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Saturday, March 25, 2017
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Cleaners must be back-paid by major hotel chain, says Fair Work Ombudsman

Oaks Hotels & Resorts has back-paid 1500 of its cleaners a total of $1.9 million as a result of a Fair Work Ombudsman’s Inquiry that we reported on back in May this year. The inquiry focused on the procurement of housekeeping services by three of Australia’s major hotel chains.

The Inquiry found that housekeepers working at 4 and 5-star hotels in Melbourne, Sydney and Brisbane were not being paid their minimum lawful entitlements.

The back-pay was recovered for the cleaners after Oaks Hotels & Resorts allegedly underplayed them due to misclassifying them as independent contractors. Oaks is said to have used its subsidiary entity, to engage cleaners as ‘independent contractors’, when the cleaners’ correct classification would have been as employees.

The cleaners, mostly overseas workers and were paid on a rate per-room-cleaned basis, but it was found that they were lawfully entitled to receive minimum employee wages and conditions.

The self-audit has now identified that 1502 cleaners across Oaks’ more than 40 Australian hotels were underpaid a total of $1.9 million between August, 2015 and August this year.

Fair Work Ombudsman Natalie James said that the outcome highlights, “the ability of her Agency to get companies with significant non-compliance issues to take responsibility for resourcing and driving rectification of their issues – in some cases, achieving outcomes that could not be achieved through litigation in the courts”.

This large underpayment and wider Inquiry findings highlight a need for lead businesses in Australia to consider the steps they can take to enhance compliance in their supply chains.

“It’s not about removing the responsibility of the direct employer – it’s about making sure that those at the top aren’t unfairly benefiting or turning a blind eye to the impacts on the workers at the bottom,” Ms James said.

She warned: “It is now a normal part of our work when we find exploited workers to look up the supply chain and ask: what part has the business benefitting from the labour had to play in what has occurred?” Ms James says the cleaning industry often involves vulnerable workers at the bottom of complex supply chains and has been a priority for her agency.

At the Australian Hotels Association NSW Legal and Industrial Conference 2016 today, referring to the Inquiry, Ms James stated: “It is also a reminder to make sure you know your obligations; being informed is the easiest way to know you’re doing things right.”

The inquiry findings and EUs are available in a statement on the outcome of inquiry into the housekeeping services of 4 and 5-star hotels.

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One comment

  1. I am really surprised that an organisation such as Oaks could have made this error…I remember years ago at our accommodation management companies discussing what/who represented a true contractor. It was pretty clear that just because someone had an ABN it didn’t make them a contractor. They would have been better off using an outsourcing company, developing set rates per room clean and leave the administration to that company.

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