05 March 2013FWBC alleges NSW employers engaged 8 foreign workers on sham contracts

 

Director of Fair Work Building Industry Inspectorate v Tunc & Jarrett

Allegations as outlined in Fair Work Building & Construction’s (FWBC) statement of claim, these may vary over the course of the proceeding.

Background

  1. Fair Work Building & Construction alleges that two construction company directors misrepresented to eight foreign workers that they were independent contractors when they should have been employees, thereby engaging in sham contracting. FWBC is seeking penalties and compensation totalling $33,345, plus interest, in back-pay for the eight foreign workers.
  2. Serdar Tunc and Christopher Jarrett were directors of Focal Group Pty Ltd (Focal), a labour hire company supplying workers to the construction industry, until it was placed into liquidation on 4 July 2012.
  3. Mr Jarrett was also the director of another labour hire company, Cindor Pty Ltd (Cindor).
  4. From November 2009 to June 2012, Focal engaged eight foreign workers, for various durations, purportedly as independent contractors. It is alleged that these workers were actually engaged by Focal as employees.

Worker One

  1. Worker One was a foreign citizen living in Australia. From November 2009 to early February 2012, Worker One was on a Working Holiday Visa and, after that, was on a student visa.
  2. In November 2009, Worker One responded to a Focal leaflet which advertised for workers. During an interview, Mr Tunc told Worker One that he would need an Australian Business Number (ABN) to work for Focal, would work for Focal as a contractor, he would be paid $20 an hour which would be transferred into his bank account and he would need to provide his own protective equipment.
  3. From November 2009 to 7 March 2012, Worker One performed construction and labouring work for Focal on construction sites under a contract of employment.
  4. Worker One worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker One would conduct his duties and determined his hours and rate of pay. Focal paid Worker One fortnightly for the hours he worked, rather than the tasks he performed.
  5. Focal required that Worker One fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker one was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work.
  6. Focal provided Worker One with a blank tax invoice template and instructed him on how to fill it out.
  7. Focal held a workers’ compensation policy for Worker One and Cindor began making superannuation contributions on his behalf from 30 June 2011.
  8. In February 2010, Mr Tunc represented to Worker One that, despite the restrictions on his visa, he was legally permitted to work more than 20 hours a week for Focal because he was “working on an ABN”.

Worker Two

  1. Worker Two was a foreign citizen, living in Australia under a Working Holiday Visa.
  2. In March 2011, Mr Tunc interviewed Worker Two for a job and told him he had to have an ABN and would be paid $20 an hour.
  3. From August 2011 until March 2012, Worker Two performed construction and labouring work for Focal on construction sites pursuant to a contract of employment.
  4. Worker Two worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Two would conduct his duties and determined his hours and rate of pay. Focal paid Worker Two fortnightly for the hours he worked, rather than the tasks he performed.
  5. Focal required that Worker Two fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker Two was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor completed tax invoices on behalf of Worker Two.
  6. Focal held a workers’ compensation policy for Worker Two and Cindor began making superannuation contributions on his behalf from December 2011.
  7. On 14 February 2012, Mr Tunc sent worker two a text message stating “just let them know you’re working on an ABN as a contractor.”

Worker Three

  1. Worker Three was a foreign citizen, living in Australia under a Student Visa.
  2. Worker Three enquired about working for Focal. Mr Tunc told him that, in order to work for Focal, he needed a green card and must provide his own protective equipment. Mr Tunc told Worker Three he would need to fill out a timesheet and would be paid $20 an hour in wages directly to his bank account every two weeks.
  3. From about 9 December 2010 to 4 April 2012, Worker Three performed construction and labouring work for Focal on construction sites under a contract of employment.
  4. Worker Three worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Three would conduct his duties and determined his hours and rate of pay. Focal paid Worker Three fortnightly for the hours he worked, rather than the tasks he performed.
  5.  Focal required that Worker Three fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker three was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor filled out tax invoices for Worker Three.
  6. Focal held a workers’ compensation policy for Worker Three and began making superannuation contributions on his behalf from July or August 2011.

Worker Four

  1. Worker Four was a foreign citizen, living in Australia under a Working Holiday Visa.
  2. Worker Four accessed Focal’s website which invited people to call a phone number if they were looking for work. Worker Four called the number and was invited to attend a job interview.
  3. Worker Four attended an interview with Mr Tunc on 16 January 2012. Mr Tunc gave Worker Four a Focal timesheet and told him he would be required to fill them out.
  4. From 19 January 2012 to 14 March 2012, Worker Four performed construction and labouring work for Focal on construction sites under a contract of employment.
  5. Worker Four worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Four would conduct his duties and determined his hours and rate of pay. Focal paid Worker Four fortnightly for the hours he worked, rather than the tasks he performed.
  6. Focal required that Worker Four fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker Four was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor filled out tax invoices for Worker Four.
  7. Focal held a workers’ compensation policy for Worker Four and Cindor began making superannuation contributions on his behalf from January or February 2012.
  8. In mid-February 2012, Mr Tunc sent Worker Four a text message which stated “just say you’re a contractor”.

Worker Five

  1. Worker Five was a foreign citizen, living in Australia under a Working Holiday Visa.
  2. Worker Five attended a job interview with Mr Tunc on 27 September 2011. Mr Tunc told Worker Five he would need an ABN to work for Focal, would need to fill out a timesheet and would be paid $20 an hour directly into his bank account.
  3. From 28 September 2011 to 16 January 2012, Worker Five performed construction and labouring work for Focal on construction sites under a contract of employment.
  4. Worker Five worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Five would conduct his duties and determined his hours and rate of pay. Focal paid Worker Five fortnightly for the hours he worked, rather than the tasks he performed.
  5. Focal required that Worker Five fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker Five was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor created tax invoices for Worker Five.
  6. Focal held a workers compensation policy for Worker Five and Cindor began making superannuation contributions on his behalf from 3 November 2011.
  7. On 14 February 2012, Mr Tunc sent Worker Five a text message which stated “just let them know you’re working on an ABN as a contractor”.

Worker Six

  1. Worker Six was a foreign citizen, living in Australia under a Working Holiday Visa.
  2. In mid-2011, Worker Six responded to a Focal advertisement seeking labourers on the Gum Tree website by submitting his resume via email.
  3. About 10 minutes after this email was sent, Mr Tunc telephoned Worker Six and told him he would need an ABN to work for Focal and would be paid cash prior to getting one.
  4. Mr Tunc also told Worker Six he would need a white card and to provide his own protective equipment. Mr Tunc told Worker Six he would need to fill out a timesheet and would be paid $20 an hour directly into his bank account. Mr Tunc told Worker Six he would not be paid superannuation because he would be working on an ABN.
  5. From July 2011 to September 2011 and January 2012 to March 2012, Worker Six performed construction and labouring work for Focal on construction sites under a contract of employment.
  6. Worker Six worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Six would conduct his duties and determined his hours and rate of pay. Focal paid Worker Six fortnightly for the hours he worked, rather than the tasks he performed.
  7. Focal required that Worker Six fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker Six was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor filled out tax invoices for Worker Six.

Worker Seven

  1. Worker Seven was a foreign citizen, living in Australia under a Working Holiday Visa.
  2. In November 2011, Worker Seven attended Focal’s offices to respond to an advertisement placed on the Gum Tree website seeking labourers.
  3. Mr Tunc told Worker Seven that, in order to work for Focal, he would need to obtain an ABN, would need a white card and to provide his own protective equipment. Mr Tunc told Worker Seven he would need to fill out a timesheet and would be paid $20 an hour.
  4. For five or six weeks from 10 November 2011, Worker Seven performed construction and labouring work for Focal on construction sites under a contract of employment.
  5. Worker Seven worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Seven would conduct his duties and determined his hours and rate of pay. Focal paid Worker Seven fortnightly for the hours he worked, rather than the tasks he performed.
  6. Focal required that Worker Seven fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker Seven was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor completed tax invoices for Worker Seven.

Worker Eight

  1. Worker Eight was a foreign citizen, living in Australia under a Student Holiday Visa.
  2. In April 2010, Worker Eight telephoned Mr Tunc to respond to an advertisement for labourers on the Gum Tree website.
  3. Mr Tunc told Worker Eight that, in order to work for Focal, he would need to obtain an ABN, would need a green card for construction and to provide his own personal protective equipment. Mr Tunc told Worker Eight he would need to prepare invoices and submit them to Focal, would be paid $20 an hour and would be a subcontractor.
  4. During a meeting a few weeks later, Mr Tunc directed Worker Eight how he could apply for an ABN, told him how to access Focal’s timesheets and told him he would be a subcontractor and would require an ABN.
  5. From April 2010 to November 2011, Worker Eight performed construction and labouring work for Focal on construction sites under a contract of employment.
  6. Worker Eight worked exclusively for Focal and could not subcontract the performance of his duties for Focal to others. Focal directed the location Worker Eight would conduct his duties and determined his hours and rate of pay. Focal paid Worker Eight fortnightly for the hours he worked, rather than the tasks he performed.
  7. Focal required that Worker Eight fill out Focal’s employee timesheets and obtain the signatures of Focal’s clients on the timesheets. Worker Eight was inducted on construction sites as an employee of Focal and he used Focal’s equipment to carry out his work. Cindor completed tax invoices for Worker Eight.

Role of Cindor

  1. Cindor paid the workers’ wages and superannuation in relation to the work they performed for Focal.

Workers’ losses

  1. The eight workers should have been paid according to the Building and Construction General On-Site Award 2010 (the Award), rather than a flat rate of $20 per hour.
  2. They were also entitled to annual leave and rostered days off which they didn’t receive.
  3. As a result of Focal not paying the workers in accordance with the Award, the workers were not correctly remunerated and suffered loss.
  4. FWBC is seeking compensation totalling $33,345 for the unpaid wages and entitlements, plus interest, for the workers as well as declarations of the breaches and penalties to be paid to the Commonwealth.

Contraventions

  1. FWBC alleges that Mr Tunc and Mr Jarrett contravened s357 of the Fair Work Act 2009 (FW Act) on eight occasions by misrepresenting an employment relationship as an independent contracting relationship to each of the workers, thereby engaging in sham contracting.

Civil Litigation Proceedings

  1. FWBC filed proceedings in the Federal Magistrates Court at Sydney on 17 January 2013.
  2. A directions hearing is scheduled for 24 April 2013.

Maximum penalties

  1. The then maximum applicable penalty for a contravention of the FW Act is $6600 for an individual.

 

 

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