Humiliating, sexual, racist acts have been uncovered inside an Australian street fundraiser business. This is the depressing life of a charity collector.

A former collector engaged by Appco Australia says staff members who beg for spare change on the street were paid as little as A$5 (NZ$5.40) an hour. When they didn't meet sales targets, things got much worse.

Among the punishments doled out by superiors were shaving moustaches to look like Adolf Hitler, smoking cigarettes that were previously inserted in the rectums of employees and performing simulated sex acts in front of other staff.

So ingrained was the culture that staff even dished out their own punishments. One particularly disturbing anecdote involves one colleague licking another colleague's underwear after it had been worn for an entire day.

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Tyrone Corbett, 25, was engaged by the now under-siege Appco business, which is at the centre of one of Australia's biggest ever class action lawsuits.

He told news.com.au the things he witnessed were beyond belief. He didn't report them because he was afraid to.

"Probably the cigarette situation or the underwear licking (was the worst thing I've seen)," he said.

"For not hitting targets, one punishment for the salesperson was to shove a cigarette up their bottom, pull it out, and smoke it. This happened to the one person several consecutive days; I think the only reason they kept returning was because of how hard it was to find full time work, and because they had a hope that the promises made to them when they were recruited would come through.

The questionable culture filtered through after work too. Mr Corbett highlighted two instances where colleagues dished out their own punishment.

"Later, for not hitting targets on a separate road trip, (the same employee) was forced to shave off his moustache into a 'Hitler 'stache' and try to hit targets that next day.

"The underwear licking was the result of a 'double or nothing' bet between two (colleagues). "What happened was we were discussing how disgusting the driver's seat of (one consultant's) car would be; their hygiene levels were not the greatest. So, when two consultants were playing a video game, one suggested a bet; 'Whoever lost the game has to lick the driver's seat of his car.'

"When the game was over, the person who lost said 'Double or nothing'. What's double licking the driver's seat? After a short discussion, it was established firmly in their minds that meant to lick the underwear that this certain consultant had been wearing all day. He lost again and so had to fulfil his bet.

"For each of these things, if I hadn't seen it myself I wouldn't believe that that was how it had happened. They're all so bad and so unrealistic that they could be part of a comedy sketch. A sick and twisted sketch, but a comedy nonetheless."

Mr Corbett's comments come a day after the ABC's 730 program revealed new, embarrassing footage for Appco.

The leaked footage showed chuggers in pseudo sex scenes while colleagues stood around and egged them on. In one scene, three colleagues surround one man, thrusting themselves in his direction.

It's part of a bigger headache for Appco Australia, which is staring down a lawsuit filed in Federal Court on behalf of 700 claimants to the tune of A$85 million.

Mr Corbett, who worked for the company in Hobart for three months when he was 22, told news.com.au it was the most miserable workplace he's ever been a part of. And he's worked for other charity organisations before.

He said he was underpaid by Appco and worked long days for as little as A$80 a day.

"Working for Appco was incredibly draining. There were long days with not much pay, and, when you're told that you're paid what you're worth, most days we would leave feeling quite down about ourselves.

"We needed copious amounts of caffeine and loud music to pump us back up to our normal level. But when every day takes a little bit more out of you, it really adds up and eats into your happiness."

APPCO CONTESTING RESPONSIBILITY IN COURT

The class action against Appco takes into account underpayments and a number of the rituals staff were allegedly forced to do, including simulated sex acts.

Rory Markham from Chamberlain Law Firm is leading the charge on behalf of those who feel victimised by the organisation.

In a statement released to news.com.au, he said "claimants span across the entire country, with 27 per cent of individuals from NSW, 20 per cent from Victoria, 19 per cent from Queensland, 9 per cent from Western Australia, South Australia and the ACT respectively, and 3 per cent from Tasmania", where Mr Corbett worked.

"The average profile of each claimant is an individual aged 22 years who has worked in the Appco business for 44 weeks and for 67 hours per week. The individual would have earned a total commission payment of A$387 per week but would then need to have paid work expenses of between A$60 and A$140 per week.

"The individuals claim values identified in the class action to date range from A$469.19 through to an individual who has lost A$632,292.94."

He will allege in Federal Court that Appco's engagement of young people "constitutes sham independent contracting or sole trader arrangements resulting in under payment of wages, totalling up to A$85m".

'WELL-INTENTIONED BUT IMPROPER'

On Wednesday, Appco Australia released a statement on the matter. A spokesman told news.com.au that at the heart of the court case is the suggestion that Appco "employs" its fundraisers. He said that is simply not true.

"This ... is hotly contested by Appco, which maintains that it requires the independent marketing companies to engage the fundraisers as independent contractors in full compliance with the law," he said.

"Appco Australia does not employ or directly contract independent contractors. Appco Australia stipulates in its contracts with all independent marketing companies that they must comply with all legal obligations around the engagement of independent contractors."

The statement promised Appco will "terminate its contract" with any marketing company that "promotes or tolerates offensive or inappropriate activities amongst its contractors".

The statement acknowledged there were problems with subcontractors in the past.

"In some of the 60 (approx.) businesses that it subcontracts to provide services to Appco Australia's clients, there may have been motivational games that, while well-intentioned, crossed the line into improper behaviour.

"Any such activities were conducted without the knowledge, permission or encouragement of Appco Australia. These activities have now been banned and represent a breach of contract with Appco."

News.com.au has specifically asked Appco to respond to allegations of inherent cultural problems.

Chamberlain Law Firm argues Appco "must accept that it has a real problem".

"No reasonable person could say that simulated sexual acts or slug like rituals on poor performing staff are 'fun or motivational' exercises," Mr Markham said. "These rituals have occurred in QLD, South Australia, NSW, Tasmania and the ACT."

Mr Corbett agrees. He says the time for change is now.

"I feel like the company is on the edge of something. They've used and abused too many people, and those of us who have been used and abused are only now realising how strong we are when we band together."