Australian charities scrutinised by Fair Work Ombudsman

Some major Australian charities will be scrutinised by the Fair Work Ombudsman as part of a new Inquiry in response to concerns that young charity collectors are being exploited.

The Fair Work Ombudsman is concerned that due to lax governance arrangements, charities are unaware that workplace laws are being flouted by some of the specialist companies they are outsourcing their fundraising activities to.

The Inquiry will scrutinise charities’ labour procurement and supply chain practices, with a particular focus on whether their governance arrangements are adequate.

The Inquiry will examine seven large charities with an annual income of more than $1 million, five medium charities with an annual income of more than $250,000 and three small charities with annual incomes below $250,000. The charities to be scrutinised will be selected at random.

The fundraising companies contracted by the selected charities will also be scrutinised to ensure their business models are compliant and they are paying workers’ minimum lawful entitlements. Acting Fair Work Ombudsman Michael Campbell said there are more than 54,000 registered charities in Australia and it is common for them to outsource fundraising activities to sales-and-marketing companies and other specialist fundraising companies.

“We have been monitoring the practices of operators in the charity sector for some time now and the practices of some specialist fundraising companies concerns us,” Campbell said.

“Many do the right thing by workers but our intelligence suggests a minority are not respecting workers’ rights.

“Young and overseas workers are often the ones who are getting short-changed and because they are generally not fully aware of their workplace rights, we certainly don’t think they are reporting all instances of exploitation to us.”

Campbell said a crucial part of weeding out rogue operators in the sector is creating more awareness among charities that if they fail to exercise due diligence when outsourcing their fundraising activities, workers in their supply chains can be exploited.

“Many charities have no idea whether the workers who are wearing hats and T-shirts bearing their logos and collecting donations on their behalf are being paid correctly or treated fairly,” he said.

“There have been a number of instances where charities have been horrified to learn about the exploitation of workers occurring in their own supply chains.”

The Inquiry comes as a Fair Work Ombudsman investigation results in Sydney-based fundraising company Mondial Fundraising Communications Pty Ltd agreeing to back-pay $770,000 to 824 current and former employees it has underpaid since 2010. Mondial holds contracts to fundraise for charities including The Wilderness Society, OXFAM Australia, UNICEF, RSPCA, Starlight Children’s Foundation of Australia and the Cancer Council.

Mondial unintentionally underpaid the minimum wages and penalty rates their call centre workers were entitled to under the Contract Call Centre Award because it incorrectly paid them according to the national minimum wage. The company will also apologise to the underpaid workers and donate $10,000 to the Marrickville Legal Centre.

Campbell said operators in the fundraising sector need to be aware that just because they instruct a charity collector to obtain an Australian Business Number (ABN), it doesn’t necessarily mean the worker can lawfully be treated as an independent contractor.

“When our inspectors see a situation where a worker’s classification doesn’t look right, they will conduct their own assessment of factors such as the level of control and direction the operator has over the worker and whether the worker is legitimately running their own business,” he said.

The Fair Work Ombudsman is currently taking legal action for the second time against fundraising company Australian Sales and Promotions Pty Ltd, which has held contracts with charity and not-for-profit organisations to conduct fundraising activities on their behalf. The latest action alleges the company breached sham contracting laws by requiring a 26-year-old British backpacker in Sydney to obtain an ABN and telling him that he was a contractor operating his own business, rather than an employee.

Campbell said the Inquiry findings will enable the Fair Work Ombudsman to make informed decisions about how to best develop a sustainable culture of compliance in the charity sector.

“The intelligence we gain through the Inquiry will help us tailor compliance and education activities for the charity sector that help to prevent exploitation and increase awareness of rights and obligations among workers, charities and fundraising companies,” he said.

“The desired end result is that all parties in the supply chain recognise and accept their social, moral and corporate responsibility to ensure compliance with workplace laws.

“Outsourcing can be a legitimate business decision but appropriate controls need to be put in place.”

As part of the Inquiry, the Fair Work Ombudsman plans to design tailored material for the charity sector, including a checklist encouraging self-initiated compliance testing by charities, intermediaries and workers.

AAP

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