Court action over underpayment of travel consultant

A Melbourne travel services company which paid a young migrant consultant as little as $9 an hour and told her she was a contractor will face court following an investigation by the Fair Work Ombudsman.

Facing legal proceedings in the Federal Circuit Court is Grandcity Travel & Tour P/L, which operates the Grandcity Tours travel agency at Glen Waverley. Also facing court is company director and majority owner Na Xu.

The Fair Work Ombudsman claims the company and Ms Xu breached sham contracting laws last year when they represented to a 24-year-old worker, a Chinese migrant, that she was an independent contractor operating her own business. The company allegedly required the worker to sign a contractor agreement and paid her flat rates of between $9 and $11 an hour for the work she performed between January and September last year. The Fair Work Ombudsman says the worker should have been classified as an employee, not a contractor.

Reasons include the level of direction and control the company had over her duties and when she was required to attend work. The employee was allegedly short-changed a total of $16,756 over an eight-month period as a result of being underpaid her minimum hourly rate, casual loadings and weekend and public holiday penalty rates. Breaches of superannuation, record-keeping and pay slip laws are also alleged.

Last year the Fair Work Ombudsman issued Ms Xu a Letter of Caution in relation to another worker – also a young Chinese migrant – allegedly being misclassified as a contractor.

Ms Xu faces maximum penalties of up to $10,200 per contravention, while Grandcity Travel & Tour faces penalties of up to $51,000 per breach. The Fair Work Ombudsman is also seeking Court orders for the company to back-pay the worker in full and to notify all workers engaged since October, 2012 of the outcome of the proceedings.

A directions hearing is listed for October 27.

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