With Bullying and Harassment taking an increasingly high profile in the media and in legislation it is becoming critical that employers carefully review the systems that are in place to manage these matters. As employers we all have a duty of care to ensure, so far as is reasonably practicable, that workers are not exposed to health and safety risks in the workplace. 
Bullying is a recognised risk to health and safety and it is therefore incumbent on employers to take action if bullying in their workplace is identified or reported.
If actions or behaviours directed at a person is repeated; if a person feels threatened or intimidated; or if a person is deliberately excluded from a group or social activities – it’s bullying.
Here are some further examples of bullying that might be taking place right now in a workplace near you:
- Deliberate uneven or unfair distribution of work
- Excessive intervention in a person’s work
- Excessive amounts of work
- Provision of menial or tedious tasks or failure to provide any (or any meaningful) work
- Aggressive, forceful or demanding behaviours
- Aloof or overbearing behaviours
It is not likely to be bullying if it is a one-off event. The definition of bullying requires repeated behaviour – that is, more than one occasion or single act.
If bullying is taking place at your workplace, be very mindful that legislation is in place and it is being enacted very proactively right across Australia. Workers also now have an avenue through the Fair Work Commission to apply for an order to stop bullying in their workplaces. There is no doubt that more bullies will be outed and more employers who take no action will be prosecuted heavily.
How you identify it, deal with it appropriately and what you can do to prevent bullying from happening in the future are the topics for future e-bulletins but if you have any doubts and want to take action now, Workwise is offering training, available to all members at a low-cost rate per person.
Contact the Workwise office now for full details of our customised training in this increasingly high profile area.
SHAM CONTRACTING
As this is still an area that causes concern and attracts some popular misconceptions I thought we should look at ‘sham contracting’ as it is defined under the Fair Work Act that is, from an IR perspective rather than form a taxation perspective.
Traditionally there have been some perceived benefits in relation to having contracting arrangements these include:
- Flexibility in ending relationship
- Unfair dismissal provisions don’t apply
- No requirement to provide paid leave
- No payroll tax
- No works compensation insurance
- Company tax VS income tax
- Deductibility of expenses
- No vicarious liability
On the flip side the risks of contracting encompass such matters as:
- New sham contracting provisions
- No implied duty of good faith
- Risk of prosecution for unpaid tax
- Superannuation Guarantee Charge
- No statutory ownership of intellectual property
- Little enforceability of restricted covenants (eg restraint of trade)
- Inadequate insurance coverage
Sections 357 and 358 of the FW Act prohibit misrepresentation and HR Managers can be prosecuted in these sorts of matters (Fair Work Ombudsman V Centennial Financial Services 2011 FMCA 459)
Specifically an employer:
- Must not represent employment as independent contract
- Must not dismiss an employee in order to re engage as independent contractor for the same work
- Must not make misrepresentation to persuade employee to become contractor for the same work
True sham contracting arrangements where an employer deliberately seeks to disguise a true employment relationship are rare. The more common scenario is where the Principal intends to create a contractor relationship, however at law this is deemed to be an employment relationship.
Sham contracting is not simply ‘mischaracterising’ a person as a contractor rather than an employee but rather involves a ‘deliberate or reckless intention to treat an employee as a contractor’.
Other than infringements relating to breaches of sham contracting provisions there may be other implications to consider:
- Non compliance with minimum entitlements under the National Employment Standards (NES) and/or Award conditions
- Unfair dismissal or other employee rights under the Fair Work Act 2009
- Superannuation
- Payroll Tax
- Workcover
A previous defence has been an employer’s lack of understanding ie if there is no concept of ‘risk’ then a person cannot be convicted of being reckless. However this defence is diminishing with time due to the large amount of information available surrounding this topic and ongoing educational campaigns by FWO.
The existence of a contract ‘for’ service (contracting) as opposed to a contract ‘of’ service (employment) can be in writing, oral or implied. Ultimately the existence of a contractual relationship is a question of law to be determined objectively.
Statements about the contract eg ‘you will need an ABN’, ‘you are not entitled to paid leave’ will carry weight in making a determination as in the case of CFMEU V Nubrick Pty Ltd [2009] FMCA 981
The increasing levels of red tape which are being rolled out will impact on the use of independent contractors in all sectors. Whilst the initial target is the Building Construction industry – with an estimated impact on 150,000 building and supply companies servicing the sector according to Ken Phillips of Independent Contractors Australia reporting requirements will inevitably roll out across most industries and particularly where there has been historic use of contractors.
Still not sure? Call us for advice and assistance.