Fair Work Ombudsman asks Court to rule on alleged sham contracting

Minister for Small and Family Business, the Workplace and Deregulation Craig Laundy says action commenced by the Fair Work Ombudsman today against alleged sham contracting was a reminder to businesses operating on digital platforms to categorise workers correctly.

The Fair Work Ombudsman (FWO) has filed legal proceedings in the Federal Court against Foodora alleging that when they engaged three workers in 2015, and during periods in which they performed work in 2016, the company breached sham contracting laws by misrepresenting to those workers they were independent contractors when they were in fact casual employees.

“There are clear provisions in the Fair Work Act that protect against sham contracting and breaches of modern awards,” Mr Laundy said.

“Sham contracting is a serious breach of Fair Work laws as it can result in workers being ripped off.

“All businesses, including those in the gig economy, that treat workers as independent contractors must take great care to ensure that they have categorised those workers correctly.”

The FWO’s action against Foodora follows an extensive investigation.

“The FWO is doing what it should do as the regulator and taking action on these matters when there are concerns about an employment relationship,” Mr Laundy said. 

“It is now up to the courts to decide if those concerns are justified.”

If workers or businesses have questions about the difference between employees and independent contractors they can get assistance from the FWO, by visiting www.fairwork.gov.au, where information is available in 40 languages, or by calling the Fair Work Infoline on 13 13 94.