Baiada agrees to proactive compliance partnership with Fair Work

26 October, 2015 by
Aoife Boothroyd

Poultry processing company Baiada has agreed to a proactive compliance partnership with the Fair Work Ombudsman to improve its work site practices following an array of serious breaches.

The company came under fire in November 2013 when an inquiry was launched by Fair Work following complaints from plant workers that they were being underpaid, forced to work extremely long hours and required to pay high rents for overcrowded and unsafe employee accommodation.

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At the time, Baiada refused permission for Fair Work inspectors working on the Inquiry to access the factory floor at its worksites, denying them an opportunity to observe work practices, as well as talk to employees about conditions, policies and procedures. Baiada also failed to provide the Inquiry with any “significant or meaningful” documentation on the nature and terms of its labour contract arrangements.

The company had verbal agreements with an extensive list of labour-hire operators used to source most of its workers, largely 417 working holiday visa-holders from Taiwan and Hong Kong. Baiada’s labour-hire contractors were unwilling to engage with the Inquiry and produced inadequate, inaccurate and/or fabricated records to Inspectors.

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Based on limited material provided, hundreds of thousands of dollars could not be accounted for as money moved through various hands down the company’s labour supply chain.

The Inquiry found exploitation of a labour pool comprised predominantly of overseas workers in Australia on the 417 working holiday visa. Exploitation included significant underpayments, extremely long hours of work, high rents for overcrowded and unsafe worker accommodation, discrimination and misclassification of employees as contractors.

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It also found non-compliance with a range of Commonwealth workplace laws and very poor, or no governance arrangements, by all parties in the various labour supply chains,

Under the new three-year proactive compliance partnership with the Fair Work Ombudsman, Baiada will be required to make good past on underpayments by contractors and to continue to implement changes to its practices on its work sites to ensure compliance with workplace laws in the future.

“Over the life of the Deed, Baiada has agreed to assume responsibility for the underpayment of workers engaged in its supply chain through contract labour arrangements, even though it is not their direct employer,” said Fair Work Ombudsman, Natalie James.

The Proactive Compliance Deed, which details the terms of the compliance partnership, states: “Baiada believes it has a moral and ethical responsibility to require standards of conduct from all entities and individuals involved in the conduct of its enterprise, that comply with the law in relation to all workers at its sites, and meet Australian community and social expectations to provide equal, fair and safe work opportunities for all workers at all of its sites”.

As part of the compliance partnership, Baiada will ensure that:

  • A dedicated hotline is established for employees to call and make a complaint if they believe they have been underpaid,
  • Workers carry photo identification cards which record the name of their direct employer,
  • An electronic time-keeping system that records all working hours of each employee,
  • Employee wages can be verified by an independent third party, and are preferably paid via electronic funds transfer,
  • Contractors must be independently audited to ensure their compliance with workplace laws, with audit results to be provided to the Fair Work Ombudsman and published,
  • The company’s own compliance with the Fair Work Act is independently assessed regularly over the next three years, 
  • A workplace relations training program is put in place to educate employees about their workplace rights, including language-specific induction documents,
  • Qualified human resources staff are on-site at each processing plant to respond to inquiries, complaints and reports of potential non-compliance,
  • Contact details of all labour-supply contractors are provided to the Fair Work Ombudsman, including copies of passports of company directors, 
  • Fair Work inspectors have access to any worksites and any documents at any time, and
  • Arrangements with contractors are formalised in written contracts requiring contractors to comply with workplace relations laws.

“We are pleased to enter into a proactive compliance partnership with the Fair Work Ombudsman,” said Baiada Managing Director Simon Camilleri. 

“Our ongoing priority is to ensure that contractors’ workers are being paid correctly and treated fairly and that contractors are acting lawfully… We will closely monitor the effectiveness of these measures and will act to terminate agreements with contractors who do not comply.”

Baiada is the largest Australian-owned poultry processing company and has a market share of more than 20 per cent. It produces the Lilydale Select and Steggles chicken brands for customers including Coles, Woolworths, IGA, Aldi, McDonald’s, KFC, Pizza Hut, Red Rooster, Nando’s and Subway.

James said that sustainable changes require that businesses at the top of the supply chain, such as Baiada, partner with the government agency to “stamp out dodgy operators who deliberately set out to use exploitative labour practices.”

“We are pleased that Baiada has partnered with us to take action,” says James.

“We already have a number of Inquiries underway to identify and address the structural and behavioural drivers of non-compliance in various industry networks and supply chains, in which overseas workers are heavily represented.”