A Perth-based labour supply company has been accused of deliberately misclassifying young employees as independent contractors in order to underpay them thousands of dollars.
The Fair Work Ombudsman alleges Personnel Contracting Pty Ltd, also trading as Construct Contractor Solutions, underpaid five labourers aged between 16 and 21 for work done over a four-month period at an East Perth site back in 2016.
It's been alleged the company underpaid the five employees by $19,111.
Questions were raised about the company's general compliance issues after a fatal workplace accident at the East Perth site two years ago.
The Fair Work Ombudsman commenced their own investigation into the company, and their inspectors allegedly found Personnel Contracting Pty Ltd had engaged five workers as "self-employed contractors".
According to the Ombudsman, the workers were paid flat hourly rates and three were paid rates that coincided with their ages.
The Ombudsman alleges the 16-year-old was paid $16 an hour, a 17-year-old was paid $17 an hour and a 19-year-old was paid $19 an hour.
Two workers aged between 20 and 21-years-old were also reportedly paid between $23 and $25 an hour.
Following the investigation, the Fair Work Ombudsman said they believed five workers pay rates actually fell under the Building and Construction On-Site Award 2010.
Workers are allegedly owed anywhere between $2324 to $6539.
Acting Fair Work Ombudsman Kristen Hannah said the authority had since commenced legal action against the business over the allegations.
“All businesses that treat the individuals who perform work for them as contractors must take great care to ensure that they have classified those individuals correctly,” she said.
“Courts have found again and again that merely labelling the relationship to be one of independent contracting does not make it so, and it is the substance of the relationship that decides the status of the workers and the regulatory requirements that flow.
“Relevant to the decision to litigate in this case is the extent to which contracting arrangements are utilised by this company.
“If we are successful in this matter, we hope that a key outcome will be Personnel Contracting classifying all workers correctly in future and paying all workers’ full lawful minimum entitlements.”
The Fair Work Ombudsman alleges Personnel Contracting committed several breaches of the Fair Work Act.
The company faces penalties of up to $54,000 per contravention.