Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

MCG head contractor slammed for wage underpayment

Adam Zuchetti
Adam Zuchetti
29 May 2018 1 minute readShare
Fist, squash

One of Melbourne’s most iconic venues has been the scene of a wage underpayment scandal, with a head contractor for the MCG fined $130,000 in court.

ISS Facility Services Australia, the Australian offshoot of global firm ISS Group, holds the contract to provide various cleaning services at the Melbourne Cricket Ground (MCG).

Fair Work Ombudsman (FWO) inspectors made a surprise trip to the footy in September 2014 (during the Hawthorn versus Port Adelaide AFL preliminary final), speaking with a total of 44 cleaners that evening after reports in the media of “significant compliance issues”.

The FWO allegedly uncovered evidence that 11 cleaners employed by First Group of Companies — a sub-contractor to ISS — had been underpaid to the tune of $37,471 for clean-up work after AFL matches that year.

First Group of Companies has since been deregistered.

In court, ISS admitted that it knew at the time what it paid to First Group was “not sufficient to cover the employees’ entitlements”, in a direct breach of workplace laws.

First Group was found to have used bogus contracts to engage the cleaners, most of whom were international students, and treated them as contractors, paying them flat rates well below award rates.

For its part, ISS tried to deflect responsibility, telling the court it had been a third party to the underpayments.

But Judge Suzanne Jones disagreed.

“It is simply incorrect to describe [ISS] as a ‘third party’, if the use of that word is designed to minimise or reduce [ISS's] responsibility for its involvement in the contraventions,” she said.

“Principal contractors must be deterred from engaging subcontractors without taking steps to ensure that so long as those subcontractors are engaged by them, they comply with the [Fair Work] Act.

“If principal contractors do not treat this as a business imperative, the notion of a level playing field in which principal contractors tout for business on the basis of the same labour costs, would collapse.”

ISS was issued penalties worth $132,217. First Group’s former owner-operators, Sharad Patel and Sidarth Luthra, were also fined $17,926 each for their role in the breach. All affected workers were reimbursed prior to First Group being de-registered.

MCG head contractor slammed for wage underpayment
mybusiness logo
Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?