The situation centres on Victoria’s labour hire regulator alleging that the supermarket group entered into its large-scale security contract with a now-collapsed provider under pricing arrangements that suggested guards could not realistically receive all their legal entitlements. That claim comes on top of wider criticism from a major union and intense scrutiny from both federal and state agencies, all unfolding while the retailer manages separate legal challenges and a recent dip in profit.
The security firm at the heart of the issue, which supplied guards to major retailers, sporting bodies and government agencies, went into administration in December after allegations of tax fraud, wage underpayments and links to criminal groups became public following a media investigation. The retailer insists its contract with the Melbourne-based business followed standard commercial terms with a reasonable margin built in and says the agreement explicitly required that every worker on its sites be paid in line with workplace laws. Regulators and unions, however, are questioning how such widespread alleged underpayments and falsified payroll information could occur alongside regular audits and spot checks that the retailer says it carried out.
The fallout now stretches well beyond one supermarket chain. The United Workers Union is pushing for a sector-wide review of private security, arguing that when big organisations and governments pursue low-cost contracts without robust integrity checks, reputable operators are squeezed out and high-risk providers are effectively rewarded. Multiple regulators, including the Fair Work Ombudsman and state licensing bodies, are making preliminary inquiries into the failed security firm’s work with large retailers and government departments and the outcome could reshape how labour hire and procurement are handled across essential services. Early signs suggest this case may become a test of how far major buyers are expected to go in verifying compliance deep within their supply chains.
