Major hotels have been underpaying housekeeping staff Photo: Frances MocnikThree upmarket hotel chains in Sydney, Melbourne and Brisbane have been allegedly short-changing their housekeeping staff, a Fair Work Ombudsman investigation has found.

The inquiry into housekeeping services at four and five-star hotels within the Starwood, Accor and Oaks groups found more than 120 housekeepers were underpaid more than $57,000.

Hotel groups that were probed by the Fair Work Ombudsman included the owners of the high-profile Sheraton, Westin and Ibis brand names.

Many housekeepers were paid a flat rate for each room cleaned, inconsistent with their legal entitlements under relevant industry awards.

Most were international students and backpackers from China and Korea on 417 working holiday visas. Follow BusinessDay on LinkedIn

Their jobs included vacuuming, turning down beds, cleaning, restocking minibars and washing.

Starwood owns and operates some 1200 properties around the world, including the Sheraton, Four Points and Westin hotels in Australia. Accor has more than 3700 properties internationally, with more than 40 in Australia, including Ibis hotels.

Oaks Hotels and Resorts, which runs 43 properties in Australia, has reluctantly signed enforceable undertakings with the Fair Work Ombudsman to avoid civil court proceedings. Its cleaning contractor, Housekeepers Pty Ltd, had engaged its workers as independent contractors instead of employees. It has also signed the undertakings.

The investigation targeted a sample group of housekeepers and the names of individual hotel properties found to be in breach have not been released.

Oaks, which the Ombudsman singled out as the most serious offender, acknowledged its housekeepers had been vulnerable to exploitation and accepted an ethical responsibility to ensure its contractors comply with workplace laws.

The Fair Work Ombudsman also issued eight letters of caution, six compliance notices and two on-the-spot fines in response to its findings.

“It is not acceptable for an employer to take advantage of any worker, especially overseas workers who speak limited English and have limited understanding of their workplace rights,” Ombudsman Natalie James said.

“The community expects more from established and profitable brands to ensure that workers on their sites, whether directly employed or not, are treated and paid fairly.

“Employers cannot undercut minimum wages, even if their employees offer to accept lower rates – and they must keep accurate time-and-wages records.”

The inquiry found that employers had failed to pay applicable penalty rates, leave entitlements and had not reimbursed employees for specialist clothing. Part-timers were not given a regular pattern of work.

Employers had also failed to keep proper employment records and rosters did not have clear start and finish times, making it difficult to identify overtime. Unauthorised salary deductions were made for lost equipment.

Fair Work Ombudsman inspectors spoke directly to housekeepers during unannounced visits to hotels.

Oaks and Housekeepers established an independent contracting model, while other hotel groups were found to have applied the wrong industrial instrument or provisions.

The former chief operating officer at Oaks was issued with a letter of caution and Housekeepers Pty Ltd has reimbursed almost $13,000 to 16 underpaid workers.

Housekeepers has also made its housekeepers employees instead of independent contractors.

“Outsourcing is a legitimate business arrangement – but in my experience, in highly competitive markets for low-skilled work, it also increases the risk that workers will be underpaid, sometimes quite deliberately,” Ms James said.

The Ombudsman recommended that the Starwood and Accor Group enter into compliance partnerships to demonstrate commitment to creating productive and inclusive workplaces.

AccorHotels chief operating officer Simon McGrath said the Fair Work Ombudsman in 2014 found two of its housekeeping contractors allegedly had not created a regular pattern of work documentation  for part-time employees and had incorrectly named their employer on pay slips.

“There was no finding in the report of underpayment to our contractors’ employees,” he said.

“As soon as AccorHotels was made aware of this, we worked with those third-party operators to rectify this issue.

“Since then we are not aware of any further allegations.

“As leaders in the industry, we take our responsibility to all employees very seriously and we will continue to strictly monitor our contractors to ensure they comply with their obligations.”

A spokeswoman for Oaks Hotels and Resorts declined to comment other than to say it was working closely with the Fair Work Ombudsman “to resolve any issue”.

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