The Fair Work Ombudsman has commenced legal action against a Sydney health and wellness research company for alleged sham contracting involving workers with a disability.
Facing the Federal Court is Doll House Training Pty Ltd, based in Bondi, which operated a business conducting research into robotics, coding and artificial intelligence and their application to the health and wellness industry.
The regulator investigated after receiving requests for assistance from three workers who had been engaged by Doll House Training as employees with the help of an employment services provider for people with disabilities.
Doll House Training employed the workers between August and October 2020. The FWO alleges that in October last year, the company breached the Fair Work Act 2009 by terminating or threatening to terminate the workers’ employment in order to engage them as independent contractors to perform substantially the same work.
It is alleged the company then misrepresented to the workers that they were or would be engaged as independent contractors, including by requiring them to submit invoices and provide Australian Business Numbers (ABNs), when in fact they continued to be employees.
The FWO also alleges that the company did not pay the workers in full at least monthly during their employment.
The company also allegedly failed to comply with a Notice to Produce issued by a Fair Work Inspector that required it to provide specified records or documents, including documents relating to terms of engagement and duties performed by the workers.
Fair Work Ombudsman Sandra Parker said the regulator prioritised matters involving sham contracting.
“Enforcing the Fair Work Act’s prohibitions on sham contracting helps to protect the fundamental rights of employees. If businesses unlawfully misclassify workers, it can lead to them not being paid the wages and entitlements they are entitled to as employees,” Ms Parker said.
“Employers are urged to prioritise workplace law compliance, particularly how they engage their workers. Any employees or employers with concerns about their obligations or rights should contact the Fair Work Ombudsman for free advice and assistance.”
The workers performed duties including research and preparing presentations in relation to how technology, such as robotics, interacted with the health and wellness industry.
Doll House Training Pty Ltd faces maximum penalties of $66,600 per contravention. The company last year rectified payments owed to the workers.
A directions hearing in the Federal Court in Sydney is still to be scheduled.
There are a number of factors that contribute to establishing the difference between an employee and an independent contractor. The Fair Work Ombudsman has guidance on its website to help businesses understand when each classification is appropriate.