Coles can’t duck responsibility on wages rip-off: ombudsman

Coles has been lashed for hiding behind complex arrangements which ‘rely on ­exploitation of vulnerable workers’.

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The Fair Work Ombudsman has lashed supermarket giant Coles for hiding behind complex supply chains and sub-contracting ­arrangements that “rely on ­exploitation of vulnerable workers to make a profit”.

Natalie James told The Australian that — in the wake of a third successful penalty decision in the case of gross underpayment of supermarket trolley collectors — big business in Australia too often turned a blind eye to deliberate ­exploitation of workers.

She put big business on notice that the law would be applied. “It is time big business stopped wiping its hands of the problem with the excuse that it was not the (direct) employer,” Ms James said.

“Other sectors operating with supply chain and subcontractor arrangements can expect to be held accountable if any part of their labour networks contravene workplace laws.

“The community expects more from established and profitable brands. And the law can extend legal responsibility up the supply chain ... we will look up to the business at the top.”

Ms James said her office was not finished with the trolley collection sector. “If major super­markets are not already having a boardroom discussion about the governance of their trolley collection services, then someone is asleep at the wheel,” she warned.

In what Ms James described as her agency’s “strongest play” ever, she said the Federal Court last Friday delivered a “trifecta”, with a final strike on all levels of the Coles supply chain that saw 10 ­Adelaide trolley collectors underpaid more than $220,000 in 18 months.

“Strike three was delivered in the Federal Court against the troublesome supply chain, with the middlemen — the operators of Sydney-based and now in liqui­dation Starlink and Starlink Operations, Nidal Albarouki and Clency Ferriere — ordered to pay $94,050 each for allowing the gross non-compliance in their ­Adelaide operations,” she said.

“All levels in the supply chain have been penalised or had an enforcement outcome applied.”

It marks the end of an almost six-year operation by the FWO.

“In the Adelaide case, Coles Supermarkets Australia had typically used the supply chain ­arrangements as an ‘out’ clause for its requirement to comply with the Fair Work Act — often stating it wasn’t the direct employer, so the collectors were not its responsibility,” Ms James said.

“It was that kind of attitude that created the shocking circumstances where a young Adelaide western suburbs trolley collector could be short-changed almost $90,000 in 18 months.”

That worker, Indian migrant Bhupinder Singh, 29, did not ­receive 65 per cent of his total wages. Mr Singh, who struggles to speak English, and his wife, Sara, yesterday said others in the same situation should seek help.

“My husband ... was taken ­advantage of because he did not have a good understanding of ­English,’’ Ms Singh said. “I would say to other ­migrants to find someone who has good English and know your rights. It is lucky an inspector came along, otherwise we would never have got what he was owed.”

Coles has back-paid the workers and established a $500,000 fund for others found to have been underpaid. A first-year report by Coles to the FWO on its response to the problem shows that since October 2014, a further seven trolley collectors have been back-paid $41,030 and 558 of its 776 stores have in-house collection services.

Coles operations and supply chain director Andy Colemans said changes had resulted in ­improved business outcomes and higher levels of customer and ­employee engagement and satisfaction.