A Fair Work Ombudsman (FWO) director has emphasised that her body will be making an example of the contract cleaning industry’s endemic ‘sham contracting’.
The just published Australian Cleaning Contractors’ Association’s February 2011 newsletter carries a lead item written by ACCA’s executive director John Laws, who had been talking with FWO director Lynn Wilcox early this week.
“What she has to say is always interesting but this time it was quite startling. The recent audit of the industry is ongoing and a great many of you would have had to submit information to the FWO for a sample audit. This has resulted in a large number of adjustments being made to wages paid and has given many employers pause to think about the cost of the service they provide,” Laws states.
“The more interesting information I received is that, at this point, they have identified 63 cleaning companies for further investigation into their ‘sham contracting’ practices. All of the companies to be investigated, by a specialist sham contracting section of the FWO are on the eastern seaboard of Australia. In fact, 43 of the 63 being investigated are in NSW.
“This is not the only industry being investigated but it is one of the top three and the WO is determined to set an example to the Cleaning industry such that the vast majority of companies will regard subcontracting as a bad practice which should be avoided at all costs.”
In applauding the WFO’s initiatives, Laws says, “Yes, I know you have all been ‘forced’ to employ subcontractors because of the actions of others and you are just trying to keep your head above water. Well, the fact is that so many workers are being ripped off by someone that any Labor oriented government will be forced to take action and the result is that you may be one of the 63 being investigated.
“Just to top this off I was also told that the ATO and the DEWR people are also on the lookout for sham contracting and will be imposing heavy fines wherever possible. They are all united in their aim to stamp out illegal subcontracting. You have been warned!” he stresses.
Laws’ solution is for contractors to set their prices at a minimum of $33.00 per hour including gst and stick to them. “Any client who attempts to force down these prices is forcing you to break the law in the mistaken belief they are clear of any action. That client is wrong and you should refer them to your association or the FWO where they will get advice indicating they might be responsible for the shortfall in wages and entitlements.
“The industry has to lift its game and get back to competition based on service and not price. Continue to flout the law and you will pay. A legal subcontracting arrangement will cost you at least $27.00 per hour so forget the low prices and make your business viable. Together as an industry we can get things back on an even keel,” Laws concludes.