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Estimates: Education and Employment Legislation Committee: Employment Portfolio: Fair Work Commission

Estimates & Committees
Lee Rhiannon 14 Jun 2017

Tuesday 30 May

Senator RHIANNON: There has been a great deal of criticism in the media of a number of the enterprise agreements with various retail outlets, which you would obviously be aware of. And I was looking at your form, F17, the employers statutory dec, and from what I can see it looks like it would work on a lot of trust. Does the Fair Work Commission rely just on the evidence submitted by employers when applications are received for approval?

Ms O'Neill: Mr Furlong will assist you with that question.

Mr Furlong: The F17 is obviously the employer statutory declaration. The draft agreement, as lodged, is published on our website on an agreements-in-progress page, so any party can have a look and review the terms and conditions that reside in that enterprise agreement. Then if they feel the need they can seek to make an application or an appearance before the commission.

Senator RHIANNON: But, in the first instance, it is you and the employer—correct?

Mr Furlong: In terms of the F17, yes it is.

Senator RHIANNON: Some of it is as simple as ticking a box, so I could see how it works off a lot of trust. In question 3.6, on form 17, I notice that it states that a person making the declaration thinks the agreement passes the Better Off Overall Test, so all you rely on there is for them to tick the box. Is there any other evidence that you require, or is it just what I see here?

Mr Furlong: The application is obviously made, and then a specialised team performs an analysis of the agreement, as made, to determine whether or not it meets a number of pre-lodgement provisions but also that it may satisfy the BOOT, the Better Off Overall Test. It is then dealt with by a member of the tribunal, who will then consider the application, as made. If they require any additional information or if they have any concerns about the accuracy of any of the information in the F17 then they can ask the employer to provide some additional information.

Senator RHIANNON: When a company has ticked the BOOT box, do your people then, as part of the process, always investigate it? Or is it just some spot checks that are made? Is it always or sometimes?

Mr Furlong: There is a very detailed guidance document that our assessors go through to ensure that it complies with a number of pre-lodgement provisions.

Senator RHIANNON: But does every form get checked?

Mr Furlong: Every agreement gets checked.

Senator RHIANNON: You also rely on sample rosters that are put in from the employers. So when you come to looking at the rosters for the workers that is purely from the employer—is that correct?

Mr Furlong: It is a matter of discretion for members of the tribunal to deal with these matters as they see fit. I cannot propose to talk about the way that members will conduct their examination of an application for an agreement. But what I can say is that members have the capacity to inform themselves how they see fit, and, if they have any concerns about the information that has been provided, including in relation to those sample rosters, they can seek additional information. They can also, towards the end of the process, seek undertakings from the employers to make sure that, if they have any concerns about particular elements of the draft agreements, they are satisfied.

Senator RHIANNON: We have seen some of these agreements leaving workers worse off, so that is what I am trying to understand. If the Fair Work Commission relies on the evidence of the employer and relies on sample rosters submitted by the employer which are not representative of what many employees are doing at work, the Fair Work Commission could approve an agreement which leaves many workers worse off, couldn't it?

Mr Furlong: I am not too sure if I can answer that question clearly. What I can say is that the Better Off Overall Test is applied at the point that the agreement is made. If an aggrieved party has a concern about an agreement that is made, they can appeal that decision.

Senator RHIANNON: If you cannot answer that general question, let us take the specific: isn't that precisely what happened with regard to the Coles agreement 2014?

Mr Furlong: I can say that, in the first instance, the agreement was approved, and then there was an application brought to appeal that decision in the first instance. In a very high level summary, the full bench, in that matter, decided that issues in the agreement could be resolved with particular undertakings. My understanding is that Coles did not accept those proposed undertakings, and so that decision was quashed.

Ms O'Neill: The other point that might assist you is that the process Mr Furlong has described—where every agreement is assessed by an administrative team with a detailed checklist, as an input to a member in assessing whether an agreement should be approved or not—has not always been in place. It has been introduced in more recent times. The circumstances in which agreements can be approved or cannot be has not changed, and if there is an instance where an agreement is approved outside that statutory framework then the act provides some remedies, including the capacity to appeal, which is what has happened in that particular case.

Senator RHIANNON: Let me see if I understand correctly. From what I understand, it required an appeal to overturn the decision in that case. And, Ms O'Neill, you have said that things have not changed. My question was going to be: 'Did you learn any lessons out of this?' and 'Has the system changed?' but I think you said it has not changed.

Ms O'Neill: No, I was saying that it has changed, so the process that Mr Furlong described has not always been in place, and I do not believe it was in place in relation to the Coles matter. It is not accurate to say it was introduced in response to the Coles matter. It is just one of the ongoing reforms that the commission has introduced, but it is a different process to what was in place at that time.

Senator RHIANNON: We have had a situation where hundreds of thousands of low-paid, often securely employed workers are affected at large retail and fast food companies. The question does arise: why didn't the Fair Work Commission get onto this? It is extraordinary. It is huge number of workers, and some of the most disadvantaged in the country, and we find out that it was a young man, in his own time, who was the one who tracked this down and exposed this story. I guess that it must have been embarrassing for you. But, from what I am hearing, it could actually still happen.

Ms O'Neill: The process that was in place at the time the Coles agreement was approved is not the process that is in place now. All agreements that are lodged are subject to an extensive checklist, that Mr Furlong has described, and that checklist is on the website. That analysis and input, including an administrative assessment as to whether the proposed agreement passes the BOOT or not, is then provided to a member with any queries or issues that have been flagged. It is ultimately up to the member to decide whether the statutory tests have been met and whether to approve an agreement or not. In the event that there have been agreements approved that, on proper analysis, do not pass the BOOT—and that Coles example is the obvious one—there are limited ways that the tribunal can deal with that scenario. Under the legislation, it is not open to the commission to, of its own motion, reopen a decision to approve or to dismiss an application for approval. The act provides for appeals to be lodged, which is what happened in that case, and in certain circumstances reviews can be sought.

Senator RHIANNON: Could I ask about a specific example, because from some of the complaints that come to us it certainly appears that it is not changing for workers, particularly low-paid workers. The example I want to ask about is Domino's, the pizza outlet. Is there an investigation being undertaken into Domino's? How is that going? And is Pamir, the largest Domino's franchisee in New South Wales, being investigated? The complaints that I receive are that he is close to the CEO, Don Meij, and is regularly known for underpaying his workers. Is this something that you are looking into?

Mr Furlong: The responsibility for investigating contraventions of modern awards and agreements in terms of the underpayments sits within the operational remit of the Fair Work Ombudsman.

Ms Parker: They will be on later, perhaps later this morning, after the Registered Organisations Commission.

Senator RHIANNON: Okay. I will go back to some of my general questions. Object 3(b) of the Fair Work Act states:

(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;

So if current agreements allow workers to be paid less than the award minimum wage then the guaranteed minimum safety net of fair and enforceable conditions set out in object 3(b) is not being met, is it?

Ms O'Neill: That is really an opinion as to the objects of the entire scheme. I am not sure that we can assist with that.

Senator RHIANNON: No, it is not an opinion. That is why I read out what object 3(b) is. That is how it is supposed to work. We have got clear evidence, mounting evidence, that there is a problem that shows we are not achieving 3(b), so that is why I am asking that question—so that we can then explore why.

Ms O'Neill: My concern is that it is essentially a policy question in terms of whether the act is or is not meeting its objectives, and that is a matter for the department rather than the agency.

Ms Parker: I am actually here representing the department. You are absolutely right: the agreements are required to meet the National Employment Standards and the other tests. They have to be better off overall. The difficulty that Fair Work commissioners face is the fact that the 'overall' can be complicated, because people have very different rosters and they are working different hours. It is not consistent. People do not work the way they used to, nine to five or various overtime arrangements, so it can get very complicated for very large organisations to determine that every single worker working in a whole range of different ways—including prospective employees, who may be employed—is better off overall. It is a very complicated test for the Fair Work Commission, but they are required to determine that each worker is better off overall, so you are quite right.

Senator RHIANNON: I think that would have some credibility if all we were talking about was a few workers, but considering we are talking about thousands and thousands across the country, and there are more examples coming in—

Ms Parker: I am not sure we are aware of the numbers. If you are talking about the Coles decision, I do not think we are aware what numbers there are in that case. There was one person who put in an appeal.

Senator RHIANNON: One person who put in an appeal, but everything I have read has not challenged that that is how people work in those big retail outlets.

Ms Parker: I think in this case it was for those ones that are on the unusual rates, that are working unusual hours, as opposed to the full-time workers, who are quite consistent. It is very easy to work out their rosters and whether they are actually better off overall. The complication comes when people are working perhaps a few hours on a Sunday, different hours on a Saturday, late nights sometimes. That is where the complication comes in.

Senator RHIANNON: Just to go back to a general question about how the commission works, what investigation has been conducted into applications for approval of agreements, including the submission of statutory declarations, which might mislead the Fair Work Commission into approving agreements?

Mr Furlong: I will just reiterate the comment, which I made previously, that the ultimate discretion about whether or not an agreement is approved sits with a member of the tribunal. They need to be satisfied that the information in front of them is true and accurate and that the agreement satisfies the legislative scheme in relation to the pre-lodgement provisions, including the principle approval requirement that deals with the content of enterprise agreements, which is the better off overall test.

Senator RHIANNON: So no investigation has been conducted after all of this? You will continue with the methods of work that you had prior to these scandals breaking?

Mr Furlong: I would like to reiterate what the general manager said in her evidence a couple of minutes ago. The Fair Work Commission has reformed the way that it processes enterprise agreement applications significantly over the last two or three years. That involves a very detailed process against the checklist, which is available on the website, to ensure that an agreement satisfies the number of the pre-lodgement provisions. In terms of the issue that you continue to raise about the statutory declaration, it is, as you would be aware, a criminal offence to knowingly provide false or misleading information in association with a statutory declaration. Certainly, the form indicates the severity of making a false declaration.

Senator RHIANNON: Thank you.

CHAIR: My apologies, Senator! Does anybody have any further questions for the Fair Work Commission?

Senator RHIANNON: I have some following on from what Senator Marshall had to say. In terms of Senator Marshall's questions about understanding how it works if a worker wants to terminate an agreement, I was interested in the point that they fill out a form. Where do they find the form?

Mr Furlong: It is on the commission's website.

Senator RHIANNON: And how easy is it to find the form?

Mr Furlong: It is two clicks.

Senator RHIANNON: Two clicks?

Mr Furlong: Yes.

Senator RHIANNON: And it is well documented? Because Senator Marshall set it out, but it really came home when you were answering. You are a big institution, and here is a worker on little pay, trying to work out how they penetrate it. So you think it is clear enough?

Mr Furlong: The website, I have to say, is easy to navigate. But, in addition to that, if an employee wanted some assistance then they could just contact us.

Senator RHIANNON: Do you offer that?

Mr Furlong: Certainly, we have a contact number, and they can send us an email as well.

Senator RHIANNON: But, at the point when they find the form, is there anything saying, 'If you're having difficulty with this'—

Mr Furlong: Filling in the form? We will assist them with filling in the form.

Senator RHIANNON: But you are not offering that at the point where they find the form? They have to go to the website and do two clicks; they get there and then all they have is a form.

Mr Furlong: Not necessarily. They could contact us in the first instance, and then we could navigate them to the part of the website where they could find the form.

Senator RHIANNON: It does not sound really easy, though, does it? A single worker trying to work that out, up against a big institution—I can imagine it could be intimidating.

Mr Furlong: I just reiterate that they can contact us and we will assist.

Senator RHIANNON: Okay. I just wanted to understand. Thank you.


CHAIR: Thank you, Ms Webster. You have taken that on notice. Senator Rhiannon, we will go to you, and then we will return after lunch to Senator Cameron.

Senator RHIANNON: I want to go to the investigation of Domino's. How long has the investigation been going for, and how many raids have there been since you last gave evidence on this?

Ms James: I will ask Mr Campbell to address the detail of your question. We became aware of concerns with respect to the Domino's network not long, I think, before the last Senate estimates. We answered a number of questions on notice there. Since then, our activities have continued and, indeed, increased.

Mr Campbell: We currently have 26 active investigations involving Domino's outlets. I think that is an increase of about 10 since the last time we appeared before you, but I can confirm that for you.

Senator RHIANNON: How many raids have there been?

Mr Campbell: Each of those investigations will involve a store visit or a site visit. If you class them as 'raids', I suppose all of them.

Senator RHIANNON: How many times would you have gone to each? You have gone to 26. How many times to each?

Mr Campbell: I could not answer that question, Senator.

Senator RHIANNON: Can you take it on notice, please? How much of the ombudsman's time and resources are allocated to this investigation?

Mr Campbell: It is a very important piece of work for us, so we are attaching significant quality resources to it. I do not know the number.

Senator RHIANNON: What does 'significant' mean? Fifty per cent? More than 50 per cent? The bulk of your time?

Mr Campbell: We are an organisation of 820. I do not have 50 per cent of my staff involved in this, but I would say that there would probably be 10 people involved in these Domino's activities at any given time—probably more. If we are doing—and we have done—unannounced visits simultaneously up and down the east coast, that calls on more resources at any given time.

Senator RHIANNON: Of those 10 staff, are they working full time or part time on this?

Mr Campbell: We might have a couple of staff full time on these matters, but they carry a workload.

Senator RHIANNON: 'They carry a workload'?

Mr Campbell: Compliance teams and compliance officers have a range of different matters that they are responsible for at any given time. You are not working full time on any investigation at any given time.

Senator RHIANNON: Are you investigating Pamir Dehsabzi, the largest franchisee in New South Wales?

Mr Campbell: I am pretty confident we took that on notice at the last appearance and confirmed that we were.

Senator RHIANNON: That is a yes? You are confirming that?

Mr Campbell: Yes.

Senator RHIANNON: I understand that Pamir is close to the CEO, Don Meij. It is known, and one of the complaints that we have been getting is, that he regularly underpays his workers. Have you identified how many outlets Pamir has?

Mr Campbell: We are familiar with his operation and the scale of his operation and how many stores he operates, yes.

Senator RHIANNON: How many stores does he have?

Mr Campbell: It is more than 10, I am pretty sure. I do not have the details to hand, but he is a significant player.

Senator RHIANNON: Is that 'more than 10'?

Mr Campbell: That is my belief.

Senator RHIANNON: Can you take it on notice to supply that?

Mr Campbell: I will, if it is appropriate to do so.

Senator RHIANNON: I come from New South Wales where, if you did not get a clear answer about questions on notice, the witness would slip out of it. So has that question been taken on notice?

Mr Campbell: One of the overlays of our work is that we can only disclose so much about ongoing investigations for fear of compromising them. So, if we identify a target, explain how large his operation is and then identify that we are involved or interested in all his stores, then we kind of give the game away just a little. I have probably gone as far as I want to in this space, but if it is appropriate to release more information about what we know of this operation then I will. That is what I am trying to say to you, politely.

Senator RHIANNON: I will look forward to the answer. Have you contacted any former workers about Pamir?

Mr Campbell: I believe so. It would be strange if we had not contacted individuals as part of these investigations.

Senator RHIANNON: Can you take on notice to confirm that so it is not just a belief?

Mr Campbell: Yes.

Senator RHIANNON: Have you asked Domino's how many franchises lose money each year?

Mr Campbell: No.

Senator RHIANNON: Why not?

Mr Campbell: That is not of interest to us.

Senator RHIANNON: Why is that not relevant to understanding how the operations work?

Mr Campbell: They have an obligation to pay their workforce, irrespective of their profit margin. It is an interesting piece of information. It may go to a decision about enforcement outcomes or it may be something they may want to put before a judge at some point as a mitigating circumstance. But, in terms of our interest in determining whether or not there has been an underpayment, it is not a consideration for us.

Senator RHIANNON: Do you know anything about or have you any information about how many franchises make less than $60,000 in earnings before interest and taxes each year?

Mr Campbell: No.

Senator RHIANNON: Considering so many of the franchisees are saying the model is flawed and they cannot make money, I cannot understand why those two questions are not relevant to your inquiry.

Ms James: Senator, we are always conscious of the surrounding circumstances that might impact on noncompliance going on in any system or network. When we carried out our 7-Eleven inquiry, for example, we did look to the franchising model, so we are conscious of that. But, when we have allegations of underpayment, our primary focus and our primary functions go to assessing whether or not people are being paid correctly and then to seeking appropriate rectification for that. It is to be expected, at this stage of the matter, when we are focused on individual complaints and stores, that we would be looking to find out what people have been paid and whether they have been paid correctly, so we are actively pursuing those matters. At a certain point, we might step back and say, 'Well, what's going on in this network, and what are the drivers of noncompliance?' If we got to the point of, for example, discussing an enforceable undertaking with Domino's because we thought they were materially involved in breaches of the act, we might talk then about steps Domino's might take to stop any systemic noncompliance going on in the network. But, to start with, we need to assess what has gone on with what people are being paid, so we are very focused on getting that information. It is not always straightforward. Records are not always what we would prefer them to be. Employees do not always have their own records. So we are at a very basic level of our inquiries at the moment, and we are focused on assessing what people have been paid and whether they have been paid correctly. We will come to the reasons and the broader environment at the appropriate point.

Senator RHIANNON: You used the term 'paid correctly'. How can you divorce that? You want these people to be paid correctly. We are talking about thousands of workers who are doing it tough and have not been paid properly. We are talking about doing the right thing by them in this bubble of 'paid correctly', without ensuring that, immediately surrounding that bubble, the system that they are in can pay them correctly.

Ms James: I agree with you that, if you are actually looking to long-term solutions, we cannot divorce ourselves from this broader environment. That is why we have taken the sort of approach we have with 7-Eleven and Baiada, where we have gone to the top. But right now we are just trying to assess what has gone on. You are asserting—and we have read allegations in the paper about this—widespread underpayment. We are at the moment, in a very forensic way and using the evidence-gathering powers currently available to us under the act, seeking to assess precisely what has gone on. Subject to what those initial inquiries expose, we will get to the question of solutions, particularly with Domino's itself but remembering that, at law, the employer of these workers is not Domino's head office. It is the particular franchisee that you have referred to and other franchisees, and that is where the legal obligations currently lie under the current act.

Senator RHIANNON: And how they get away with it. There are thousands of workers. Do you know if they are being compensated and how they are being compensated?

Ms James: We are aware of assertions by Domino's of workers being compensated. We are yet to satisfy ourselves as to exactly the nature of any underpayments in the Domino's network. We are yet to satisfy ourselves of the nature of any remedial action Domino's might have taken. We are in the process of trying to assess these matters through discussions with, and using our formal evidence-gathering powers with respect to, Domino's and some of its franchisees.

CHAIR: Senator Rhiannon, we are over time.

Senator RHIANNON: Can I have one more question, please, and then I am finished with Domino's.

CHAIR: Okay.

Senator RHIANNON: Thank you. I really appreciate it. You ended up talking about the franchisees. With regard to Pamir, is that one of them where you understand that the compensation has been given and the workers are being paid properly?

Ms James: I do not think we are familiar with that level of detail.

Mr Campbell: We do not have that information.

Senator RHIANNON: Are you saying that it is not complete or that you do not want to release it? What is the situation?

Ms James: We are yet to secure information that would enable me to answer that question to my knowledge. This is a live investigation, so we may have procured more documents at this stage. But when we most recently discussed this, which was only a week or two ago, we were still waiting for documents that we have asked for to be provided to us.

Senator RHIANNON: Thank you.


CHAIR: Senator Rhiannon has come back in. She has been in another committee. I might go to you, Senator Rhiannon, and we can return.

Senator RHIANNON: Mr James, I want to ask some questions about the investigation into Hungry Jack's following revelations of wage theft. How long has your investigation been going for?

Mr Campbell: I am not familiar with that particular issue. Can you give me a little bit more background?

Senator RHIANNON: Is there anybody here who is? I understood that there was an investigation going on into Hungry Jack's over wage theft from the workers.

Ms James: Not a current matter, to my knowledge.

Senator RHIANNON: No current matter—nobody knows about it? Okay. What about Caltex?

Ms James: Caltex we can talk about.

Senator RHIANNON: Good. How is your investigation going there? Do you have a report that will be released soon, or sometime?

Ms James: We have a range of investigations underway with respect to Caltex, having conducted a number of site visits. I will ask Mr Campbell.

Mr Campbell: We have in the vicinity of about 25, I think, active inquiries into Caltex operations at the moment. Some are at different stages of investigation, because we commenced some of them around September last year. We have newer leads of inquiry as well which are currently being considered.

Senator RHIANNON: So you have 25 active inquiries. Is that the biggest number that you have for any companies or anybody under investigation—25 into one company?

Mr Campbell: It is not the biggest, but it is big enough.

Senator RHIANNON: Just out of interest, what is the largest number of inquiries into any company?

Mr Campbell: I do not know, but we talked before about a number of lines of inquiry into Domino's. I think Domino's have got them slightly pegged at the moment.

Senator RHIANNON: Can you give us the number of inquiries into Domino's?

Mr Campbell: Yes, 26 before—

Senator RHIANNON: So still the 26 we had before. Sometimes it is a little bit fluid here. I understand Caltex has set up a $20 million compensation scheme but it only relates to workers who work for a franchise who has been terminated, and the worker has three months to apply. Do you have any concerns with this model, which makes compensation available to workers if the franchisee has been terminated, and the worker has three months to apply and must have proof?

Ms James: Firstly, the fact that Caltex have put money on the table is something that we applaud. Caltex are not legally obliged to do so. They are not the direct employer of these workers. Having said that, the Fair Work Ombudsman was not involved in the design of this particular scheme that Caltex have set up. I am not familiar with the details, and unlike in a case such as 7-Eleven it is not an arrangement that is transparent and contained in a compliance partnership with us. So I cannot really account for either the nature of their scheme or the decision-making process they are engaging with to make decisions. As a first principle, I would applaud anything that gets money back into the hands of workers when they have been underpaid. Under the current law, Caltex is not legally obliged to do that, so it is more than what they are legally obliged to do. I would like to know more detail about what they have done, and ideally it would be contained in a partnership with the regulator that was accountable and transparent to the public and to senators like you.

Senator RICE: So is it contained in a partnership that is transparent?

Ms James: No. This is not a matter that Caltex engaged with us on. They have designed it and announced it to the media, and as a principle, as I said, we applaud it when franchisors or head companies in supply chains step up and take responsibility—moral and ethical responsibility—for workers in their networks or supply chains, but this has not been designed in collaboration with us and we are not in a position to speak for it.

Senator RICE: Although you have said a number of times in these short minutes that you applaud it—

Ms James: The principle of it, but I cannot speak to the detail or their methodology.

Senator RICE: Yes. I am now talking about a public comment. You have said a number of times that you applaud it; you have also said that it is announced to the media and does not have anything to do with what you are managing here. So then is it necessary or legitimate to ask: is Caltex engaging in a media management exercise here? With all due respect, the $20 million compensation that you congratulate them for putting on the table would barely be petty cash for this company. So is it media management rather than sitting down and working out how this abuse does not continue?

Ms James: I am not in a position to say one way or the other yet. It is an excellent question.

Senator RICE: I heard you loud and clear that the model they have put down is not part of what you are dealing with, but I cannot understand why that is the case. If you are trying to work out this franchise, and the parent company that is involved in all this then puts forward a plan, does that not come under how you manage all this?

Ms James: We would prefer that we completed our investigations and got to the bottom of what is going on in this network—that sounds familiar; I am pretty sure I have said this today—and then you design a solution based on the knowledge of what is going on. So Caltex have made a decision to go out ahead of any findings by us. They have done that based on information available to them. We will form our own view about what has gone on in this network and we will propose solutions once we are fully informed of all those facts and apprised of those facts. At the moment we have a number of lines of inquiry involving breaches of the law, and there is a question about what the consequences should be for that. As we heard Senator Cameron say before, fixing the underpayments is one thing, but the question of whether there should be some form of penalty is our issue; it is not Caltex's issue. It is the regulator's role to determine that, and we will determine it.

Senator RICE: You have talked about going out there and finding the facts, but as we know these scams are scams; they are not evidence based. They are about ripping off people so that a few make a lot of money out of many. Given much of these scams are not evidence based, how will workers be able to get any money? Don't you have to come at it from a fairness point of view and to ensure that workers who have lost out badly are compensated?

Ms James: There are a range of ways in which we can come at these issues. We are in the early stages of our inquiries here. I would not presume that there is no evidence or that there are no records. We do find that as a common barrier. We are hoping the changes proposed before the parliament at the moment, if they are passed, would help with that. But I would not say it is hopeless. We put nine matters involving 7-Eleven franchises into court, with false records and very little cooperation from anybody. There are ways. It is resource intensive. It involves my inspectors going through CCTV footage, toll records, talking to workers who will engage with us

Senator RICE: Well, that is a little bit unfair—

Mr Campbell: It is, but I need a name.

Senator RICE: At any rate, you sit where you do.

Ms James: If you have examples, we would be happy to have you come to our office with them. We have dealt with 7-Eleven on a number of matters where we have heard that they are taking a little longer. 7-Eleven's evidence thresholds are actually pretty low. They ask for identity and they ask for information about the store that you worked at, and I think there is one more piece of information—an estimation of your shifts or the hours. They then have a quite sophisticated formula to work out what that franchisee should have paid the worker. Many are proceeding quite quickly. We are aware that some are not proceeding quickly, and it might be that the individuals have not quite put the right information—we are happy to talk to them about this, and we have raised these sorts of issues with them. But, just looking at their website, 7-Eleven—who is not the employer of these workers, so they are not legally obliged to do this—have nearly paid out $100 million at this point to over 2½ thousand workers. There is much more work to do, and it is a laborious process they are going through. It is not the law that has brought them to this but public pressure. Under the current law, they could not be forced to do this.

Senator RHIANNON: Thank you for that offer. This question is from anecdotal comments that the cash back scam continues. Is that something that you are aware of?

Ms James: Yes.

Mr Campbell: Cash back continues to be a feature of our work, and it is something 7-Eleven is targeting more actively as well through its own systems that it has introduced as a result of the deed that we struck with the company. It is, obviously, particularly appalling behaviour where it occurs, and it takes a different approach to identify it because the employee has been paid. It is then about establishing evidence that they were required to make the payments back. There are significant law firms, which are representing some parties to this matter, which have raised concerns along the lines you have raised with me about the methodology of the company or the methodology of determining underpayments. I have said to that law firm and representatives of it that I would like them to come to me with those examples so I can then actively act on them with either 7-Eleven or Deloitte, depending on when they made their claim, so I can determine the truth of those allegations.

Senator RHIANNON: Still with 7-Eleven, I understand that that company recently signed a proactive compliance deed. Is a PCD an effective tool in ensuring that employees receive the correct pay and entitlements?

Ms James: The proof of the pudding will be in the eating. This is a long-term commitment 7-Eleven have made under this proactive compliance deed, but we would say it was the most appropriate and effective tool for putting wages back in the hands of these workers, given 7-Eleven, the franchise, is not the employer of these workers, and they have committed in writing to a wage repayment scheme that provides the facility for these workers to receive their money back. This is more than we could ever achieve through court action.

Senator RHIANNON: So does that mean you are confident that this will stop workers being underpaid by tens of millions of dollars each year?

Ms James: I am confident that it provides a framework through which 7-Eleven can clean up its network, and it has demonstrated to us a commitment to do that; however, this will not happen quickly. Am I buying my newspapers from 7-Eleven yet in confidence that every worker there is being paid correctly? I would not go so far just yet.

Senator RHIANNON: Not 10 years?

Ms James: I would say that the company has fully committed to cleaning up its network. It is engaging significant resources in ensuring that its franchisees are doing the right thing. It is kicking them out, if they are not, subject to the franchising code enabling them to do so. I do not think we have seen any other franchising system make the sorts of commitments that 7-Eleven has made, and I would welcome any other franchising system—United Petroleum, Caltex, Dominos; any of them—who wanted to enter into similar arrangements. I would welcome them into that and to making those commitments in black and white.

Senator RHIANNON: I hope it does not take 10 years. Do you support changes to the Fair Work Act that would ensure employees covered by an enterprise agreement receive a rate of pay that is not below the award?

Ms James: Under the law as it stands, I understand that section 260 of the act ensures that base rates of pay applicable under the award must be paid and, if the base rates in the agreement slip below those rates, then the award, effectively, becomes the base rate. I could not comment on any suggested law reform outside of what is already in the act. I would say that we would enforce that aspect of the law with respect to agreements and base rates, if that arises.


Senator RHIANNON: I would like some clarification on a question I put to you earlier about Domino's. The CEO, Donald Meij, is an associate of Pamir, who owns more than 10 stores and is said to underpay staff. In your investigation into Pamir, have you ensured that Donald Meij is not involved in any of the investigation process or engagement with the company?

Mr Campbell: I have not heard that allegation. I will keep it in mind that it is not a feature of the inquiries we have been making thus far. The relationship between the company owner and the CEO is of interest but it does not determine the outcome of the investigation. If we find this guy has exploited his workforce then we will take action.

Senator RHIANNON: The actual question was: in your investigation into Pamir have you ensured that Donald Meij is not involved in any of the investigation process?

Mr Campbell: He is not involved in the investigation process, but if we find that he has facilitated the exploitation of his workforce then he could find himself involved in the contraventions.

Senator RHIANNON: Back on 7-Eleven, I have been told that Maurice Blackburn are providing their services to underpaid workers, and I have been told that 7-Eleven are making bankruptcy determinations that are considerably lower than calculations provided to them by Maurice Blackburn. Have you heard about this?

Mr Campbell: I do not know about the bankruptcy claims—it is not a feature of our work. But in terms of 7-Eleven's wage program and determining the quantum of underpayment for individuals, I know that Maurice Blackburn is representing parties, representing individuals, with 7-Eleven and Deloitte through that process. If they have disagreement about the interpretation quantum, a dialogue needs to be created. There is one that exists. If it is broken down I will find out about it, and I will make sure it is opened up again.

Senator RHIANNON: I did not actually mention the word 'bankruptcy'—

Ms James: You did, I am sorry. 'Bankruptcy' was a word you used.

Senator RHIANNON: It is not my notes here, so if I did I apologise—it was not what I meant to refer to. So I get the right question answered, I have been told that 7-Eleven are making back pay determinations—maybe I said 'bankruptcy determinations'—that are considerably lower than the calculations provided to them by Maurice Blackburn. Have you heard about this?

Ms James: That is an allegation that I have heard of, yes.

Senator RHIANNON: What do you intend to do about it, or what are you doing about it?

Ms James: What I did with Maurice Blackburn was say can you please give me an example of a case, an individual, that I can go and test those allegations with. Unless I actually have an identity of a store or an individual, I cannot put anything to Deloitte or 7-Eleven. What I have done is ask Maurice Blackburn to give us some examples. They recently have, and we are trying to determine who the individuals involved might be. Then we can ask questions of 7-Eleven and Deloitte, depending on when the claim was lodged, to reconsider or provide further particulars on their determinations.

Senator RHIANNON: So you have the examples now?

Mr Campbell: I have more detailed examples, but again they do not tell me who the individual is so it is hard to go to employee X unless I know the allegation goes to—

Senator RHIANNON: So you are saying that what you need is the name of the employee?

Mr Campbell: It certainly helps in everything we do. I do not want this to play out in this forum, Senator. I am happy to brief you further on it, if you wish, but Morris Blackburn—Jerry Silverman—has my contact details. His officers are contacting my officers about these issues. We are creating channels for communication so we can determine this stuff. They have an interest in representing their client, and the client has expectations of certain outcomes—and there will be an outcome. It is just a matter of going through the process.

Senator RHIANNON: Thank you.

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