On 19 June 2018, the Senate referred the following matter to the Education and Employment References Committee (the committee) for inquiry and report by 17 September:
The exploitation of general and specialist cleaners working in retail chains for contracting or subcontracting cleaning companies, with particular reference to:
(a) frameworks at both Commonwealth and industry level to protect workers from harm, including exploitation, wage theft, underpayment, wage stagnation and workplace injury;
(b) measures designed to ensure workers have adequate representation and knowledge of their rights;
(c) compliance with relevant workplace and taxation laws, including the effectiveness and adequacy of agencies such as the Fair Work Ombudsman and the Australian Taxation Office;
(d) practices including ‘phoenixing’ and pyramid subcontracting; and
(e) any related matters.
On 25 June 2018, the Senate granted an extension of time to report until 15 October 2018. On 13 September 2018, the Senate granted a further extension of time to report until 13 November 2018.
Conduct of the inquiry
Notice of the inquiry was posted on the committee's website. The committee also wrote to key stakeholders to invite submissions.
The committee received 22 submissions, as detailed at Appendix 1.
The committee held 5 public hearings:
19 July 2018 in Caboolture;
25 July 2018 in Devonport;
4 September 2018 in Melbourne;
14 September 2018 in Canberra; and
18 October 2018 in Canberra.
A list of witnesses that appeared at these hearings is available at Appendix 2.
Structure of the report
During the course of the inquiry the committee identified a number of key issues relating to the exploitation of workers in the retail cleaning industry. It also examined similar matters relating to the Commonwealth procurement of cleaning services.
Chapter 2 provides background information on the cleaning industry and identifies the characteristics that make it 'high risk' for worker exploitation.
Chapter 3 summarises the findings of the Fair Work Ombudsman's investigation into the procurement of retail cleaners in Tasmania, with a focus on Woolworths' poor management of its cleaning supply chain. It also examines the effectiveness of proactive compliance deeds as a compliance tool used by the Fair Work Ombudsman, and the limitations of the Cleaning Accountability Framework.
Chapter 4 turns to a case study in the public sector involving the Commonwealth Department of Finance and its cleaning contracting arrangements under the Property Services Coordinated Procurement framework.
Chapter 5 examines issues surrounding the fragmentation of employment chains and the effectiveness of Section 550 of the Fair Work Act 2009.
Chapter 6 contains a discussion on the additional measures needed to address non-compliant behaviour from employers, including the inappropriate use of pyramid subcontracting, the misuse of labour hire arrangements, and illegal phoenixing.
Chapter 7 sets out the need for additional measures to assist vulnerable workers.
The committee thanks those individuals and organisations who contributed to this inquiry by preparing written submissions and giving evidence at public hearings.
Notes on references
References in this report to the Hansard for the public hearings are to the proof Hansard. Page numbers may vary between the proof and official Hansard transcripts.