I have included the following matter as I am regularly asked for advice whether a client is able to substitute the provision of accommodation for an employee in place of wages, this usually occurs in a Caretaker situation. A decision to substitute accommodation for wages has cost an employer $108,000.

I have included the following matter as I am regularly asked for advice from clients as to whether they are able to substitute accommodation for an employee in place of wages, this usually occurs in a caretaker situation.The decision to substitute accommodation for wages has cost an employer $108,000.

The Court determined that the employee was engaged as a part-time employee for a period of seven years where the employee acted as caretaker and lived in accommodation attached to the Centre where he performed handyman duties, maintained the centre and helped to set up and take down community events. Instead of being paid wages and allowances, he was provided with accommodation.

 

When the matter was before the Court it was revealed that the Caretaker had to follow directions and comply with policies and procedures of the employer as well as th employee working 20 hours per week. It was also shown that the Caretaker had a signed position description and was required to report to the Chief Executive Officer.

Documentation surrounding the work the employee was very vague, however it mentioned that the arrangement is a live-in one where in exchange for subsidised accommodation the position holder will undertake duties commensurate with a general handyman's duties.  Other aspects of the work pointed towards the employer having a degree of control over the caretaker's duties, which in every case is suggestive of employment.

Without being privy to all of the details leading up to the arrangement between the caretaker and the employee, experience tells me that the employer did not set out to cheat the employee.These arrangements come about when at the time of engagement it suits both parties and as long as the suitability is maintained, there would not be a problem.

Where a problem occurs and the matter is progressed to Court it is always the employer who is found to be in the wrong and is required to pay any monies owing.The simple reason is that regardless of the intentions of the parties at the time, they cannot contract out of, or avoid paying wages and allowances set be a relevant award or legislation.

Should you as an employer or a decision maker be faced with such a decision where an employee requests accommodation in place of wages, I suggest that prior to embarking on such a course, it should be determined first whether the person is in fact an employee. 

If you are unsure, call me on 0428 112 009 or email me on john@lambwrc.com.au