Fair Work Infoline: 13 13 94
Media Release
19 Oct 2010
SA court action over alleged sham contracting
The Fair Work Ombudsman has launched a prosecution against the operators of two
labour-contracting companies and an Adelaide fast food outlet, alleging they engaged in
sham contracting.
Facing court is Flagstaff Hill man Michael Wright, who is a director and part-owner of
labour-contracting companies Contracting Solutions Australia Pty Ltd (CSA) and Labour
Contracting Solutions Pty Ltd (LCS).
Also facing court is Athelstone man Daryl Lenkic and his company Blue Steel Corporation
Pty Ltd.
Through his company, Mr Lenkic owned and ran the Pretzel Bakehouse outlet in the Tea
Tree Plaza shopping centre in Modbury until April 2008. The outlet was formerly known as
Wetzels Pretzels.
Documents lodged in the Federal Court in Adelaide allege Mr Wright hired one 15-year-old
on behalf of CSA and two 15-year-olds on behalf of LCS, classified them as ‘independent
contractors’ and paid them according to contract rates.
It is alleged Mr Wright, on behalf of CSA and LCS, then supplied the teenagers as
contractors to work at the pretzel outlet and charged Mr Lenkic’s company fees to make
the arrangement profitable for CSA and LCS.
Fair Work Ombudsman Nicholas Wilson says it is alleged the arrangement was a breach of
the sham contracting provisions of workplace laws because the teenagers were entitled to
be classified as employees and receive the minimum hourly rates and penalty rates
payable to casual retail food assistants.
“These teenagers were working at a fast food shop after school to earn a bit of pocket
money,” Mr Wilson said.
“We allege they should have been classified as employees and not as self-employed
independent contractors.”
The Fair Work Ombudsman is seeking Court Orders for compensation for the three young
workers as well as $4704 back-payment for one who was allegedly underpaid as a result of
the unlawful employment arrangement.
The Fair Work Ombudsman is also seeking penalties against Mr Wright, Mr Lenkic, CSA,
LCS and Blue Steel Corporation, who were allegedly involved in multiple breaches of
workplace laws.
The maximum penalties per breach are $33,000 for the companies and $6600 for Mr
Wright and Mr Lenkic. The case is listed for a directions hearing on November 8.
Employers or employees seeking assistance or further information should contact the Fair
translations, call 13 14 50.
Editor’s note: Mr Wright is NOT the Hon Michael Wright, MP, Member for Lee
Media inquiries:
Ryan Pedler, Media Adviser, 0411 430 902, ryan.pedler@fwo.gov.au
NEWS 
