By Aimee Chanthadavong
The Fair Work Ombudsman has launched legal action against an international retail company, alleging it engaged in sham contracting activity that resulted in an Adelaide employee being underpaid more than $32,000 over just 18 months.
eCosway, which sells a range of household products through dozens of stores across Australia, has allegedly breached sham contracting laws when it misrepresented to an employee it engaged to operate its stores at Unley and Kensington, in Adelaide, that she was an independent contractor when her correct classification was as an employee.
As a result of the alleged misclassification led the worker worker being paid according to a percentage of store sales, when she should have been paid Award employee entitlements including minimum wages, leave pay, overtime and penalty rates.
The situation allegedly led to the worker being underpaid a total of $32,116 over an 18-month period between March, 2011 and September, 2012
The Fair Work Ombudsman discovered the alleged underpayment when it investigated a complaint lodged by the worker.
Fair Work Ombudsman Natalie James said the significant amount involved and the failure to rectify the alleged underpayment were significant factors in the decision to commence legal action.
eCosway is expected to face penalties of up to $33,000 per breach. The Fair Work Ombudsman is also seeking a Court Order for full back-payment of the worker.