A Melbourne company with a multi-million dollar contract to clean the city's train fleet is being investigated over allegations it underpays its largely foreign workforce.

Key points: Metro is auditing Transclean after staff underpayment allegations

Metro is auditing Transclean after staff underpayment allegations Some staff allege they work as many as 55 hours per week

Some staff allege they work as many as 55 hours per week Transclean rejects the allegations, says 'no-one was underpaid'

Court documents reveal that Metro, the operator of Melbourne's train system, is conducting an extensive audit of Transclean following the ABC's coverage of an unfair dismissal case brought by a Pakistani Australian who wants to be known only as Asim.

One of the central claims made by Asim in the Fair Work proceedings was that he was unfairly dismissed by Transclean after he failed to place a safety flag on a train.

Transclean initially rejected the suggestion that Asim was an employee, pointing to a deed of agreement he signed with the company in 2013, which stated that he was a subcontractor.

However, when Asim's case was heard by Fair Work Commissioner John Ryan in October, lawyers for Transclean conceded that Asim was in fact an employee.

This key concession could expose the company to a raft of new claims from some of its 500 cleaners.

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Asim's case was settled on the opening day of the Fair Work hearing. The terms of the settlement are confidential.

However, following the ABC's coverage of the case, lawyers for Transclean issued legal proceedings against Asim and his industrial relations representative, Garry Dircks, alleging they broke the confidentiality of the settlement and made a number of false and misleading statements in the original story.

Mr Dircks and Asim both deny the allegations.

A former Transclean employee won a confidential settlement over his unfair dismissal. ( ABC News )

In an affidavit lodged in the Supreme Court in late October, Transclean's managing director George Haritos claimed his business was damaged by what he described as false claims made by Asim about work conditions at Transclean.

Mr Haritos said that as a result of the publicity surrounding the case Metro had commenced an audit of his business that threatened his company's lucrative contract to clean the city's train fleet.

Sammie Black, a Metro spokesperson, told the ABC that all contractors were required to pay their personnel in accordance with relevant employment laws.

"Metro does not condone contractors underpaying their personnel," she said.

"Metro is currently investigating allegations made against Transclean."

Claims that some cleaners work seven day weeks 'false'

In his affidavit, Mr Haritos also rejected a number of claims made by Asim about conditions for workers at the company — namely that they regularly work seven nights a week and for as long as 55 hours per week.

However, the ABC has spoken to a number of former employees of Transclean who support Asim's claims about the work conditions at the company.

Ali, who did not want to use his real name, worked for Transclean for 12 months until, he said, he was abruptly sacked in late 2014.

He said that a Transclean staff member threatened to kill him when he informed them that he was going to refer the matter to Fair Work Australia.

Ali said he regularly worked seven nights a week and as many as 60 hours a week, cleaning trains for the company.

Transclean rejected allegations that some workers were doing 55 hour weeks. ( ABC News )

"Monday to Friday we were working at daytime, and Monday to Sunday the whole week we were working night time as well," he said.

Ali said he had been made to sign a deed of agreement that effectively made him a subcontractor to Transclean, so he was not paid superannuation or covered by WorkCover insurance.

Despite being considered a subcontractor by Transclean, Ali said he and the other workers never provided an invoice for services rendered to Transclean.

Labor law expert Professor John Howe, from Melbourne University, said companies could save a lot of money by categorising workers as independent contractors.

"If people are being employed in name as subcontractors but they're really employees that is a breach of the law because what you are doing then is avoiding the legal entitlements that are attached to employment," Professor Howe said.

Transclean rejects allegations it underpaid workers

Transclean declined to be interviewed, but said in a statement to the ABC that it refuted the allegations.

"No-one at Transclean has been underpaid," general manager Nelson Aguila said. "Transclean meets all the statutory requirements... Transclean has evidenced this with payroll and employment information provided to Metro."

Mr Haritos and his company AES Services were targeted in raids by the Australian Federal Police in 2009 after the Australian Tax Office (ATO) hit Mr Haritos, his business partner Alex Kyritis and their company AES Services with an unpaid tax bill and associated penalties of more than $28 million.

Mr Haritos is still fighting the bill in court, but the alleged non payment of tax was linked to income that AES made from its contract to clean trains for MTE/Connex, the previous operator of Melbourne's trains network.

The ATO alleged that Mr Haritos and his business partner used a Westpac business account to write cheques for cash, without declaring the income and therefore avoiding income tax and GST payments.

The company denied the allegation and said the funds deposited in the account were used for legitimate businesses expenses.

Court documents also reveal that Metro has previously held serious concerns about Transclean's performance.

In 2012 the company took action in the Supreme Court to stop Metro from tearing up its multi-million dollar cleaning contract over a series of breaches to the terms of its contract.

Between September 2011 and June 2012, Metro sent three formal warnings to Transclean over its failure to meet its standards.

However, Transclean's lawyers sought an injunction in the Supreme Court preventing Metro from tearing up the contract.

The case settled out of court and Transclean continued to hold the contract.