Two firms in sham con­tract­ing fine

Australian Transport News - - Contents -

Con­tra­ven­tions costs Z Trans­port and Boxbay $35,000 each

THE FAIR WORK OM­BUDS­MAN’S (FWO) lengthy pur­suit of courier firm Z Trans­port and a linked firm, Boxbay, has re­sulted in $72,000 in penal­ties for de­lib­er­ate sham con­tract­ing.

The case be­gan in 2012 with a bi­cy­cle courier’s com­plaint at be­ing mis­clas­si­fied as an in­de­pen­dent con­trac­tor – Queens­land-reg­is­tered Boxbay be­ing in a labour-supply and ser­vices agree­ment with Vic­to­rian firm Z Trans­port.

Em­ployee en­ti­tle­ments un­der the Road Trans­port and Dis­tri­bu­tion

Award, in­clud­ing min­i­mum wages and leave en­ti­tle­ments meant the courier was un­der­paid $7641 be­tween Fe­bru­ary and Novem­ber 2013.

How­ever, in what has been a fraught year for the Aus­tralian Tax­a­tion Of­fice in the trans­port space, Judge Grant Ri­eth­muller in the Fed­eral Cir­cuit Court of Australia noted that its on­line au­to­mated as­sess­ment tool for em­ploy­ers may not have been up to scratch.

“It ap­pears from the print­out that was an­nexed to the af­fi­davit that the tool pro­vided by the ATO is par­tic­u­larly sim­plis­tic and fails to pro­vide suf­fi­cient queries as to the na­ture of the work and the prac­ti­cal re­al­i­ties that may re­strict a par­tic­u­lar worker with re­spect to choos­ing a sys­tem of work or sub­con­tract­ing,” Ri­eth­muller’s find­ings state.

He also notes that the con­tra­ven­tions were by way of al­low­ing a mar­ginal busi­ness to sur­vive.

“In this case, the cir­cum­stances in­volve a rel­a­tively small busi­ness.

“The turnover of the busi­ness is a lit­tle over half a mil­lion dol­lars per an­num. The busi­ness does not gen­er­ate sig­nif­i­cant prof­its.

“The pay­ments to the sec­ond re­spon­dent have been very mod­est.”

De­spite that, the guilty plea and re­pay­ments, the com­pa­nies were fined $ 35,000 each, though no con­tra­ven­tions were found against the own­ers.

Ri­eth­muller found that the con­tra­ven­tions were de­lib­er­ate be­cause in 2012, the Fair Work Om­buds­man had pro­vided Z Trans­port and Boxbay with “sig­nif­i­cant ma­te­rial” ex­plain­ing that the cor­rect clas­si­fi­ca­tion for their bi­cy­cle couri­ers was as em­ploy­ees, not con­trac­tors.

Act­ing Fair Work Om­buds­man Kris­ten Han­nah says her agency has a low tol­er­ance for em­ploy­ers who en­gage in sham con­tract­ing ar­range­ments.

“Em­ploy­ers ought to be warned that they can­not sim­ply ig­nore our ad­vice,” Han­nah says.

“Em­ploy­ers ought to be warned that they can­not sim­ply ig­nore our ad­vice”

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