Multimillion-dollar wage theft group actions to be filed in Federal Court
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Multimillion-dollar wage theft group actions to be filed in Federal Court

Two multimillion-dollar wage theft group actions will be filed in the Federal Court on Monday on behalf of hundreds of Australian door-to-door and direct sales workers.

The young workers were allegedly paid well below the legal minimum wage for sales and charity fundraising for international direct marketing companies AIDA and Credico.

Karina Smith who is part of the class action.

Karina Smith who is part of the class action.

Photo: Supplied

Affected workers sold products door to door and in shopping malls for large corporates, including Telstra, Optus and Foxtel, as well as raised funds for major charities.

Charities included Clown Doctors, World Wildlife Fund Australia, Prince of Wales Hospital, Amnesty International and the Cancer Council NSW.

The court action is on behalf of 100 members of the National Union of Workers but the union says this is just the start and wage underpayments for workers in the group action are estimated to be in the millions of dollars.

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NUW assistant branch secretary Godfrey Moase said the anti-wage-theft campaign will also investigate Global and PCA, which are part of the long-term campaign but are not part of the initial action.

"It will end up being thousands of workers," he said. "It really comes down to young workers' lives. There are two related issues, one is wage theft, where a lot of these workers were paid $3 to $5 an hour and the second is theft of time, they were often working 60-70 hours a week to try to make any sort of living."

Mr Moase said the direct sales firms do a lot of work for the charitable sector and many big-name companies.

"It's all the recognised charities you’d see on the street corners," he said.

Mr Moase said the legal minimum is $17 an hour in most cases but workers were  wrongly classified as independent contractors instead of employees despite being given no choice in clients or control over their hours.

"If we succeed we will end up setting some pretty important precedents on the difference between independent contractors and employees," he said.

Mr Moase said the action was being pursued by the National Union of Workers, Adero Law and two litigation funding specialists, Balance Legal Capital and Augusta Ventures.

Mr Moase said the group action breaks new ground in Australia because it establishes unions’ ability to act as “the cop on the beat” on behalf of workers after exploitation has occurred against organisations that may never have had an interaction with a union.

Some of the claimants in the group action say that they went weeks without pay and were denied Centrelink payments because work conditions meant they were isolated from friends and family, were constantly moving around Australia and had no fixed address.

The group action comes in the wake of the $85 million group action against Appco, which is alleged to have engaged in sham contracting.

The Federal Court is deciding whether the Appco litigation can proceed as a class action.

Penalties can be up to $54,000 per contravention – per impacted worker. Or up to $63,000 for offences from July 2017.

Mr Moase said people would need to join his union to join the class action.

Karina Smith, who worked six days a week as a contractor for Credico in 2014, is taking part in the new class action.

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Ms Smith previously told Fairfax Media she was paid on a commission-only basis for door-to-door sales of raffle tickets. She said she earned as little as $150 to a maximum of $900 per week after tax.

"The average would have been $300 to $400," she said.

"I didn't have money for anything aside from paying rent each week, food and public transport.

"I had no control over my working life, the hours I worked or the clients I dealt with."

Fairfax Media contacted AIDA and Credico but did not receive a response before publication.

Credico previously told Fairfax Media it was confident it had acted lawfully at all times.

"Credico Australia has, and will continue to, operate a compliant business that meets Workplace Laws," a spokesperson said.

A spokesperson for the World Wildlife Fund Australia said it ceased working with AIDA approximately four years ago.

"WWF-Australia is committed to supporting legal and ethical working conditions across our fundraising suppliers," the spokesperson said. "In 2016, we conducted a thorough review of our fundraising suppliers and developed a new compliance framework."

A spokesperson for Optus said it supports the principle of fair and correct employee entitlements for employees and contractors.

"We have clear and absolute terms in our contracts that require compliance with all laws, including laws relating to payment of workers," the spokesperson said. "If these companies are suppliers – either directly or indirectly - we have an express right of termination which we have exercised previously. Optus expects suppliers to act with the utmost legal and social responsibility towards its workers in both in Australia and overseas."