A Gold Coast tour op­er­a­tor faces al­le­ga­tions of sham con­tract­ing and un­der­pay­ment

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A Gold Coast tour bus op­er­a­tor will face the Fed­eral Cir­cuit Court in Bris­bane over claims it en­gaged in sham con­tract­ing and un­der­paid two work­ers from non-English speak­ing back­grounds more than $43,400.

The Fair Work Om­buds­man (FWO) ini­ti­ated the case against AVA Travel, along with its op­er­a­tions man­ager Terry Huang, sole di­rec­tor Chin Kuen Yung and part­ner firm JTH En­ter­prises af­ter re­ceiv­ing a re­quest for as­sis­tance from an em­ployee.

The re­quest for as­sis­tance cen­tred on a claim that staff re­ceived a text mes­sage in Septem­ber 2014 re­quir­ing them to pro­vide an ABN and in­form­ing them that they would be en­gaged as in­de­pen­dent con­trac­tors from Oc­to­ber 1, 2014 on­wards.

Work­ers con­tin­ued to per­form work in the same man­ner as they had pre­vi­ously done and were to be paid the same flat rate, how­ever they were not paid any superannuation.

The FWO al­leges that this amounts to sham con­tract­ing as the work­ers were still in an em­ployer-em­ployee re­la­tion­ship with AVA Travel and were not gen­uinely en­gaged as in­de­pen­dent con­trac­tors.

In ad­di­tion to al­le­ga­tions of sham con­tract­ing, an in­ves­ti­ga­tion car­ried out by the FWO found that by pay­ing em­ploy­ees a flat rate of $20.59 for all hours worked, AVA Travel had sig­nif­i­cantly un­der­paid its work­ers.

The un­der­pay­ments were a re­sult of fail­ing to pay the cor­rect rates for a range of work in­clud­ing week­end hours, pub­lic hol­i­day hours and over­time.

In­spec­tors cal­cu­lated that one em­ployee was short- changed more than $27,900, while the sec­ond em­ployee was un­der­paid more than $15,500.

AVA Travel has ac­knowl­edged the un­der­pay­ments and set in place a pay­ment plan to re­im­burse the work­ers.

Fair Work Om­buds­man Natalie James says the agency took the mat­ter to court due to the na­ture of the al­leged con­tra­ven­tions and the sig­nif­i­cant amount of un­der­pay­ments that oc­curred over such a short time­frame.

“The FWO has com­menced pro­ceed­ings re­lat­ing to sham con­tract­ing in the pas­sen­ger ve­hi­cle in­dus­try pre­vi­ously and the al­le­ga­tions put for­ward in this case are also very con­cern­ing,” she says.

Sham con­tract­ing is a se­ri­ous con­tra­ven­tion of the Fair Work Act

2009 where em­ploy­ers at­tempt to avoid their obli­ga­tions by dis­guis­ing em­ploy­ment ar­range­ments as in­de­pen­dent con­tract­ing ar­range­ments.

“It is im­por­tant that em­ploy­ers in all in­dus­tries un­der­stand that they can­not avoid their obli­ga­tions un­der work­place laws by ap­ply­ing a false la­bel to an em­ploy­ment re­la­tion­ship,” James says.

Em­ploy­ees and em­ploy­ers who are un­sure about their work­place rights and obli­ga­tions can seek as­sis­tance via the Fair Work Aus­tralia web­site.

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