Travel businesses fined $138,000 for underpaying staff and sham contracting

The Federal Circuit Court has fined two Gold Coast travel businesses almost $138,000 for underpaying six employees $25,250 between January 2011 and October 2012.

Following litigation by the Fair Work Ombudsman (FWO), the Court found two Main Beach Global Work & Travel outlets had misclassified the underpaid employees as independent contractors.

Paid retainers between $250 and $750 a week, plus commissions and sale bonuses, the workers contacted the FWO with complaints about their wages. The FWO took action, classifying the workers as employees – not contractors – and, as a result, finding that they should have been paid minimum wages, leave payments, overtime and penalty rates.

The employees, most of which are in their twenties, worked as travel agents, sales consultants and as a program coordinator and recruitment officer.

Husband-and-wife owner-managers Pierre and Caryl Himmelmann were fined a total of $22,515 and their majority family-owned companies, Global Work & Travel Co. Pty Ltd and Global Work & Travel Co. (Australia) Pty Ltd, were penalised $60,018 and $56,306 each.

The FWO said that while underpayments were rectified back in 2013, “the seriousness of the matter and the employer’s carelessness towards breaches” led to legal action.

The Australian Tax Office (ATO) had allegedly contacted the Himmelmanns to inform them that one of their workers was an employee for superannuation purposes. On top of that, no action was taken when one of their workers made it known that the ATO would not give her an Australian Business Number due to being an employee and not a contractor.

“There are clearly consequences for business operators who recklessly breach their employees’ workplace rights through sham contracting,” Fair Work Ombudsman Natalie James said.

“In cases 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.”

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