Published: 9 Feb 2022
The High Court has today dealt a savage blow to the sham contracting labour hire practices that rob construction workers of wages.
It found that a construction worker who was engaged through a labour hire company but required to work under an ABN for 25% less pay was, in reality, an employee of the labour hire company and not an independent contractor.
The CFMEU has long argued that such sham contracting arrangements are unlawful.
In this case, a British backpacker was employed as a labourer through a labour hire company, Construct, and required to work on two Hanssen sites in Western Australia under Hanssen’s direct supervision. Construct controlled where he worked, and who he worked for. The union successfully argued he was in reality a casual employee of Construct and entitled to compensation.
Today’s High Court ruling overturns two earlier Federal Court decisions and in finding that this worker was in fact an employee of the labour hire company.
“The High Court has today reaffirmed that workers have rights and entitlements that cannot be taken away by shady legal devices and dodgy employment contracts,” said Dave Noonan, CFMEU National Construction Secretary.
“Labour hire companies who attempt to use legal trickery in employment contracts to undermine wages and conditions are on notice now that the High Court has exposed that trickery for what it is.”
“The WA Branch of the CFMEU had to pursue this matter all the way to the High Court of Australia to get the law to reflect the reality that if a worker is told where, when and what to do, then they are exactly what they appear to be – an employee.”
“The Fair Work Ombudsman could have pursued a public prosecution on this matter but bowed out at the very first stage leaving it up to the CFMEU to stick up for workers and protect their rights.”
“Bosses who try to rip their employees off by mislabelling them as independent contractors are not engaged in inadvertent underpayment; they are operating a deliberate strategy across the industry to steal wages from workers.”
“Employers who respond to today’s ruling by hiring lawyers to try to draft their way around the decision will only create more uncertainty for the industry.”
“This decision is not a threat to legitimate sub-contractors or workers running their own small business. It is a repudiation of unscrupulous labour hire companies who seek to undercut their competitors through wage theft.”