Introduction

The Fair Work Ombudsman has secured $139,800 in penalties in proceedings against the operator of a Brisbane café that partially paid some of its employees in food and drink.

The Federal Circuit Court has imposed a $95,000 penalty against Timi Trading Pty Ltd, which operated Café 63 Chermside at the Westfield Chermside shopping centre.

Directors also penalised

In addition, company director and manager Tien Hoang Le and company manager Minh Vo Duy Nguyen have each been penalised $20,000 for their involvement in all of the contraventions by the company; and Hamish Watson, the owner of the café 63 brand, has been penalised $4,800 for his involvement in one contravention by the company.

Eleven employees at Café 63 Chermside were paid part of their wages in food and drink during two periods between August 2017 and January 2018.

Mr Le and Ms Nguyen were involved in breaches relating to all 11 workers and Mr Watson was involved in breaches relating to six of the workers.

Most visa holders

Most of the affected workers were visa holders, including seven juniors aged under 21, who worked as cooks, kitchen attendants and food and beverage attendants. Fair Work inspectors investigated after receiving underpayment allegations.

Fair Work Ombudsman Sandra Parker said Timi Trading’s conduct breached the provision of the Fair Work Act requiring that employees be paid in money.

“Purporting to pay employees in food and drink is a clear breach of workplace laws and employers can face significant penalties,” Ms Parker said.

“Employers have a lawful responsibility to ensure they understand the lawful minimum wage rates and entitlements that apply to their staff and they must pay those wages and entitlements in full at all times. A range of free resources are available at www.fairwork.gov.au to help employers comply with their obligations to their employees.”

“Businesses should be aware that we are cracking down on the underpayment of vulnerable workers in the fast food, restaurant and café sector as a priority. Any worker with concerns about their pay or entitlements should contact the Fair Work Ombudsman,” Ms Parker said.

Individual Flexibility Agreements

Eight of the 11 employees were paid according to Individual Flexibility Agreements (IFAs) that provided for flat hourly rates and a list of ‘bonuses’ and ‘allowances’ – instead of being paid penalty rates and overtime under the Restaurant Industry Award 2010.

The IFA ‘allowances’ included employees being allowed food and drink for the most part up to the value of $42 per day when working, including $20 in meals, $7 in desserts and $15 in drinks.

Timi Trading’s conduct also breached workplace laws by failing to ensure the IFAs passed the better-off-overall test (which requires employers to ensure employees are better off overall under an IFA than under the relevant Award) and failing to detail in the IFAs how each individual was better off overall under the IFA.

False and misleading records

Timi Trading also breached workplace laws by providing the FWO with false and misleading records, failing to make and keep proper records and failing to enter into written part-time agreements.

Introduction

Disability Services Australia (DSA) has entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman and is back-paying employees more than $1.6 million.

The not-for-profit organisation, which provides services to disabled clients throughout NSW and operates a packaging factory at Mascot in Sydney, self-reported underpayments to the FWO in 2019.

Prompted by an employee query

After being prompted by an employee query, DSA became aware employees at the Mascot site were being provided with gift vouchers in lieu of overtime payments on Sundays, in contravention of workplace laws.

DSA subsequently commissioned an independent investigation of its compliance with workplace relations laws, which identified a range of non-compliance issues affecting supervisors and production staff at the Mascot site and workers in disability support and caring roles located at various locations throughout Sydney and in regional locations such as the Hunter and Southern Highlands regions.

Issues found by the independent investigator

Issues included incorrect use of time-off in lieu of overtime and penalty rates, underpayment of minimum wage rates, incorrect application of on-call and sleepover provisions, and underpayment of annual leave loading and allowances.

To date, the assessment has found that a total of more than 800 DSA employees were underpaid more than $1.6 million between 2013 and 2020. Individual underpayments range from $2 to over $100,000. The underpaid employees are not workers with disabilities.

Key factors causing the underpayments included inadequate governance and processes for ensuring compliance, annualised salaries being too low to meet all entitlements such as overtime and penalty rates, and some employees being incorrectly classified as being award free.

Further underpayments, expected to be significant in size, are yet to be quantified.

Other businesses caught in the net

In addition, underpayments totalling less than $50,000 have been identified at two other businesses operated by DSA – Macquarie Employment Training Services, a registered training organisation, and DSA Mentoring Services, which provides services to facilitate transition to the community for people with complex support needs. Both businesses are also covered by the EU.

The EU requires DSA, Macquarie Employment Training Services and DSA Mentoring Services to pay amounts owing to every affected employee, plus interest and superannuation, by March 2021.

Cooperation helps

Fair Work Ombudsman Sandra Parker said an EU was an appropriate outcome as DSA had cooperated with the regulator and demonstrated a strong commitment to rectifying underpayments.

“Under the Enforceable Undertaking, DSA has committed to stringent ongoing measures to ensure it complies with the law and protects its workforce. This includes engaging, at its own cost, an expert auditing firm to check its workplace compliance for the next two years, and report back to the FWO,” Ms Parker said.

“This matter serves as a warning to all public and private sector employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale. Any employers who need help meeting their lawful workplace obligations should contact us for free advice.”

Under the EU, DSA must also fund an independent organisation to operate a Hotline for employees to seek assistance on payroll or related queries; apologise to its employees; and display online, workplace and social media notices detailing its contraventions. Given the community services role of the not-for-profit organisation, the FWO did not consider a contrition payment to the Commonwealth was in the public interest.

Introduction

The Fair Work Ombudsman has secured its first penalties under the ‘serious contraventions’ provisions of the Protecting Vulnerable Workers laws, after a former Han’s Café franchisee in Perth underpaid vulnerable workers despite having previously faced Court for similar conduct.

Federal Circuit Court orders $191,000 penalty

The Federal Circuit Court has ordered Tac Pham Pty Ltd, the former franchisee of the Han’s Café Rockingham outlet, to pay penalties of $191,646. The former general manager of the outlet, Cuc Thi Thu Pham, has been ordered to pay $38,394.

The company and Ms Pham breached pay slip laws and underpaid 11 employees – including a number of young and migrant workers – a total of $5,111 between October 2017 and April 2018. The employees were back-paid only after the Fair Work Ombudsman commenced its latest investigation.

“Serious contraventions”

Three of the contraventions – relating to failures to provide required information within pay slips and underpayment of both adult and junior minimum wages – met the definition of ‘serious contraventions’ under the Protecting Vulnerable Laws because of the repeat offending.

Of the total penalties ordered, 80 per cent related to these serious contraventions.

Could have been $630,000

Under the laws, which came into effect in September 2017, the maximum penalties for serious contraventions are $630,000 per breach for a company and $126,000 for an individual, 10-times the penalties which would ordinarily apply.

Fair Work Ombudsman Sandra Parker said the new judgment highlighted the value of the serious contraventions powers in providing a significant deterrent for employers doing the wrong thing.

“We will continue to make full use of the Protecting Vulnerable Workers laws to ensure that any individuals or companies who commit serious contraventions are held to account and understand the consequences of their failures,” Ms Parker said.

There are currently three other unrelated matters before the courts nationally in which the FWO has alleged the increased maximum penalties should apply.

Repeat offending not on

“Repeat offending is simply unacceptable. Employers should also be aware that we treat cases involving underpayment of young and migrant workers particularly seriously, because we are conscious that they can be vulnerable due to factors such as a lack of awareness of their entitlements and a reluctance to complain. Any workers with concerns should contact us,” Ms Parker said.

This legal action came after the Fair Work Ombudsman secured total penalties of $45,000 in Court against Tac Pham Pty Ltd and Ms Pham in March 2018, relating to pay slip laws being breached and 22 staff being underpaid $27,920 at the Rockingham café between December 2014 and December 2015.

FWO Inspectors

FWO Inspectors discovered the breaches in this latest litigation when they investigated the business during auditing activities. The breaches in the latest litigation related to underpayment of ordinary minimum hourly rates, penalty rates, minimum shift-pay and an allowance, and regular failures to provide pay slips and to provide lawfully required information within pay slips when they were issued.

In this latest litigation the respondents admitted liability, including to the serious contraventions.

Judge commends FWO inspectors

Judge Christopher Kendall said the latest litigation revealed the extent of the non-compliance by the respondents had increased, despite commitments from Ms Pham during the earlier court proceedings to improve her payroll practices.

“The respondents had no intention of changing their conduct and would have continued as they had been if the [Fair Work Ombudsman] had not intervened when it did. The fact that the respondents did not take steps to engage an external [payroll] consultant for over one year after they had said they would do so and only in response to the [FWO]’s investigation is, again, entirely unsatisfactory,” Judge Kendall said.

“Importantly, the respondents failed to comply with the most basic obligations owed to employees. Their conduct reflects a cavalier and entirely unacceptable approach to core legal obligations.”

“Some employees were more vulnerable than others and in an industry which has a high number of junior employees, the need to ensure that the rights and entitlements of those more vulnerable are met is particularly high. Employers must be deterred from engaging in similar conduct,” His Honour said.

Introduction

A major national medical centre operator, Idameneo (No 123) Pty Ltd, has back-paid employees $15.3 million and entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO).

Idameneo (No 123) Pty Ltd has provided medical centre management services through its 69 medical centres and 13 GP practices under the brand names of parent company Healius Limited, which include ‘Primary Dental’ and ‘Primary Health Care’.

Company self-reported

Healius reported to the FWO in late 2018 that Idameneo (No 123) had underpaid more than 5,000 current and former employees over $12.3 million after failing to meet rates owed under either the Health Professionals and Support Services Award 2010 or the Nurses Award 2010.

Incorrectly classifying workers

Workplace law breaches included assigning an incorrect classification or pay point to some employees, applying an annualised salary rate for salaried employees which did not meet award entitlements, not paying all additional hours worked by waged and salaried employees, and other payroll system errors.

This led to widespread underpayments of award entitlements including minimum weekly wages, casual loading, various allowances, overtime and penalty rates for weekend and public holiday work.

As at April this year, Idameneo (No 123) had identified and back-paid 4,018 employees just over $14 million, which includes interest, for underpayments that occurred between July 2011 and November 2018. The company has also paid additional superannuation contributions.

Underpaid employees include nurses, administrative staff, doctors, dentists and scientists. Individual back-payments range from $1.51 to $131,336.

Looking for 1,300 other workers who are owed money

A further 1,341 employees who are owed $880,000, including interest, have not yet been found. Under the EU, these underpayments must be rectified within 90 days of the EU’s signing, or be paid into the Commonwealth’s Consolidated Revenue Fund 30 days after workers have not been able to be located. The monies will be distributed to the employees as they are found by the FWO.

Fair Work Ombudsman Sandra Parker said an Enforceable Undertaking was appropriate as the employer had self-reported and cooperated with the FWO’s investigation.

“Under the Enforceable Undertaking, Idameneo (No 123) has committed to stringent measures to comply with the law and protect its current and future workforce. This includes at Idameneo’s cost, an independent assessment of its rectification program by a qualified expert and three future independent reviews of its compliance,” Ms Parker said.

“This matter serves as a warning to all employers that if you don’t prioritise workplace compliance, you risk underpaying your staff on a large scale. Any employers who need help meeting their workplace obligations should contact the Fair Work Ombudsman for free advice.”

$400,000 fine imposed

The Enforceable Undertaking commits Idameneo (No 123) to make a contrition payment of $400,000 to the Commonwealth’s Consolidated Revenue Fund.

The EU requires Idameneo to pay for an independent expert to conduct a review of the underpayments with the findings reported directly to the FWO. Any further underpayments that are identified must be back-paid promptly.

Idameneo will continue its dedicated telephone hotline and email service to help its employees with any pay and entitlements concerns for the next 12 months.

Introduction

The National Library of Australia has entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman after underpaying employees almost $250,000 in wages and superannuation.

The public Commonwealth entity, based in Canberra, self-reported to the Fair Work Ombudsman earlier this year that it had failed to pay casual employees the correct weekend and public holiday penalty rates they were entitled to under the applicable Enterprise Agreements.

During an internal payroll audit, the National Library identified that it had misunderstood its obligations under the Agreements in failing to pay penalty rates to its casual employees over two decades.

Casual employees and overtime rates

The underpaid casual employees were library assistants who, among other things, offered assistance to the general public in the reading rooms of the National Library on weekends and public holidays.

In total, the National Library underpaid 106 current and former employees a total of $245,359 in wages and superannuation between 2000 and April 2020. Individual underpayments range from $12 to $19,997, with 11 employees underpaid $5000 or more.

More than half of the underpayments have been rectified and the EU requires the National Library to pay amounts owing to every affected employee within the next three months. The National Library is also required to pay additional interest on all back-payments.

Cooperation helps

Fair Work Ombudsman Sandra Parker said that an EU was an appropriate enforcement outcome as the National Library of Australia had cooperated with the investigation and demonstrated a strong commitment to rectifying all underpayments.

“Under the Enforceable Undertaking, this entity has committed to stringent measures to comply with the law and protect its workforce. This includes engaging, at its own cost, an expert auditing firm to audit its compliance with workplace laws,” Ms Parker said.

“This matter serves as a warning to all public and private sector employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale. Any employers who need help meeting their lawful workplace obligations should contact the Fair Work Ombudsman for free advice.”

Going beyond the statute of limitations

The National Library is also required by the EU to display an online notice detailing its workplace law breaches, apologise to workers, commission workplace relations changes for managerial staff and provide evidence to the Fair Work Ombudsman that it has developed systems and processes for ensuring compliance in future.

The National Library’s co-operation in rectifying its non-compliance issues, including making back-payments that occurred well beyond the statute of limitations, and implementing measures to ensure future compliance were key factors in determining that it should not be required to make a contrition payment.

Introduction

The Fair Work Ombudsman has secured total court penalties of $19,100 after a Victorian massage parlour operator admitted it underpaid a Chinese worker $13,522 and provided false records to inspectors.

The Federal Circuit Court has ordered penalties of $8,500 be paid by Austop Natural Therapy and Supplies Pty Ltd, which formerly operated massage parlours trading as ‘Yin’s Chinese Traditional Massage’ in Bacchus Marsh and Ballarat.

The company’s sole director Yusen Yin and company secretary Wenhua Liu, who are a couple, were each penalised $2,800 for their involvement in the underpayments.

Accountancy firm nabbed also

The Court has further ordered the company’s accounting firm, Keith Golding & Associates Pty Ltd, to pay a $5,000 penalty for its involvement as an accessory in the company’s false-records breaches.

Fair Work Inspectors investigated after contact from the worker, who was in Australia on a subclass 462 Work and Holiday Visa. Between December 2016 and July 2017, Austop paid the employee a percentage of the price of each massage she performed at its Ballarat business, rather than hourly rates of pay as she was entitled to under the Hair and Beauty Industry Award 2010.

This resulted in underpayment of the employee’s minimum hourly rates, overtime rates, weekend and public holiday penalty rates, superannuation and annual leave entitlements. The company also failed to ensure the employee did not work on more than six consecutive days in breach of the award, and failed to issue any pay slips.

Austop Natural Therapy and Supplies and Keith Golding & Associates each breached workplace laws by providing inspectors with records (including pay slips created by Keith Golding & Associates) they knew to be false or misleading.

Fair Work Ombudsman Sandra Parker said the agency prioritised requests for assistance from migrant workers.

“We know migrant workers can be particularly vulnerable due to language or cultural barriers and may not be aware of their workplace rights. Failing to provide pay slips can make matters even worse as workers will lack the clarity they need about their pay,” Ms Parker said.

“All employees in Australia have the same rights at work, regardless of citizenship or visa status, and we encourage anyone with concerns about their pay to contact us.”

“This case also highlights that the Fair Work Ombudsman will use accessorial liability laws to hold professional services firms to account where they are involved in breaching workplace laws. Third parties such as accountants should be aware that they can be ordered by a court to pay penalties if found to be involved in contraventions,” Ms Parker said.

Deterrence

Judge Alistair McNab said the underpayments were significant, and the conduct of the accounting firm required deterrence.

“…[T]he Fourth Respondent [accounting firm] was providing professional services which in effect encouraged the First Respondent [Austop Natural Therapy and Supplies] to authorise the Fourth Respondent to produce false documents to the Applicant [FWO],” he said.

“I have imposed higher penalties in respect of record keeping and payslip provision contraventions because a failure to comply with those provisions makes it very difficult for an employee to determine what their rate of pay is and whether they are being properly paid.”

Introduction

The Fair Work Ombudsman has secured $121,000 in penalties in court against the former operators of a grocery store in the Melbourne CBD for paying migrant workers as little as $10 per hour, despite having been put on notice of workplace laws.

Asian grocery store

The Federal Circuit Court has imposed a $90,000 penalty against Jenni International Pty Ltd, which previously operated the Dae Bark Mart Asian grocery store in Flinders Street, and a $31,000 penalty against the company’s former owner-operator, Jordan Shan.

Mr Shan and Jenni International underpaid two employees from South Korea – both aged in their mid-20s and in Australia on working holiday visas – a total of $13,997 over a period of less than four months in 2016.

Fines and backpay

In addition to the penalties, the Court has ordered Mr Shan and the company to rectify the underpayments in full, plus interest.

The underpayments occurred despite the Fair Work Ombudsman having put Mr Shan on notice of Commonwealth workplace laws in 2015.

Fair Work Ombudsman Sandra Parker said employers that deliberately underpay vulnerable workers even after being put on notice should expect to face legal action.

“Employers are on notice that they must pay all workers according to Australia’s lawful minimum pay rates or risk significant financial penalties. We prioritise matters involving vulnerable workers, especially if we think breaches are deliberate,” Ms Parker said.

“All workers have the same rights regardless of nationality or visa status. Any worker concerned about their rights can contact us for free advice and assistance.”

Fair Work inspectors

Fair Work inspectors investigated after the two underpaid employees lodged requests for assistance. One of the employees, engaged full-time, worked six or seven days a week with duties including ordering and stacking stock. The other was a part-time cashier.

The employees were paid flat rates of $10 to $12.50 per hour, despite being entitled to $19.44 for ordinary hours and penalty rates of $24.30 to $48.60 under the General Retail Industry Award 2010, at the time. Annual leave entitlements were also underpaid.

Judge Alister McNab said the underpayments were significant and deliberate and that Mr Shan and the company had not exhibited contrition.

“The conduct of the Respondents was deliberate and involved a number of employees where the underpayment of their entitlements was significant. The underpayment of entitlements also occurred where (Mr Shan) is a highly educated person and had previously occupied a senior position as an Associate Professor of Applied Economics at Victoria University,” Judge McNab said.

Judge McNab said the penalties imposed are “a strong disincentive for small businesses to engage in similar conduct”.

Introduction

Major convenience and fuel outlets franchisor 7-Eleven Stores Pty Ltd has made substantial improvements to its payroll and time-recording systems as part of a three-year compliance partnership with the Fair Work Ombudsman.

Voluntary Compliance Deed

7-Eleven voluntarily entered into a Compliance Deed in December 2016 to improve compliance across its franchise network. The Compliance Deed was a recommendation from the FWO’s Inquiry Report, which found significant underpayments in 7-Eleven’s franchise network.

Falsifying records

The FWO’s inquiry found that several 7-Eleven franchisees had been deliberately falsifying records to disguise the underpayment of wages and that 7-Eleven’s approach to workplace matters, while seemingly promoting compliance, didn’t adequately detect or address deliberate non-compliance.

The FWO brought 11 litigations against 7-Eleven franchisees resulting in courts awarding more than $1.8 million in penalties against them, including for operating unlawful cash-back schemes, paying unlawful flat rates to workers, and falsifying records.

Actions taken

As part of the Compliance Deed, 7-Eleven put in place a biometric time recording system across all its Australian stores, requiring employees to clock in and out with a thumbprint, which is cross-checked against employee facial recognition images and store rosters to enable more accurate recording of working hours. Costs for the improved technology, systems and processes was more than $10 million.

Other governance measures implemented include 7-Eleven requiring all staff to be paid electronically only, new compulsory online training on employment conditions for new employees, an Internal Investigations Unit and a new employment conditions chapter in the Franchisee Systems Manual.

The compliance partnership also required 7-Eleven to engage an independent expert to complete three annual audits of its compliance with workplace laws, leading to back-payments of $102,167 as a result of the first audit in 2017. No further underpayments were identified in the second and third annual audits.

Compliance partnership = great improvement

Fair Work Ombudsman Sandra Parker said the compliance partnership had led to network-wide improvement to protect the workplace rights of current and future employees.

“After widespread non-compliance in its franchise network was identified, 7-Eleven has implemented extensive high-tech systems, training and employee assistance programs across its business. Through our Compliance Partnership, the franchisor has delivered on its commitment to address past breaches by its franchisees and lead a network that meets its lawful obligations to workers,” Ms Parker said.

“Franchise networks are a priority sector for the Fair Work Ombudsman. We urge all head offices to prioritise compliance with workplace laws or risk systemic breaches that impact their brand and workforce. Franchisors can now be held responsible for their franchisees’ conduct and may be subject to enforcement action, court proceedings and penalties if their franchisees have breached the law.”

$173 million plus in backpay

Between September 2015 and February 2020, 7-Eleven Stores Pty Ltd have back-paid $173,610,752 in wages, interest and superannuation to 4,043 current and former franchisee employees.

“We will continue to monitor compliance in 7-Eleven outlets and encourage head office to consider entering into a second compliance partnership to ensure ongoing accountability,” Ms Parker said.

There are more than 700 stores in the 7-Eleven network across NSW, Victoria, Queensland, Western Australia and the ACT, including those operated by over 530 franchisees.

Introduction

The Fair Work Ombudsman’s 2019-20 Annual Report reveals a record sum of money recovered for underpaid workers across the country during the past financial year.

Records trending up…

In total, $123,461,548 was recovered for 25,583 employees, which included $90 million in underpayments that were self-reported by employers. More than $56.8 million was backpaid following extensive investigations and Enforceable Undertakings negotiated with the FWO.

Fair Work Ombudsman Sandra Parker said that significant underpayments from large corporate entities had been a new challenge for the FWO over the past year and the trend continues.

“The prevalence and the scale of big corporations underpaying their workers is extremely disappointing and concerning. We have established a dedicated taskforce within the Fair Work Ombudsman to investigate these matters,” Ms Parker said.

“I strongly encourage the CEOs and boards of Australia’s largest corporations to ensure they are complying with workplace laws and to advise us immediately if they identify significant underpayments.”

Going to court

The FWO had 72 matters before the courts as of 1 July 2020, in many cases alleging exploitation of vulnerable workers. There were 54 new litigations filed – more than double that of last year – and 50 per cent of those involved businesses in the fast food, restaurant and café sector.

Compliance notices

The FWO is increasing its use of enforcement tools and the agency issued 952 Compliance Notices in 2019-20, recovering $7.8 million in unpaid wages. This is more than triple the number of Compliance Notices and more than seven times the monies recovered from this tool in the previous year.

Enforceable Undertakings

In 2019-20, the FWO entered into 12 Enforceable Undertakings with businesses. Nine of these related to self-reported non-compliance from large employers. The workplace regulator secured agreement for almost $1.5 million in contrition payments from companies during the year, which has gone into the Commonwealth consolidated revenue fund.

Dispute resolutions

The FWO resolved almost 22,000 workplace disputes between workers and businesses last financial year. The agency’s website, www.fairwork.gov.au, had a record 21.8 million visits to access its information, and the Fair Work Infoline (13 13 94) answered a record 424,255 calls.

The pandemic

Ms Parker said the agency’s achievements showed its commitment to promoting productive, cooperative and compliant workplaces, including during the challenges of COVID-19.

In response to the pandemic, the FWO boosted resourcing for its frontline services and set up a dedicated hotline, which has answered more than 50,000 calls from employers and employees. Dedicated Coronavirus web content has received more than 4 million page views.

“Our efforts guiding businesses through the pandemic’s significant disruption to workplaces have been considerable and I am extremely proud of how the agency has responded. I encourage any affected employers and employees to contact us for free advice and assistance,” Ms Parker said.

Migrant workers

For migrant workers, the FWO secured $3 million in penalties and recovered $1.7 million in unpaid wages in 2019-20. Overall, the agency’s total court-ordered penalties for the financial year was $4.3 million, while inspectors issued 603 infringement notices (total fines of about $891,000).

“We will continue our intelligence-led, priority-driven work targeting high risk sectors and practices, protecting vulnerable workers and educating both employers and employees across Australian workplaces as they recover from the pandemic in the year ahead,” Ms Parker said.

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The Fair Work Ombudsman (FWO) has recovered $25,292 in unpaid wages for 270 employees after investigating companies contracted to clean some of the nation’s leading stadiums.

Fair Work Inspectors investigated nine cleaning companies following surprise site visits to Sydney’s ANZ Stadium, Perth’s Optus Stadium, the Adelaide Oval, Brisbane’s Gabba, Melbourne’s AAMI Park and Canberra’s GIO Stadium in September and October last year.

This was in response to general intelligence that cleaning companies in the stadiums sector may not have been compliant with workplace laws, including concerns about possible sham contracting.

Inspectors interviewed cleaners and supervisors about the work that cleaners were required to do, photographed venues to better understand the employment conditions, and inspected records.

The FWO found that seven of the nine cleaning companies (78 per cent) were non-compliant with workplace laws. Seven companies were found to have underpaid their employees and three had breached pay slip obligations. Breaches included failures to correctly pay the minimum hourly rate, casual loading, and penalty rates for weekend, public holiday and overtime hours.

While the stadium operators were not found to be involved in contraventions of workplace laws, inspectors found layers of sub-contracting operating without appropriate checks and balances to ensure workplace relations compliance.

Inspectors also found poor record-keeping practices at the bottom of sub-contracting supply chains. No sham contracting or misclassification of employment was found.

Fair Work Ombudsman Sandra Parker said the regulator has engaged with stadium operators and recommended governance improvements, including the need to review existing contracts.

“The FWO’s investigations identified opportunities for stadium operators, as heads of supply chains, to increase their level of involvement in how cleaning contractors operated,” Ms Parker said.

“We expect all cleaning employers to comply with workplace laws. The heads of all supply chains should be aware that they can be held responsible if they are found to be involved in any breaches by their contractors. Any workers with concerns about their pay should contact us,” Ms Parker said.

In total, there were recoveries of $20,961 for 139 workers from three businesses contracted to clean ANZ Stadium. There were recoveries of $3,473 for 78 workers from one cleaning business at the Adelaide Oval, with the same cleaning business operating at the Gabba back-paying $743 for 51 workers. There was also $114 recovered for two cleaners from one business at GIO Stadium. Records reviewed showed no breaches at AAMI Park.

In response to the breaches, inspectors issued five Compliance Notices requiring employers to rectify failings. There were also two Infringement Notices issued for pay slip breaches (total fines of $4,200) as well as two contravention letters and two formal cautions.

Businesses can apply for certification of employment sites through the industry-led Cleaning Accountability Framework. The FWO’s online resources help businesses monitor their supply chains.