Charities Under Scrutiny for Collector Underpayments

By Andrew Heaton
Image source: Reason Digital

Image source: Reason Digital

The charity sector in Australia is set to come under scrutiny amid concern that young people employed to conduct fundraising activities on its behalf are being exploited and underpaid.

In his latest announcement, the Fair Work Ombudsman (FWO) says it will examine practices of fifteen charities with regard to labour procurement and supply chains in order ensure that governance arrangements with regard to the employment of workers are adequate.

The Ombudsman is concerned that charities may be unaware of cases whereby laws are being flouted by specialist companies to whom they are outsourcing fundraising activities.

In a statement, Acting Fair Work Ombudsman Michael Campbell says it is common for charities in Australia to outsource fundraising activities to specialist marketing companies, who in turn 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.”

The inquiry follows the significant albeit unintentional underpayment of workers on the part of Sydney based company Monidial, which conducts fundraising activities on behalf of organisations such as The Wilderness Society, OXFAM Australia, UNICEF, RSPCA, Starlight Children’s Foundation of Australia and the Cancer Council.

Upon engaging an employment law specialist to undertake an audit in December last year, Mondial discovered that it had inadvertently underpaid 824 current and former workers at its call centres by a total of $770,000 since 2010.

The workers had been incorrectly paid according to the national minimum wage and had therefore been paid less than their entitlements according to the Contract Call Centre Award.

The company has agreed to rectify all underpayments by the end of next year.

In another case, the FWO is taking action against fundraising company Australian Sales and Promotions, whom it alleged underpaid a 26-year-old British Backpacker by almost $8,000 after requiring him to get an Australian Business Number and telling him that he was a contractor who was operating his own business rather than an employee.

This is the second occasion that Australian Sales and Promotions has been accused of underpayment.

In 2013, it was penalised $23,100 in court over the underpayment of five sales workers including 417 working holiday visa holders from the US and Taiwan by more than $9,000.

Campbell said a significant number of charities had little knowledge about whether workers who were being employed in fundraising activities were in fact being paid correctly, and had in several instances been horrified to find out that this was in fact not the case.

He says a common issue revolves around collectors being misclassified as contractors rather than employees and therefore either receiving a lower rate of pay than is acceptable under the national employment standards and /or not receiving entitlements such as superannuation and leave.

Other common issues included the unlawful payment of collectors on a commission-only basis and the use on the part of fundraising companies of unpaid internships or even high school work experience students with their business models.

Of the fifteen charities which are being scrutinised, seven will be large organisations with an annual income of more than $1 million, five will be medium sized charities with turnover of more than $250,000 and three will be small ones with an annual income of less than $250,000.

The charities will be selected at random.

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