A review of Australia Post's delivery contractors has found the company did not know what subcontracted post and parcel deliverers were being paid by delivery contractors.

The review, by former Victorian Police chief commissioner Ken Lay, also found flaws in the company's management of its procurement and contracting systems.

It was commissioned after one of the company's major delivery contractors was raided and charged by the AFP over an alleged immigration racket, and also followed a series of reports by 7.30 which exposed widespread under-award payments to subcontracted post and parcel delivery drivers, and the use of foreign student labour.

The report, co-authored by legal firm Allens Linklaters, also found Australia Post had little oversight of whether subcontractors were meeting visa and other work conditions.

Australia Post outsources a significant portion of its delivery business to contractors who in turn employ around 5,000 subcontractors to deliver parcels and letters.

The review found that although Australia Post paid contractors enough to cover a "fair rate" of payment to their subcontractors, there was no system by which Australia Post could monitor what pay those subcontractors were in fact receiving.

7.30 spoke to a number of subcontractors across Australia, some of whom alleged they were paid between $9 and $15 an hour, with no superannuation or other entitlements.

The Lay review made a number of recommendations for how the company could improve its systems including:

Requiring contractors to sign a statutory declaration specifying pay and other entitlements it would give to subcontractors and employees;

Requiring contractors to sign a statutory declaration specifying pay and other entitlements it would give to subcontractors and employees; Random audits to ensure correct payment to subcontractors and employees, and to make sure visa requirements were being met; and

Random audits to ensure correct payment to subcontractors and employees, and to make sure visa requirements were being met; and Translating contracts into languages other than English, to make sure contractors are aware of their responsibilities.

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Australia Post cleared by AFP in alleged immigration scam

Australia Post has welcomed the report's findings.

"It was important to take a thorough look at how we manage compliance matters relating to delivery contractors and I am pleased to say we have already started implementing the review's recommendations," managing director Ahmed Fahour said.

"Australia Post is incredibly focussed on strengthening our existing processes, including improving contractor induction to our organisation and increasing our random audit and compliance checks."

The review also investigated Australia Post's arrangements with a former major contractor, Baljit "Bobby" Singh, who was charged along with three others in August in relation to an alleged immigration scam, after a long-running investigation by the AFP.

Mr Lay cleared Australia Post of any wrongdoing in the Singh affair, saying there was "no evidence that anyone at Australia Post knew or should have known" about any of the issues investigated by the AFP.

It is alleged Mr Singh and others falsified documents while operating two Melbourne training colleges which allowed them to help procure student visas, and fraudulently obtain Commonwealth education funding.

A number of those student visa holders were then supplied by Mr Singh and his associates to Australia Post as subcontracted letter and parcel delivery drivers and worked more than 20 hours a week, in violation of their visa conditions.

Joan Doyle, organiser at the Communication Workers Union's postal branch in Victoria, said she was deeply unhappy with the outcome of the review.

"We don't believe Australia Post has faced up to the real problems in their contracted areas," she said.

"What matters is what's going on on the ground and people are still getting paid appalling amounts of money — working 12 hours a day, six days a week at Christmas time — and are barely making ends meet."

Ms Doyle said in the wake of the scandal, more contractors were now formalising work agreements in writing, however, in some cases, these agreements specifically waived rights to superannuation, workers' compensation and other entitlements.