ARTICLE · 18 SEPTEMBER 2013

Record penalties in sham contracting case

Kemp Strang Lawyers

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The bus company wrongly represented to six of its 22 drivers that they were independent contractors and not employees.

AustraliaEmployment and HR

Lisa Berton (Formerly With Kemp Strang Lawyers)

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In the case of Fair Work Ombudsman v Happy Cabby Pty Ltd & Anor [2013] FCCA 397 a shuttle bus company was fined record amounts for breach of the sham contracting provisions of the Fair Work Act 2009 (Cth) and other contraventions including underpayment and failure to issue payslips.

Happy Cabby Pty Ltd (the Company) carried on the business of offering airport shuttle services. The Company wrongly represented to six of its 22 drivers that they were independent contractors and not employees.

This classification resulted in a loss to the drivers as they were paid fixed rates of pay per run, which meant the Company avoided paying the drivers' entitlements to minimum hourly rates of pay, casual loadings, minimum engagement periods, payments for waiting time, overtime rates of pay and penalties. The Company also avoided paying superannuation contributions and relevant workers compensation insurance.

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