Some companies still aren't getting the message, with two call centre service providers set to face court after the Fair Work Ombudsman accused them of breaking "sham contracting" guidelines.
The organisations in question are being accused of breaching a number of workplace laws, by employing 10,000 call centre workers and door-to-door sales people as contractors, resulting in "massive underpayments".
The Ombudsman defines sham contracting as an employer disguising or misrepresenting an employment relationship as an independent contracting arrangement, thereby avoiding employee entitlements such as minimum pay rates and leave entitlements.
Speaking at the Australian Industry Group's workplace conference earlier this week, Fair Work Ombudsman Nicholas Wilson, stressed that while hiring independent contractors is not illegal, if an organisation sets out to evade their workplace relations responsibilities, by using commercial processes to find a business partner who will undercut established minimum wage rates, then that may be considered unlawful.
"The pretence that commercial negotiations can procure below award wages or that the cover of an ABN can avoid an employment arrangement are merely that – pretences. And they are pretences that can have significant consequences," he added.
In March, the Ombudsman warned that it would be cracking down on sham contracting in the health and beauty, cleaning, and call centre industries.
That same month, a Brisbane call centre company and its director were fined $214,500 for sham contracting and underpayments while the Construction, Forestry, Mining and Energy Union also threatened industrial action against developers and builders that engage staff as ''sham contractors'', which is believed to account for up to 168,000 workers (See Blog Post: Employers shirk Employee Obligations).
Read the full story: http://www.smartcompany.com.au/industrial-relations/20110503-fair-work-ombudsman-claims-two-companies-labelled-10-000-workers-as-sham-contractors.html
Avoid your business being branded a sham
Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, but you don't need to evade the law to avoid the stresses of Award Interpretation and Employee Time Management processes.
An effective Employee Time Management System can do all the hard work for you via an in-built, fully customisable Award Interpreter.
Calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.
If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management download our Free Guide on How to Choose a Time and Attendance System.
Alternatively feel free to contact Mitrefinch today on 1300 884 831 or email sales@mitrefinch.com.au
Showing posts with label CFMEU. Show all posts
Showing posts with label CFMEU. Show all posts
Wednesday, May 4, 2011
Monday, March 21, 2011
Employers shirk employee obligations with Sham Contracts
As per an article in the latest online edition of the HR Leader, a Brisbane call centre has been ordered to pay a total of $214,500 after being found guilty of underpaying its staff by using “sham contracts”.
Contracting Plus Pty Ltd was found guilty of violating workplace laws by paying its workers less than the minimum hourly rate of pay, amounting to $46,000.
The former Brisbane CBD call centre attempted to classify workers as “independent contractors” rather than employees, and therefore avoided mandatory requirements relating to salary and benefits.
At the ruling, Federal Magistrate Michael Burnett said that, “Sham contracting is a serious matter because if workers are incorrectly classified as independent contractors, they can miss out on fundamental entitlements such as minimum pay rates, penalty rates and annual leave.”
Burnett ordered that the fines should go towards reimbursing the employees of Contracting Plus Pty Ltd, a large number of whom were under the age of 21.
“To purposely deny vulnerable and low-skilled workers these important employment entitlements by disguising them as contractors is particularly reprehensible,” he added. “As such, it is important that my agency mark its disapproval of such behaviour and deter others from doing the same.”
Michael Campbell, Fair Work Ombudsman Executive Director, praised the decision, advising that it sent out a very clear warning to other would-be employers looking to evade workplace legislation and their obligations to employees.
The HR Leader reports that the trend of so-called sham contracting appears to have spread into several sectors, with a recent investigation led by the Construction, Forestry, Mining and Energy Union (CFMEU) halting hundreds of illegal contracts at construction sites across Australia. Nationwide audits look set to continue, with well-known multi-nationals such as Bovis Lend Lease and Multiplex construction being questioned by the CFMEU.
Construction workers have teamed up with the union to create the ‘Stop the Sham’ campaign, in an effort to voice their anger against the growing practice of sham-contracting. They are also calling for co-ordinated Federal Government action.
CFMEU Construction National Secretary Dave Noonan said that he blamed authorities for turning a blind eye to the practice, and as well as treating workers unfairly, the organisations responsible were also evading business taxes.
“These companies are taking lucrative Federal Government construction contracts with one hand, and undermining Australia’s tax base with the other,” he said.
To read the full article see: http://www.humanresourcesmagazine.com.au/articles/27/0C06F927.asp
There is an easier way to comply with penalty rates and workplace legislation without resorting to Sham Contracts
Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, but you don't need to evade the law to elevate the stress of effective Award Interpretation and Time Management processes.
Mitrefinch's Employee Time Management System (TMS) can do all the hard work for you via an in-built, fully customisable Award Interpreter.
Calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.
If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management contact Mitrefinch today on 1300 884 931 or email sales@mitrefinch.com.au
Contracting Plus Pty Ltd was found guilty of violating workplace laws by paying its workers less than the minimum hourly rate of pay, amounting to $46,000.
The former Brisbane CBD call centre attempted to classify workers as “independent contractors” rather than employees, and therefore avoided mandatory requirements relating to salary and benefits.
At the ruling, Federal Magistrate Michael Burnett said that, “Sham contracting is a serious matter because if workers are incorrectly classified as independent contractors, they can miss out on fundamental entitlements such as minimum pay rates, penalty rates and annual leave.”
Burnett ordered that the fines should go towards reimbursing the employees of Contracting Plus Pty Ltd, a large number of whom were under the age of 21.
“To purposely deny vulnerable and low-skilled workers these important employment entitlements by disguising them as contractors is particularly reprehensible,” he added. “As such, it is important that my agency mark its disapproval of such behaviour and deter others from doing the same.”
Michael Campbell, Fair Work Ombudsman Executive Director, praised the decision, advising that it sent out a very clear warning to other would-be employers looking to evade workplace legislation and their obligations to employees.
The HR Leader reports that the trend of so-called sham contracting appears to have spread into several sectors, with a recent investigation led by the Construction, Forestry, Mining and Energy Union (CFMEU) halting hundreds of illegal contracts at construction sites across Australia. Nationwide audits look set to continue, with well-known multi-nationals such as Bovis Lend Lease and Multiplex construction being questioned by the CFMEU.
Construction workers have teamed up with the union to create the ‘Stop the Sham’ campaign, in an effort to voice their anger against the growing practice of sham-contracting. They are also calling for co-ordinated Federal Government action.
CFMEU Construction National Secretary Dave Noonan said that he blamed authorities for turning a blind eye to the practice, and as well as treating workers unfairly, the organisations responsible were also evading business taxes.
“These companies are taking lucrative Federal Government construction contracts with one hand, and undermining Australia’s tax base with the other,” he said.
To read the full article see: http://www.humanresourcesmagazine.com.au/articles/27/0C06F927.asp
There is an easier way to comply with penalty rates and workplace legislation without resorting to Sham Contracts
Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, but you don't need to evade the law to elevate the stress of effective Award Interpretation and Time Management processes.
Mitrefinch's Employee Time Management System (TMS) can do all the hard work for you via an in-built, fully customisable Award Interpreter.
Calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.
If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management contact Mitrefinch today on 1300 884 931 or email sales@mitrefinch.com.au
You can't afford not to.
(Source: HR Leader)
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