Charity Workers Take Class Action Against Alleged Contracting Scam

A group of former charity street fundraisers, “chuggers”, have joined a class action against a third-party global fundraising company Appco claiming to have been ripped off in a “massive sham-contracting scam”.

The class action against the Appco Group was filed in the Federal Court on Thursday by Chamberlains Law Firm which said it had been having discussions with clients since April and the claims could affect many thousands of chuggers.

The law firm’s website claims the chuggers have been ripped off in a massive sham-contracting scam and as such would be entitled to compensation for underpayment.

The Appco Group describes itself as the largest face-to-face donor recruitment agency in the world with more than $800 million in donations raised since 2007.

Director at Chamberlains Law Firm Rory Markham told Pro Bono Australia News that the basis of the action was their claim that the individuals working for Appco were employees and yet they were treated as independent contractors which for the purposes of the law was a “sham contract”.

“They were not paid their fair entitlements that a normal employee would get such as hourly wages, annual leave and sick leave and other loading that should be attributed to a low paid worker,” Markham said.

“Appco is the largest provider of fundraising services and we estimate the class is between 4,000 and 8,000 workers.

“On average we found that the per hour rate of pay was actually $6 or less for individuals engaged in charitable fundraising for Appco.”

He said there would be an argument about whether in fact they were independent contractors.

“Our clients say that can’t be the case because they rely on the fact that they were almost required to, and humiliated if they didn’t, attend meetings and work long hours,” he said.

“Part of the activities concerned people who did not meet their sales targets and it’s the view of the clients that these activities meant that they [were a] more compulsory activity if you want to be part of the Appco group rather than something someone can voluntarily go by.”

He said the not-for-profit organisations would have contracted with Appco which would have then driven the private fundraising activities.

“Not all charities use the Appco service arrangement.”

He said the service arrangement however did affect a number of large and well known charities.

“What I know is that the lead claimant Mr Jacob Bywater acted for Surf Life Saving Australia, the Paralympic Association and also the Allanah and Madeline Foundation. They were three of the larger clients.

“At Appco he was a team leader in the Appco model. His role was to administer a team of 20 fundraisers to effectively raise money for these charities. He is the lead plaintiff.”

Markham said it was up to individual charities who are clients of Appco to ensure that they are meeting their guidelines.

“We simply know of the relationship between the individual [worker] and Appco.”

The Fundraising Institute Australia CEO Rob Edwards told Pro Bono Australia News he was aware the case was on the horizon.

“I know that the Public Fundraising Regulatory Association has been looking at this issue for the last month or so and we know it has been on the horizon,” Edwards said.

“In the end what I would say is that charities have to enter into agreement with their suppliers that are in accordance with industrial relations laws.

“In the end it is the charity’s brand that’s at stake and it reflects poorly on the sector.”

Earlier this month the Fair Work Ombudsman announced an an investigation into the fundraising practices of some major Australian charities.

It 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.

More information about the law firm’s Appco action can be found here.