Homewares business slammed with $161,000 fine over sham contracting
Monday, August 19, 2013/
A homewares business has been slammed with a massive $161,000 fine from the Federal Court over a sham contracting case, after the workplace watchdog accused the company of having misclassified its employees.
The case is yet another example of how the government is continuing to crack down on employers who don’t recognise their obligations under Fair Work.
The commission has flagged this as an ongoing area of investigation – and businesses need to remain vigilant.
Wollongong-based Metro Northern Enterprises has been fined $161,700 in the Federal Circuit Court after the company’s employment arrangements led to underpayments of more than $10,000. The four employees in question were classified as independent contractors and paid on commission, but they were wrongly classified.
The court found they should have been classified as employees, because they were required to attend work, and perform certain duties prescribed by the company.
Judge Shenagh Barnes also ordered the company pay back the workers in full.
Metro Northern Enterprises was contacted by SmartCompany this morning, but founder Danny Bizimovski declined to comment – only to say the business had been shut down as a result of the proceedings.
The misclassification resulted in the workers being underpaid minimum wages rates, overtime and other payments.
In a statement, Fair Work Ombudsman Natalie James said this was yet another decision which shows sham contracting won’t be tolerated.
“There are serious consequences for business operators who recklessly or carelessly misclassify employees as contractors, leading to employees being denied basic workplace rights and entitlements.
“Successful legal actions such as this also help other employers who are complying with workplace laws by ensuring a level playing field.”
Feel the churn: How to bounce back after losing staff and clients Sue Parker DARE Group founder
Own it: The 10 things you need to do to manage your personal brand Lisa Stephenson Who Am I Projects founder
How to call your team into action with a winning presentation Emma Bannister Presentation Studio founder
The link between diet and mental health — and how to eat your way to wellbeing Kate Save Be Fit Food co-founder
From interactive videos to AI: The five marketing trends that will dominate 2019 Warwick Boulter Collaboro co-founder
Australia is leading the legaltech revolution, but what does this mean for lawyers, firms and clients? Jodie Baker Xakia founder
Why a video news release needs to be part of your PR strategy Leisa Goddard Adoni Media managing director
Want to catch more customers? Here's how to create a super sales funnel Jovana Vujnic Bumper Leads founder