The Victorian Government has torn up its contract with the company responsible for security at the National Gallery of Victoria over allegations that it underpaid guards.

Earlier this month the ABC revealed that security company Business Risks International had subcontracted work to another company which paid its guards cash-in-hand at below the award rate.

An independent inquiry into the allegations found that BRI had breached its contract by using the other firm without approval.

One guard told the ABC that he and many of his colleagues were illegally paid cash-in-hand by subcontractor Java Security, while other guards worked on the weekends for a flat hourly rate well below the award wage.

At a protest outside the gallery on Wednesday the security union, United Voice, claimed that NGV guards had been underpaid a total of $3 million.

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The Minister for Creative Industries, Martin Foley, said the State Government would not tolerate the underpayment of workers and had terminated BRI's contract after receiving the investigation's findings.

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"We will make sure that the security staff are paid the appropriate arrangements and that a new security contractor is brought in who will stick to the rules," Mr Foley said.

"Any kind of underpayment that rips off low-paid working people and takes away from them their penalty rates is wrong, it's wrong in law, it should not be supported."

The Government said that BRI had also failed to provide information regarding the pay and conditions of guards who were working at the gallery for the subcontractor.

BRI Security holds contracts to guard many well-known institutions including the Art Gallery of Western Australia, Australian Council of the Arts, Public Record Office of Victoria, La Trobe University and the University of Western Sydney.