What is sham contracting?
Sham contracting describes a situation where an employee is incorrectly treated as an independent contractor. This often means that the employee does not receive superannuation, annual leave, personal leave, long services leave, public holiday pay and other employment entitlements.
When determining whether a person is an employee or a contractor, the court or tribunal will examine the true nature of the relationship. In other words, the court or tribunal will look at substance over form. This means that a person may be an employee, even if they have agreed to be characterised as an independent contractor. This is in recognition of the long standing principle that the parties to the relationship cannot deem it to be something that it is not. A person may also be an employee even if they provide their services through an ABN or a company and invoice for their work.
While many different factors will be considered, the ultimate question is whether or not the person is operating their own business or whether they are simply furthering the business of someone else.
How to make a claim
Sham contracting claims are complex and are usually made in the Federal Circuit Court of Australia or the Federal Court of Australia. The lawyers at Jewell Hancock Employment Lawyers have successfully made hundreds of sham contracting claims over the years and have recovered millions of dollars in compensation. Given the complexity of the jurisdiction, it is always best to obtain sound legal advice before making a claim.
Contact us today to arrange a no-obligation confidential discussion with one of our experienced lawyers.