From Our Blog

A Call to Arms against Sham Contracting Practices

It’s already 2017 and still sham contracting continues to stain the reputation of legitimate contracting agreements.

Recent news report of a tour bus operator in Gold Coast who allegedly engaged in sham contracting and underpayment by labeling two employees as independent contractors despite making no changes to what was still an employment relationship.

What’s really alarming is that this sham contracting arrangement had been happening since 2014.

The Fair Work Ombudsman (FWO) has taken legal action against AVA Travel after a request for assistance from the tour bus company’s employee. The request centres on a claim that staff received a text message in September 2014 informing them that they would be engaged as independent contractors starting the following month.

Moreover, they would still perform the same work and be paid the same flat rate for all hours worked, but without any superannuation. As you’d surmise, this already amounts to sham contracting as well as underpayment, since rates must also be adjusted for overtime, weekend and public holiday hours.

It’s time to end this myth propagating the conversion of employees to contractors as a way to cut business costs. It is a deplorable practice that undermines workforce relationships and casts unfair scrutiny on compliant contracting arrangements.

We commend the FWO’s vigilance against sham contracting. We at Certica® will never participate in causing workers to lose employment protections and entitlements by labeling them as independent contractors.

Certica® works with existing contracting relationships and contractors to bring compliance and simplicity of operation – this ensures all statutory concerns are met and all parties can focus on their business, leading to increased earnings for all.

If you have questions or concerns on your current contracting arrangements, please feel free to contact us on our hotline 1300 301 401.

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2 responses to “A Call to Arms against Sham Contracting Practices”

  1. aazmon.com says:

    Legally, Uber and Lyft are also facing charges of misclassifying workers, and a case against an online work platform called Crowdflower that uses independent contractors to complete tasks is in the process of being settled.

  2. […] that you are engaging contractors compliantly? Unfortunately, many businesses are at risk for sham contracting because their contracting arrangements have not been properly set […]

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