A company linked to a businessman who has won contracts to clean federal government buildings in Canberra has been found guilty of wage theft.
A Federal Circuit Court judge has found Pioneer Facility Services and Pioneer Contracting Services had been knowingly concerned in the underpayment of $20,000 to Tasmania Woolworths cleaners.
One of Pioneer Facility Services' directors, Francis Xavier Scarce, is also a director of Prompcorp.
Spanish services giant Broadspectrum recently won the contract for Department of Jobs and Small Business buildings around the national capital's Civic precinct.
Broadspectrum then engaged Prompcorp as a subcontractor.
The change of contractors means nine of 24 workers currently employed to clean the buildings lost their job, while the remaining cleaners have been told their wages will be cut by $4 an hour, or 16 per cent, to the award rate.
In court, the Pioneer companies argued they had not been involved in the underpayments and should not be held responsible for ensuring its subcontractor paid it's employees correctly.
However, Judge Alister McNab, in a decision published last month, rejected the Pioneer companies claims
"[The] omission to pay a sum sufficient to cover award rates is an act which directly involves the Pioneer respondents in the contraventions," Justice McNab wrote.
"For these reasons, the Court finds that PFS and PCS were knowingly concerned in the underpayment contraventions."
Pioneer Facility Service chief executive Ben McGaw said the company had been "extremely disappointed" by the finding.
"We are currently exploring our legal options," he said.
"Pioneer and its directors are committed to ensuring that employees are paid all of their legal entitlements, and do not condone any subcontractors underpaying employees or mistreating employees in any way.
"We have further strengthened our oversight processes in this regard."
Mr Scarce was also one of the directors of two companies in 2015 when the Fair Work Ombudsman found they had subcontracted cleaning work at retailer Myer, and firms further down the subcontractor chain had underpaid cleaners.
RCS Cleaning Services had subcontracted work to a company, which in turn subcontracted to another firm that underpaid cleaners $6300 in less than a month.
Subcontractors engaged by another company, Pioneer Cleaning Australia, left workers $12,000 out of pocket in six weeks.
United Voice ACT branch secretary Lyndal Ryan alleged that Broadspectrum had failed to adequately vet the sub-contractors it had engaged to clean the Commonwealth offices given Prompcorp’s chequered background.
"The fact that Broadspectrum thinks this company is appropriate to clean Commonwealth offices shows the rot at the heart of the current industrial relations system," Ms Ryan said.
"Workers' lives are being wrecked by the high-handed actions of head contractor Broadspectrum in giving work to a company whose ... close associates have repeatedly shown disdain for the rule book.
"The fact the loss of jobs is occurring in the Department of Jobs only goes to show how crook this system is."
Ms Ryan said the Federal Government should back it's "loyal cleaning workforce, and push pause on this race to the bottom by cleaning contractors."
The Senate education and employment references committee is currently conducting an inquiry into the exploitation of cleaners working in retail chains for contracting or subcontracting cleaning companies.
The committee is scheduled to sit in Canberra on September 14.