Cleaner wage theft inquiry calls for fundamental reforms

Cleaner wage theft inquiry calls for fundamental reforms

A fundamental overhaul of Commonwealth tenders to protect vulnerable cleaners is among the key recommendations of a parliamentary inquiry into cleaner wage theft released overnight.

The inquiry also accepted arguments put by the cleaners union, United Voice, that industry-wide collective bargaining should be examined as a way to address flatlining wage growth.

The Senate report titled “Wage theft, what wage theft?” also called for major reforms including a national licensing scheme for labour hire companies and changed laws to address “pyramid sub-contracting”, where head contractors take no responsibility for their sub-contractors.

The inquiry accepted evidence showing the Department of Finance had entered into a contract through multinational contractor Broadspectrum that left cleaners at seven Department of Jobs sites in the Australian Capital Territory worse off than under their previous contract.

The inquiry also condemned the Department of Finance for working with a sub-contractor, Prompcorp, accepting that Prompcorp’s associated companies have a track record of being penalised for wage theft.

“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 states.

“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.”

Senator Doug Cameron, who led the charge to establish the inquiry, said when releasing the findings: "What we basically had was employers coming along and 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."

As a result of the findings, the inquiry has recommended a shakeup of Commonwealth tendering practices including:

  • A renegotiation of the current Department of Jobs cleaning contracts with Broadspectrum to address the cleaners left worse off in the new deal.
  • An Australian National Audit Office audit of Commonwealth departments’ compliance with ethical procurement rules.
  • New laws banning companies or their associates found guilty of breaching employee entitlement laws from tendering for Commonwealth contracts.

The inquiry also 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”.

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