Supermarket giant Coles is auditing a meat supply company the Fair Work Ombudsman found was underpaying and exploiting overseas workers.
But Coles says it won't immediately terminate its contract with the company if the allegations prove correct and won't release the findings of the report.
Coles officials appeared before a Senate labour market inquiry in Adelaide on Tuesday and said it was auditing poultry supplier the Baiada Group and would seek improvements if it found evidence of unfair practice.
"In the first instance that is working with our suppliers to ensure that workers are treated fairly and paid in accordance with workplace legislation," Coles government and industry relations manager Vicki Bon said.
"If the corrective action doesn't result in the required changes, we will reserve the right to terminate our arrangement."
Senators questioned the ability of the Coles' investigation to get the information it required.
They were particularly sceptical of the willingness of foreign workers on temporary visas to speak with the auditors because of fears of losing their jobs and having to leave the country.
In June, the Fair Work Ombudsman found evidence overseas workers, mainly from Asia, were underpaid and exploited at Baiada's poultry processing sites in NSW.
It was critical of Baiada's use of labour hire firms, including many which ceased to exist the day before scheduled meetings with its investigators.
Its report found Baiada's labour pool consisted mainly of workers in Australia on 417 working holiday visas who were significantly underpaid, worked extremely long hours and were charged high rents for overcrowded and unsafe accommodation.
As the hearing continued the ACTU called for a public registry of labour hire companies and a rigorous licensing system to protect hundreds of thousands of workers.
"The curtain needs to be pulled back on an industry which is currently expanding, operates without adequate checks and balances and stands accused of exploitation and abuse," ACTU president Ged Kearney said.
"We have a situation at present where rogue operators can set up shop and then when things go wrong they simply change their name and their phone number and start again."
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