Greater Dandenong Council has extended its contract with recycling contractor Polytrade Operations, which had been accused of underpaying refugees on visas.
The six-month extension passed at a council meeting on Monday 28 August, to allow the council further time to prepare a competitve tender process for its mixed recyclables processing services.
The contract, which was to end in September 2023, will be extended to 30 March 2024.
Polytrade was recently prosecuted in the Federal Court by the Fair Work Ombudsman for allegedly underpaying five refugees on visas of nearly $200,000 over 20 months at Dandenong and Hallam.
It was fined $138,600, its labour provider Polytrade Employment Services fined $200,375 and its husband-and-wife owners Man Sang Chen and Pui Shan Ho were respectively fined $27,720 and $8,820.
Polytrade back-paid the five underpaid workers in full – and also backpaid other underpaid workers a further $2.2 million.
When the allegations surfaced, the council stood by its 10-year-contract with Polytrade. On 28 August, Cr Rhonda Garad raised the question of why the council was further extending the contract.
“That contract was novated about a year ago across to a new company called Regroup who are a national based waste company,” Greater Dandenong business, engineering and major projects director Paul Kearsley replied.
“They purchased Polytrade outright.
“What I can advise is that with regard to the inappropriate matters the previous company undertook, this council stood firm in regard to any comments made in regard to the inappropriate ways perhaps our residents were treated.”
Council had received correspondence from Regroup assuring them of an end to such activities, Mr Kearsley said.
He also mentioned that the fines imposed against Polytrade entities didn’t make up part of the 2022 transactions when Regroup acquired the assets.
“Regroup has not associated with this company and certainly not been exposed to the fines so the outcome does not have any impact on the liability of our business.
“Regroup regularly undertakes visa checks and … assessments to ensure that they pay all staff the correct amount.
“We are confident we have the necessary systems in place to ensure these historic issue does not arise in the future.”
Mr Kearsley was hopeful that Regroup and a number of significant others will participate in the upcoming tender process.
“That decision in terms of who is chosen is a council decision and will be reported to the council,” Mr Kearsley said.
Cr Garad said she’s willing to accept the guarantee by the new owners but is also keen for the six-month extension to come to an end.
“The (workers) were in need of money they were working hard and they were ripped off knowingly by these really despicable people.
“On the other hand they were a big employer of refugees struggling to find jobs which is a positive and that’s why council was keen to trade with them.
“If we did it again that would be shameful and that is what we must prevent.
“I would be keen to know what level of due diligence is given, that whoever receives the contract ensures this doesn’t happen again.”
