Federal Court slams holiday resort for pressuring staff to become contractors

The Federal Court has ordered a Tasmanian resort owner to pay compensation to six casual staff who were dismissed after they refused to become independent contractors.

The Fair Work Ombudsman confirmed the ruling but declined to comment before a penalty is handed down at a second hearing on February 2.

The decision comes as the issue of contractors' rights continues to be debated among politicians and business leaders. While the Government has identified a number of instances of "sham contracting", there is also confusion among SMEs about what exactly constitutes a contractor relationship versus a traditional employee relationship.

The new ruling also comes after the FWO said it would begin cracking down on dodgy contracting.

Wendy Wells, who owns the Diamond Island resort in Tasmania, was heard to have pressured staff to become contractors because she didn't "want to have to pay superannuation... I want it all on contracts so that I don't have these other extra worries, I just have one payment".

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