Trolley-gate: Supermarket services company faces underpayment fine from Fair Work

Two more Fair Work Ombudsman cases have emerged of employers being accused of mistreating foreign nationals as a trolley collection company and an advertising company face court over alleged underpayments.

Twelve individuals contracted to Effective Supermarket Services, and working at a Costco outlet to collect trolleys, were allegedly not paid any wages for an 11-day period.

Nick Iksidis, the owner and operator of Effective Supermarket Services, has already had two substantial fines for underpaying staff. This is the fourth FWO case of trolley collectors being underpaid since August 2011.

The FWO is alleging two companies and three individuals were involved in underpaying the men a total of $27,284 in July 2011.

The Costco store in the western Sydney suburb of Lidcombe paid a contract fee of $34,633 to Effective Supermarket Services to provide trolley collection services. Effective Supermarket Services then sub-contracted Jay Group Services to collect the trolleys for a fee of $14,800.

The FWO alleges Iksidis knew the fee paid to Jay Group Services was not sufficient for Jay Group Services to meet minimum wage obligations.

The employees were allegedly entitled to be paid amounts between $1,829 and $2,830 but received nothing.

Fair Work Ombudsman Nicholas Wilson says if workplace practices have been breached, the FWO will step in.

“In cases where we believe breaches of workplace laws have occurred, we are committed to scrutinising the commercial processes behind those breaches and holding any involved parties to account,” Wilson says in a statement.

This is the third time the FWO is seeking to fine Iksidis and his company Effective Supermarket Services. In 2007 he was fined $25,000 for underpaying three trolley collectors and in 2008 he was fined $125,000 after he “bullied, intimidated, threatened, exploited and underpaid” a further 42 employees.

TressCox Lawyers partner Rachel Drew told SmartCompany the courts will take into account Iksidis’ prior convictions when determining an appropriate fine.

“The fines one would expect will increase with each breach. You might start to wonder how he can afford to pay the fines if he can’t pay his employees. The courts will impose a much more significant fine because of his prior convictions,” she says.

But in relation to Jay Group Services, she says it was impossible for the company to pay its staff adequately with the money from Effective Supermarket Services.

“There’s actually a series of underpayment cases specifically involving trolley collectors, since it seems grocery stores have outsourced trolley collectors, the companies (such as Effective Supermarket Services) will then pay a small and inadequate amount of money to the contractor.

“It’s very difficult to do this within the wage structures and it results in the trolley collection companies not having enough money to pay their staff.

“The grocery companies pay the money expecting the company they pay will do the work, but in this case it didn’t. It is not obvious from the grocery stores perspective that the worker is going to be unpaid,” she says.

SmartCompany attempted to contact Effective Supermarket Services but received no response and Jay Group Services had no comment at this stage.

Another underpayment case currently being prosecuted by the FWO involves a national advertising company underpaying workers almost $60,000.

OHMedia Melbourne company director and part-owner Wen Zhou, of Melbourne, also known as Joseph Chou, will face the Federal Magistrates Court in late March for allegedly underpaying 45 casual employees a total of $59,145.

The employees worked at stalls outside supermarkets promoting prepaid SIM cards and top-up vouchers supplied by global telco Lycamobile, which had contracted OHMedia Melbourne to promote its products.

Several of the employees are foreign nationals who were in Australia on student and working holiday visas.

SmartCompany contacted OHMedia but received no response prior to publication.

Drew says in both cases the companies have taken advantage of vulnerable people.

“Both companies are using foreign workers on short-term visas or people with limited understanding of English and I think this vulnerability of the individuals will have influenced the FWO decision to prosecute,” she says.