Record Fine for Exploiting Workers

The former operators of Tasmania’s Diamond Island Resort, Maclean Bay P/L, has been fined a record $294,000 for allegedly “exploiting employees”.

The Federal Court of Melbourne imposed the penalty last week after an investigation by the Fair Work Ombudsman.

A Brisbane woman, Wendy Ann Wells, who owned the resort at Bicheno on Tasmania’s east coast was penalised an additional $13,860.

Justice Shane Marshall imposed the fines after finding that Maclean Bay had embarked on an unlawful sham contracting campaign aimed at converting Diamond Island resort employees into contractors to cut costs and when they refused some were sacked. Sham contracting is when an employer attempts to disguise an employment relationship as an independent contracting relationship, thereby avoiding obligatory rates of pay and other entitlements.

Maclean Bay’s unlawful conduct affected nine employees and it was also found to have breached workplace laws by failing to pay thousands of dollars in superannuation and annual leave entitlements to a number of employees.

The same operators were forced to provide their employees with back-pay in January after the court heard the resort owner dismissed the six staff who refused to become independent contractors.

Justice Marshall said it was a matter of great concern that the employees affected by Maclean Bay’s conduct remain uncompensated and that the situation should be rectified as soon as possible.

Kevin Harkins from Unions Tasmania said the record decision sent a clear message to bosses, particularly in the hospitality industry. “I think employers need to realise the days of ripping off employees are over.”

Fair Work Ombudsman Nicholas Wilson said this is yet another message sham contracting won’t be tolerated.

“Inadvertent misclassification of employees as contractors does occur – but when that misclassification is done deliberately or recklessly by an employer to avoid providing employees their lawful entitlements and workplace rights, that amounts to sham contracting.”

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