NSW Independent Contractor/Subcontractor

[Julez]

Hi
I have been offered with a casual 9-5 job through a recruitment agency. The employment contract states that I'm an Independent Contractor/Subcontractor working for their client (9-5, equipment/training provided by the same client).

They said it is not a business relationship, I'm not hired as an ABN contractor. But I am not the recruitment agency's casual employee either. I don't submit invoices I submit timesheets and get paid after being approved by their client.

They will pay for my super and deduct the payroll fees from my pay. The T&Cs on the 'employment contract' are quite unfair if not unlawful: my wages can be withheld for a range of reasons such as job incompetency; they can terminate my contract at anytime but I have to provide 4 weeks of termination notice and the termination needs to be approved or my pay will be withheld; I have to compensate for their loss & damages, etc.

Q. Is this a sham contract and not enforceable? Do 'Independent Contractors/Subcontractors' only refer to those who uses their ABNs ie. there is no mid way between an 'Independent Contractor/Subcontractor' and a 'casual employee'?

Thanks in advance for all your helpful resources on this forum!

 

[Tim W]

I certainly smell sham contracting here

 

[Julez]

I certainly smell sham contracting here

Fair Work Aust says they never heard of a labour hired as somewhere in between. I couldn't find anywhere online that a labour can be hired as mid way either.

 

[Tim W]

Well then, you know better than to take the job on those terms, don't you?

 

[Julez]

Well then, you know better than to take the job on those terms, don't you?

I didn't accept the job but am curious to know if it's enforceable because obviously there are still agencies using such T&Cs. My guess another high court ruling heavily fine such arrangement there will still be agencies using them.

 

[Rod]

Based on your description and without seeing the actual contract, they are likely contravening the Fair Work Act.

 

[Julez]

Based on your description and without seeing the actual contract, they are likely contravening the Fair Work Act.

Thanks. That's what I thought.

 

[Wikiwebs]

Hi
I have been offered with a casual 9-5 job through a recruitment agency. The employment contract states that I'm an Independent Contractor/Subcontractor working for their client (9-5, equipment/training provided by the same client).

Q. Is this a sham contract and not enforceable? Do 'Independent Contractors/Subcontractors' only refer to those who uses their ABNs ie. there is no mid way between an 'Independent Contractor/Subcontractor' and a 'casual employee'?

Thanks in advance for all your helpful resources on this forum!

FWA S357 states (bold black font added):

A person (the employer ) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor.​

As I understand S357, Independent Contractors require their own ABN because they will need to invoice GST on behalf of the Govt, notwithstanding exemptions. Note also that sham contracts cut both ways. If I am expecting to be engaged as an independent contractor then S357 forbids presenting me with a casual employment contract instead, particularly after time and money is spent by the IC in onboarding beforehand (this kind of sham happens a lot in IT contracting).

The world's best practice in international job search engines is that "casual" (in the context of work) never refers to a contract but is only ever a "casual employee". The FWA also does not recognise "casual contractor", only "casual employee". To avoid claims under S357 agencies must avoid the ambiguity of the word "contract" such that "contract" always means independent contract, and casual always means casual employment. The terms temp and vacation can be used to refer to independent contract and casual respectively. Employment agreements are always "agreements", not "contracts". An agreement is a specific type of contract that involves industry negotiated awards. Independent contracts involving work (as opposed to trade or commerce) are always for performance of services, and the IC pays the overheads such a super, GST Insurance (etc).

I hope this helps, and the above is based on workplace experience, and is not legal advice.

 

[Julez]

FWA S357 states (bold black font added):

A person (the employer ) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor.​

As I understand S357, Independent Contractors require their own ABN because they will need to invoice GST on behalf of the Govt, notwithstanding exemptions. Note also that sham contracts cut both ways. If I am expecting to be engaged as an independent contractor then S357 forbids presenting me with a casual employment contract instead, particularly after time and money is spent by the IC in onboarding beforehand (this kind of sham happens a lot in IT contracting).

The world's best practice in international job search engines is that "casual" (in the context of work) never refers to a contract but is only ever a "casual employee". The FWA also does not recognise "casual contractor", only "casual employee". To avoid claims under S357 agencies must avoid the ambiguity of the word "contract" such that "contract" always means independent contract, and casual always means casual employment. The terms temp and vacation can be used to refer to independent contract and casual respectively. Employment agreements are always "agreements", not "contracts". An agreement is a specific type of contract that involves industry negotiated awards. Independent contracts involving work (as opposed to trade or commerce) are always for performance of services, and the IC pays the overheads such a super, GST Insurance (etc).

I hope this helps, and the above is based on workplace experience, and is not legal advice.

Thanks very much for your information. Correct it was an IT recruitment agency trying to offer 'mid way' despite I lost count how many times I told them I was only interested in casual employment offer >,<