The Fair Work Commission found that 11 cleaners were shortchanged $37,471 for work at the MCG after AFL matches in 2014.
The cleaners were paid flat rates of between $18 and $25 an hour - wages lower than legal Australian standards taking into account casual loading, weekend rates and overtime.
The contractor ISS Facility Services Australia Limited was fined $132,217 in the Federal Circuit Court for its part in the underpayment.
The court also imposed penalties of $17,926 against each of the former owner-operators of subcontractor First Group of Companies Pty Ltd – Sharad Patel and Sidarth Luthra – for their involvement in sham contracting, the frequency of pay and pay slip contraventions by their company, according to the Fair Work Ombudsman.
First Group of Companies employed 11 cleaners between 2009 and 2014 to provide post-event cleaning services at the ground. First Group of Companies was working as a subcontractor for the Australian arm of a global cleaning company ISS Facility Services Australia Limited.
First Group of Companies has subsequently been deregistered.
The workers found to be exploited were mostly international students. Six of them, Sachin Chinsab, Sundeep Kunduru, Parth Patel, Rutul Patel, Dharma Teja Reddy and Aditya Sundini, were from India.
Others were from the Philippines, Colombia and Brazil.
ISS which holds a contract to provide a variety of cleaning services at the Melbourne Cricket Ground, has operations in more than 50 countries.
"The rates failed to meet minimum pay, and entitlements under the Cleaning Industry Award 2010, including hourly base rates, casual loading, penalty rates, overtime and allowances," the ombudsman said in a statement.
"Given ISS was not the direct employer of the 11 exploited cleaners, the Fair Work Ombudsman used accessorial liability laws to hold ISS lawfully accountable for its part in the workers being underpaid," the statement reads.
ISS admitted knowing in 2014 that the rates it paid First Group of Companies were “not sufficient to cover the employees' entitlements”. It was aware of the unlawfully low rates its subcontractor was paying workers.
Judge Suzanne Jones said that "in light of the admissions" made by ISS "it is simply incorrect to describe [ISS] as a 'third party', if the use of that word is designed to minimise or reduce [ISS's] responsibility for its involvement in the contraventions”.
“Principal contractors must be deterred from engaging subcontractors without taking steps to ensure that so long as those subcontractors are engaged by them, they comply with the [Fair Work] Act,” Judge Jones said.
Fair Work Ombudsman Natalie James says the significant penalties handed down should serve as a wake-up call to any head contractors who think they can turn a blind eye to non-compliance by the subcontractors they engage.
“The Fair Work Ombudsman has been warning businesses for years: you can’t turn a blind eye to the exploitation of contracted workers in your labour supply chains,” Ms James said.
“This case provides a clear example of what can happen if you fail to actively manage your contractors in high-risk sectors.
