Ioakimidis v Lygon Court Travel Pty Ltd (No 2) [2026] FCA 176

Ioakimidis v Lygon Court Travel Pty Ltd (No 2) [2026] FCA 176 is a Federal Court penalty decision under the Fair Work Act 2009 (Cth). The employer admitted three contraventions: failing to pay annual leave loading on accrued but untaken annual leave on termination, failing to make and keep employee records, and failing to provide payslips.

The Court made declarations and imposed total penalties of $55,000 against the company. The penalties were $15,000 for the annual leave loading contravention, $20,000 for the employee records contravention, and $20,000 for the payslips contravention. The penalties were ordered to be paid to the applicant within 28 days.

The decision is especially useful for business owners because the admitted breaches arose in a setting where the parties had not properly resolved whether the worker was an employee or an independent contractor. The Court accepted that confusion formed part of the background, but still treated the compliance failures seriously.

Ms Lisa Ioakimidis worked with Helloworld Lower Templestowe between 2014 and 25 September 2019. The business was a franchisee travel agency. Its directors and managers were Ms Suzanne Corvasce and Ms Kristina Rowe. The relationship began after Ms Ioakimidis had ceased work at another Helloworld franchise. She and Ms Corvasce agreed that she could attend the Helloworld Lower Templestowe office to work on current bookings and files.

The evidence described an arrangement that the respondents considered different from their ordinary staff arrangements. Ms Corvasce said the applicant would bring her own clients, develop a group travel business, use her own business name and ABN, work on a commission split, and not be required to attend the office each day. The respondents said those features led them to treat the arrangement as something other than employment.

But the written documents did not cleanly reflect that view. In about June 2014 the parties signed a written contract, and in 2015 they signed a further contract in substantially the same form. Both were titled "Employment Agreement". They also contained terms commonly associated with employment, including references to salary, termination of employment, workplace policies and procedures, and restraint obligations after employment ended. At the same time, the contracts also said that "as a contractor" the worker was not entitled to leave. That internal inconsistency became an important part of the Court's description of the context.

The relationship ended acrimoniously on 25 September 2019. In November 2019, Ms Ioakimidis commenced proceedings in the Federal Circuit Court against the company and the two individual respondents. Her claims were broad. They included alleged breaches of contract, alleged contraventions arising from wrongly characterising her as an independent contractor rather than an employee, alleged failures to pay entitlements under the National Employment Standards and the General Retail Industry Award 2010, alleged payslip failures, alleged adverse action, and a claim about reasonable notice of termination.

The respondents filed a response in December 2019 admitting the existence of an employment relationship for the period between May 2014 and 25 September 2019, and admitting that the company failed to make and keep employee records and failed to give payslips during that time, while denying the contraventions. The pleadings later expanded, including additional claims and a cross-claim by the respondents alleging unjust enrichment, breach of fiduciary duty and breach of the Corporations Act.

There were also criminal proceedings in Victoria concerning aspects of the applicant's conduct while working for the business. In those criminal proceedings, the applicant gave evidence and made submissions that she was an independent contractor, while Ms Corvasce and Ms Rowe also gave evidence about their subjective view of the relationship. The respondents later relied on that history to argue there had been ongoing confusion about status.

The proceeding was transferred to the Federal Court in 2021. In June 2025, the Court dismissed an interlocutory application by the respondents seeking to dismiss the Fair Work causes of action as an abuse of process and to withdraw admissions that the applicant was an employee. Shortly after that, the parties settled some claims. On 11 September 2025 they further settled the proceeding, with the respondents paying a confidential sum to compromise the remaining claims except for declarations and pecuniary penalties in respect of three admitted contraventions by the company.

Those admitted contraventions were: one contravention of s 45 arising from failure to pay annual leave loading on termination in breach of the General Retail Industry Award 2010, one contravention of s 535 arising from failure to make and keep employee records, and one contravention of s 536 arising from failure to give payslips. As part of the settlement, the parties also agreed to dismiss the proceeding against Ms Corvasce and Ms Rowe.

By the time of this judgment, the Court was not deciding whether the three Fair Work contraventions had occurred. The company had admitted them. The Court's task was narrower but still significant: whether to make declarations, and what pecuniary penalties were appropriate.

That required the Court to assess the nature and extent of the conduct, the circumstances in which it occurred, the role of deterrence, the size and position of the business, the involvement of senior management, whether the conduct was deliberate, whether there had been contrition and corrective action, and whether the breaches were properly distinct or should be treated as a single contravention for penalty purposes.

The case also involved a practical status issue. The obligations under ss 45, 535 and 536 arose because the applicant was an employee. The respondents argued that the admitted breaches occurred in a context of ignorance, confusion and lack of appropriate enquiry about whether she was an employee or an independent contractor. The applicant argued that this was not a strong mitigating factor, particularly where the confusion reflected a failure to obtain proper advice.

The Court accepted that the circumstances were capable of arising where parties had not given sufficient and ongoing attention to the nature of the working relationship and the obligations that followed from it. The Court set out the surrounding facts in some detail, including the unusual features of the arrangement, the use of the applicant's own business name and ABN, the invoicing practice, and the fact that she was treated differently from other staff.

Importantly, the Court also focused on the contracts. The 2014 contract was titled "Employment Agreement" and included employment-style clauses, while also stating that as a contractor the worker was not entitled to leave. The Court considered that this inconsistency underscored the need for attention and clarification. The same point applied to the 2015 contract, which had been prepared with assistance from an HR professional but remained substantially in the same form. The Court accepted that the 2015 contract should have made it more obvious that the characterisation of the relationship required clarification and that an inquiry should have been made at that point.

Justice Dowling held that it was appropriate to make declarations and impose penalties totalling $55,000. The Court declared that, upon admission by the company, it had contravened s 45 of the Fair Work Act on about 25 September 2019 by failing to pay annual leave loading on accrued but untaken annual leave upon termination of employment, contrary to cl 32.3 of the General Retail Industry Award 2010.

The Court also declared that, upon admission, the company had contravened s 535(1) in the period June 2014 to 29 August 2019 by failing to make and keep employee records as required by the Fair Work Regulations, and had contravened s 536(1) in the period June 2014 to August 2019 by not providing payslips to the applicant in the course of her employment.

The penalties imposed were $15,000 for the s 45 contravention, $20,000 for the s 535 contravention, and $20,000 for the s 536 contravention. The Court ordered that those penalties be paid to the applicant within 28 days. The proceeding against the second and third respondents was dismissed by consent, and all other claims against the company were dismissed apart from the admitted contraventions.

The judgment explains that civil penalties under the Fair Work Act are imposed primarily for deterrence. The Court referred to the usual principles, including that the penalty must be proportionate and no more than reasonably necessary to deter further contraventions by the contravener and others. The Court also referred to the familiar penalty factors, such as the nature and extent of the conduct, the circumstances in which it occurred, prior conduct, contrition, corrective action and the need for specific and general deterrence.

For the record-keeping and payslip breaches, the Court accepted that the failures continued over a number of years but were taken to constitute a single contravention of each provision because of s 557(1) of the Fair Work Act. Even so, the Court treated them as serious ongoing failures. The maximum penalty for each admitted contravention was identified as $63,000 for the body corporate, making the total maximum exposure $189,000.

The Court accepted that the contraventions arose in a context of ignorance, confusion and lack of appropriate enquiry about the applicant's status. But the Court also accepted the applicant's submission that the underlying cause of the contraventions was a failure to obtain proper advice as to the characterisation of the relationship. The respondents had apologised and had taken steps since the litigation began to obtain specialist HR and legal advice when employing new staff. Those matters were relevant, but they did not remove the need for substantial penalties.

One of the most useful parts of this judgment for business owners is the Court's treatment of the written contracts and the way the arrangement operated in practice. The respondents pointed to features they said supported a contractor-style arrangement: the applicant brought her own clients, used her own business name and ABN, invoiced the business, was not required to attend the office every day, and was paid on a commission basis. They also pointed to the fact that she charged and collected GST during part of the relationship.

But the contracts themselves were titled "Employment Agreement" and included clauses that looked like employment clauses. They referred to salary being compensation for incidents of employment, termination of employment, workplace policies and procedures, personal communications during working hours, and a restraint of trade after employment ended. The Court accepted the applicant's submission that these were not the sort of terms one would ordinarily expect in a contract with an independent party providing services at arm's length.

The problem was not just that the documents were mixed. It was that the mixed drafting should have prompted the business to stop and clarify the arrangement. The Court said the contractor clause ran against the grain of the rest of the document. It also accepted that the 2015 contract, prepared with assistance from an HR professional, should have made the need for clarification even more obvious. That is a practical warning for any business using templates or hybrid arrangements. A contradictory contract can become evidence that you should have made further enquiries, not evidence that you were safe.

The Court also noted that the business had a record-keeping system called Wages Manager for all other staff. That system generated payslips and tracked annual leave and annual leave loading. The applicant, however, was treated differently. She was not issued payslips through that system. Instead, the business received invoices from her and paid accordingly. This difference in treatment mattered. It showed how a classification assumption can flow into day-to-day compliance failures.

For businesses, that is a common risk pattern. One worker is seen as a special case, so they sit outside normal payroll, outside ordinary record-keeping, and outside the standard process for leave and termination payments. If the legal characterisation later turns out to be employment, the business may face multiple contraventions at once.

This case should not be read as saying that every unusual or commission-based arrangement is necessarily employment. Nor does it decide every issue that can arise in a worker classification dispute. It is a penalty judgment after admissions and settlement of most claims. But it does show how the Court is likely to view a business that leaves status unresolved while continuing to engage the worker for years.

The first point is that uncertainty is dangerous. If the arrangement does not fit neatly into your normal employee or contractor model, that is the moment to get the position checked. Waiting until a dispute arises can mean years of exposure have already accumulated.

The second point is that contracts need to be internally coherent. A document that says "Employment Agreement" while also saying the person is a contractor is not a clever compromise. It is a warning sign. If the contract contains employment-style controls, policies, remuneration language and post-employment restraints, you should expect close scrutiny.

The third point is that payroll compliance follows legal status, not business preference. If the worker is an employee, the business needs to consider award obligations, termination entitlements, employee records and payslips. A worker should not be left outside ordinary payroll systems simply because the arrangement feels different from everyone else's.

The employment relationship ran from 2014 until 25 September 2019. Proceedings began in November 2019. The matter was transferred to the Federal Court in 2021. In June 2025 the Court dismissed an interlocutory application by the respondents seeking to withdraw admissions and argue abuse of process. The parties then reached partial and further settlements in June and September 2025, leaving only declarations and penalties for three admitted contraventions. Judgment on penalty was delivered on 27 February 2026.

The decision is therefore best understood as the end point of a long-running dispute. It does not resolve every allegation originally made. Instead, it records the Court's final orders on the admitted Fair Work breaches that remained after settlement.

This page is based on the Federal Court judgment in Ioakimidis v Lygon Court Travel Pty Ltd (No 2) [2026] FCA 176, delivered by Dowling J on 27 February 2026. The judgment clearly supports the parties, the background facts, the admitted contraventions, the declarations made, the penalty amounts, the broad procedural history, and the Court's treatment of confusion about worker status as part of the penalty context.

The publicly reviewed text ends before the full discussion of all penalty submissions concludes. For that reason, this page stays within the facts, orders and reasoning that are clearly supported and does not add further conclusions beyond them.