Legal

Fair Work on tour: Sham contracting crack down at Storm versus Cowboys

Matthew Elmas /

sham contracting

Fair Work rocked up after the Storm beat the Cowboys last Friday. AAP/Scott Barbour.

Fair Work Ombudsman (FWO) inspectors were combing through the stands at AAMI Park in Melbourne last Friday as the dust settled on the final round clash between NRL ladder leader Melbourne Storm and the Cowboys.

So too at the Rabbitoh’s versus Roosters game at ANZ Stadium in Sydney and the Raiders versus Warriors match at GIO Stadium in Canberra. 

They weren’t there to watch the rugby. Five months after being provisioned $9.2 million by the federal government to establish a dedicated sham contracting unit, the FWO was speaking to cleaners and their supervisors as part of an ongoing audit on their employers.

Inspectors conducted interviews and took photographs of the venues to better understand the employment conditions of cleaners at the stadiums, reviewing employment records on-site in an evidence-gathering operation. 

Businesses across the country can likely expect more of these inspections in the coming months as the FWO further focuses on sham contracting arrangements, amid concern from the government that many employees are being ripped off by being treated as contractors when they’re effectively employees.

“Fair Work Inspectors will now analyse the evidence they have gathered to check if the cleaning contractors are meeting their lawful obligations under Australia’s workplace laws. If we identify non-compliance, our first priority will be arranging back-pay for affected workers and we will then consider our compliance and enforcement options,” fair work ombudsman Sandra Parker said in a statement circulated Monday.

“Sham contracting is a widespread problem in the contract cleaning industry.

“We will take strong action if companies are avoiding their lawful obligations to their workers by asking them to register as independent contractors instead of paying them as employees and providing them leave and other entitlements under the Cleaning Services Award 2010.”

Sham contracting is when an employer avoids payment of worker entitlements by disguising its employment relationship as an independent contractor arrangement.

The FWO crackdown comes at a time when there’s significant uncertainty over what an employment relationship even looks like in Australia. There’s a Federal Court case underway considering whether Deliveroo has engaged in sham contracting, and the FWO has previously investigated whether UberEats riders are employees or contractors.

The cleaning industry has previously been flagged as high risk for this type of behaviour, with the FWO recently auditing Melbourne’s Marvel Stadium and the MCG over similar concerns, resulting in a $132,000 penalty.

NOW READ: Budget 2019: Millions for Fair Work Ombudsman sham contracting crackdown squad

NOW READ: Budget 2019: Instant asset write-off boosted to $30,000, set to save small business $700 million

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Matthew Elmas

Matthew is the news editor at SmartCompany. You can contact him at [email protected].

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