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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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Federal Court appoints provisional liquidators to Uglii Corporation Limited

By Georgina King a Senior Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In a decision handed down on 8 September 2016 the Federal Court has appointed provisional liquidators to online search company Uglii Corporation Limited and five of its related companies.

Prior to the decision, investigations by ASIC identified suspected contraventions of the Corporations Act 2001 (Cth) (Act) in connection with the companies including a failure to lodge financial reports, false and misleading statements in relation to sale of shares, offering securities for sale and advertising the offer without a disclosure document, having only two directors registered in respect of two public companies and trading while insolvent. At the time of the decision ASIC had applied to wind the companies up on the basis of insolvency pursuant to sections 464 and 459B of the Act or alternatively pursuant to section 461(1)(k) on just and equitable grounds.

In respect of the facts of the matter, Justice Davies noted:
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Recent Federal Court decision spells disaster for bankrupt and his non-compliant self managed superannuation fund

The recent case of Coshott v Prentice [2014] FCAFC 88 highlights the importance of seeking legal advice to ensure that your self managed superannuation fund (SMSF) is compliant under the Superannuation Industry (Supervision) Act 1993 (Cth).

In this case, the Full Federal Court found that although a property was claimed to be held by a SMSF it was in fact beneficially owned by the bankrupt. Consequently, the property would be dealt with as being part of the bankrupt estate.

If you wish to ensure the protection of assets held in a SMSF the fund must operate as a compliant fund.  Contact Matthews Folbigg today to speak with a commercial lawyer about asset protection or to check the compliance of your SMSF.

Phillip Brophy – phillipb@matthewsfolbigg.com.au or 9635 7966