Staffing costs can be a pain right? Engaging contractors
can be a great solution, but beware! Last week, the Federal
Magistrates Court handed down penalties in the first "sham
contracting" prosecution brought by the Fair Work
Ombudsman.
Centennial Financial Services was fined $13,200 for dismissing
employees then rehiring them in identical roles but as
"independent contractors". But wait for it –the
HR Manager who was "just following orders" was also
personally fined $3,750.
Independent contractors –not likely!
The Court found that, once rehired, the employees' duties
were pretty much identical and they were still required to devote
themselves exclusively to the work of Centennial. Although the
"contractors" were expected to generate their own sales
leads, any new business prospects became clients of Centennial. The
"contractors" also had Centennial mobile phones, office
facilities and business cards.
