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Employment Law – Landmark Sham Contracting Case

Employment Law – Background

In March 2015, the Fair Work Ombudsman (FWO) brought a case against Quest South Perth Holdings Pty Ltd (Quest) for breaches of the Fair Work Act 2009 (Cth) (the Act). In a long-running legal saga, the Federal Court found that Quest and Contracting Solutions Pty Ltd had not contravened the Act by moving employees onto independent contractor arrangements. By the end of 2015, the High Court of Australia overturned the Federal Court ruling and therefore found Quest had engaged employees in a ‘triangular’ sham contracting arrangement.

In June 2017, the Federal Court fined Quest a total of almost $60,000 in penalties for contraventions of the Act. This outcome underlines the importance of employment protections in employment law.

Employment Law – Facts

In essence:

  • Quest and Contracting Solutions Pty Ltd (‘Contracting Solutions’) moved two housekeepers and a receptionist onto independent contractor arrangements
  • the receptionist faced ‘significant’ financial issues because she no longer received any shifts
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