Woolworths will pick up the tab for underpaid trolley collectors where the contractor responsible for ripping off the workers has gone under or disappeared after an investigation found rampant exploitation of workers.
Woolworths agreed to assist in the back pay of its contracted trolley collectors stretching back to July 2014 under a compliance deed it has signed with the workplace regulator.
Fairfax Media can reveal that Woolworths has entered into the compliance partnership with the Fair Work Ombudsman in recent weeks after after a three-year inquiry by the regulator found trolley collectors at Woolworths supermarkets were being paid as little as $10 an hour despite casual rates for that work being $22.51 in 2014.
Under the deed, Woolworths will back-pay any trolley collector employed during the period from July 1, 2014 until the present if the primary contractor has failed to rectify wages within 20 days.
Woolworths will also ensure records of its contractor workforce are accurately maintained and will audit its contractors annually.
In 2016, a FWO inquiry found contractors at a staggering 79 per centof the 130 Woolworths stores visited by the regulator in 2015 were in violation of workplace laws.
Under the deed, Woolworths will continue to use the contractor model, which relies on outsourcing trolley collections to contractors and sub-contractors, rather than bringing its trolley collectors inhouse like its chief competitor Coles.
Coles made the decision to directly employ its trolley collectors after accepting an enforceable undertaking with the FWO in 2014 following an investigation which found underpayment within its network of contractors.
Under Woolworths' deed with FWO, trolley contractors providing services to Woolworths will ensure its contractors use biometric sign-ons for employees – such as fingerprint sign ons – or geo-fencing capabilities – which tracks whether an employee is on site during their reported shift.
Contractors will also be issued with photo identification through Woolworths' contract management system.
Fair Work Ombudsman Natalie James said the deed was the result of "widespread exploitation" and Woolworths' signing the deed showed that while contractors were primarily responsible for payment of workers, in a supply chain the accountability went all the way to the top.
"Our inquiry found that Woolworths' existing governance systems were not effective in addressing these issues, contributing to a culture of non-compliance by its contractors," Ms James said.
Our inquiry found that Woolworths' existing governance systems were not effective in addressing these issues, contributing to a culture of non-compliance by its contractors.Natalie James, Fair Work Ombudsman
"With Australia's two largest supermarket retailers now accepting a moral and ethical responsibility for ensuring the trolley collectors on their sites are being treated fairly regardless of who their employer is, we hope that rampant underpayment of this vulnerable cohort becomes a thing of the past."
Woolworths Head of Facilities Management Trent Mason said the company had worked with the Fair Work Ombudsman throughout this process and had already implemented many of the obligations set by the deed.
"Compliance with all relevant laws and contractual obligations by service providers is a fundamental part of working alongside Woolworths," Mr Mason said.
- Article originally featured on the Sydney Morning Herald.