Sham Contracting

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Fair Work Act 2009, Independent Contractors Act 2006, Awards – what happens when you are in breach of 3 pieces of legislation?  You get fined a lot of money.

What if you have 3 contracts that are Sham? You get fined for all 3 contracts.

What if you have 2 Directors?  You get fined for each Director.

Do the math: approximately $1600 fine by 3 pieces of legislation. $4800 multiplied by 3 contracts = $14,400, multiplied by 2 Directors = $28,800. Those land on your lap and you are really going to wish you hadn’t got out of bed this morning!!

What is Sham? 

The problem with that answer is it is not a simple answer.  So don’t try and work out if your relationship with your Contractors is true contracts.  Get help.  Ask for assistance.  Then you can leap out of bed every morning, confident you will go to bed tonight with $28,800 still in your bank account.

Unfair Dismissal

The term gets bandied around a bit, more employers have heard of it, but they generally don’t take much notice of it until it arrives in their inbox in a letter from the Fair Work Ombudsman.  Then they become an expert the hard way!  The paperwork and sleepless nights are the worst part and you really don’t know what the outcome is going to be for some time.

Are you going to be found guilty? Will you have to pay a fine?  Will you have to pay the employee compensation for the unfair termination which could be up to six months’ salary? Did you terminate unfairly?  You will be required to have phone hook ups with the Ombudsman and your terminated employee and if it isn’t settled, you will end up in front of the Commission to explain your case.

Related:  Advice on How to Deal With Redundancy and Serious Misconduct

Flipside – terminate correctly.  Ensure you are procedurally fair.  Don’t know how to do that?  Check out the Fair Work site for instructions on what to do or if that gets confusing, obtain some assistance (we can help) and follow the steps to dismiss correctly.

No email from Fair Work, no sleepless nights, no huge fines.  Hindsight is a wonderful thing.  Use this advice as your hindsight.

RECRUITMENT – don’t forget we can assist with your Recruitment on an hourly basis, not a percentage of salary

The HR People is a team of HR consultants with extensive experience in multiple industries and we have national reach.

If you have staff, there is a large amount of legislation that you need to be aware of and our role is to ensure that you are armed with that information so you can make educated decisions. In the event of a fine, you will be best positioned to act on the consequences before rather than after.

We will cover contracts of employment, employment relationships, termination, redundancy, sham contracts, unfair dismissal, workplace health & safety and much more.

If you like to contact us now or you would like more information about us and our team check out our website here.

If you would like a Do It Yourself (DIY) Service, check this link.

We look forward to working with you and your team.


Disclaimer: Chan & Naylor take no responsibility for the accuracy of any research material of contributors to our newsletter. Contributions to our newsletter is meant to be educational only and Chan & Naylor does not endorse any promotional material promoted in their articles. Readers should do their own research to determine the accuracy of their material.

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