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Multi-Stakeholder Frameworks for Rectification of Non-Compliance in Cleaning Supply Chains: The Case of the Cleaning Accountability Framework

Published online by Cambridge University Press:  01 January 2025

Michael Rawling Open the ORCID record for Michael Rawling [Opens in a new window] ,
Sarah Kaine ,
Emmanuel Josserand  and
Martijn Boersma
Michael Rawling*
Affiliation:
University of Technology Sydney, New South Wales, Australia
Sarah Kaine*
Affiliation:
University of Technology Sydney, New South Wales, Australia
Emmanuel Josserand*
Affiliation:
University of Technology Sydney, New South Wales, Australia; Geneva School of Economics and Management, University of Geneva, Geneva, Switzerland
Martijn Boersma*
Affiliation:
University of Technology Sydney, New South Wales, Australia
*
The author may be contacted at michael.rawling@uts.edu.au
The author may be contacted at sarah.kaine@uts.edu.au
The author may be contacted at emmanuel.josserand@uts.edu.au
The author may be contacted at martijn.boersma@uts.edu.au
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Abstract

There is now an expanding body of literature on the significant problem of business non-compliance with minimum labour standards including ‘wage theft’. Extended liability regulation beyond the direct employer is seen as one solution to this non-compliance in fragmented but hierarchically organised industries—such as the cleaning industry. This article uses empirical evidence to assess the effectiveness of one such regulatory scheme, the Cleaning Accountability Framework (CAF), in addressing non-compliance with minimum labour standards (including provisions of the Fair Work Act 2009 (Cth) and the Cleaning Services Award 2020). We find that CAF has been successful in identifying and rectifying certain non-compliance, improving working conditions for some cleaners involved in the scheme. We synthesise the key success factors of CAF in view of envisioning the adoption of such co-regulation frameworks in other industries. We also propose legal reforms that will support change across the cleaning industry.

Type
Articles
Information
Federal Law Review , Volume 49 , Issue 3 , September 2021 , pp. 438 - 464
Copyright
Copyright © 2021 The Author(s)

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Footnotes

Thank you to Terry Carney for reading a previous draft of this article and to Katie Johns for assistance with referencing, editing and formatting. Also thank you to the anonymous referees. Any errors are our own.

References

1. See, eg, Stephen Clibborn, ‘Multiple Frames of Reference: Why International Student Workers in Australia Tolerate Underpayment’ (2018) Economic and Industrial Democracy (forthcoming); Stephen Clibborn and Chris F Wright, ‘Employer Theft of Temporary Migrant Workers’ Wages in Australia: Why Has the State Failed to Act?’ (2018) 29(2) Economic and Labour Relations Review 207; Laurie Berg and Bassina Farbenblum, Wage Theft in Australia: Findings of the National Temporary Migrant Work Survey (Migrant Worker Justice Initiative, November 2017) (‘Wage Theft in Australia’); Laurie Berg and Bassina Farbenblum, ‘Remedies for Migrant Worker Exploitation in Australia: Lessons from the 7-Eleven Wage Repayment Program’ (2018) 41(3) Melbourne University Law Review 1035. This article does not consider the relative merits of the terms ‘wage theft’ and ‘underpayment’ but uses them interchangeably to refer to the situation where an employer does not pay a worker their full, legal, payment entitlements. The broader term employer ‘non-compliance’ is also used to denote the situation where an employer does not comply with legal standards including standards relating to payment of workers.

2. David Weil, The Fissured Workplace: How Work Became So Bad for So Many and What Can Be Done to Improve It (Harvard University Press, 2014). For prior research on the fragmented workplace, see Judy Fudge, ‘Fragmenting Work and Fragmenting Organizations: The Contract of Employment and the Scope of Labour Regulation’ (2006) 44(4) Osgoode Hall Law Journal 609, 622–5, 635–46; Jill Rubery, Jill Earnshaw and Mick Marchington, ‘Blurring the Boundaries to the Employment Relationship: From Single to Multi-Employer Relationships’ in Mick Marchington et al (eds), Fragmenting Work: Blurring Organizational Boundaries and Disordering Hierarchies (Oxford University Press, 2005) 63.

3. Criminal penalties have also been proposed as a solution to wage theft. Extended liability and criminal penalties could be combined and are not mutually exclusive. This article does not deal further with the issue of criminal penalties but focuses on the extended liability solution.

4. The Fair Work Ombudsman (‘FWO’) deploys this mechanism in litigation by pleading that price maker businesses are accessories under s 550 of the Fair Work Act 2009 (Cth) (‘FW Act’) to non-compliance by price taker non-compliance with labour standards. See Tess Hardy and John Howe, ‘Chain Reaction: A Strategic Approach to Addressing Employment Noncompliance in Complex Supply Chains’ (2015) 57(4) Journal of Industrial Relations 563 (‘Chain Reaction’).

5. Guy Davidov, ‘Indirect Employment: Should Lead Companies Be Liable?’ (2015) 37(1) Comparative Labour Law & Policy Journal 5; Chris F Wright, ‘Should Corporations Be Responsible for Labour Standards in Their Supply Chains? (Deben las empresas ser responsables de las normas laborales en sus cadenas de suministro)’ (2016) 40(463) Analisis Laboral 10; Chris F Wright and William Brown, ‘The Effectiveness of Socially Sustainable Sourcing Mechanisms: Assessing the Prospects of a New Form of Joint Regulation’ (2013) 44(1) Industrial Relations Journal 20; Igor Nossar et al, ‘Protective Legal Regulation for Home-Based Workers in Australian Textile, Clothing and Footwear Supply Chains’ (2015) 57(4) Journal of Industrial Relations 585; Michael Rawling and John Howe, ‘The Regulation of Supply Chains: An Australian Contribution to Cross-National Legal Learning’ in Katherine V W Stone and Harry Arthurs (eds), Rethinking Workplace Regulation: Beyond the Standard Contract of Employment (Russell Sage Foundation, 2013) 233; Phillip James et al, ‘Regulating Supply Chains to Improve Health and Safety’ (2007) 36(2) Industrial Law Journal 163.

6. Daniel Berliner et al, Labor Standards in International Supply Chains: Aligning Rights and Incentives (Edward Elgar Publishing, 2015); Richard M Locke, The Promise and Limits of Private Power: Promoting Labour Standards in a Global Economy (Cambridge University Press, 2013).

7. Gale Raj-Reichert, ‘Safeguarding Labour in Distant Factories: Health and Safety Governance in an Electronics Global Production Network’ (2013) 44 Geoforum 23; Andrew Crane et al, ‘Governance Gaps in Eradicating Forced Labor: From Global to Domestic Supply Chains’ (2019) 13(1) Regulation & Governance 86.

8. Reinhard Steurer, ‘Disentangling Governance: A Synoptic View of Regulation by Government, Business and Civil Society’ (2013) 46(4) Policy Sciences 387.

9. Matthew Amengual and Janice Fine, ‘Co-Enforcing Labor Standards: The Unique Contributions of State and Worker Organizations in Argentina and the United States’ (2016) 11(2) Regulation & Governance 129; Janice Fine, ‘Enforcing Labor Standards in Partnership with Civil Society: Can Co-Enforcement Succeed Where the State Alone Has Failed?’ (2017) 45(3) Politics & Society 359.

10. Sarah Kaine and Michael Rawling, ‘Strategic “Co-Enforcement” in Supply Chains: The Case of the Cleaning Accountability Framework’ (2019) 31(3) Australian Journal of Labour Law 305.

11. See Tess Hardy and John Howe, ‘Partners in Enforcement? The New Balance Between Government and Trade Union Enforcement of Employment Standards in Australia’ (2009) 23(3) Australian Journal of Labour Law 306, 330–1; Hardy and Howe, ‘Chain Reaction’ (n 4).

12. See Cleaning Accountability Framework (‘CAF’), Introduction to CAF Certification Agreement (CAF, 2019).

13. Fair Work Commission, Cleaning Services Award 2020, MA000022, 30 April 2020.

14. The FW Act does not apply to some employers in Western Australia, and where an enterprise agreement is registered the relevant award does not apply. The FW Act also applies to the Commonwealth public service but the focus of this article is on business non-compliance.

15. Clibborn and Wright (n 1) 207.

16. Berg and Farbenblum, Wage Theft in Australia (n 1).

17. Senate Education and Employment References Committee, Parliament of Australia, A National Disgrace: The Exploitation of Temporary Work Visa Holders (Report, 17 March 2016). Three States (Western Australia, South Australia and Victoria) have concluded separate inquiries into wage theft laws, concurrent with a federal inquiry into the issue, prompted by a Queensland report: Education, Employment and Small Business Committee, Parliament of Queensland, A Fair Day’s Pay for a Fair Day’s Work? Exposing the True Cost of Wage Theft in Queensland (Report No 9, 56th Parliament, November 2018).

18. See, eg, Peter Ryan and David Chau, ‘Woolworths Investigated After Admitting it Underpaid 5,700 Staff up to $300 Million’, ABC News (Online, 30 October 2019) <https://www.abc.net.au/news/2019-10-30/woolworths-underpays-5700-staff-up-to-300-million-dollars/11652656>; ABC Online, ‘Woolworths Contractors Underpaying Cleaners in “Serious Exploitation” Across Tasmania, Inquiry Finds’, ABC News (Online, 14 February 2018) <https://www.abc.net.au/news/2018-02-14/woolworths-cleaners-underpaid-tasmanian-inquiry-finds/9444916>; Madeleine Heffernan, ‘Fair Work Takes Myer to Cleaners Over Underpaid Wages’, Sydney Morning Herald (Sydney, 30 May 2016).

19. Eugene Schofield-Georgeson and Michael Rawling, ‘Industrial Legislation in 2019’ (2020) 62(3) Journal of Industrial Relations 425, 426.

20. Australian Council of Trade Unions (‘ACTU’), Wage Theft—The New Model for Big Business (ACTU, 2019).

21. David Peetz, The Realities and Futures of Work (ANU Press, 2019) 292–3.

22. David Weil, ‘Creating a Strategic Approach to Address Wage Theft: One Academic’s Journey in Organizational Change’ (2018) 60(3) Journal of Industrial Relations 437, 439.

23. Clibborn and Wright (n 1) 208, citing Monder Ram et al, Non-Compliance and the National Living Wage: Case Study Evidence from Ethnic Minority and Migrant-Owned Businesses (Low Pay Commission, 2017).

24. Clibborn and Wright (n 1) 208; Bassina Farbenblum and Laurie Berg ‘Migrant Workers’ Access to Remedy for Exploitation in Australia: The Role of the National Fair Work Ombudsman’ (2017) 23(3) Australian Journal of Human Rights 310.

25. Berg and Farbenblum, Wage Theft in Australia (n 1) 5.

26. Clibborn and Wright (n 1) 212.

27. See generally Clibborn and Wright (n 1) 214; Kaine and Rawling (n 10). However, we note that wage theft is not confined to small business employers at the base of business networks—large employers can also steal wages from their direct employees: see, eg, Ryan and Chau (n 18).

28. Clibborn and Wright (n 1) 212.

29. Kaine and Rawling (n 10) 315.

30. Interview with facilities manager (2018).

31. Clibborn and Wright (n 1) 212.

32. Kaine and Rawling (n 10).

33. In 2016–17, it was estimated that the sector would generate $8.6 billion in revenue and grow to $9.8 billion over 5 years: Alen Allday, Commercial Cleaning Services in Australia (IBISWorld Industry Report No N7311, November 2016).

34. Interview with Steering Committee Member (CAF, 2019).

35. See FWO, National Cleaning Services Compliance Campaign 2014/15 Report (Report, March 2016).

36. Iain Campbell and Manu Peeters, ‘Low Pay, Compressed Schedules and High Work Intensity: A Study of Contract Cleaners in Australia’ (2008) 11(1) Australian Journal of Labour Economics 27.

37. This objective and the data on which the article draws are part of a larger project funded through a Linkage grant from the Australian Research Council. The main objective of the project was to contribute to the implementation and improvement of CAF and evaluate its outcome.

38. Mark Saunders, Phillip Lewis and Adrian Thornhill, Research Methods for Business Students (Financial Times Prentice Hall, 7th ed, 2009); Edgar H Schein, Process Consultation Revisited: Building the Helping Relationship (Addison Wesley, 1999).

39. Schein (n 38).

40. Colin Eden and Christine Huxham, ‘Action Research for the Study of Organizations’ in Stewart R Clegg and Cynthia Hardy (eds), Studying Organization: Theory and Method (SAGE Publications, 1999) 526.

41. John Rowan, ‘A Dialectical Paradigm for Research’ in Peter Reason and John Rowan (eds), Human Inquiry: A Sourcebook of New Paradigm Research (John Wiley and Sons, 1981) 93.

42. Eden and Huxham (n 40); Laurel Richardson, ‘Writing: A Method of Inquiry’ in Yvonna S Lincoln and Norman K Denzin (eds), Turning Points in Qualitative Research: Tying Knots in a Handkerchief (AltaMira Press, 2003) 379.

43. Saunders, Lewis and Thornhill (n 38).

44. Edward J Balleisen and Marc Allen Eisner, ‘The Promise and Pitfalls of Co-Regulation: How Governments Can Draw on Private Governance for Public Purpose’ in David A Moss and John A Cisternino (eds), New Perspectives on Regulation (Cambridge, 2009) 127, 130–3.

45. Jolyon Ford and Justine Nolan, ‘Regulating Transparency on Human Rights and Modern Slavery in Corporate Supply Chains: The Discrepancy Between Human Rights Due Diligence and the Social Audit’ (2020) 26(1) Australian Journal of Human Rights 27, 28.

46. Thomas Clarke and Martijn Boersma, ‘The Governance of Global Value Chains: Unresolved Human Rights, Environmental and Ethical Dilemmas in the Apple Supply Chain’ (2015) 143(1) Journal of Business Ethics 111.

47. Genevieve LeBaron, Jane Lister and Peter Dauvergne, ‘Governing Global Supply Chain Sustainability Through the Ethical Audit Regime’ (2017) 14(6) Globalizations 958; Berliner et al (n 6); Locke (n 6); Raj-Reichert (n 7).

48. LeBaron, Lister and Dauvergne (n 47).

49. Crane et al (n 7) 101.

50. ‘The Cleaning Accountability Framework: Core Principles’, Cleaning Accountability Framework (Web Page, 2019) <https://www.cleaningaccountability.org.au/wp-content/uploads/2019/03/CAF-Core-Principles.pdf>.

51. Clarke and Boersma (n 46).

52. ‘Three Star Standard’, Cleaning Accountability Framework (Web Page, 2019) <https://www.cleaningaccountability.org.au/wp-content/uploads/2019/03/190327-3-Star-Standard-public.pdf>.

53. Locke (n 6); Berliner et al (n 6); Lone Riisgaard and Nikolaus Hammer, ‘Prospects for Labour in Global Value Chains: Labour Standards in the Cut Flower and Banana Industries’ (2011) 49(1) British Journal of Industrial Relations 168; Emmanuel Josserand and Sarah Kaine ‘Labour Standards in Global Value Chains: Disentangling Workers’ Voice, Vicarious Voice, Power Relations, and Regulation’ (2016) 71(4) Relations industrielles/Industrial Relations 741.

54. Leah F Vosko (ed), ‘Mapping the Enforcement Gap: Historical and Contemporary Dynamics’ in Closing the Enforcement Gap: Improving Employment Standards Protections for People in Precarious Jobs (University of Toronto Press, 2020).

55. Ilona M Kelly et al, ‘Fig Leaf for Fashion: How Social Auditing Protects Brands and Fails Workers’ (Report, Clean Clothes Campaign, 2019) <https://cleanclothes.org/file-repository/figleaf-for-fashion.pdf>.

56. Fair Food Standards Council, Frequently Asked Questions (Web Page) <http://www.fairfoodstandards.org/resources/frequently-asked-questions/>.

57. Coalition of Immokalee Workers, Fair Food Program: Frequently Asked Questions (Web Page) <https://ciw-online.org/ffp_faq/>.

58. Ibid.

59. CAF, CAF Worker Engagement Costs (CAF, 2020) 1.

60. Processes relating to worker engagement have varied slightly over the course of the certification pilots and subsequent certification rounds.

61. See Work Health and Safety Act 2011 (NSW) pt 5.

62. At the time of writing this article, the current version of the procedure was the one passed by the CAF building certification committee on 2nd October 2019.

63. Justine Nolan and Martijn Boersma, Addressing Modern Slavery (UNSW Press, 2019) 6.

64. CAF, ‘Appendix D: CAF Remediation Procedure’ in Guide to the CAF Building Certification Scheme (CAF, 2019) 31 (‘Remediation Procedure’).

65. Ibid.

66. Building Owner Site 2 and Facilities Manager Site 2 cited in S Kaine et al, Report on the Pilot Audit Process (Sydney, 26 April 2019) 11.

67. ‘Remediation Procedure’ (n 64) 33–4.

68. CAF, Contractor Prequalification (Web Page) <https://www.cleaningaccountability.org.au/contractor-prequalification/>.

69. ‘Remediation Procedure’ (n 64) 32.

70. Ibid.

71. Ibid.

72. Ibid.

73. Ibid.

74. Ibid 34.

75. Ibid 32.

76. CAF, Attachment B: Summary of Compliance Issues and Key Insights (CAF, 2019) (‘Summary of Compliance Issues’).

77. CAF, Three-Star Standard Restructure MT 181212 (CAF, 2018).

78. CAF, CAF Guidelines for Inductions November 2019 (CAF, 2019) (‘Guidelines for Inductions’).

79. CAF, CAF Compliant Personal/Carer’s Leave Policy Guidelines (CAF, 20 February 2020).

80. CAF, Guidelines for Inductions (n 78).

81. Kaine and Rawling (n 10) 319.

82. See Igor Nossar, ‘Cross-Jurisdictional Regulation of Commercial Contracts for Work Beyond the Traditional Relationship’ in Christopher Arup et al (eds), Labour Law and Labour Market Regulation (Federation Press, 2006) 202; David Walters and Phil James, ‘What Motivates Employers to Establish Preventive Management Arrangements within Supply Chains?’ (2011) 49(7) Safety Science 988. Gary Gereffi has a large body of work that investigates global supply chain dynamics and while CAF is a domestic supply chain, many of the concepts explored by Gereffi with regard to fragmentation of business, drive in supply chains, the role of private and civil governance are instructive: see Gary Gereffi and Joonkoo Lee, ‘Economic and Social Upgrading in Global Value Chains and Industrial Clusters: Why Governance Matters’ (2016) 133 Journal of Business Ethics 25; Gary Gereffi and Joonkoo Lee, ‘Why the World Suddenly Cares About Global Supply Chains’ (2012) 48(3) Journal of Supply Chain Management 24; Gary Gereffi, John Humphrey and Timothy Sturgeon, ‘The Governance of Global Value Chains’ (2005) 12(1) Review of International Political Economy 78; Gary Gereffi, ‘The Organization of Buyer-Driven Global Commodity Chains: How US Retailers Shape Overseas Production Networks’ in Gary Gereffi and Miguel Korzeniewicz (eds), Commodity Chains and Global Capitalism (Praeger, 1994) 95 (‘Global Commodity Chains’).

83. Kaine et al (n 66) 9.

84. Ibid.

85. Ibid.

86. Ibid.

87. Richard Johnstone, ‘Regulating Health and Safety in “Vertically Disintegrated” Work Arrangements: The Example of Supply Chains’ in John Howe, Anna Chapman and Ingrid Landau (eds), The Evolving Project of Labour Law: Foundations, Development and Future Research Directions (Federation Press, 2017) 130.

88. Kaine et al (n 66) 10.

89. Ibid.

90. Ibid.

91. Michael Quinlan, Supply Chains and Networks (Safe Work Australia Report, July 2011).

92. Rather, as others have examined there is more piecemeal and limited accessorial liability under s 550 of the FW Act which for the most part allows lead firms to escape liability for labour abuses in extended supply chains: see Hardy and Howe, ‘Chain Reaction’ (n 4).

93. Kaine et al (n 66).

94. Ibid 11.

95. Ibid.

96. Ibid. See also Certification Interview with CAF (CAF, 2019) 21.

97. Summary of Compliance Issues (n 76).

98. Kaine et al (n 66) 12.

99. See, eg, Ibid 11. Oversight of contractor compliance was the issue that the auditor reported during the two pilots and the 2019 certification process: Summary of Compliance Issues (n 76).

100. Interview with CAF (CAF, 22 August 2019) (‘22 August Interview’); Interview with CAF (CAF, 19 September 2019) (‘19 September Interview’); Interview with CAF (CAF, 12 December 2019) (‘12 December Interview’).

101. 22 August Interview (n 100).

102. 19 September Interview (n 100) 10.

103. 12 December Interview (n 100) 3.

104. 22 August Interview (n 100).

105. Interview with Steering Committee Member (n 34) 5.

106. Crane et al (n 7).

107. The concept of ‘drive’ has been defined by Josserand and Kaine (n 53) 755. It is based on the ideas of ‘buyer driven’ supply chains (‘Global Commodity Chains’ (n 82)) and ‘producer driven’ supply chain (Gereffi, Humphrey and Sturgeon (n 82) 82).

108. ‘Global Commodity Chains’ (n 82).

109. Josserand and Kaine (n 53).

110. Berliner et al (n 6); Josserand and Kaine (n 53).

111. Josserand and Kaine (n 53) 755; Jimmy Donaghey et al, ‘From Employment Relations to Consumption Relations: Balancing Labor Governance in Global Supply Chains’ (2014) 53 Human Resource Management 229–52, 240.

112. Locke (n 6).

113. Raj-Reichert (n 7); Crane et al (n 7).

114. Berliner et al (n 6).

115. Riisgaard and Hammer (n 53).

116. Steve Davies et al, ‘Labour Standards and Capacity in Global Subcontracting Chains: Evidence from a Construction MNC’ (2011) 42(2) Industrial Relations 124.

117. 22 August Interview (n 100); 19 September Interview (n 100); 12 December Interview (n 100).

118. See analysis above in Part II A of this article and Interview with Steering Committee Member (CAF, 2020).

119. Guy Davidov, ‘Special Protection for Cleaners: A Case of Justified Selectivity?’ (2015) 36 Comparative Labor Law and Policy Journal 219.

120. Ibid 239.

121. For a slightly different but complementary argument for joint and several liability of supply chain participants for labour recruitment violations, see Jennifer Gordon, ‘Global Labour Recruitment in a Supply Chain Context’ (Fundamental Working Papers, International Labor Organisation, June 2015) 19–20.

122. This legislative instrument was made under pt 3 of the Industrial Relations (Ethical Clothing Trades) Act 2001 (NSW) and came into force on 1 July 2005. For an almost identical set of mandatory clothing retailer obligations, see the South Australian Clothing Outworker Code of Practice in sch 1 of the Fair Work (Clothing Outworker Code of Practice) Regulations 2007 (SA) (‘South Australian Clothing Outworker Code of Practice’).

123. Michael Rawling, ‘Cross-Jurisdictional and Other Implications of Mandatory Clothing Retailer Obligations’ (2014) 27(3) Australian Journal of Labour Law 191, 201.

124. Ethical Clothing Trades Extended Responsibility Scheme 2005 (NSW) cl 8; South Australian Clothing Outworker Code of Practice (n 122) cl 8.

125. Rawling (n 123) 198.

126. Nossar et al (n 5) 592.

127. Ibid.

128. Ibid.

129. Interview with CAF (CAF, 13 March 2019).

130. See James et al (n 5) 175–6.