Prime Mover Magazine

Ombudsman boosted by funding to crackdown on sham contracts

The Fair Work Ombudsman has been bolstered by a $9.2 million funding investment in a special unit revealed last week in the Government's federal budget.

A unit dedicated to uncovering sham contracting will receive funding over a four year period as it tackles reckless employers who knowingly misrepresent employment relationships as independent contracts to avoid their statutory obligations and employment entitlements.

Part of the unit's purview will be to increase education, compliance and enforcement activities while dedicating additional resources to investigate and litigate cases.

National Roads Transport Association welcomed the announcement in a statement.

"NatRoad opposes sham contracting. This is because legitimate employer members are disadvantaged by having to compete with firms that reduce their costs through unlawful means. We support the Government’s crackdown."

As it helps its members put in place contracts to set out rightful terms of those relationships NatRoad said there was circumstances where supposed contract relationships are misused.

"That is where there is a deliberate disguising of an employment relationship as an independent contracting relationship. That practice is illegal under the Fair Work Act," NatRoad said.

"Sometimes members ask whether workers with ABNs are always contractors. That's not the case. If the working arrangement is primarily for the provision of a worker’s labour, whether the worker has, or quotes, an ABN is not the deciding factor of whether or not a worker is a contractor."

"Unless a driver provides a vehicle or other significant equipment, it is unlikely that they will be a contractor, even when holding an ABN."

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