A lengthy investigation into the contractors by the Fair Work Ombudsman (FWO) found “alarming levels of exploitation”, which it attributed to multiple levels of subcontracting.
While its inquiry also looked at selected Coles and IGA stores in the state, Woolworths was the primary target for investigation given that it was the only supermarket chain to outsource its cleaners.
“Our inquiry found deficiencies in Woolworths’ governance arrangements with regard to its procurement and oversight of cleaning contracts, resulting in serious exploitation occurring at multiple levels of its cleaning supply chain,” Ombudsman Natalie James said.
“We uncovered breaches across 90 per cent of Woolworths’ Tasmanian sites, including cases of contractors paying cleaners as little as $7 per hour for training and $14 per hour for work – well below their legal entitlements.”
She also criticised the records kept by the contractors, which she deplored as “abysmal”.
“Overall, record-keeping by contractors engaged at Woolworths’ sites was abysmal: at 84 per cent of sites workplace records were inaccurate or not kept at all,” said Ms James.
“The impact of record-keeping failings is exacerbated by the use of cash payments which, while lawful, make it difficult to determine with any certainty the extent of underpayment of wages by the contractors.
“Such blatant and widespread breaches of workplace laws are clearly unacceptable, and echo the findings of our previous inquiries into supply chains employing low-skilled and vulnerable workers.”
More than $64,000 worth of underpayments have so far been identified, only $21,000 of which have been rectified so far.
“Woolworths will continue to work closely with the Fair Work Ombudsman as we incorporate enhanced management of our cleaning contractors throughout Australia,” a spokesperson for the company told My Business.
“We’re also committed to paying cleaners if they’re found to be underpaid for cleaning services provided to Woolworths, and where the relevant subcontractor employing entity fails to rectify the underpayments.
“Cleaners are an integral part of our store teams, providing an essential service across Woolworths’ sites, not just in Tasmania, but nationwide. We’d like to thank them for their continued hard work and support of our store teams.”
Following the findings, the FWO appealed to larger businesses to improve their supply chain governance. It noted that investigations in Woolworths’ supply chain of cleaning services are ongoing.