The Construction Forestry Mining and Energy Union (CFMEU) has published a report that said about $2.45 billion is being lost by the government in taxes due to sham contracts.
The report says that the Federal government needs to crackdown on these sham contracts on commonwealth projects. The report coincides with three federal regulators investigating the extent of sham contracts in many industries.
The employers use false contracts to avoid paying worker entitlements and tax as per Dave Noonan, the National Secretary. He added that there is a need for proper checking by the authorities to see that minimum standards are being met. A process to enforce the government’s code and implementation guidelines are also needed.
The sham contacts used by dishonest employers misinterpret the worker and employer relationship as a contract being provided for services. This allows the employers to avoid giving the workers leave, superannuation and even fair wages. It is reported that about 168,000 people are employed in this manner across many industries.
Australian Building and Construction Commission has also been running its own inquiry into the scam employments. Leigh Johns the Australian Building and Construction Commissioner, said that unlawful industrial action is never an acceptable tactic, and is not capable of bringing about a lasting solution.
In response the Master Builders Australia says the report is a shameful attack on sub-contractors. Chief executive of Master Builders Australia, William Harnisch said that incidents of sham contracting were isolated ones. He added that the union’s report was part of a smear campaign it was running.