Video shows sales team forced to simulate sex acts

LEIGH SALES, PRESENTER: If you work in the CBD of a major city, getting bailed up by young charity muggers, known as "chuggers," can be a daily occurrence.

Even though the charities they collect for are many and varied, many chuggers work for a marketing company called Appco.

Appco's facing a $60 million class-action, the biggest of its kind in Australian history, over accusations it pays its collectors as little as $5 an hour - well below the minimum wage.

Lawyers have already signed up more than 700 claimants around the country - many of whom allege that, not only were they underpaid, they were also subjected to bizarre workplace humiliation rituals.

Lorna Knowles has this exclusive report and a warning that it contains words and images that some viewers may find confronting.

LORNA KNOWLES, REPORTER: It's the morning rush hour in Adelaide, on the edge of the CBD, a meeting of young sales reps IS under way, and the scenes are extraordinary.

(Clapping and music)

RORY MARKHAM, CHAMBERLAINS LAW FIRM: The video depicts a series of pseudo-sexual acts performed by men on other men in a rooms morning meeting that we are instructed was orchestrated by the managing director of that company.

LORNA KNOWLES: These young men were salesmen for a marketing company engaged by Appco Australia. It raises funds for some of the country's biggest-name charities.

(Clapping and music)

As their co-workers look on, the men are encouraged to simulate sexual acts on colleagues who fail to meet their daily sales targets.

When you look at the video, there seems to be a strobe light flashing. It looks to have been filmed somewhere like a nightclub but in fact, it happened in the workplace.

RORY MARKHAM: Indeed. A common feature of direct-sales companies is actually what they call the atmosphere room, which is a room that people meet in the morning, and there's high-powered music, there's an energy, gym-like vibe that is played to motivate people, and effectively to get people cheering and chanting.

MAN ON VIDEO: Do something to him or stop wanking in the corner. he likes it rough. Spank him.

RORY MARKHAM: No employer in Australia could get away with that sort of behaviour - it appears to be the relics of a very long-lost navy ritual that we don't see in the Australian context anymore.

LORNA KNOWLES: Many of the charity collectors commonly seen on city streets work for Appco.

They're known as charity muggers, or "chuggers," and although some might find them annoying, many of these young workers are struggling to meet sales targets, leaving them overworked and underpaid.

TYRONE CORBETT: All of Appco preyed on the unemployed and when you're in a desperate situation like that, trying to find work - any work that you find is good work.

RORY MARKHAM: The culture appears very cult-like. It appears focused on relentless profits, relentless sales energy by young people that give their entire effort and dreams to it.

But which are ultimately ritualised into some sort of bullying and harassment if you don't meet those goals.

LORNA KNOWLES: Lawyer Rory Markham has been travelling around the country signing up new members to a class-action against Appco Australia for underpaying its workers.

Along the way, many have told him about bizarre workplace rituals.

RORY MARKHAM: We have evidence of multiple companies across the 2014 to 2016 period where this has occurred, and in no case was it ever a lone or rogue operator - it seemed to be dominant feature of the business.

LORNA KNOWLES: In this video, supplied by a former Appco worker in Brisbane, a manager instructs young workers how to perform the slug race - another ritual designed to punish workers for not meeting sales targets.

(Video)

LORNA KNOWLES: The videos will be used to support the class-action which is being brought here in the Federal Court of Australia.

Lawyers will allege that Appco engaged in sham contracting - that is, hiring workers as independent contractors rather than employees to avoid paying them the minimum wage and other entitlements.

RORY MARKHAM: If you're an independent contractor, you do not have to go for a ritual or some sort of organisational game if, in fact, you don't meet your goals.

It's your business, your decision.

(On phone) I'm calling from Chamberlains Law Firm in regards to the class action. Just calling to say thank you for registering to the class-action, as well as to verify some details...

LORNA KNOWLES: Seven hundred and thirty people have signed up to the class-action - Tyrone Corbitt is one of them.

TYRONE CORBETT: A good day would be selling $400 worth of pins, which meant that we would take away $80 at the end of the day.

When you're working from 7:30 in the morning to after 5:00 in the afternoon, it's a big day for not much.

LORNA KNOWLES: Tyrone says he also witnessed horrendous workplace bullying on road trips.

TYRONE CORBETT: So the first day of the road trip, all the leaders before going out got together and discussed a punishment for what would happen if they didn't hit this $400 target at the end of the day.

As it turns out, the punishment for not getting $400 worth of sales in a day was to shove a cigarette up his bottom, pull it out, and then smoke it.

LORNA KNOWLES: He says another ritual involved workers being forced to lick underpants.

TYRONE CORBETT: I tried as hard as I could to not be involved. It was horrible for me to witness. It was horrible for me to witness.

LORNA KNOWLES: Tyrone complained to the Fair Work Ombudsman and, in a major breakthrough for the class-action, he ruled that Tyrone was an employee, not an independent contractor.

TYRONE CORBETT: Being classed as an employee means that we have at least the minimum base rate wage.

For someone in the sales industry like that, it's at least $20 an hour.

LORNA KNOWLES: In statements late today, Appco Australia said the adverse findings didn't relate to its company directly.

It said it would vigorously defend the allegations of sham contracting, and it said some motivational games, while well-intentioned, crossed the line into improper behaviour and wouldn't be tolerated.

TIM GUNSTONE, NATIONAL UNION OF WORKERS: Young workers continue to be exploited every day, wearing the T-shirts of charities that many of us trust and donate to.

It makes me happy meeting people who are getting paid properly and that's wrong. I should be talking to every charity collector.

LORNA KNOWLES: The National Union of Workers welcomes the class-action.

TIM GUNSTONE: And it's sad that a lot of them put fundraising ahead of people getting paid properly.

TIM GUNSTONE: There's very minimal checking either by the charities using these suppliers or by any form of government body, which means that, repeatedly, we see companies appearing in this sector who deliberately engage workers as sham contractors, resulting in those workers getting paid not at all, or as low as a few dollars an hour.

LORNA KNOWLES: And, while charity collectors raise up to $200 million a year in Australia, in some cases, as much as 90 cents in the dollar ends up going to the marketing companies.

TIM GUNSTONE: The only people really winning at the moment are the for-profit companies who ripping off workers, they're ripping off charities and they're ripping off donors.

The charities are suffering reputational risk. Donors are having money not reaching the charity they believe and the young people doing the work are not getting paid or not getting paid enough.

LORNA KNOWLES: For Tyrone Corbitt, it's not just about the money.

TYRONE CORBETT: What I'm hoping will happen is they will be held accountable for their actions.

They are getting away with something that just isn't right.

LEIGH SALES: And we'll keep you up to date with what happens with that court case.