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Tuesday, 14 August 2012 12:00

Sham Contracting - Penalty Imposed Against Company

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Sham Contracts Sham Contracts

In the case of ACE Insurance Ltd v Trifunovski (No 2) [2012] FCA 793, the Federal Court ordered compensation and imposed a penalty of $10,000 against a company which engaged 5 insurance sales representatives as independent contractors, when in fact they were held to be employees.

Before this case, the company received legal advice that the sales representatives were not employees and acted on this advice. However, since receiving the advice a High court case changed the law on this issue and therefore, invalidated the advice.

The case demonstrates that companies should seek legal advice before engaging an individual as an independent contractor and ensure that such arrangements are reviewed regularly.

Read 1144 times Last modified on Thursday, 07 March 2013 07:27
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