How a compliance partnership can greatly improve workplace practices

by HCA29 Nov 2016

Baiada Group, Australia’s second largest poultry processer, has greatly improved its workplace practices and addressed the exploitation of vulnerable overseas workers by its contractors, according to the Fair Work Ombudsman.

The improvements comes after Baiada Group entered into a compliance partnership with the Fair Work Ombudsman just over a year ago.

This involved Baiada last year publicly declaring it had a “moral and ethical” responsibility to join with the Fair Work Ombudsman to eliminate the exploitation of vulnerable workers by contractors at its sites.

The compliance partnership is underpinned by a three-year Proactive Compliance Deed that requires the Baiada Group to make good past underpayments by contractors and to continue to implement changes to its practices on its worksites to ensure compliance with workplace laws.

The report notes the important systems reforms Baiada has undertaken to ensure it knows who is working on its sites, and that they have been paid correctly.

Baiada has also seen that workers previously underpaid have been able to claim backpay and, where a contractor has not rectified an underpayment, Baiada has taken responsibility and paid-up.

“Some contractors have sought to circumvent the new systems, for example, by demanding workers pay ‘cash back’ to their contractor or swipe off the electronic system and continue to work for below minimum rates," said the report.

“Baiada has detected and acted in response to such behaviour, including by terminating contractors.

“Throughout the partnership Baiada has taken action to address such behaviour, in some cases taking steps additional to what is required by the strict letter of the Proactive Compliance Deed, and reported the details of each step to the Fair Work Ombudsman.”

Fair Work Ombudsman Natalie James said that while vigilance is required to ensure the compliance improvements are sustained over time, the early results show what can be achieved when a company decides to take responsibility for its labour supply chain through governance and systems.

The compliance partnership was entered into last year after the Fair Work Ombudsman conducted an Inquiry into the employment practices of contractors engaged at Baiada’s processing sites in NSW.

The Inquiry findings included exploitation of overseas workers by contractors and very poor, or no governance arrangements, by Baiada relating to the various labour supply chains.

The measures incorporated in the compliance partnership were designed to build compliance throughout Baiada’s sites.

James said it is significant the majority of back-pay recovered for underpaid workers at Baiada sites has been back-paid by contractors, rather than by Baiada directly. This was a result of Baiada implementing a range of measures to ensure its contractors comply with their lawful obligations to workers.

“Compliance partnerships are aimed at ensuring businesses have the right systems and governance processes in place to ensure that the direct employers of workers in their supply chains are providing those workers’ minimum lawful wages and entitlements,” she said.

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