Ensure you never miss an issue of the
real estate business bulletin
Fair Work launches "sham contracting" case

Fair Work launches "sham contracting" case

by Reporter 2 comments

Stacey Moseley

The Fair Work Ombudsman is seeking to prosecute a Queensland-based real estate agency for allegedly paying a sales agent just $100 for five months work.

Fair Work Ombudsman Nicholas Wilson said a decision to prosecute the Burpengary-based agency Property Lovers, and company directors and part-owners William Nicholas Fraser and Diana Sylvia Cartwright, was made because of the significant amount of money involved and the seriousness of the alleged breaches.

“Where we suspect sham contracting is occurring, we look behind the often carefully drafted legal documents to determine what the correct classification for workers is under workplace laws,” Mr Wilson said.

Fair Work is also seeking to prosecute ICS Real Estate Pty Ltd, a national company involved in contracting sales and marketing workers on behalf of real estate agencies. According to Fair Work, Lovers of Property allegedly used the services of ICS Real Estate in 2010 to engage the salesman.

The prosecution centres around how the sales agent was classified for employment purposes.

Fair Work alleged the salesman was classed as an independent contractor and paid him on a commission-only basis. The salesman, who was in his late 50s and had no prior experience in the real estate industry, performed five months work for just $100, which he received in recognition of his assistance in concluding a sale.

In a release by Fair Work, it was alleged the salesman’s correct classification was as an employee and was assigned tasks included letterbox drops, door knocking, answering phone calls and offering free property appraisals and that his usual rostered hours were 8.30 am to 5 pm, Monday to Saturday. It was also alleged that he wasn't required to supply an Australian Business Number or register his own business, and was unable to work for any other company.

Additionally, the salesman was allegedly required to provide his own work laptop, mobile phone and a car of a make and model approved by Lovers of Property as projecting an acceptable image and standard of professionalism.

If he was considered an employee, Fair Work said his wages and annual entitlements would equate to $12,440 for the five months of work he performed.

Barry Gannon, the federal secretary for the Property Sales Association of Queensland, a registered industrial organisation, said this type of alleged scam was common in Queensland.

“We have been pushing the Fair Work Ombudsman to do more to prosecute these sorts of [alleged] shams for a long time,” Mr Gannon told Real Estate Business.

Mr Gannon stressed the importance of principals having a thorough understanding of industrial relations laws.

The Fair Work Ombudsman alleges ICS Real Estate, Mr Fraser and Ms Cartwright were involved in three breaches of workplace laws committed by Lovers of Property. The maximum potential penalty per breach is $33,000 each for the companies and $6600 each for Mr Fraser and Ms Cartwright.

The Fair Work Ombudsman is also seeking a Court Order for Lovers of Property to rectify the alleged underpayment of the salesman.

Real Estate Business contacted Property Lovers about the case, although the company declined to comment.

Stacey Moseley

The Fair Work Ombudsman is seeking to prosecute a Queensland-based real estate agency for allegedly paying a sales agent just $100 for five months work.

Fair Work Ombudsman Nicholas Wilson said a decision to prosecute the Burpengary-based agency Property Lovers, and company directors and part-owners William Nicholas Fraser and Diana Sylvia Cartwright, was made because of the significant amount of money involved and the seriousness of the alleged breaches.

“Where we suspect sham contracting is occurring, we look behind the often carefully drafted legal documents to determine what the correct classification for workers is under workplace laws,” Mr Wilson said.

Fair Work is also seeking to prosecute ICS Real Estate Pty Ltd, a national company involved in contracting sales and marketing workers on behalf of real estate agencies. According to Fair Work, Lovers of Property allegedly used the services of ICS Real Estate in 2010 to engage the salesman.

The prosecution centres around how the sales agent was classified for employment purposes.

Fair Work alleged the salesman was classed as an independent contractor and paid him on a commission-only basis. The salesman, who was in his late 50s and had no prior experience in the real estate industry, performed five months work for just $100, which he received in recognition of his assistance in concluding a sale.

In a release by Fair Work, it was alleged the salesman’s correct classification was as an employee and was assigned tasks included letterbox drops, door knocking, answering phone calls and offering free property appraisals and that his usual rostered hours were 8.30 am to 5 pm, Monday to Saturday. It was also alleged that he wasn't required to supply an Australian Business Number or register his own business, and was unable to work for any other company.

Additionally, the salesman was allegedly required to provide his own work laptop, mobile phone and a car of a make and model approved by Lovers of Property as projecting an acceptable image and standard of professionalism.

If he was considered an employee, Fair Work said his wages and annual entitlements would equate to $12,440 for the five months of work he performed.

Barry Gannon, the federal secretary for the Property Sales Association of Queensland, a registered industrial organisation, said this type of alleged scam was common in Queensland.

“We have been pushing the Fair Work Ombudsman to do more to prosecute these sorts of [alleged] shams for a long time,” Mr Gannon told Real Estate Business.

Mr Gannon stressed the importance of principals having a thorough understanding of industrial relations laws.

The Fair Work Ombudsman alleges ICS Real Estate, Mr Fraser and Ms Cartwright were involved in three breaches of workplace laws committed by Lovers of Property. The maximum potential penalty per breach is $33,000 each for the companies and $6600 each for Mr Fraser and Ms Cartwright.

The Fair Work Ombudsman is also seeking a Court Order for Lovers of Property to rectify the alleged underpayment of the salesman.

Real Estate Business contacted Property Lovers about the case, although the company declined to comment.

Fair Work launches "sham contracting" case
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
The difference between an average agent and one who dominates

McGrath Crows Nest’s Peter Chauncy is number 10 in this year’s REB Top 100 Agents ranking. Peter, however, is more likely not surprised ...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?