The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No.8)

The Director of the Fair Work Building Industry Inspectorate (the Director) brought proceedings against Linkhill Pty Ltd (Linkhill) seeking declarations, penalties, and orders for payment of monies. The core of the dispute concerned whether Linkhill had engaged in sham contracting by representing that contracts with certain workers were contracts for services when, in reality, they were contracts of employment. The proceedings were heard in the Federal Court of Australia before Judge O’Sullivan.

The court was required to determine whether the relationships between Linkhill and the workers were, in substance, contracts of employment, despite being labelled as contracts for services. This involved assessing whether Linkhill had made a misrepresentation that the contracts were for services, and if so, whether Linkhill had acted without knowledge or recklessly in making such representations. Additionally, the court needed to ascertain if there had been underpayments to the workers and, if so, to determine the applicable industrial instrument and the correct classification of the workers under that instrument.

Judge O’Sullivan found that the relationships were indeed contracts of employment, not contracts for services, and that Linkhill had made misrepresentations. The court rejected Linkhill's defence that it did not know or was reckless, finding that Linkhill had been aware of the true nature of the employment relationships. Consequently, the court made declarations and orders, including orders for the payment of monies to the affected workers, reflecting the underpayments identified. An oral application for an adjournment by the respondent was refused, and the proceedings were adjourned for a penalty hearing.