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Scrutiny on Cleaning sector continues

news
September 25 2019

By Leigh Johnston

A surprise audit of the Optus Stadium in Perth was conducted by the Fair Work Ombudsman on Sunday as part of an ongoing investigation into cleaning operations at major Australian sporting venues.

The nationwide audit comes as the Fair Work Ombudsman cracks down on sham contracting, as a result of information suggesting working arrangements may not comply with Australia’s workplace laws.

In particular, the Fair Work Ombudsman is concerned about the potential of cleaners being misclassified as independent contractors, rather than as employees, which means they would not receive the same entitlements as an employee would under the relevant industrial instrument.

Particular aspects of Sham contracting, may include: “deliberately disguising an employee/employer relationship as an independent contracting arrangement. It frequently occurs in situations when companies need labour, but don’t want the responsibility of paying for employee entitlements such as leave, workers’ compensation and superannuation”.

With the rise of the “gig-economy”, where temporary positions are commonplace and organisations are increasingly contracting with independent workers, Employsure urges employers to be confident about their contracts with employees, and to be aware that it is possible to accidently engage in a sham contracting arrangement.

When engaging independent contractors or hiring employees, the Fair Work Act is clear about sham contracting arrangements and what employers are not able to do.

When determining whether a relationship is that of contractor or employee, a court or tribunal generally looks at the totality of the relationship and may consider the following:

  • Degree of control over how and when the work is done
  • Expectation of work
  • Financial risk
  • Who provides tools and equipment
  • Method of payment
  • Leave entitlements
  • Ability to work for other companies
  • Right to delegate or subcontract

If you incorrectly represent to your worker the nature of the relationship between you and that worker, under Australian employment law this could be a sham contracting arrangement.

Related: Employee versus independent contractor

 As it is possible for companies and businesses to accidentally engage in sham contracting arrangements, Employsure encourages employers seek advice if they are unsure about whether someone is an employee or independent contractor, and to clarify any uncertainties they may have.