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FWO orders $16k backpay plus policy, procedure & training changes

11 February 2014

A Queensland real estate company has been ordered by the Fair Work Ombudsman to pay $16,600 to an underpaid worker and must review its policies, procedures, training and payroll.

The mistake arose when the consultant was hired, as she was classified as an independent contractor while the nature of the work she carried out indicated she should have been classed as an employee of the firm, and remunerated as such.

Independent workplace investigations from the Fair Work Ombudsman (FWO) revealed that the woman was ostensibly engaged as an independent contractor on a commission-only basis, and received no income during the course of her employment. Upon the termination of her employment, she received a small payment that comprised her superannuation and the commission from a sale she made of one property.

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However, upon reviewing the circumstances of her employment, the FWO decided she should have been classed and paid as an employee under the Real Estate Industry Award 2010. Some of the factors that swung the decision were that she worked to a roster provided by the company, only worked for one organisation during the course of her employment and was provided with an office space and desk.

The firm has since apologised and voluntarily back-paid the worker the full amount. The Ombudsman also ordered the company to undertake several other activities, these include:

  • Putting policies and procedures in place to ensure ongoing compliance with the Fair Work Act and the Real Estate Industry Award 2010,
  • Organising workplace relations training for managers responsible for human resources, recruitment and payroll functions,
  • Assessing each independent contractor to ensure they are engaged lawfully, and auditing the pay packets of all employees to ensure they are receiving their minimum entitlements.

Incidents such as this often arise as the consequence of basic mistakes and therefore it is important employers provide appropriate workplace training to HR staff to avoid errors and ensure they are cognisant of their responsibilities. HR consulting firms can also provide expert advice and help to audit your organisation's policies, procedures and contracts. iHR Australia delivers a range of HR training courses both in house and publicly across Australia, iHR is also an HR consulting firm offering a range of HR support services.

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