Australian Charities Scrutinised Over ‘Chugger’ Exploitation

Concerns that young charity collectors – “chuggers” – are being exploited has sparked an investigation into the practices of some major Australian charities.

The Fair Work Ombudsman, in announcing its investigation on Thursday, said it would randomly investigate seven charities with an annual income of more than $1 million, five charities with an annual income of more than $250,000 and three charities with annual incomes below $250,000.

The workplace watchdog said it would scrutinise their labour procurement and supply chain practices.

It emphasised that charities were responsible for any workplace laws flouted by the for-profit companies they outsource fundraising to, even if lax governance arrangements mean charities were unaware of the situation.

Acting Fair Work Ombudsman Michael Campbell said they had been monitoring charities’ use of face-to-face fundraising, tele-fundraising and door knocking for some time.

“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.

“Young and overseas workers are often the ones who are getting short-changed and because they are generally not fully aware of their workplace rights, we certainly don’t think they are reporting all instances of exploitation to us.

“The inquiry will help us to understand the nature and prevalence of this issue.”

The inquiry has the support of the Not for Profit sector’s peak body.

“Charities trade on trust,” CEO of Community Council for Australia David Crosbie told Pro Bono Australia News.

“No charity wants to see their name or reputation damaged by the behaviour of sub contractors working for them. I am sure every charity would want to know about inappropriate practices within any of their contractors and be keen to take steps to see it addressed.

“The community should contact any charity if they feel a fundraiser or anyone acting in the name of the charity has engaged in any form of inappropriate behaviour.”

The regulatory body for face-to-face fundraising, the Public Fundraising Regulatory Association (PFRA), also called on charities to ensure their practices met the legal requirements.

“This is an issue we’ve actually been working with our members on for quite a long time. We have been encouraging members to be as thorough and effective as they can in their own due diligence processes,” PFRA CEO Paul Tavatgis told Pro Bono Australia News.

“Our role is to make sure that face-to-face fundraising is kept to the highest possible standard… so we encourage members to cooperate fully with Fair Work and to make sure that their supply chain arrangements are fully compliant with all relevant legislation.”

Tavatgis said it was “absolutely” up to charities to take responsibility for workers employed in their supply chains.

“You can outsource the work but you can’t outsource the responsibility for making sure standards are high and laws are complied with,” he said.

“It’s important for people to make sure their supply chains are complaint.

“And we do encourage [charities] to cooperate fully with any inquires that happen.

“If the outcome is that there are any issues showing we’d be certainly hoping that people would work as hard as they can to resolve those issues.”

The Fair Work Ombudsman said a crucial part of “weeding out rogue operators” in the sector was increasing charity awareness of the importance of due diligence to protect workers.

“Many charities have no idea whether the workers who are wearing hats and T-shirts bearing their logos and collecting donations on their behalf are being paid correctly or treated fairly,” Campbell said.

“There have been a number of instances where charities have been horrified to learn about the exploitation of workers occurring in their own supply chains.”

The issues that will be examined by the inquiry include charity collectors being classified and treated as independent contractors, when their correct classification was as employees, fundraising companies unlawfully paying charity collectors on a commission-only basis and using unpaid internships and high school work experience students.

Campbell said the inquiry findings would help create a “culture of compliance” in the charity sector.

“The intelligence we gain through the inquiry will help us tailor compliance and education activities for the charity sector that help to prevent exploitation and increase awareness of rights and obligations among workers, charities and fundraising companies,” he said.

“The desired end result is that all parties in the supply chain recognise and accept their social, moral and corporate responsibility to ensure compliance with workplace laws.”

Campbell said they had been warning companies for a number of years about the dangers of outsourcing low-skilled work to the lowest cost provider.

“The dangers faced by companies outsourcing work to low-cost security and cleaning contractors also apply with equal force to charities and not-for-profit organisations outsourcing fundraising work,” he said.

“Outsourcing can be a legitimate business decision but appropriate controls need to be put in place.”

The Inquiry comes as a Fair Work Ombudsman investigation resulted in Sydney-based fundraising company Mondial Fundraising Communications Pty Ltd agreeing to back-pay $770,000 to 824 current and former employees it has underpaid since 2010.

Mondial holds contracts to fundraise for charities including The Wilderness Society, OXFAM Australia, UNICEF, RSPCA, Starlight Children’s Foundation of Australia and the Cancer Council.

Mondial unintentionally underpaid the minimum wages and penalty rates their call centre workers were entitled to.  

The Fair Work Ombudsman has consulted with the Australian Charities and Not-for-profits Commission and the National Union of Workers about its inquiry.