Sydney private cleaning company Jooine (Investment) Pty Ltd and owner Jae Kye Lee face severe fines for allegedly exploiting and underpaying a South Korean man to work as a cleaner whilst on a working holiday to Australia, the Fair Work Ombudsman (FWO) alleges in a 24 July media release.
Lee and his company allegedly breached the sham contracting provisions of workplace laws by ‘knowingly misclassifying the employee as an independent contractor’ and faces maximum penalties of up to $6600 per breach and his company up to $33,000 per breach.
‘The man, in his early 30s who speaks little English, worked as a night cleaner at Northbridge, where he was allegedly paid $12.50 an hour when he should have been getting $19 an hour. The FWO has initiated legal action against the cleaning company that hired him, alleging it engaged the man under a sham contract, underpaid him and threatened to dismiss him if he spoke out.’
‘It is alleged the employee was required to obtain an Australian Business Number (ABN) and issue invoices to Lee’s company to receive payment. Lee allegedly instructed the employee that if he was questioned by the Fair Work Ombudsman, he must state that he was an independent contractor – or his position would be terminated.’
‘It is further alleged the employee was unlawfully required to perform two shifts of ‘unpaid-training’ before he started receiving payment, had unlawful deductions made from his pay and was not paid any annual leave entitlements.’
The man was allegedly underpaid a total of $1858 between March and May, 2011. The FWO discovered the alleged breaches last year when it investigated a complaint lodged by the employee.
“Sham contracting is a serious matter because it can lead to workers being denied their rightful workplace rights and entitlements,” says acting FWO Mark Scully.