Cooped Up Workers And Mystery Contractors: Major Chicken Supplier Roasted For Labour Exploitation

The Fair Work ombudsman has released a scathing investigation into the Baiada Group, a poultry processing company which holds down a 20 per cent market share in Australia, and provides chicken to brands including Coles, Woolworths, IGA, Aldi, McDonald’s, KFC, Pizza Hut, Red Rooster, Nando’s and Subway.

The investigation found employees had not been paid lawful entitlements and that a shadowy group of subcontractors were overseeing the exploitation of a largely foreign workforce.

It said there was evidence Baiada and its subcontractors had;

• Paid large amounts to workers “off the books”
• Not complied with workplace law
• Exploited a labour pool of mostly 417 visa workers
• Underpaid workers, forced them to work “extremely long hours”, and pay high rents for overcrowded and unsafe accommodation
• Failed to provide significant documents to the investigation and, in some cases, provided “inaccurate and/or fabricated records”
• Paid contractors per kilogram of poultry processed, not per hour of work done
• Relied on verbal agreements instead of clearly documented ones

This evidence emerged despite the fact Baiada prevented Fair Work investigators from gaining access to its factory floor operations, “denying them an opportunity to observe work practices, as well as talk to employees about conditions, policies and procedures”.

The Inquiry raises baffling questions about the company’s governance, and its long chains of subcontractors operating without proper oversight highlights a key issue in the labor-hire market that now dominates industries which employ high levels of skilled foreign workers under 457 visa arrangements.

One chain included 34 separate subcontracted entities, and the Fair Work investigation found that four of Baiada’s six principle contractors and 17 subcontractors had ceased trading during the Inquiry, which was launched in November 2013.

To put it mildly, Fair Work experienced difficulties in gleaning information out of these organisations. The report gives this example:

“DMY Trading and Yu Lin Trading Pty Ltd, operated by husband-and-wife directors, had six sub-contractors supplying workers to Baiada’s Hanwood site.
Based on records provided by DMY Trading, Fair Work inspectors attempted to serve a Notice to Produce documents on one sub-contractor.
When they arrived at the address provided, they found an automotive workshop. The business had been there for 25 years and the owner had never heard of the labour-hire contractor.
Similarly, when Fair Work inspectors sought to contact two other sub-contractors, the addresses provided led them to clothing manufacturers who had never been involved in the poultry processing industry.”

It wasn’t just in the factories that Baiada workers were having a tough time. The chickens might be free range, but not so much the employees.

“Workers at Beresfield reported that they would not get any work unless they rented accommodation from the labour hire contractor, and rent was allegedly unlawfully deducted from their pay,” according to the Fair Work statement of findings.

“One property, found to be sleeping 21 people, was purchased in March, 2012, for $370,000 as a rental accommodation. Based on 20 people paying $100 a week each, it has a potential rental income of over $100,000 a year.”

Another subcontractor, which was paid over a million dollars by Baiada for the Month of October 2013, paid its own workers as little as $11.50 an hour for shifts of up to 19 hours. Up to 30 workers would be living in six-bedroom homes for which they were required to pay $100 a week.

Advertisements for workers – which potentially breached discrimination laws by demanding the applicant’s nationality, height, and weight – were placed in Chinese newspapers, on Facebook, and on Taiwanese backpacker sites to draw workers from low paying locations.

Issues around the exploitation of workers on short term visas were highlighted in a recent Four Corners investigation that found evidence labour hire contractors had been paying staff engaged in season harvesting and factory work as little as $3.95 per hour, and subjecting them to abuse, sexual assault, and racism.

“I am deeply concerned by the findings of this Inquiry, particularly the behaviour of Baiada and its contractors who failed to engage with us about serious concerns about compliance with workplace laws on the company’s sites,” Fair Work Ombudsman Natalie James said.

“In my view, Baiada and others in this supply chain now need to consider the legal, moral and ethical implications of continuing to operate in a manner that fails to deliver workers their minimum entitlements.”