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Australia’s largest chicken supplier, Baiada, will pay $500,000 towards compensating the underpayment of workers following exposure of wide-spread unlawful practices by contractors at its worksites.

Under an agreement reached with the Fair Work Ombudsman, Baiada will assume limited responsibility for the underpayment of contract labour employees engaged in its supply chain, even though it is not their direct employer.

Baiada is Australia’s largest locally owned poulty processing company, producing the Lilydate Select and Steggles chicken brand s for customers including Coles, Woolworths, IGA, Aldi, McDonalds, KFC, Pizza Hut, Red Rooster, Nando’s and Subway.

The enforceable undertaking follows a scathing report by the Fair Work Ombudman in June that found staff were underpaid, worked extremely long hours, and paid high rents for overcrowded, unsafe accommodation.

Workers were paid as little as $11.50 and hour for shifts up to 19 hours a day.

Initially, Baiada refused permission for Fair Work Inspectors working on the inquiry to have access to the factory floor at worksites, denying them an opportunity to observe work practices, as well as talk to employees about conditions, policiies and procedures. It also failed to provide the inquiry with any “significant or meanginful” documentation on the nature and terms of its labour contract arrangements.

However, the company, which was severely embarrassed by the publicity given to the findings, has now agreed to work with the ombudsman. 

The agreement will reimburse any current or former workers found to have been underpaid from January 1 this year. However the agreement does not apply to underpayments that occurred before this year.