Australian charities face scrutiny in new inquiry

“Many Australian 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.”

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 Mr Michael Campbell says 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.

The companies then engage workers to collect funds for the charities via methods including seeking donations on the street and at shopping centres, tele-fundraising and door-to-door collections.

“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. “The Inquiry will help us to understand the nature and prevalence of this issue,” he added.

Campbell says 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,” Campbell said.

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 discovered its mistake after it engaged an employment law specialist to conduct an audit in December, 2015. Mondial has already back-paid workers more than $300,000 and has agreed to rectify all underpayments by the end of 2017.

Most of Mondial’s staff are adult Australian workers, with a small proportion being 417 working holiday visa-holders from Canada, the UK and Ireland.

Inside Small Business

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