Three cleaning companies and a sole trader have been penalised for their involvement in underpaying cleaners at four Woolworths stores in the state’s North.
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The Federal Circuit Court penalised major cleaning company Pioneer Facility Services $20,000, with subsidiary company Pioneer Contracting Services also penalised $20,000.
The Pioneer companies subcontracted cleaning work to Sung Gun Hwang and his company OzKorea for four Woolworths sites at Deloraine, George Town, Riverside, and Mowbray.
Mr Hwang, both as a sole trader and through OzKorea, underpaid four cleaners who worked shifts in the early morning between January 2014 and January 2015.
Three of the employees were South Korean nationals.
Mr Hwang, who is of Koran heritage, gave evidence to the court of paying flat rates paid by other “Korean people in the Launceston area” for the type of work.
Mr Hwang and OzKorea provided inspectors with false time and wage records, and breached workplace laws relating to loading, minimum engagement periods, payslips, engaging employees in writing, and frequency of pay.
The four workers were underpaid a combined $21,332 through low flat rates which failed to meet the rates for ordinary hours, and weekender, public holiday, and overtime hours that they were entitled to under the Cleaning Services Award 2010.
The court penalised OzKorea $20,400 and Mr Hwang $5000 for workplace breaches.
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The Fair Work Ombudsman was working with key industry participants as part of a Cleaning Accountability Framework to promote compliance with workplace laws.
In August, Woolworths committed to protecting the rights of cleaning service workers by entering into a new Compliance Partners Up with the Fair Work Ombudsman.
Fair Work Ombudsman Sandra Parker said the underpayment of the four workers were identified through an inquiry into Woolworths’ arrangements for cleaners at all of its Tasmanian sites.
“The Federal Circuit Court decision serves as a warning to businesses that they can be held liable for underpayments of their subcontractors’ where they have failed to pay a subcontractor enough to cover those minimum entitlements,” Ms Parker said.
“Businesses throughout a supply chain should ensure that workers are getting paid what they were entitled to.
“The Court’s penalties should remind all employers that they cannot pay workers a going rate that undercuts the lawful minimum wage rates in force across Australia.”
Judge Alister McNab said the underpayments were a “significant amount” for the workers.
He said the Pioneer companies were involved in the underpayment breaches as they knew the amounts paid to Mr Hwang and OzKorea were insufficient to cover minimum Award amounts.
Mr Hwang and OzKorea back-paid the four workers after legal action commenced.
OzKorea has ceased trading.
- Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. A free interpreter service is available on 13 14 50.