Under the terms of a service agreement that Woolworths has with its principal contractors, all and any subcontractors are required to be approved by Woolworths before they work in a supermarket site. Moreover, the agreements only allow for one level of subcontracting. However, the inquiry found Woolworths regularly failed to monitor that only one level of subcontracting was occurring at its sites.
Contractor A1, a principal contractor for Woolworths, won a tender to provide cleaning services at a Woolworths site. They were to perform cleaning services to this site for $873.00 per week for 14 hours of cleaning labour per week, including provision of all the equipment and consumables.
Contractor A then contracted the work to Contractor B (a wholly owned subsidiary of Contractor A) who then subcontracted the cleaning work out again to Contractor C. Contractor C was to perform the cleaning services for $625.00 per week. Contractor C was required to provide all cleaning materials at its cost.
Contractor C engaged its workforce as ‘independent contractors’, requiring the workers to invoice for hours worked at a flat rate of $20.00 per hour for 14 hours work per week ($280.00).
Figure 1: Case study supply chain
- References to Contractor A, B etc in case studies in this report are de-identified and are not intended to relate to specific entities, and do not suggest that the same company is referred to throughout.