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Five workers on visas were subjected to sham contract arrangements and short-changed up to $50,000, the office claims.
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FWO acts over alleged $125k underpayment of migrant cleaners
13 March 2023
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9 minute read
The FWO has begun legal action against a Sydney cleaning firm for allegedly underpaying five migrant workers more than $125,000 through sham contracts.
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The legal action would see former directors of ProClean HQ Pty Ltd – Timothy Baxter Chambers and Craig Richard Simpson – face federal court two years after the firm went into liquidation.
The ombudsman’s investigation allegedly found the business had breached provisions of the Fair Work Act 2001 by knowingly misclassifying the five cleaners as independent contractors.
It alleged that the cleaners had to obtain ABNs and sign contractor agreements that provided flat rates of pay of $20 to $22 per hour.
Due to these rates, the FWO alleged the workers were underpaid minimum wage rates, casual loadings, overtime rates and allowances under the Cleaning Services Award 2010, which also would have provided them penalty rates of up to $55 on public holidays.
The FWO claimed ProClean HQ underpaid the migrant workers a total of $125,565 for work they performed between February 2018 and April 2019.
It said the workers should have been classified as employees of ProClean HQ because their hours were set by the company, they were unable to subcontract and were required to follow the company’s directions.
The ombudsman alleged individual underpayments ranged from $1,057 up to $50,926.
It claimed Mr Chambers was involved in both the sham contracting and underpayment contraventions and that Mr Simpson was involved in only the underpayment contraventions. They face penalties of up to $12,600 per contravention.
The FWO said it would also seek court orders for the men to rectify the alleged underpayments, including superannuation and interest. It was unable to pursue ProClean HQ because it was in liquidation.
Fair Work Ombudsman Sandra Parker said action to protect vulnerable workers, such as migrants on visas, and to address sham contracting were priorities for the FWO.
“Sham contracting is extremely serious misconduct because it involves employers knowingly or recklessly misrepresenting to workers that they have less lawful rights than they actually do, and it often goes hand in hand with exploitation of vulnerable workers,” said Ms Parker.
“Employers need to be aware that the FWO is prepared to take strong enforcement action to stamp out sham contracting and protect the rights of vulnerable workers.”
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