The Fair Work Ombudsman website requires JavaScript. Please enable JavaScript on your browser.

Labour procurement and supply chain practices

We continued to encourage businesses to take responsibility for labour procurement practices throughout their supply chains. We find the most serious examples of exploitation often involve vulnerable migrant workers employed by an operator who is part of a much bigger supply chain or network. These workers are typically employed to perform low-skill and labour-intensive work such as collecting supermarket trolleys or picking fruit on the Harvest Trail. We used accessorial liability provisions under the Fair Work Act to address serious and deliberate contraventions of workplace laws in supply chains.

Fifty-one of the court actions commenced during the year (93%) involved an accessory–a company or individual other than the employing entity who was involved in the contravention. This compares with 92% in 2015–16. Community and media condemnation of businesses benefiting from the labour of unpaid workers in their supply chains also continued.

To support businesses to take steps to monitor and manage contract arrangements and minimise legal and reputational risks, we:

  • Developed supply chain resources in consultation with business, unions and employer organisations in industries where outsourcing or contracting work is common. Trolley collection, charity collection, security, poultry processing and horticulture representatives provided input. The guides contain advice on contracting labour, monitoring arrangements and self-auditing. Since their publication in May 2017, the guides were downloaded from our website 2750 times.
  • Signed a Memorandum of Understanding with the Recruitment and Consulting Services Association (RCSA) to establish an information-sharing pathway between RCSA members, other interested parties and the FWO. Information shared may include the identification of illegally operating labour hire providers or serious discriminatory or otherwise illegal hiring practices. We also jointly developed an accreditation scheme for the sector.
  • Partnered with key industry stakeholders to pilot a national supply chain certification scheme for the cleaning industry. Cleaning industry employees are among the most vulnerable. Intelligence tells us some businesses compete to win contracts by undercutting their workers’ lawful entitlements.
  • Partnered with Foodco Group (operator of Muffin Break and Jamaica Blue) and 7-Eleven to assist the franchisors in ensuring compliance with workplace laws across their networks. The 7-Eleven Proactive Compliance Deed generated media coverage in more than 10 newspapers, over 100 radio stations and 50 plus websites.
  • Conducted an activity focused on understanding the relationship between United Petroleum head office’s contracting arrangements with franchisees and commission agents and their respective employment of console operators at retail fuel sites. This followed media allegations of exploitation and a pattern of requests for FWO assistance from workers. Site visits and employment records revealed $20 551 in underpayments. Two enforceable undertakings, two compliance notices and three letters of caution were issued.
  • Conducted the education phase of a national campaign in the textile, clothing and footwear industry. The findings of this phase revealed limited understanding or observation among business operators of minimum pay rates and other obligations under workplace laws. It also revealed confusion about how compliance and regulation interacts with different levels of the supply chain. In response to the findings, audits of more than 365 clothing, textile and footwear manufacturing businesses are underway.
  • Shared information and advice with small business operators and their advisers at more than 20 events nationally. This included at the Small Business and Franchising Consultative Committee to address issues affecting the small business and franchising sectors under competition and consumer law. 

Further details about key FWO-initiated activities are available in research, campaign and inquiry reports and policies on the FWO website.