Warning over rights of contract workers

by Ray Clancy on November 23, 2011

in Australia Immigration

Unions call for workplace protection against sham contracting

Overseas workers in Australia need to be aware that some employers offering contract work may not offer them enough protection.

The Australian Council of Trade Unions (SCTU) is calling for workplace protection to be strengthened to ensure secure jobs in the wake of a Fair Work Ombudsman’s report that sham contracting is rife across a range of industries.

ACTU President Ged Kearney said the Fair Work Ombudsman’s report confirmed longstanding concerns that employers are avoiding their obligations, including pay and entitlements, by disguising a straightforward employment relationship as a contracting arrangement.

The office of the Fair Work Ombudsman’s report is based on an investigations of employers in the cleaning, hair and beauty and call centre industries, which found one in five engage in sham contracting, a third of them knowingly.

The Ombudsman has already prosecuted a number of employers and is considering further legal action in other cases.

The report found the issue is not limited to these industries, confirming union reports that it is also rife in construction, transport and other sectors.

‘Sham contracting is one of the dirty secrets of the modern Australian workplace. By hiring someone as a contractor, employers manage to avoid their legal responsibilities including pay rates and other entitlements,’ said Kearney.

‘Hiring an employee as a contractor shifts the risk onto the worker and makes it impossible for them to plan for their future because they have little or no job security, slim chance of securing a mortgage and no holiday or sick pay. We have cleaners, call centre workers, hairdressers and other workers forced to register an Australian Business Number and be treated as a contractor so their regular employer can avoid giving them decent pay and conditions, and entitlements like superannuation,’ she explained.

She pointed out that secure jobs are getting harder and harder to find.

‘This is not about improving efficiency or productivity, it is about shifting risks and costs onto workers, to increase profits. Stronger enforcement of existing laws and tougher legislation and penalties are necessary to prevent employers setting up sham contract arrangements, either knowingly or unknowingly,’ she said.

‘The definition of sham contracting needs to be tightened too, to make sure it captures cases where the employer claims it did not deliberately break the law,’ Kearney added.

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