Building and construction companies in southern Queensland will be targeted in an audit of ‘sham contracts’. The ABCC will conduct audits through to the end of October 2009 to ensure contracting arrangements in the region are lawful and legitimate.
Where an ABCC audit identifies concerns about contractual arrangements, we will provide advice and information to improve the arrangements. ABC Inspectors may initiate an investigation into suspected sham contracting arrangements.
The southern Queensland audit will focus on subcontractors working in the concreting, formwork scaffolding and steel fixing areas.
What is sham contracting?
When an employer tries to disguise an employment relationship as an independent contracting arrangement it may be a ‘sham contract.’ Such arrangements often result in an employer avoiding responsibility for legal entitlements due to employees, such as superannuation and leave.
Examples of sham contracting under independent contractors legislation include:
- Misrepresentation of genuine employment:
A person misrepresents an employment relationship, or a proposed employment arrangement, to be an independent contracting arrangement.
- Re-engagement:
An employer dismisses, or threatens to dismiss, an employee with the sole or dominant purpose of re-engaging that employee as an independent contractor to perform substantially the same work.
- False Statement:
An individual knowingly makes a false statement with the intention of persuading or influencing a current or past employee to enter into an independent contracting arrangement to perform substantially the same work.
Penalties for sham contracting
Maximum penalties of $6,600 for an individual and $33,000 for a body corporate apply to those who breach these laws.
Contact the ABCC
If you are concerned that the arrangements currently in place with your contractors could potentially be considered a sham, contact the ABCC hotline on 1800 003 338 for advice.