23
EMPLOYMENT
LAW
UNFAIR DISMISSAL ADVOCACY
SCHEME
RLC has con nued our partnership
with Clayton Utz this year on the Unfair
Dismissal Advocacy Scheme. Some of
the central issues that arose from the
scheme were: businesses a emp ng
to hide the true employment
rela onship by using an intermediary
to distance themselves; businesses
claiming employees as contractors
to enable them to qualify as small
businesses; and staff being made
redundant so that businesses could
rehire cheaper workers or contract
work out. Many clients assisted by the
scheme have associated legal issues
such as discrimina on, bullying and
redundancy. Businesses restructuring
and the underpayment of wages and
en tlements were also problems clients
faced. During the 2012-13 fi nancial
year, RLC and the seconded Clayton Utz
solicitors assisted 29 clients. 75 per cent
of ma ers se led at concilia on, three
clients se led prior to concilia on,
and where ma ers involved monetary
compensa on, the average se lement
was $4308.
SUBMISSIONS
In November 2012, RLC responded to
the dra Fair Work Amendment Bill
2012 (Cth), expressing concern over the
new sec on 400A. This sec on would
allow the Fair Work Commission (FWC)
to make a costs order against a party if
the Commission was sa sfi ed that an
unreasonable act or omission of that
party caused the costs to be incurred.
The relevant ‘act or omission’ could
include failing to accept a se lement
off er. RLC’s submission recommended
that the sec on be rejected because
it could force applicants to accept
unreasonably low se lement off ers
to avoid the possibility of costs orders
against them, and discourage them
from seeking other remedies such as a
reinstatement or an apology.
In April 2013, RLC made a submission
on the Bill itself. Our submission
supported the broadening of reasons
for reques ng fl exible working hours,
especially where the employee has
a disability or is experiencing family
violence. RLC also supported the
clarifi ca on that a worker can request
to return to part- me work a er the
birth or adop on of a child, and the
clarifi ca on of reasonable business
grounds for refusal of the request.
Addi onally, RLC submi ed that the
Bill be strengthened by placing an
obliga on on the employer to enable
fl exible working arrangements or
returning to work part- me.
SHAM CONTRACTORS
RLC’s Employment Law Service
has observed an increase in sham
contrac ng where employers require
vulnerable workers to get an ABN
and classify them as independent
contractors, when they should be
treated as employees. Such workers
o en have no real understanding
of Australian Tax Offi ce (ATO)
requirements and are then subject
to tax penal es for non-compliance.
Under the Fair Work Act 2009, it
is illegal for an employer to claim
that an employee is an independent
contractor. As outlined in the case
study that follows, employees are
usually advised about work and
hours by their employer, are en tled
to superannua on and minimum
wages, are paid regularly and are
not responsible for fi nancial risk.
Independent contractors decide how
to do the work and whether to employ
someone else to do it, carry the risk of
making a profi t or loss, have their own
insurance, are contracted to work for
a set me or to do a set task, decide
their own hours and invoice for their
work or receive payment at the end of
a contract or project.
CASE STUDY: SHAM
CONTRACTORS
In 2006, Levi (not his real name) was
carrying out demoli on work and his
employers told him to get an ABN in
order to receive payment. He thought
nothing of the ABN un l he received
no ce to lodge a Business Ac vity
Statement the following year. Levi did
not understand the no ce and forgot
about it.
Six years later, Levi was appalled when
he received a bill from the ATO for
$11,150. The debt was made up of
individual fi nes for failure to lodge
Business Ac vity Statements. Levi
was confused because he did not
have a business.
Levi approached RLC for assistance
with the debt. He was advised to call
the ATO and seek exemp on. With
RLC’s assistance, Levi called the ATO,
who informed him that his ABN could
be cancelled from its registra on in
February 2006. His tax penal es were
li ed, all Ac vity Statements were
cancelled and the penalty no ces
were remi ed.
Levi’s situa on demonstrates that
employers may incorrectly instruct
workers to get an ABN as contractors,
when they should really be classed
as employees. Failure to comply with
the ATO requirements can result in
large debts like Levi’s accumula ng
for unsuspec ng ABN holders. With
eff ec ve fi nancial counselling and an
explana on to the ATO, the problem
was resolved quickly.