Real estate agent faces court over alleged sham contracting and underpayment

20 February 2012

Note: Reference to prosecution in this media release is a general reference to the FWO commencing proceedings for the imposition of civil penalties and should not be taken to be a reference to criminal proceedings.

The Fair Work Ombudsman has launched a prosecution against a Queensland real estate agent for alleged sham contracting and paying a salesman just $100 for five months work.

Facing court is Lovers of Property Pty Ltd, which trades as the Burpengary-based agency Property Lovers, and company directors and part-owners William Nicholas Fraser and Diana Sylvia Cartwright, both of Morayfield.

Also facing court is ICS Real Estate Pty Ltd, a national company involved in contracting sales and marketing workers on behalf of real estate agencies.

Lovers of Property allegedly used the services of ICS Real Estate in 2010 to engage a salesman.

Lovers of Property allegedly classified the salesman as an independent contractor and paid him on a commission-only basis.

This allegedly led to the salesman, who was in his late 50s and had no prior experience in the real estate industry, performing five months work for just $100, which he received in recognition of his assistance in concluding a sale.

However, it is alleged the salesman's correct classification was as an employee.

It is alleged the salesman's assigned tasks included letterbox drops, door knocking, answering phone calls and offering free property appraisals and that his usual rostered hours were 8.30 am to 5 pm, Monday to Saturday.

It is alleged the salesman was not required to obtain an Australian Business Number or register his own business and that he believed he was an employee.

The salesman was allegedly also told he could not work for any other company.

The salesman was allegedly required to provide his own work laptop, mobile phone and a car of a make-and-model approved by Lovers of Property as projecting an acceptable image and standard of professionalism.

It is alleged that after the salesman left work early one day to attend a job interview with another agency and then resigned after securing the job, Mr Fraser told him: "That's fine, I was going to fire you anyway for leaving work without approval".

It is alleged the salesman was entitled to have been paid wages and annual entitlements of $12,440 for the five months of work he performed. The alleged underpayment has not been rectified.

Fair Work inspectors discovered the alleged breaches when they investigated a complaint the salesman lodged after he resigned.

Fair Work Ombudsman Nicholas Wilson says a decision to prosecute was made because of the significant amount involved and the seriousness of the alleged breaches.

"Where we suspect sham contracting is occurring, we look behind the often carefully drafted legal documents to determine what the correct classification for workers is under workplace laws," Mr Wilson said.

The Fair Work Ombudsman alleges ICS Real Estate, Mr Fraser and Ms Cartwright were involved in three breaches of workplace laws committed by Lovers of Property.

The maximum potential penalty per breach is $33,000 each for the companies and $6600 each for Mr Fraser and Ms Cartwright.

The Fair Work Ombudsman is also seeking a Court Order for Lovers of Property to rectify the alleged underpayment of the salesman.

Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au A free interpreter service is available on 13 14 50.

Information specific to contracting can be obtained at www.fairwork.gov.au/contractors.

Follow the Fair Work Ombudsman on Twitter @fairwork_gov_au external-icon.png or find us on Facebook external-icon.png.

Media inquiries:

Ryan Pedler, Assistant Director, Media & Stakeholder Relations
(03) 9954 2561, 0411 430 902
ryan.pedler@fwo.gov.au

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