THE Fair Work Ombudsman has alleged the Happy Cabby company was involved in sham contracting activity.
In a statement released this week the Fair Work Ombudsman said Happy Cabby Pty Ltd would face court and so would company owner and sole director Graeme Paff, of Nords Wharf.
The Newcastle and Central Coast airport shuttle service was accused of underpaying employees a total of $43,000, with the largest individual debt being $18,758.
"Mr Paff was allegedly involved in Happy Cabby breaching the sham contracting provisions of workplace laws by knowingly misclassifying seven bus drivers as independent contractors," the statement said.
"The Fair Work Ombudsman alleges the correct classification for the drivers was as casual employees, for reasons including that Happy Cabby owned the buses they drove, had a high degree of control over their work and determined how much they would be paid."
The allegation is the drivers were being underpaid for entitlements including minimum wages and penalty rates for weekend work, overtime, public holidays and early-late work between January and November last year.
The alleged breaches were discovered last year during a national auditing campaign focusing on sham contracting for Fair Work.
Fair Work Ombudsman Nicholas Wilson says sham contracting is a serious matter because it can lead to workers being denied their rightful workplace rights and entitlements.
The Newcastle Herald was unable to contact Happy Cabby.