Two former directors of a cleaning company that is undergoing liquidation is set to face the Federal Court for their involvement in the underpayment of five migrant cleaners and for subjecting them into sham contracts.
According to the Fair Work Ombudsman, Timothy Baxter Chambers and Craig Richard Simpson were involved in the underpayments which totaled $125,565 for work that was owed to the cleaners who performed at the Sydney Trains’ Auburn Maintenance Centre between February 2018 and April 2019.
The workers were noted to have been underpaid of their minimum wage rates, casual loadings, weekend and public holiday penalty rates, overtime rates, shift loading and allowances under the Award, with individual underpayments ranging from $1,057 to $50,926.
The cleaners were Sri Lankan and Nepalese nationals, aged between 19 and their early 20s at the time. They were in Australia on student visas and post-study work visas.
The FWO also alleged that Chambers was involved in the sham contracting violations by knowingly misclassifying five cleaners as independent contractors.
The FWO stated that ProClean HQ’s misclassification of the five cleaners as independent contractors included requiring the cleaners to obtain Australian Business Numbers and sign contractor agreements providing for flat rates of pay of $20 to $22 per hour.
Under the Fair Work Act, the correct lawful classification of the cleaners was as employees of ProClean HQ, for reasons including that the purported contractor agreements were varied by the parties’ conduct such that the employees would work hours set by the company, were not able to subcontract and were required to follow the company’s directions. The cleaners therefore lawfully entitled to receive entitlements under the Cleaning Services Award 2010, including penalty rates of up to $55 on public holidays.
Fair Work Ombudsman Sandra Parker said taking action to protect vulnerable workers, address sham contracting and improve non-compliance in the contract cleaning sector were top priorities for the FWO.
“Sham contracting is extremely serious conduct 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,” Parker said. “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.”
The FWO is seeking penalties in Court against Chambers and Simpson, each of whom are facing penalties of up to $12,600 per contravention. It is seeking Court orders for the men to make payments to the workers to rectify the alleged underpayments, plus superannuation and interest.
The Fair Work Ombudsman cannot seek penalties and compensation orders against ProClean HQ because the company is in liquidation.
A directions hearing in the Federal Court in Brisbane is to be scheduled at a later date.
