March 10, 2016
Coles is transitioning away from using subconstractors for trolley collection services after a pay scandal.
THEY perform one of the lowest paid, but essential jobs that keep our supermarkets running like clockwork.
But Coles was caught out using trolley collectors paid as little as $5 an hour, in an exploitation scandal that has seen the supermarket giant lashed by the Fair Work Ombudsman.
Fair Work Ombudsman Natalie James told the Australian it was time for big business to stop turning a blind eye to underpayment by subcontractors.
“The community expects more from established and profitable brands,” she said.
A former company director and his operations manager have been fined $188,100 for their role in underpaying 10 Adelaide trolley collectors more than $220,000.
Coles has had to fork out the owed wages as part of an enforceable undertaking signed with the Ombudsman, and set aside a further $500,000 for any other cases that may be uncovered.
Federal Court Justice Anthony Besanko has now imposed hefty penalties against Sydney-based Starlink entities, which is now in liquidation.
The company provided trolley collection services to Coles supermarkets in the Adelaide suburbs of West Lakes, Elizabeth, Munno Para and Gawler until 2010.
Starlink director Nidal Albarouki and operations General Manager Clency Ferriere were each fined $94,050 for their part in subcontracting arrangements which short-changed vulnerable workers over 18 months.
Bhupinder Singh, a migrant worker from India, was underpaid almost $90,000, the Australian reports.
SUPPLY CHAIN DUTY
Coles’ enforceable undertaking included the admission that it had “an ethical and moral responsibility” for the conduct of all persons involved in its supply chain.
The retailer has begun progressively moving its trolley collection services “in-house” to minimise the risk of underpayments by subcontractors.
The service was subcontracted twice at the Adelaide stores, with Starlink contracting the work out to two men, Ahmad Hamid Mohammed Al Hilfi and Ayam Rahmah Al Basry.
Justice Besanko held Starlink’s Mr Albarouki and Mr Ferriere responsible for the subcontracting arrangement and found that both were familiar with the basis and rates of pay for trolley collectors.
The court heard that Sydney-based Mr Albarouki, who was declared bankrupt last June, knew the trolley collectors were being underpaid and told Mr Al Hilfi that he didn’t care.
He made regular overseas trips during the court proceedings, including numerous trips to Syria for extended periods.
The court heard that Starlink commenced its own legal proceedings against Mr Albarouki in 2012, resulting in a penalty against him of almost $750,000. That judgment debt remained outstanding when he was declared bankrupt.
It also heard that Mr Albarouki had divested himself of three properties, including one with a price guide of more than $2 million that was transferred to his former wife.
Underpayment of trolley collectors around Australia has been a persistent problem for many years, the Ombudsman said.
Census data shows that many are young, do not have an education level beyond Year 10, come from non-English speaking countries and have physical or other disabilities.
Coles Operations and Supply Chain Director Andy Coleman said the company was working to eradicate underpayment of trolley collectors.
“We believe it is vital to ensure fair practices apply to all team members at our stores and believe positive relationships with our team members are essential for our business,” Mr Coleman said.
“We previously had around 30 contractors engaged to provide trolley collection services, but moved to one national trolley collection provider in late 2012.
“We have since made further improvements to the management of our trolley collection by directly employing our own team to collect trolleys at more than 520 stores across Australia.”
The company has audited the wages of 400 trolley collectors working for 15 subcontractors, back paid a further seven workers a total of $41,030 and given its staff workplace relations training.
Coles now directly employs about 2500 staff to collect trolleys and is rolling this direct employment model out nationally, a spokesman said, replacing the previous system where about 30 different contractors were engaged to provide the service.
Ms James welcomed Coles’ efforts, but said the wage audits had revealed that “there yet remains more to be done in this sector throughout the supply chain to ensure all of workers get their minimum wages.’’
Coles encourages trolley collectors with pay concerns to phone its reporting hotline on 1800 507 877.