Change Branch
Standards Don’t
Defend Themselves
We Do
Work rights aren’t handed down. They’re won by workers standing together and refusing to let dodgy bosses get away with it. Laws only work if we enforce them. And enforcement starts with us knowing where we stand.
What is Sham contracting?
Sometimes a boss tells a worker they’re a “contractor” when really they’re an employee. That’s called sham contracting — and it’s illegal unless the employer genuinely believed the person was a contractor. It’s also illegal for an employer to:
Lie to a worker to talk them into becoming a contractor for the same job.
Sack (or threaten to sack) an employee just to bring them back as a contractor doing the same work.
Bosses do this to dodge paying entitlements like super, leave and award rates.
If this is happening to you, you haven’t done anything wrong. You’re not in trouble, and you haven’t broken any rules by going along with what you were told. The responsibility sits with the employer — they’re the ones being dodgy, not you.
Penalties: courts can fine individuals up to $21,840, small businesses up to $109,200, and bigger businesses up to $546,000 — for every breach.
Example:
Dave runs a construction firm. He hires Ray for 12 months to cover a worker on parental leave. Dave tells Ray he’ll need an ABN and to invoice for his hours, because he’ll be a “contractor.”
But the job is really employee work: Ray follows Dave’s instructions on site, uses the company’s tools, works set hours, and can’t send someone else in his place or make a profit or loss on the job.
When Ray asks why he can’t just be hired on a fixed-term contract like a normal employee, Dave brushes him off and insists he’s a contractor. Ray isn’t convinced — Ray calls the CFMEU to know where he stands. Laws only work if we enforce them. And enforcement starts with us knowing where we stand.
If this sounds familiar, let us know by filling out our checklist which tests if you might be in a sham contract, or give us a tip.