What’s going on at the Toora dairy factory?

THIS factory in rural Victoria ships baby formula to China by the tonne and nabbed a $1.5 million taxpayer grant to boost its trade. But all is not as it seems.

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THEY toil away in a factory, packing the incredibly lucrative product that’s been dubbed “white gold”.

But some employees of a dairy producer with Chinese ties — which received a $1.5 million Victorian government grant to boost its exports — have not been getting their fair share of the baby formula bonanza.

A Fair Work Ombudsman investigation has found that two Taiwanese backpackers were underpaid thousands of dollars while working at the Toora, South Gippsland factory of Viplus Dairy Pty Ltd.

The two casual workers, in Australia on 417 working holiday visas, were paid a flat rate of just $15 an hour, instead of $21.09, while packing infant formula destined for the lucrative Chinese market. They were short-changed almost $7400 in the three months to April 2015.

The explanation given, that the workers got free accommodation, was rejected by the Ombudsman.

Is is not the first time Viplus has come under scrutiny, with claims of unpaid wages, totalling tens of thousands of dollars stretching back to 2012, when the former Bonlac milk factory was bought by parent company Funton Holdings.

After lying empty for 12 years, the factory’s revival was hoped to give the town of 610 people a much-needed boost.

But trouble was just around the corner.

‘MANAGEMENT PROBLEMS’

In 2013, 12 employees and contractors at the factory walked off the job, claiming they were owed about $20,000 in wages and entitlements.

The secretary of the Gippsland Trades and Labour Council, John Parker, told the ABC it was the second time that year workers at the factory had not been paid.

“I’ve said to them I’m prepared to sit down and work out the issues with them,” he said.

“But the workers have got to be paid upfront, because they’re doing it hard and they need to be assured that money is coming.”

A spokesman told the ABC a subcontractor was to blame for failing to pay staff.

In March 2014, a Viplus representative “suddenly became unavailable for interview” after a Weekend Australian Magazine reporter started asking questions about the company’s marketing claims.

When the Weekend Australian Magazine visited, there was not a dairy cow in sight.

“The website paints a seductive picture of Toora’s entire population happily toiling in the dairy while fat Gippsland cows laze around waiting to be milked, but on a recent March afternoon there were just a handful of workers inside the largely abandoned factory and not a cow in sight,” the magazine reported.

It turned out that the formula being shipped to China by the pallet load was actually being made from milk powder imported from New Zealand.

“A photographer from this magazine was shooting pictures of the factory when a Viplus employee demanded he leave or he would be ‘thrown to the pigs’,” journalist Richard Guilliatt wrote.

A spokeswoman told the magazine that thousands of dollars worth of unpaid wage claims raised in December 2012 were “a result of language difficulties and early management problems”.

TAXPAYERS CHIP IN $1.5 MILLION

In October 2014, Viplus announced a $50.4 million expansion it said would generate 45 new jobs and enable the company to start manufacturing formula from raw milk — increasing the factory’s output from 4000 tonnes of baby formula to 30,000 tonnes a year.

That’s a lot of tins of the powder that can sell for as much as $90 each in China, where contamination scares have convinced families that Australian-made is the only safe option.

Viplus was helped on its way by the Victorian government, which tipped in $1.5 million for the factory revamp through its regional development fund.

‘Australian made’ equals big bucks when it comes to dairy.

As the state’s oldest dairy factory, the reopened Toora facility was embraced by the town, with hopes it would boost numbers at local schools and sporting clubs.

Former mayor Jeanette Harding, who last year was made an “ambassador” of the factory, acknowledged there had been “a few hiccups” at the factory, but said it was taking on more staff “slowly going ahead for our little town”, The Mirror News reported.

Viplus Dairy has signed an enforceable undertaking with the Fair Work Ombudsman to encourage behavioural change and ensure future compliance with its workplace obligations.

Ombudsman Natalie James said the company had co-operated with the investigation, repaid the employees and revised its workplace practices.

She said all employees in Australia, including foreign workers, were entitled to minimum wages which were not negotiable, and encouraged employers with any uncertainty about their workplace obligations to visit the Fair Work Ombudsman website.

The Ombudsman is undertaking a national inquiry into the wages and conditions of 417 working holiday visa-holders in Australia.

News.com.au has reached out to Viplus Dairy for comment.

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