THE Fair Work Ombudsman has won a court case against a Tasmanian resort owner, just months after warning it would crack down on sham contracts.
The owners of Diamond Island resort have been ordered to pay $37,500 compensation to six casual employees after abruptly sacking them for refusing to become independent contractors doing the same work.
The Federal Court has heard that the resort's owner, Wendy Wells, wanted staff to become contractors because "I don't want to have to pay superannuation . . . I want it all on contracts so that I don't have these other extra worries, I just have one payment."
However, a judge has ruled that some contracts were "sham arrangements" where contractors followed a roster and managerial instructions, wore resort uniforms, were not employed elsewhere, were given all their equipment by the resort, and had invoices provided by their manager.
The Ombudsman declined to comment until a penalty is issued to the resort company, Maclean Bay, in a hearing set for February 2.
The staff were casual employees at Diamond Island resort near Bicheno on Tasmania's north-east coast when Mrs Wells and her husband, Jamie Wells, became sole directors of Maclean Bay in October 2007.
Justice Shane Marshall of the Victorian district of the Federal Court yesterday found Maclean Bay breached the Workplace Relations Act when it sacked staff without notice and refused to rehire them unless they became independent contractors.
Staff were offered contracts at award rates plus 9 per cent in lieu of superannuation.
The Workplace Relations Act applied in this case because the contraventions occurred before the new Fair Work Act was introduced in July 2009.
The gardener at Diamond Island was told he had to register as an independent contractor and fund his own liability insurance, which he found would have cost more than his weekly income.
Mrs Wells claimed a receptionist was sacked for not being "gregarious" enough and having the wrong personality, but the judge found the real reason was that she had refused to become a contractor.
Four casual housekeepers were abruptly sacked in December 2008 and Justice Marshall ordered compensation be paid for loss of wages following the unexpected termination.
Justice Marshall also noted that Mrs Wells' evidence and refusal to appear as a witness in the case "did nothing . . . to enhance her standing to be readmitted as a legal practitioner in Queensland".
Mrs Wells (nee Wright) was stuck off the roll of solicitors in Queensland in 1999 for professional misconduct. She is still a director of 11 Queensland-registered companies, according to documents lodged with the corporate regulator.