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Fair Work Ombudsman first sham contracting prosecution – July 2009
The Fair Work Ombudsman has launched a prosecution against a Sydney real estate company and its director, alleging a property salesperson was underpaid more than $20,000 as a result of sham contracting. The Fair Work Ombudsman is prosecuting Land Choice Pty Ltd – which traded as Kingsford First National Real Estate – and the company’s sole director, Sugiharto Sugiharto [correct], of Maroubra.
Documents lodged in the Federal Magistrates Court in Sydney allege the salesperson signed an agreement with Land Choice titled "Independent Contractor Agreement" under which she was to receive only commission payments.
It is alleged the woman then worked an average of 40 hours a week from March to September 2007, but Land Choice paid her a total of only $1,414.
The Fair Work Ombudsman claims the salesperson was wrongly classified as an independent contractor. It says the woman should have classified as a full-time employee and been paid wages and various entitlements totalling about $22,000.
Court papers allege Land Choice should have paid the salesperson at least $14.38 an hour plus annual leave entitlements, locomotion allowance and payment in lieu of notice on termination of her employment. The Fair Work Ombudsman will also tell the Court that Land Choice failed to maintain proper employment records.
Executive Director Michael Campbell says the decision to prosecute was made because of the seriousness of the alleged breaches of workplace law and the failure to rectify the alleged underpayment.
Source: Fair Work Ombudsman media release, 22 July 2009