Sham Contracting

25 September 2012

Emeritus Professor Ron McCallum, AO comments on the rise in sham contracting, where an employer takes on a worker, not as an employee, but as an independent contractor using an Australian Business Number (ABN), to avoid paying entitlements.

Emeritus Professor McCallum was part of a recent government review of Fair Work legislation, including the issue of sham contracting.

Speaking to the Sydney Morning Herald, he says "...since Roman times, there has been a difference between employees and those who work on their account.
"This cleavage has operated in the law ever since."
He says an improvement in the law to narrow an employer's defence that they didn't know what they were doing was wrong is one recommendation to adopt.
As is the need for workers to be better educated and informed, and that unions and the Fair Work Ombudsman have important roles to play.
However, he says a stricter definition of what constitutes sham arrangements is not necessary.
"Defining 'sham contracting' is like defining an elephant - but when you see one, you know what it is," he says.

View the entire article - Easy as ABN to fall victim - Sydney Morning Herald

Contact: Greg sherington

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