Resources: Blog

Labour Supply Chain and Underpayments


Chain Reaction

Department store Myer has come under increased pressure from the Fair Work Ombudsman (FWO) after it declined to enter into a voluntary compliance deed with the regulator.

Department store Myer has come under increased pressure from the Fair Work Ombudsman (FWO) after it declined to enter into a voluntary compliance deed with the regulator.

The voluntary compliance deed was offered after claims of underpayment and sham contracting arrangements from cleaners engaged by companies who are subcontracted to Spotless, the head contractor responsible for Myer’s cleaning services.

The voluntary compliance deed would have required Myer to ensure that all employees down the chain of subcontractors paid employees the correct minimum terms and entitlements in accordance with the relevant award.

The FWO regularly uses voluntary or proactive compliance deeds with companies to ensure compliance. Recently, poultry processor and suppliers, Baiada Poultry Pty Limited and Bartter Enterprises Pty Limited (the Baiada Group) entered into such a deed following the FWO inquiry which revealed underpayments, poor labour supply chain governance and exploitation of foreign workers. As part of the terms of the compliance deed, the Baiada Group had to publicly state that it has “a moral and ethical responsibility” to ensure that contractors and entities in its labour supply chain comply with workplace laws and provide equal, fair and safe opportunities to workers.

The FWO practice of offering voluntary compliance deeds raises questions on the responsibility of principals to examine and inquire whether workers of its subcontractors are being paid the minimum terms and entitlements.

At present, the Textile, Clothing, Footwear and Associated Industries Award 2010 explicitly outlines the responsibilities of outworkers, including that “A principal must apply the NES to the worker as though the worker is an employee, whether or not the principal is an employer or the worker is an employee”.

Similarly, the Building Code 2013 also sets out the responsibilities of building contractors and subcontractors to ensure the chain comply with their applicable industrial instruments.

This indicates a new level of scrutiny applicable to subcontracting arrangements in general industry sectors where the subcontracting chain of responsibility is not specifically regulated.


Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.


Similar articles

Workplace Relations Review

Cases and Legislation September 2020

The Queensland Government recently passed legislation amending the Criminal Code Act 1899 (the Code) to criminalise wage theft by employers in Queensland.‍The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) was introduced to the Queensland Parliament in response to a Report released in 2018 by the Queensland Parliamentary Education, Employment and Small Business Committee following an inquiry into wage theft in Queensland. The Report identified critical issues in wage theft as well as deliberate action taken by employers to frustrate employees’ attempts to recover entitlements.


Workplace bullying and reasonable management action

Just Managing

Workplace bullying can be extremely serious and should not be tolerated by employers.


How a region banded together to improve employment standards

Group Effort

No employer operates in a silo – all employers operate in complex systems of interrelated stakeholders including employees, customers, other businesses, and regulators who enforce the laws that apply to the employer and their business.


The onus and presumption in adverse action matters

It’s on you

Under the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act), it is unlawful for a person to take adverse action against another person for a proscribed reason. One of the features of the general protections provisions under the FW Act is the presumption that adverse action was taken for a proscribed reason unless it is proven that the adverse action was not taken for that reason.


Notice of termination in the employment contract

Put it in writing

When it comes to engaging new employees or promoting existing employees, it is crucial that employers prepare and review contracts of employment to ensure that they accurately reflect the terms which will govern an employee’s employment.


Termination of employment letters

In your letter

A termination of employment letter serves a significant purpose in bringing the employment relationship to an end.


Let's talk

please contact our directors to discuss how ouR expertise can help your business.

We're here to help

Contact Us
Let Workplace Law become your partner in Workplace Relations.

Signup to receive the latest industry updates with commentary from the Workplace Law team direct to you inbox.