Australia’s workplace watchdog has filed a case against the former directors of a cleaning company, alleging they were involved in sham contracting of five migrant cleaners who were underpaid more than AUD 125,000 (82,994 USD).

Timothy Baxter Chambers and Craig Richard Simpson were the former directors of ProClean HQ but the company went into liquidation in 2021. The two are facing federal court charges for allegedly misclassifying the work statuses of the five cleaners as independent contractors which required them to obtain Australian Business Numbers and sign contractor agreements providing for flat rates of pay of 20 to 22 AUD (13.28 to 14.61 USD) per hour.

The Fair Work Ombudsman said the workers, who were Sri Lankan and Nepalese nationals, should have been classified as employees of ProClean HQ because the contractor agreements were varied by the parties’ conduct based on hours set by the company, and that the workers were not allowed to subcontract. The regulatory agency also alleges that the five cleaners were required to follow the company’s directions.

“Sham contracting is extremely serious conduct because it involves employers knowingly or recklessly misrepresenting to workers that they have less lawful rights than they actually do, and it often goes hand in hand with exploitation of vulnerable workers,” said Fair Work Ombudsman Sandra Parker.

The Fair Work Ombudsman alleges Chambers was involved in both sham contracting and underpayment contraventions while Simpson was only involved in underpayment contraventions. The workers were allegedly underpaid minimum wage rates, casual loadings, weekend and public holiday penalty rates, overtime rates, shift loading, and allowances.