Aus Guards Blog

Australia: Sham Contracting

Fri, 03 Sep 2010 00:40:00 GMT

These provisions are consistent with the amendments made under the Workplace Relations Legislation Amendment (Independent Contractors) Act 2006 (Cth) with the exception that this Bill removes express remedies of injunction and compensation. It is submitted that these provisions are consequently deficient in terms of remedies. Additionally, it is submitted that there needs to be provision for Fair Work Inspectors and appropriately authorized officials of organizations to have powers to investigate the genuineness of an independent contract for these sham contract provisions to be effective and enable FWA to test the relationship where it is, possibly incorrectly, labeled a contract for services.

It is submitted that the sham contracting provisions should also include:

• powers enabling Fair Work Inspectors and appropriately authorized officials of organizations to require proof that the contract is a bona fide contract for services such as with:

Powers to require the production of documents, in particular the purported contract;
Powers to inspect and copy documents
Powers to require information with respect to the purported contract;
Powers to require names and addresses;
Powers of entry into premises to exercise the above powers.
Provisions in relation to what orders the court may make with respect to a contravention (in addition to the civil penalty provisions under namely:

A provision that enables a person affected by sham contracting arrangement to apply to a court of competent jurisdiction for declaration that they are an employee; and
Provisions that grant power to the court to order the (deemed) employer to pay to the (deemed) employee, wages and other entitlements the employee would have been entitled to as an employee under any relevant fair work instrument that covers their employment where the employee was paid less.
Provisions granting power to the court to order remedies including injunction, interim injunction, and compensation.

This provision provides that an employer must not dismiss, or threaten to dismiss, an individual who is an employee of the employer and performs particular work for the employer, in order to engage the individual as an independent contractor to perform the same, or substantially the same, work under a contract for services. It is submitted that this provision should include a sub-clause that expressly permits the granting of an injunction or interim injunction for a breach of this section and/or compensation for loss suffered as a result of the dismissal or threatened dismissal.

In a recent decision, the Federal Magistrates Court examined the sham contracting provisions of the Workplace Relations Act 1996 (Cth) (WR Act). These provisions have been retained in the Fair Work Act 2009 (Cth) (FW Act). In this case, the Construction, Forestry, Mining and Energy Union (CFMEU) brought the application, claiming that two purported contractors providing ABNs and invoices were really employees. The company and directors in this case escaped penalty because the Court accepted that they did not know and were not reckless as to whether the contracts would be contracts of employment rather than contracts for services. However, the case is a timely reminder to businesses of the existence of these provisions.

Further, while the sham contracting provisions have been retained in the FW Act, there is now a reversal of the onus of proof onto employers, meaning that the case may have been decided differently under the FW Act. The QWRO has encountered alarming levels of sham contracting.

Industry investigations have shown that it is particularly prevalent in highly competitive areas including, but by no means limited to, Contract Security, Fruit and Vegetable Harvesting and Building and Construction.

Workplace Ombudsman Chief Counsel Leigh Johns says it will be argued the workers were paid on a commission basis only during the sham period and as a result were underpaid more than $52,000 in wages and annual leave entitlements. Mr. Johns says the Workplace Ombudsman is very concerned about sham contracting arrangements.

Fair work Australia

Fri, 03 Sep 2010 00:24:00 GMT

The Fair Work Ombudsman has launched a prosecution against the operators of a NSW security company over their alleged involvement in underpaying 22 workers almost $75,000. Facing court is Damien Peter Love, the sole director of Drymist Holdings Pty Ltd, and his wife Tammy Leigh Love, a part-owner of the Wollongbar-based company. Drymist Holdings was placed into liquidation in August this year, which prevents the Fair Work Ombudsman from prosecuting the company. Fair work Australia is the national workplace relations tribunal that was established by the Rudd Government under the Fair Work Act 2009. It is an independent body with the power and authority to carry out a range of functions that include:

1. The safety net of minimum wages and employment conditions
2. Enterprise bargaining
3. Industrial action
4. Dispute resolution
5. Termination of employment

The Fair Work Act established a new system of regulation that attempted to create a more national system for regulating industrial relations in Australia. Each state has the discretion to hand over some or all of their industrial relations powers to the Commonwealth, and should a state decide to refer their powers to a centralized and national industrial relations system, all the employees of that state will effectively be covered by the national Fair Work Act. This new national body has taken over the roles of the Australian Industrial Relations Commission (AIRC) in the workplace when dealing with workplace dispute and industrial actions, and in the process determining national industrial relations policies that include setting minimum wages and regulating the award system.

It is alleged that for various periods of time in 2007 and 2008 the security officers were paid according to rates stipulated in Australian Workplace Agreements (AWAs) lodged with the Workplace Authority. The Workplace Authority found that the AWAs failed to pass the ‘fairness test’. The Workplace Authority ordered Drymist Holdings to compensate the security officers for the entitlements they were underpaid but it is alleged that the company repeatedly failed to do so. The biggest alleged underpayment of an individual worker is $10,355. Fair Work Ombudsman NSW Director Mark Davidson says the decision to prosecute Mr. and Mrs. Love was made because of the significant amounts involved and their failure to rectify them.

Fair Work Australia promotes bargaining under ‘good faith’ between employees and employers. Under the Work Choices legislation, the power of trade unions to represent members during contract negotiation periods was weakened, due to laws that prevented union right of entry into the workplace. Collective bargaining regulates the terms under which employers hire employees and the future treatment of future employees. Collective bargaining acts as a voice mechanism, where employees, employers and representation parties can express their objectives surrounding the nature of work. Where an employee has only been employed a short time, there is no entitlement to redundancy pay regardless of whether the redundancy is in the ordinary and customary turnover of labor. Therefore, it is submitted that this exclusion has no effect where it is “ordinary and customary” for an employer to have a high turnover of labor, such as in service industries, or for example, the usual drop off in staff requirement in the tourism and hospitality industry after the Christmas/New Year period. The Bill should contain a specific definition of “ordinary and customary turnover of labor” in order to ensure that where an employee has been employed for a long period of service, their service is recognized for the purposes of redundancy pay if the employer is terminating their service as a consequence of economic belt-tightening. Economic belt-tightening could be “ordinary and customary” for an employer at any time, therefore this exclusion potentially operates broadly enough to entirely avoid operation of these redundancy pay provisions. Case law determining the question of “ordinary and customary” is complex and parties to future arguments on this question would be greatly assisted by such a definition.

Workplace Ombudsman

Fri, 03 Sep 2010 00:30:00 GMT

The Fair Work Ombudsman is the central point of contact for free advice and information on the Australian national workplace relations system. The Fair Work Ombudsman also investigates workplace complaints and enforces compliance with national workplace laws. The Federal Workplace Ombudsman has initiated legal action in the Federal Magistrates Court against Adrian Luik, of Arkana Road, the Gap. It alleges that Luik’s former company Alexander Rose – trading as Javelin Security Services – failed to properly pay one of its patrol officers employed between March and May, 2006. Workplace Ombudsman Executive Director Michael Campbell says Luik is named as the respondent because the company has since been wound up and deregistered.

In Queensland last financial year the workplace watchdog recovered $6.445 million for underpaid workers. The Fair Work Ombudsman does this by:

Providing information, education and advice on Commonwealth workplace laws
Investigating complaints or suspected contraventions of workplace laws
Taking court action to enforce workplace laws.

The Fair Work Ombudsman is an independent statutory agency created by the Fair Work Act 2009 along with Fair Work Australia – the national workplace relations tribunal. The Office of the Fair Work Ombudsman consists of the Fair Work Ombudsman, supporting staff and Fair Work Inspectors. Fair Work Inspectors provide advice, and investigate and resolve complaints and potential breaches of workplace law.

The Fair Work Ombudsman promotes harmonious, productive and co-operative workplaces. It also monitors compliance and investigates breaches of national workplace laws. The functions of the Fair Work Ombudsman, as set out in the Fair Work Act 2009, include: The Fair Work Ombudsman offers employers and employees free information and advice on pay, conditions, and workplace rights and obligations under the national workplace relations system. Information and guidance material in the form of fact sheets, templates and Best Practice Guides, is provided on the Fair Work Ombudsman’s website and Fair Work Online. The Fair Work Ombudsman conducts targeted campaigns and audits. Targeted campaigns aim to inform employers in a specific industry of their obligations, and ensure that they understand and comply with Commonwealth workplace laws. Fair Work Inspectors generally start an investigation once a complaint has been made. The severity of the complaint determines the course of action taken by the Fair Work Ombudsman.

The Fair work ombudsman is an independent statutory office created by the Fair Work Act 2009.Functions includes promoting harmonious, productive and cooperative workplace relations and ensuring compliance with Commonwealth workplace laws. In exercising these functions, this organization:

offer people a single point of contact for them to get accurate and timely advice and information about Australia’s workplace relations system
educate people working in Australia about their workplace rights and obligations
investigate complaints or suspected contraventions of workplace laws, awards and agreements
Litigate to enforce workplace laws and deter people from doing wrong in the community.

The prohibition on "sham arrangements"

Fri, 03 Sep 2010 00:51:00 GMT

Workplace sham contracting arrangements can present significant risks for employers who are seeking to avoid the employment related statutory obligations, such as superannuation, payroll tax, workers compensation, leave entitlements and withholding tax. However employers who intentionally disguise employees as individual contractors face serious financial penalties of up to $6,600 for individuals and $33,000 for corporations if convicted. Sham contracting occurs where an employer engages a worker under the same conditions as a normal employment relationship, but classifies the worker as an individual contractor. The arrangement may be as blatant as an employer dismissing its employees then re-engaging them once an ABN is provided. In more discreet cases, there may be difficulties in establishing whether a sham contracting arrangement exists.

It is necessary to collectively review the factors which point to whether a sham arrangement is in existence:

Who pays the tax and makes superannuation contributions?
Does the worker receive statutory leave entitlements such as annual and long service leave?
Is the worker engaged continuously or for a specific project?
Is the worker paid by the hour or at the completion of a project?
Can the worker delegate duties?
Is the worker under direct supervision and control of the employer?

If an employer is prosecuted by the Fair Work Ombudsman under this provision and the worker is deemed to be an employee, the onus lies with the employer to prove that it believed there was no risk, harm or illegality in engaging the worker as an independent contractor. A defense of ignorance will not stand where the employer has taken deliberate or reckless steps to engage the worker as a contractor in order to avoid meeting employee entitlements.

In addition to prosecution by the Fair Work Ombudsman, employers who fall foul of the sham contracting arrangements prohibition may face a claim for back-pay of unpaid leave entitlements, overtime and compulsory superannuation contributions owed to the worker, further increasing the financial consequences of engaging in this prohibited practice. Mr. Noy, on behalf of Nubrick Pty Ltd (Nubrick), a subsidiary of Brickworks Limited, offered work to Mr. Little and Mr. Bonnice. They were offered a flat rate of $30 per hour out of which they had to pay their owntax, had to provide an ABN and were required to send invoices for their work. The CFMEU brought the application in the Court alleging that the contracts entered into with Mr. Little and Mr. Bonnice were in reality, contracts of employment and that Nubrick had contravened the sham contracting provisions of the WR Act. Under the WR Act, it was prohibited for a person to offer to enter into a contract for services as an independent contractor where in reality, the contract one of employment as an employee was.

However, there is no contravention if the person proved on the balance of probabilities that at the time the person made the representations, the person did not know and was not reckless as to whether the contract was a contract of employment rather than a contract for services. In this case, the Court had two issues to decide:

whether the contracts were contracts of employment or for services
if they were contracts for services whether Mr. Noy, at the time he made the representations, was "reckless as to whether" the contracts "would be contracts of employment".

In deciding how to classify the contacts entered into, the Court examined the terms of the offers made to the two workers. The Court weighed the factors in favor of an independent contract:

Both workers were offered a flat rate of $30 per hour out of which they would have to pay tax
They were told they would have to provide an ABN and had to invoice the company for the work done
They were told they would not get superannuation
At least one of the workers was told they could delegate their work to someone else.

Factors that the Court considered were indicative of a contract of employment were:

The workers had fixed hours of employment and were told when to start and finish
They were engaged to perform continuous work for the company
They were provided with some safety gear
They did not provide their own tools and equipment but used equipment provided by the company
They had no special qualifications and did not provide any skilled labor.

In examining these factors, the Court found that while "both Mr. Little and Mr. Bonnice were offered and accepted contracts of employment, the Court does not find that the contracts were clearly contracts of employment or that they are indicative either way". Of more importance to the Court was the fact that at the time Mr. Noy made the representations, he did not know that either of these contracts were contracts of employment.

Employee workplace rights and rules

Fri, 03 Sep 2010 00:57:00 GMT

Commissioner Don Brown was appointed as the inaugural Queensland Workplace Rights Ombudsman in control of the QWRO which commenced operation from 2 July 2007. The Ombudsman’s functions include the provision of information and advice to Queensland workers and employers about their workplace rights and obligations, and to promote fair and equitable practices in Queensland workplaces. The Ombudsman is charged with investigating and publicizing unlawful, unfair or inappropriate industrial relations and other work related matters in Queensland. The Ombudsman also advises the Minister for Transport, Trade, Employment and Industrial Relations, the Hon. John Mickel MP, on the impact of industrial relations laws in Queensland workplaces as well as providing quarterly and annual reports to the Queensland Parliament.

In the 18 months since the Ombudsman was appointed and the QWRO established, there have been in excess of 29,000 inquiries and over 900 cases investigated along with three industry-wide investigations. In this time it has been possible to identify emerging trends and pressing problems. Issues addressed in these submissions arise mainly from matters dealt with by the Ombudsman and the QWRO or the experience gained by the Ombudsman in his role as a Queensland Industrial Relations Commission member.

A sham contracting arrangement occurs where an employer attempts to disguise an employment relationship as an independent contracting arrangement, usually for the purposes of avoiding responsibility for employee entitlements. Under the sham contracting provisions of the Workplace Relations Act 1996, an Employer cannot:

intentionally disguise a person’s employment, or an offer of employment, as an independent contracting arrangement;
dismiss, or threaten to dismiss an Employee for the sole or dominant purpose of reengaging the person as an Independent Contractor;
Make a knowingly false statement for the purpose of persuading an Employee to become an Independent Contractor.

The Act provides serious penalties for breaches of these provisions. Employees and Independent Contractors can request assistance from the Workplace Ombudsman if they feel their rights have been breached. Workplace Inspectors can seek the imposition of penalties for breaches of sham contracting and reform opt-in provisions. The Court may impose a maximum penalty of $33,000 per breach. Workplace Inspectors may also apply to the Court to grant an injunction if an Employer seeks to dismiss, or threatens to dismiss, an Employee for the sole purpose of re-engaging the employee as an Independent Contractor. The purpose of the injunction may be to prevent the dismissal from occurring, have the Employee reinstated, compensated or otherwise remedy the consequences.

The Occupational Safety and Health (OSH) Act of 1970 created the Occupational Safety and Health Administration (OSHA) within the Department of Labor and encouraged employers and employees to reduce workplace hazards and to implement safety and health programs. The Act gave employees many new rights and responsibilities. This booklet discusses these rights and responsibilities and encourages employees to work cooperatively with employers to promote safe and healthful workplaces that add value to everyone: businesses, workplaces, and workers’ lives.

Employers must establish a written, comprehensive hazard communication program to ensure that employees who work with or near hazardous materials are informed of the hazards and provided proper protection. A hazard communication program includes provisions for container labeling, material safety data sheets, and an employee training program. Some employers may not be able to comply fully with a new safety and health standard in the time provided due to shortages of personnel, materials, or equipment. In these situations, employers may apply to OSHA for a temporary variance from the standard. In other cases, employers may prefer to use methods or equipment that differ from those prescribed by OSHA, but which the employer believes are equal to or better than OSHA’s requirements. In these cases, the employer may seek a permanent variance for the alternative approach.

Your Own In House Security

Tue, 24 Aug 2010 06:59:00 GMT

Aus Guards gives you total control over your workers without the associated risks of employment and contracting!

You choose how much you pay*!
You choose who works and who does not work*!

Would you like to save thousands of dollars a year off your security staff costs run your own security without the risk?

How much do you currently pay for your security staff?

Do you pay more than $29.00* (ex GST) / hour flat rate 24/7?

Aus Guards hourly rate for security personnel starts from only $29.00* plus GST.

Aus Guards is a labour hire business specialising in security personnel.

Ausguards will do all of the following for you:

Over 22 years of experience in all aspects of the security industry specialising in crowd control and security guard work right here in south east queensland.
Provide access to over 200 experienced licensed security personnel already registered with ausguards if and when required.
Offer a simple, flexible and cost effective way to engage the services of your workers without the hassle and risks associated with employing staff.
Remove the stress of workplace administration, paperwork & wages.
Take care of taxation, superannuation, workers compensation, liability insurances, licensing & industrial relations relating to security staff.
Save you thousands of $$$$ on your security staff costs.
Eliminate the confusion and pitfalls regarding always changing workplace regulations and paperwork.
Convert all of your existing security personnel over to our system, giving you better flexibility and management of your workers.
Give you more time and control of your business.

To save thousands on your annual security costs without compromising anything- run your security personnel the new way- the better way...
contact Aus Guards on 1300 88 00 26 or visit www.ausguards.com.au

*Conditions Apply

Team Aus Guards

Aus Guards - Security Personnel

Tue, 17 Aug 2010 04:18:00 GMT

Aus Guards - Security Personnel From Only $29.00* plus GST Per Hour, 24/7

WARNING: Government workplace changes to rates and conditions are coming that will affect your business. Don’t get caught......

Aus Guards is a labour hire company specialising in security personnel.

Aus Guards hourly rate for security personnel starts from only $29.00* plus gst per hour, 24/7.

Aus Guards can do all of the following for you:

Over 22 years of experience in all aspects of the security industry specialising in crowd control and security guard work right here in queensland.
Offer a simple, flexible and cost effective way to engage the services of your workers without the hassle and risks associated with employing staff.
Remove the stress of workplace administration, paperwork & wages.
Take care of taxation, superannuation, workers compensation, liability insurances, licensing & industrial relations relating to security staff.
Save you thousands of $$$$ on your security staff.
Eliminate the confusion and pitfalls regarding always changing workplace regulations and paperwork.
Convert all of your existing security personnel over to our system, giving you better flexibility and management of your workers.
Give you more time and control of your business.

So save thousands on your annual security costs without compromising anything. aus guards offer you the new way - the better way...

Contact Aus Guards on 1300 88 00 26 or visit www.ausguards.com.au

*Conditions Apply