Steve Shearer, boss of the South Australian Road Transport Association (SARTA), has added his voice to industry calls for an Australian Taxation Office crackdown on sham contracting in the trucking industry.
The widespread practice, which sees employers hiring truckies on Australian Business Numbers (ABNs) to avoid paying taxes and entitlements, is now top of the agenda at the annual SARTA conference on October 18, said Shearer.
“We’re very concerned about the increasing practice,” Shearer told Big Rigs.
“From the intel I’ve managed to gather from talking to drivers, none of them are getting paid the equivalent of a wage for a driving job, which also has super and WorkCover, and all the other entitlements.
“They’re just getting paid to drive and they’ve either got no WorkCover or they’ve got to find their own which will cost them about $150 a week here in South Australia.”
Shearer said they’ve also got no super, unless they put away a portion of what they’re paid themselves.
“That means for the actual driving job they’re getting paid well below the mark, and the prime contractor is grabbing a major commercial edge with up to a 22-23 per cent saving on their labour costs.”
Shearer said the onus is now on the ATO to do more to crack down on those flouting the laws.
“How hard would it be for the ATO to run a check on its database for individuals under ABNs who are truck drivers?
“They ought to be able to find that very easily and it would be a large number of individuals. If they did some digging, there would be a very large amount of superannuation that’s not getting paid. Not only are those individuals disadvantaged but down the track, they then become more of a burden on society.”
In our story on the same issue in our July 18 issue, titled “Pleas for help grow louder”, an ATO spokesperson reiterated that sham contracting is a contravention under the Fair Work Act and can be dealt with by the Fair Work Ombudsman (FWO) through the imposition of civil penalties.
The spokesperson also told Big Rigs that even if the worker is a contractor with an ABN there is an extended definition of employee in the Superannuation Guarantee Administration Act 1992 which requires super to be paid for some contractors.
“Such as where the worker works under a contract that is wholly or principally for their labour.”
The spokesperson added that when the ATO investigates a worker classification matter it will look at the facts of the arrangement to see if there is an employment relationship which gives rise to a tax or superannuation obligation.
Where an employee has been incorrectly classified as a contractor the business will be liable for a number of penalties and charges including one for up 200 per cent of the SGC, the ATO said.
Owner-driver Ray Christie, however, said he put those laws to the test recently when he took a timber supplier he was working for to court for sham contracting.
“As someone who did actually take a certain timber supplier in SA to court for sham contracting and lost that these “statements/laws” around sham contracting are just as big a sham,” Christie said.
“I had my own truck which I provided and fitted a new crane onto at my cost and then sub-contracted back to this timber mob solely working for them and them only.
“My lawyer presented the case that I was indeed an “employee” as my truck was sign written with all their signage and I worked full time for them permanently and I never contracted to anyone else as I had all their signage all over my truck.
Christie said it took less than 40 minutes at the hearing for the magistrate to effectively ‘throw out’ his case.
“I was then left completely high and dry as I had the truck, no immediate work and copped all my legal fees too.
“It’s nothing more than all talk, smoke and mirrors.”
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