Employer's Independent Contractor Agreement found to be 'contracts of employment'
Doll House Training Pty Ltd has received a penalty of $197,000 for sham contracting involving workers with disabilities, according to the Fair Work Ombudsman (FWO).
The Federal Court imposed the penalty after it found that Doll House Training breached the Fair Work Act for terminating or threatening to terminate the employment of three employees so they could be re-engaged as independent contractors who perform the same work.
In the court's decision, it found that the Independent Contractor Agreement (ICA) emailed by Doll House Training to three employees in 2020 were "contracts of employment."
According to the court, the rights and obligation in the ICA suggested that the workers were "contracted to work for Doll House's business rather than any business of their own."
Doll House Training also misrepresented to the workers that they were or would be engaged as independent contractors, despite continuing to be employees, the FWO said.
In addition to sham contracting, the FWO said Doll House Training also failed to pay the workers in full, as well as failed to provide specified records or documents, including documents relating to terms of engagement and duties performed by the workers.
Fair Work Ombudsman Anna Booth said the FWO treats sham contracting "particularly seriously."
"We will pursue any employer who thinks they can take advantage of the power imbalance they have over workers, including those with disabilities as in this matter, some of whom felt that they had no alternative but to accept a sham contract or be jobless," she said in a statement.
According to Booth, enforcing the prohibitions on sham contracting also helps protect employees.
"If businesses unlawfully misclassify workers, it can lead to them not being paid the wages and entitlements the law provides to them as employees."
