Two supermarket trolley collecting firms and individuals involved in the companies have been fined close to $200,000 for failing to pay 12 workers who collected trolleys at a Costco shopping centre in Sydney.
Federal Circuit Court judge Michel Lloyd-Jones handed down the hefty penalties in late December, after the Fair Work Ombudsman began investigating the case in early 2013.
Nick Iksidis, operator of Xidis Pty Ltd, which traded as Effective Supermarket Services, was fined $39,600 for his role in the underpayments, while trolley collecting and cleaning company Jay Group Services, which was contracted by Effective Supermarket Services to undertake the work, was fined $109,725.
Jay Group general manger Jatinder Singh was fined $23,760 and Jay Group employee Teijinder Singh Sandhu was fined $17,160.
The court previously heard the 12 trolley collectors, aged between 19 and 32, were not paid for 11 days of work at the Costco shopping centre at Lidcombe in Sydney in 2011. All of the employees, who were on 417 working holiday visas, should have been paid more than $27,000.
Effective Supermarket Services had been paid a contract fee of $34,633 from Costco to provide the trolley collection services but sub-contracted Jay Group Services to collect the trolleys for a fee of $14,800.
This is the third time the Fair Work Ombudsman has pursued Iksidis and Effective Supermarket Services for underpayments.
In 2007, he was fined $25,000 for underpaying three trolley collectors and in 2008, he was handed a $125,000 fine after he “bullied, intimidated, threatened, exploited and underpaid” a further 42 trolley collectors.
Judge Lloyd-Jones said in his judgment Iksidis’ history of non-compliance warranted a substantial penalty.
“The person who should have been the best informed and appropriately the most cautious in respect of the appropriate remuneration was Mr Iksidis,” Lloyd-Jones said.
Overall, Lloyd-Jones said the trolley collectors were “vulnerable to exploitation” and there had been “a total failure to meet minimum standards of the most fundamental kind being a complete non-payment of wages and entitlements.”
“Further, there is a need for deterrence in the trolley collecting industry, which is generally a low-skilled industry that often uses sub-contracting arrangements to avoid obligations under workplace law,” he said.
TressCox employment, industrial relations and workplace safety solicitor Edmund Burke told SmartCompany the penalties imposed by the court are “quite high” and said Costco was fortunate to have avoided any fines.
Burke said following the admission by supermarket giant Coles in October 2014 that it has an “ethical and moral responsibility” to the workers that collect its trolleys, it appears the Fair Work Ombudsman is working its way through all shopping centres across Australia to ensure workers are being paid fairly.
“It puts everyone else on notice,” Burke says of the case. “It wouldn’t be a bad idea for all the big supermarket companies to look at their contracts.”
Burke says the ombudsman has a strong track record in prosecuting cases where vulnerable employees have been mistreated and has identified supermarket trolley collecting as a key area of concern.
“The general principle is, if it looks too good to be true, it probably is,” Burke says of contracts for this kind of work.
“In this case it was quite clear the contractors were sub-contracting and the maths didn’t add up.”
SmartCompany attempted to contact Costco, Effective Supermarket Services and Jay Group Services but did not receive a response prior to publication.
News Editor
Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on Twitter at @ellykeating.
