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AN Adelaide home care company will face court after its business model came under scrutiny for allegedly breaching sham contracting laws.
The Fair Work Ombudsman has commenced legal proceedings in the Federal Circuit Court against Care Providers Pty Ltd, which trades as ESAR Home Care.
Care Providers offers in-home personal care and domestic assistance services to elderly and people with a disability in Adelaide under contracts with local councils, government agencies and non-government organisations.
The workplace watchdog alleges the company contravened provisions of the Fair Work Act by deliberately or recklessly misclassifying four employees as independent contractors and underpaying them thousands of dollars.
Two personal care workers and two cleaners were underpaid a total of $8923 between February and September 2015, including allowances, superannuation, leave entitlements and penalty rates.
If successful, the company must repay penalties and perform an external audit of its workplace practices.
The breaches were the result of Care Providers using two companies it set up in 2014 to provide labour, Easttrac Pty Ltd and Klemtrac Pty Ltd. Prior to 2014, it used the same business model with Nortrac Pty Ltd before going into liquidation.
The company allegedly ignored advice from an accountant and solicitors that the workers might be employees not contractors and failed to comply with workplace laws.
Care Providers, Klemtrac and Easttrac each face maximum penalties of up to $51,000 per breach, while the owners face penalties of up to $10,200 each.
A directions hearing is listed for July 25.
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