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Employer in hot water for employee misclassification

Modern AwardsDecember 18, 2014

Employer in hot water for employee misclassification (Last Updated On: August 9, 2016)

A marine captain of the Devine Marine Group Pty Ltd has failed to pay Fijian workers the correct hourly rate.

Employees of this company are meant to be paid under the Manufacturing and Associated Industries and Occupations Award.

The company paid the workers a daily $100 “living away from home allowance” and called them trainees. Although, the ‘trainees’ were working 12 hour days, seven days a week.

If the workers were classified as employees, they should have been paid at least $60 extra a day under the Award.

The Fair Work Ombudsman (FWO) first got involved in 2011 when one of the workers passed out when assisting another worker who had collapsed in a buoyancy tank.

Initially, the Fijian ‘trainees’ told the FWO they were only training and the FWO dropped the legal action against the company. Eventually, the Fijian ‘trainees’ disclosed that the marine captain of the company actually told them to lie.

Their work mainly involved breaking down a Japanese vessel for sale as scrap and repair work that the company was about to use on a valuable contract in Queensland.

During the court procession, the judge said that the only proper objective conclusion on the evidence was that the Fijians were employees and not trainees.

According to the judge, factors supporting their employee status included:

  • the marine captain asked them to “work” for him when he first approached them, and did not mention “training”;
  • the company met their airfares, provided them with accommodation, paid them a daily allowance and gave one of them a vehicle;
  • they were engaged in “profit-making activity”;
  • they worked long and regular hours;
  • they both recorded the days they worked, which they would not have needed to do if they were trainees;
  • while the company said they were free to go when they wished, the company would have been “very annoyed” if they had gone off to work for someone else and would have taken steps to have their visas cancelled;
  • the company exercised control over their activities and the places they worked; and
  • the limited training they undertook was the kind of “on the job” training common in many workplaces.

The judge said that after looking at the evidence, it is clear that the purpose of the marine captain’s strategy “was to avoid the company having to pay the rates which would otherwise be applicable to the performance of that work by local employees”.

There will be declarations accordingly on the penalties to the captain and the company.

Devine Marine Group failed to follow their employment obligations and did not give their workers their correct entitlements. If you would like to ensure that you are paying your staff correctly and under the correct Modern Award call Employsure today on 1300 651 415 or fill in the form below.

*Information sourced via the Fair Work Ombudsman website.

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