January 9, 2019 - International recruitment firm Hays and Steller Recruitment, which operates in Australia and New Zealand, are facing class action lawsuits which could be worth up to AUD 50 million (USD 35.8 million) over their allegedly unlawful use of casual workers in the mining industry, reports the Australian Financial Review.
Australian law firm Adero Law launched the actions in the Federal Court at the end of 2018 claiming the companies had underpaid thousands of workers leave and other entitlements for years.
Hays is facing claims that it has been underpaying up to 1,500 workers since at least 2014 because it engaged them as casuals rather than as permanent employees. Its chief client was Australian coal producer BHP Mitsubishi Alliance.
Under the Fair Work Commission’s Black Coal Industry Award, the use of casual employees is prohibited except through an enterprise agreement. Hays did not negotiate an enterprise agreement that would have allowed it to legally use casual workers.
Staffing Industry Analysts reached out to both Hays and Stellar Recruitment. A spokesperson for Hays responded with the statement: “Hays notes an action has been filed in the Federal Court of Australia. Hays intends to vigorously defend this action.”
“We place the utmost importance on regulatory compliance, and are committed to best practice in staffing and recruitment. While we are unable to comment on specific details as it is now before the courts, we strongly believe the action does not have merit,” the spokesperson stated.
“Casual employees are paid a higher hourly rate which includes a casual loading of 25% which is in lieu of permanent employment benefits such as annual leave and sick leave. To allow what is effectively double dipping would have severe negative implications for Australian businesses,” the spokesperson continued. “We welcome the opportunity to defend our record of regulatory compliance and treatment of our employees.”
While the class action has not specified a final compensation figure, lawyers estimate that Hays could be forced to pay between AUD 30 million (USD 21.4 million) and AUD 35 million (USD 25.0 million).
Hays sought an enterprise agreement after Adero had flagged that it was investigating the recruitment firm, but workers voted the agreement down late last year.
Stellar Recruitment is also facing an estimated AUD 10 million (USD 7.1 million) to AUD 15 million (USD 10.7 million) in alleged underpayments for similar reasons in a class action representing 500 workers. The company also had no enterprise agreement.
Stellar Recruitment but they did not immediately respond to a request for comment.
Adero’s class action lawsuit also include ones filed against labour hire firms BHP and Chandler McLeod last year.