Sham Contracting

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 based on the agreement made between the parties. This means the court or tribunal will consider the terms that were agreed at the outset of the relationship and whether they appear to create a genuine contractor relationship or whether they instead appear to create an employment relationship. Where the terms have not been comprehensively recorded in writing, a court or tribunal can consider how the parties conducted themselves throughout the relationship as evidence of the agreement that was originally made.

This does not however mean the parties can deem the relationship to be something it is not. Accordingly, a person may be an employee, even if they have agreed to be characterised as an independent contractor. A person may also be an employee even if they provide their services through an ABN or a company and invoice for their work.

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.

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