Cleaning contractors will face tougher scrutiny after the workplace ombudsman found that nearly 40% of employers were underpaying staff or not following appropriate record-keeping guidelines.
Only 62% of the 578 businesses scrutinised by the Fair Work ombudsman were found to be fully compliant with regulations, a report released on Thursday said. The remaining 38% had either underpaid staff or failed to comply with record-keeping or payslip regulations.
More than 1,200 employees were underpaid by a total of $763,000, the report said.
“The cleaning services industry is characterised by layers of subcontracting, tight margins and a competitive tendering processes,” the report said. “In some circumstances, intense competition between businesses to secure contracts can result in the undercutting of minimum wages to present the lowest-cost tender.”
“It is the FWO’s view that the tenderer bears the responsibility to ensure their procurement arrangements do not create circumstances where compliance with workplace laws is unachievable,” the report said.
The cleaning industry employs about 99,000 people, and its workforce is susceptible to exploitation. More than 55% are women, and 65% are over 40 years old. Nearly half of workers employed in the industry are born overseas, and one in ten are students.
“Cleaners welcome the work by the ombudsman shining the spotlight on their industry and exposing unfair practices against their vulnerable and often isolated workforce,” the head of union United Voice, David O’Byrne, said.
The ombudsman will conduct spot checks and increased audits of the businesses that have been found to be non-compliant.
“Further auditing of this group of employers will occur in 2014-15 with a view to detecting and acting upon deliberate and wilful non-compliance,” the report said.
The FWO conducted a campaign in 2010 to expose shady operators. One in five operators who were non-compliant in 2010 were non-compliant again in 2015.
The federal government scrapped the commonwealth cleaning services guidelines in June last year, as part of its push to cut red tape. The legislation awarded cleaners a higher wage than under existing awards. Cleaners currently contracted under the guidelines will not have their wages cut, but unions warn that future contracts may feature a lower wage.
“I hope Tony Abbott is big enough to admit that it was a mistake to get rid of the guidelines. I call on him to do the right thing and reinstate them immediately,” O’Byrne said.
Guardian Australia has sought comment from the employment minister Eric Abetz.
