The Building Service Contractors Association of Australia (BSCAA) encouraged all its members to practice responsible contracting at its breakfast meeting held 23 April at The Ranch Hotel, Eastwood (Sydney). To highlight the issues involved with non-compliance, guest speakers from the Fair Work Ombudsman and Australian Tax Office shared case studies about due diligence and contract legitimacy. This was followed by a government update from AustralianSuper and a presentation on floor cleaning technology from Peerless Jal.
After a brief welcome from BSCAA NSW president, Terry Corby, FWO director general protections team, dispute resolutions and compliance, Greg Robertson, addressed the audience about genuine contracting rules and regulations, and the 50 to 80 complaints per month the Ombudsman receives in relations to illegitimate contracting arrangements across all industries.
“We’ve set up an intelligence model in the FWO along with a supply chain strategy working together to resolve sham contracting issues by starting at the top with the price maker,” shared Robertson. “Some companies want to engage contractor services but aren’t actually prepared to pay market rates, which are the award conditions if they are legitimately going to be employing people as employees.
“The FWO is aware of this and will be looking towards the price makers, rather than solely focusing on the price takes, which is everyone in this room,” he continued. “You’re the ones having to make the commercial decisions in competition, tendering and whether it’s cost effective for your business. We are finding a lot of principal contractors are sub-contracting down the line and we’ve found illegitimate contracting two or three tiers below. While the employer is doing the right thing and paying the award rate, down the line someone is paying a cleaner $15 an hour.”
With the new model the FWO is attempting to pinpoint where the industry is most at risk and vulnerable to illegitimate contracting. “A lot of our concentration now is to help people operate between the flags and do the right thing, not just to persecute. Particularly in the sham space, we want to create a level playing field,” Robertson stated. “We are meeting with major companies to discuss the fact they are not allowing enough financial budget in what they are offering for tenders for contractors to pay award rates.”
Assistant commissioner from the Australian Tax Office (ATO), John Leonard, also focused on compliance and how it is managed by the ATO to ensure employers meet their tax obligations. “Our job is to help people understand the arrangement that has been set up, whether it is employment or contracting, and how to comply with the subsequent tax obligations that might flow from that,” he stated.
“The ATO is concerned about businesses that wrongly treat employees as contractors, which means no taxes are withheld under the PAYG withholding arrangements and workers don’t receive their superannuation entitlements,” remarked Leonard. “There is no systematic reporting arrangement for contracting companies so it’s more difficult for us to encourage compliance by contractors than it is by employees, and that means businesses doing the wrong thing can gain an unfair competitive advantage.
“We have changed the way we undertake our compliance approach, generally speaking if the business doesn’t have a poor history, we approach them to work together to try and solve the issue rather than instantly penalising them,” Leonard added. “That seems to be working reasonably well and it engenders a better relationship between the tax office and our clients.”
AustralianSuper’s NSW stakeholder relations manager Martin Schultz took the podium next to discuss the imminent policy changes affecting superannuation. “Some of these include tax changes, default fund arrangements in awards, governance by independent directors, changes to access and changes to retirement products,” he revealed. “However, these changes will become clearer in a few weeks when the budget is announced.”
Last but not least, Peerless Jal’s NSW state sales manager Mark Eastwood gave a passionate presentation about technology improvements in cleaning and floor care products covering Biologically Activ cleaning products, specialised microfibre products, and hybrid floor finishes.
For more photos from this event visit INCLEAN’s photo albums.