This study examines how the risk of labour standards noncompliance can be rendered calculable and commensurable through a market device. We present a case study of the Cleaning Accountability Framework (CAF), an industry certification scheme, which seeks to address labour exploitation in the Australian contract cleaning industry. We pay particular attention to the central device of the certification scheme – the pricing schedule. We examine how the pricing schedule shaped the calculative space informing contracting parties during the procurement process. In doing so, the pricing schedule increased transparency around the potential risk of labour standards noncompliance. The nature of this transparency and the perceived objectivity of the pricing schedule acted to reshape the market for contract cleaning, resulting in a redistribution of accountability for labour exploitation. We also examine how the pricing schedule formed part of a wider framework of accountability, and how these mechanisms enabled strategic co-enforcement of labour standards compliance by supply chain stakeholders. Overall, our study indicates the potential for accounting practices to play a more active role in shaping how markets address modern slavery risks.
Underpayment is becoming an increasingly prevalent issue in Australia, with certain industries and sub-sets of workers more affected than others. Given the increasing prevalence of wage theft, workers can become resigned to accept employment below the minimum wage due to expectations that underpayment is unavoidable. While the Fair Work Ombudsman (FWO) plays a key role in identifying and rectifying underpayments, increased funding is required to allow it to effectively uncover breaches. Both mandatory and voluntary supply chain measures can play a key role to help target the issue of underpayment. Our submission recommends new legislation be passed to better regulate labour standards and the gig economy, strengthening enforcement of existing regulations.
This week an already impressive list of wage theft offenders has gotten a bit longer.
On Monday, the likes of Caltex, 7-Eleven, Pizza Hut, Domino’s Pizza and Bunnings (to name a few), were joined by Coles, which underpaid its staff $20 million over six years.
On Wednesday, Target admitted to underpaying workers about $9 million.
On Thursday, Super Retail Group – whose brands include Rebel and Super Cheap Auto, said that it had short-changed workers by $8 million more than it had originally estimated, bringing the total to $61.2 million.
On Friday, cleaning and catering company Spotless admitted to underpaying workers $4 million.
The total wage theft uncovered this week: $94.2 million.
Last week has seen the list of wage theft offenders get longer. Overall, the total wage theft revealed last week summed up to 94.2 million dollars. According to PwC, Australian workers are underpaid 1.35 billion dollars each year – that means that 1 out of 7 workers aren’t getting their wages, as well as superannuation, overtime, and entitlements like properly paid sick leave. Despite the statistics and companies being called out for wage theft, we’ve seen this issue continue. Which begs the question – why? To dive deep into this issue, I spoke to The Daily on 2SER.
I spoke to Glen Bartholomew from ABC News Radio about recent wage theft in Australia.
The open letter to Coles and Woolworths was covered by the New Daily and the supermarkets have written a response to our letter. The Australasian Centre for Corporate Responsibility (ACCR), who have been engaging both supermarkets since 2017, have prepared a response to the supermarkets. You can find the response here:
What’s next? A Shareholder Resolution!
Justine Nolan, Laurie Berg and Martijn Boersma have supported a shareholder resolution by ACCR that will be heard at the Coles AGM on the 13th November 2019. You can help by calling on UniSuper to support the resolution. All you need to do is send them a message here. You can use the sample text below, copy and paste, or write your own.
The Australian horticultural sector is one of the most at-risk industries for modern slavery.
A recent survey by the National Union of Workers among 650 workers found severe underpayments and withholding of wages, excessive overtime, retention of identity documents, threats of and actual physical and sexual violence, and coercive and excessive payments for transport and board.
A group of academics, experts in the area of labour and human rights, modern slavery, and supply chains, have initiated an open letter in which they ask Coles and Woolworths to address labour exploitation and the risk of modern slavery.
Australia’s Modern Slavery Act requires businesses to report yearly on the risks of modern slavery in their operations and supply chains, the actions taken in response, and the effectiveness of these actions. The first reporting cycle started on July 1.
Unfortunately, although companies and consumers are increasingly aware that modern slavery exists, it is a phenomenon that is often dismissed or misunderstood.
A Senate inquiry has revealed that wage theft and underpayment are so prevalent in some industries that they have become the norm. Around 79% of hospitality employers in Victoria, for instance, did not comply with the national award wage system between 2013 and 2016.
Regulators and unions don’t have the resources to combat this issue, and so we need another method to tackle wage exploitation. One way is to introduce a multi-stakeholder certification scheme, using market forces to reward companies that have committed to fair working conditions and punish those that don’t.