A staffing buyer once in hot water over its contingent labor practices has made significant improvements, according to a report released this week [1] by the Australia Fair Work Ombudsman.
Baiada Group, Australia’s second-largest poultry processor, had concerns over its contingent workforce practices aired during an Australian Broadcasting Company [2] program in October 2012. The Fair Work Ombudsman’s office then launched an inquiry into the company that found exploitation by contractors of a labor pool comprised predominantly of overseas workers. That exploitation included significant underpayments, extremely long hours of work, high rents for overcrowded and unsafe worker accommodation, discrimination, and misclassification of employees as contractors.
Baiada then signed a compliance partnership with the Fair Work Ombudsman’s office, took several other steps and the report cited significant progress.
“Probably the biggest area of improvement under the compliance partnership has been the governance of labor contractor hire arrangements,” according to a video presentation in the report.
“In the past, Baiada had a wide range of contractors and subcontractors providing labor to their sites across the country,” according to the presentation. “Unfortunately, they had very little control over those arrangements and this led to the problems we found during our inquiry. Now Baiada have put in place arrangements that set very high standards for contractors who supply labor to their worksites.”
Among the changes in managing suppliers to ensure fair treatment of workers:
- Baiada established a telephone hotline for workers to lodge complaints.
- Ensured all workers are issued with a photo identification card which includes their full name, the employing entity’s name and the employing entity’s Australian Business Number.
- Required contractors to outsource payroll services to Baiada to process wages directly into employees’ bank accounts. Suppliers must also put up an AUD 50,000 bond
- Implemented an electronic time-keeping system to maintain accurate records of the starting and finishing times worked at all of its processing sites.
- Terminated some contractors for breaching the terms of their written agreements
- Oversaw back payments of more than AUD$218,000 to 91 workers.
- Engaged Deloitte Australia to conduct an audit.
- Paid $450,000 to various charities.
“We have implemented significant reforms across our business to ensure contractors’ employees at our sites are being treated fairly and lawfully by their employer,” Baiada Managing Director Simon Camilleri said in a statement. “Baiada now has a stringent contractor compliance system that is rigorously enforced across all its processing sites. This includes Baiada taking responsibility for paying all contractors’ employees directly so they are protected from potential underpayment.”