though she was paid well under the award rate, she was still scrimped of payments and did not receive any form of rights such as holiday pay or sick pay.
Moreover, stories of bad behaviour continue to roll in. In Sydney, media reports earlier this year suggested that widespread abuse of rights was occurring at BIC Cleaning Services, which reportedly at the time had a 35 percent market share of the Sydney CBD market for office cleaning. One Thai student claimed to have worked for three weeks without being paid; another cleaner who cleaned toilets on nine levels claimed he was paid for only four hours per day but forced to work six in order to get the job done. The company denies these claims, and said the student in question who allegedly did not get paid could have received payment had he visited its head office.
In February, the Fair Work Ombudsman alleged that commercial cleaning outfit Brisclean underpaid four workers by a total of $59,878 for work performed over a two and a half year period ending December 2014 under a sham contracting arrangement under which the workers in question were misclassified as contractors and therefore denied their proper payments with regard to minimum hourly rates, annual leave, part time and shift loadings and weekend and overtime penalty rates.
In terms of why this is happening, a number of factors are at play. As a largely commoditised industry, cleaning contractors have little upon which to differentiate their services and are forced to compete predominately on the basis of price – a phenomenon which given the labour intensive nature of the industry has obvious flow-back impacts in terms of downward pressure upon wages and labour standards. Many workers are from overseas and are unlikely to speak English as their first language or be aware of their rights. Some come from backgrounds whereby questioning the boss is difficult. Thanks to visa restrictions which restrict their work rights to twenty hours per week, many of those on student visas do extra ‘cash in hand’ jobs and are particularly vulnerable.
Fortunately, action is happening. A multi-stakeholder project known as the Cleaning Accountability Framework has seen the development of a code of conduct and is expected to see the introduction of supply chain certification scheme next year through which commercial property owners will be able to attest to the achievement of standards within this area with respect to individual sites within their portfolio. A number of commercial property owners are inserting restrictions upon the use of subcontractors into contracts which they put out for tender, though these are sometimes ignored in practice.
Still, commitment to these types of initiatives must extend to all players if unsatisfactory practices are to be eradicated.
Around Australia, exploitation of workers in the cleaning services industry is far too common.
Unless practices improve, this will continue to be an area of national shame and disgrace.