Another legal action against employer who made his employee work on ABN instead of Tax File Number

16 June 2017: Fair Work Ombudsman has commenced legal action against another employer who used Australian Business Number (ABN) to secure services of an Indian delivery driver. The victim, the workplace watchdog claims, should have been an employee of the accused Pizza Hut franchisee instead of being a contractor without the regular entitlements of a worker.

The exploited man, when he worked for the franchisee between November 2015 and May 2016, was a dependent of his wife who was an international student at the time.

This latest action clearly shows that Fair Work Ombudsman is constantly on the look-out for unscrupulous employers that exploit ABN to enter into “sham contract” with their prospective workers — instead of hiring them as employees with full workplace rights.

Gold Coast man Dong Zhao, who owns and operates the Pizza Hut franchise outlet at Upper Coomera, will now face the Federal Circuit Court, a Fair Work Ombdusman press release said today.

Skyter Trade Pty Ltd, Mr Zhao’s company, faces penalties of up to $54,000 per contravention and he himself faces penalties of up to $10,800 per contravention.

It is alleged that Mr Zhao asked the Indian man to provide an ABN and then treated him as an independent contractor. The Fair Work Ombudsman believes that the man “ought to have been engaged as an employee and the arrangements amount to ‘sham contracting’ “.

During his interview with a Fair Work inspector, Mr Zhao apparently admitted that he paid the employee a flat rate of no more than $16 per hour.

However, Fair Work said, the worker was entitled to receive at least $20.36 for ordinary hours and up to $40.72 for overtime and public holiday work under the Pizza Hut enterprise agreement that applied to the business.

In other words, Mr Zhao and his company should have treated the unidentified Indian man as an employee rather than an independent contractor.

The driver was also allegedly underpaid his per-delivery entitlement, superannuation and a uniform allowance. He has since been back-paid in full, it is understood.

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