YOUNG workers who are forced to work up to 18 hours a day for as little as $11.50 per hour while living in overcrowded slum accommodation are the human casualties of the industrial-scale chicken supply chain.
At the top of that chain is giant company Baiada which uses contractors at arm's length to benefit from slave labour conditions imposed on meat processing workers.
The practices employed by Baiada, which produces the Lilydale Select and Steggles brands for Woolworths, Coles, IGA, Aldi, McDonald's, KFC, Pizza Hut, Red Rooster, Nando's and Subway, are the subject of scathing fresh criticism in a new Fair Work Ombudsman (FWO) report.
The FWO will now try to enlist major buyers of processed chicken including Coles, Woolworths, KFC and Aldi to help promote more ethical supply chains.
"I am deeply concerned by the findings of this inquiry, particularly the behaviour of Baiada and its contractors who failed to engage with us about serious concerns about compliance with workplace laws on the company's sites," ombudsman Natalie James said in a statement.
"In particular, we ask Baiada to publicly declare that it has an ethical, moral and social responsibility to join with the Fair Work Ombudsman to stamp out exploitation of vulnerable workers at its work sites, and we extend an invitation to Baiada to join with us in a compliance partnership.
"In my view, Baiada and others in this supply chain now need to consider the legal, moral and ethical implications of continuing to operate in a manner that fails to deliver workers their minimum entitlements."
The report follows a three-year campaign by the ombudsman targeting the company which, the watchdog claims, has failed to provide any meaningful help or explanation of its labour contract arrangements, which hampered enforcement.
"Lack of co-operation from the Baiada Group, including failure to provide accurate contact details for contractors, lengthy delays in providing requested records and refusing Fair Work Inspectors access to work sites, along with the failure of contractors to update business registration records in contravention of (corporations law) presented challenges in contacting directors and serving notices issues by the Fair Work Inspectors under the (Fair Work) Act," the ombudsman report says.
The ombudsman's inspectors were frustrated in their investigations because the labour-hire contracts Baiada uses produced inadequate, missing or fabricated records. That, in turn, meant the inquiry could not account for hundreds of thousands of dollars moving through the supply chain.
The findings of the inquiry, to be released publicly on Thursday, identify a murky web of sham contracting arrangements and exploitation of thousands of overseas workers mainly from Taiwan and Hong Kong in Australia on 417 working holiday visas.
The inquiry found the workers were forced to live in housing provided by labour-hire contractors and that weekly rent of around $100 was unlawfully deducted from their pay.
One house in Beresfield with sleeping for 21 Baiada workers was bought in March 2012 for $370,000 was potentially generating more than $100,000 in annual rental income.
Apart from the exploitation of workers, the inquiry found a range of workplace laws were being flouted with little or no governance standards being demonstrated through the labour supply chain.
It was routine for contractors and sub-contractors to cease trading the day before scheduled meetings with the Fair Work Ombudsman. The matter has been referred to the Australian Securities and Investment Commission.
During the course of the inquiry, 23 of 39 contractors complained of financial instability and four of six principal contractors ceased trading.
The inquiry found a large amount of work was done "off the books" and that hundreds of thousands of dollars could not be traced as a result of poor, non-existent or fabricated records.
The meat processing workers were underpaid, forced to work up to 18 hours a day without any payment for overtime.
The Baiada Group's three NSW sites in Beresfield near Newcastle, Hanwood near Griffith and Tamworth were investigated.
The Fair Work Ombudsman has so far recovered more than $100,000 in underpayments owed to employees of B & E Poultry Holdings Pty Ltd at the Beresfield site in the past three years.
The ombudsman has urged the Baiada Group to install an electronic timekeeping system for all workers at its chicken processing plants. It also recommends the introduction of a formal complaint reporting process with a Mandarin speaking human resources representative.
Improved governance and transparency around labour-hire arrangements has also been suggested.
The Fair Work Ombudsman also plans to take action against any accountants or lawyers found to be helping businesses provide false or misleading records to its inspectors.
It says it will "ensure parties do not turn a blind eye" to minimum employee entitlements and hold to account those "we find who are involved in contraventions of Commonwealth workplace laws".
'Deeply concerned': Baiada
A spokesman for Baiada said the company expects its contractors to comply with relevant legal and ethical standards.
"We were deeply concerned by the reports that came to light detailing workers poor treatment at the hands of some contractors," the spokesman said.
"Following a recent internal review, most of the measures that the FWO recommends in its report are already in place, or are being initiated, across our business.
"We have already responded to the report's authors in detail and look forward to meeting them to provide an accurate account of our company's operations."