Doll House Training in Bondi fined for ‘sham contracting’

A health and wellness research company that engaged in sham contracting and failed to regularly pay disabled workers has copped a massive fine after Fair Work stepped in.

A health and wellness research company that engaged in sham contracting against disabled workers has copped a massive fine after the Fair Work Ombudsman stepped in.

The Federal Court fined Doll House Training Pty Ltd $197,000 for breaching the Fair Work Act after it terminated, or threatened to terminate, three disabled workers to re-engage them as independent contractors.

The company also failed to pay the workers in full at least monthly during their employment, and a court found there was a “clear power imbalance” which disadvantaged the workers.

The business conducts research into robotics, coding and artificial intelligence and their application to the health and wellness industry.

The company also misrepresented to workers that they were independent contractors, when they continued to be employees and continued to do substantially the same work.

The Fair Work Ombudsman investigated Doll House Training after requests for help from the three workers, who had been hired through a disability employment services provider between August and October 2020.

Anna Booth is the Fair Work Ombudsman. Picture: Paul Hermes

In October 2020, Doll House Training emailed the workers a “new contract” with terms indicating it was an employment contract, and told them they had to provide Australian Business Numbers and submit invoices to be paid.

In his judgment, Justice Scott Goodman found the documents to be “contracts of employment” as the “rights and obligations” suggested the workers “were contracted to work for Doll House’s business rather than any business of their own”.

Justice Goodman also found there was a “clear power imbalance” for two workers who each signed the contract because they felt they had “no alternative”.

Doll House Training further failed to pay the workers in full at least monthly during their employment and failed to comply with a Fair Work inspector’s notice to produce documents relating to the workers.

Justice Goodman considered one worker’s evidence that the non-payment “caused her financial and other stress” and “she needed to borrow money from a short-term lender”.

Fair Work Ombudsman Anna Booth said the substantial penalties send a clear message that sham contracting is serious conduct that will not be tolerated in Australian workplaces.

“We will pursue any employer who thinks they can take advantage of the power imbalance they have over workers, including those with disabilities as in this matter, some of whom felt that they had no alternative but to accept a sham contract or be jobless,” Ms Booth said.

“If businesses unlawfully misclassify workers, it can lead to them not being paid the wages and entitlements the law provides to them as employees.”

The underpayments were fully rectified after the Fair Work Ombudsman began its investigation.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance.