Company acts to end question mark over employment classifications

5 February 2014

A company which underpaid a sales consultant more than $16,000 after incorrectly hiring her as an independent contractor will review all its employment records to ensure no other workers are being underpaid.

The review will also assess whether other independent contractors have been engaged lawfully or should instead be classified as employees. 

Queensland-based Centenary Suburbs Sales and Management Pty Ltd will conduct the review as part of an Enforceable Undertaking it has signed with the Fair Work Ombudsman.

The company operated real estate agencies on Moggill Road, Kenmore and Dandenong Road, Mount Ommaney. The Kenmore agency closed in late 2012.

The Enforceable Undertaking is the outcome of an investigation by the Fair Work Ombudsman into a complaint from a sales consultant who worked at both agencies between May and November, 2012.

The woman, who had no prior experience as a real estate sales agent or consultant, was engaged as an independent contractor on a commission-only basis and received no income during her employment.

After she left, she received $1365 for commission on the sale of one property and superannuation.

The Fair Work Ombudsman later concluded that the consultant should have been engaged as an employee under the Real Estate Industry Award 2010, and had therefore been underpaid a total of $16,600.

In reaching its conclusion, the Fair Work Ombudsman noted the consultant:

  • Had no prior real estate sales experience,
  • Did not have an ABN and had no experience running her own business, 
  • Worked to a roster maintained by the company,
  • Did not subcontract work and could only work for one organisation,
  • Was provided with office space, a desk and access to office equipment, and
  • Was required to wear corporate attire and a company name badge.

As part of the Enforceable Undertaking, Centenary Suburbs Sales and Management Pty Ltd has voluntarily back-paid all outstanding entitlements and written the former employee a letter of apology acknowledging its "sincere regret" for breaching federal workplace laws and giving a commitment that it won’t happen again.

The company has agreed to a range of measures to revamp its workplace practices.

These include:

  • Putting policies and procedures in place to ensure ongoing compliance with the Fair Work Act and the Real Estate Industry Award 2010,
  • Organising workplace relations training for managers responsible for human resources, recruitment and payroll functions,
  • Assessing each independent contractor to ensure they are engaged lawfully, and auditing the pay packets of all employees to ensure they are receiving their minimum entitlements.

Fair Work Ombudsman Natalie James says the Enforceable Undertaking is in line with the Agency's commitment to proactively improve compliance rates in the real estate industry.

"We are serious about our job of building knowledgeable and fairer workplaces and don't insist there is only one way to achieve compliance - education and positive motivators are equally as important as deterrents," she said.

Enforceable Undertakings were introduced by legislation in 2009 and the Fair Work Ombudsman has been using them to achieve strong outcomes against companies that breach workplace laws without civil court proceedings.

"Their purpose is to focus the employer on the tasks to be carried out to remedy the alleged contravention and/or prevent a similar contravention in the future," Ms James said.

"Many of the initiatives included in Enforceable Undertakings - like compulsory training sessions - help to build a greater understanding of workplace responsibilities, motivate the company to do the right thing and help them avoid the same mistakes again."

A copy of the Enforceable Undertaking is available on the website at www.fairwork.gov.au

Employers and employees seeking assistance should visit the website or call the Fair Work Infoline on 13 13 94. An interpreter service is available on 13 14 50.

Copy of undertaking:

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

Media inquiries:

Tom McPherson, Media Adviser
Mobile: 0439 835 855
tom.mcpherson@fwo.gov.au

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