The case involved an oil and gas engineer who was engaged by Manpower and contracted to BHP Billiton to oversee the construction of an offshore pipeline for the Minerva gas field off coastal Victoria.

In June last year, the Administrative Appeals Tribunal in Melbourne upheld the engineer’s right to claim deductions as an incorporated independent contractor, finding that he passed the unrelated clients test, even though Manpower was his sole source of income for two full tax years.

In that ruling, the tribunal found that the contractor had satisfied the test in previous years, and was likely to do so in the future, but delays to the Minerva project had prevented him working for other clients during the two years.

The ATO appealed that decision, and in a hearing this month argued that the unrelated clients test had two requirements, and the engineer had been exempted from passing only the first of those.

The ATO said that as well as working for two or more customers during a tax year, contractors were required to be genuinely offering their services to the public, by “making offers or invitations (for example, by advertising)”.

In finding for the contractor, AAT senior member Bruce Pascoe said the explanatory memorandum to the Tax Act made it clear that one of its purposes was “to ensure that genuine business situations whose services are available to the public at large in the year of income are differentiated from an employee-like situation”.

He said the evidence the engineer gave at the original hearing was that he obtained the BHP contract, via Manpower, as a result of the personal recommendation of a former colleague.

“It was the further evidence of [the engineer] that his expertise is relevant to a very small number of companies engaged in offshore petroleum exploration and mining.

“As a consequence, advertising in a general sense of advertising in newspapers, brochures or other media is clearly inappropriate in this context.”

Word-of-mouth and marketing calls sufficient

Senior member Pascoe said the engineer’s evidence was that he acquired his clients primarily through word-of-mouth, referrals and phone calls he made to the various companies in the oil and gas industry.

He noted that the exact wording of the Act stated that a contractor passed the unrelated clients test if: “the services are provided as a direct result of the individual or personal services entity making offers or invitations (for example, by advertising), to the public at large or to a section of the public, to provide the services.”

“I am satisfied that those companies constitute ‘a section of the public’.”

He said he was also satisfied that the engineer’s regular personal contact with those companies, and promotion of his services through word-of-mouth and recommendations, fulfilled the meaning of “making offers or invitations to provide services”.

“I am further satisfied that the services to BHP Billiton through Manpower were provided as a result of this form of marketing.”

He affirmed the original decision of the tribunal, and ordered the ATO to make a determination excluding the engineer from the personal services income provision during the period.

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Link to Original Article

Yalos Engineering Pty Ltd and Commissioner of Taxation [2010] AATA 408 (3 June 2010)

Fair Work Australia heard that the employee was hired by Brisbane’s Mater Hospital in September 2008, as a billing officer.

The candidate was found through one of the Mater’s recruitment agencies, Brisbane healthcare specialist Pink Collar.

The employee told the Fair Work tribunal that in her initial conversation with Pink Collar principal Shona Grant, she was told the position was a full-time, permanent role.

After an interview process in which the employee said both Ms Grant and her future manager at the hospital represented the job as being permanent, she received a letter of offer with “Permanent Placement” written at the top.

FWA senior deputy president Peter Richards said that in May 2009, some eight months after the employee started work, she sought written confirmation of her employment for the purpose of securing a home loan.

“At that point [Mater Hospital] referred to her employment as being ‘full-time, and she is contracted for 76 hours per fortnight’. The applicant subsequently contacted her supervisor… for purposes of clarifying her employment status in relation to the reference to her hours being ‘contracted’.”

SDP Richards said it wasn’t until August that the Mater responded to this query, telling the employee she was on a fixed-term 12-month contract that would expire in September 2009.

The employee argued that when her employment ceased in September, it was in effect an unfair dismissal rather than the completion of a fixed-term contract.

Grant told the tribunal she had erred in sending the employee a template document during the recruitment process which was headed “Permanent Placement”, and had forgotten to alter the heading.

She noted that the text of that document included a clear statement to the effect that it was not an employment contract, which would be provided later by the employer.

Grant said she had never represented the position as being permanent, and in fact had stressed to the employee that it was a 12-month contract, but it might enable her to “get her foot in the door” for possible future work.

She added that she had received specific instructions from the Mater that it was not recruiting any permanent billing staff, because the billing department was being restructured.

She also produced an interview form the applicant had filled out, which noted the 12-month term.

The Mater Hospital manager gave evidence that it was clear from the outset that the role was a 12-month contract and this had been reinforced with the candidate.

SDP Richards said that to find in favour of the employee, he would have to accept her assertion that the recruiter and manager had both lied under oath, and falsified the interview form.

He said the recruiter and manager had given evidence “with a high degree of authenticity”, and had provided a compelling narrative of events.

“On the balance of probability, I am of the view that Ms Grant… recruited the applicant for a temporary position, informed her that the position would enable her to get her ‘foot in the door’ and provided her with an interview form to the same effect.

“It would appear that on receipt of the [incorrectly marked 'Permanent Placement'] correspondence, the applicant took a different view going forward from that time as to the basis of the position on which she had been recruited.”

He dismissed the employee’s claim.

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Link to Original Article

Sharon F Idanan-Pagkalivangan v Mater Misericordiae Health Services Brisbane Limited [2010] FWA 4029 (9 June 2010)

NSW gets another payroll tax cut, rebate extended in Queensland
The NSW government has pushed forward a cut to the state’s payroll tax in today’s budget, and outlined plans for a further reduction early next year.

NSW Treasurer Eric Roozendaal said the payroll tax cut scheduled in last year’s budget, from 5.65% to 5.5%, would now take effect on July 1, six months earlier than the original date of January 1, 2011.

On January 1, there would now be a further payroll tax cut, from 5.5% to 5.45%, Roozendaal said.

He said the savings for employers in the 2010/11 year would come to $110 million.

Businesses would save a total of $4 billion in payroll tax, he added, over the next six years.

“The strong financial position of the NSW budget has allowed the Keneally Government to not only bring forward the planned payroll tax cuts by six months, but to also cut payroll tax further.”

The government was also raising the payroll tax threshold from $638k to $658k, taking effecting on July 1, he said.

Roozendaal said less than 10% of businesses in NSW paid payroll tax.

Meanwhile, in the Queensland state budget, also released today, the state government announced that it would extend the additional 25% payroll tax rebate for employers of apprentices and employees.

While there was no cut to the existing payroll tax, the apprentice rebate announced in last year’s budget has been extended by one year to June 2011.

Because apprentices and trainees are already exempt from payroll tax, the rebate allows employers recoup tax payable on the wages of other employees.

Queensland’s payroll tax rate remains at 4.75%, with a threshold of $1 million.
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Link to Original Article

Nicholas Duggal, special counsel on employment and industrial relations for TressCox Lawyers, told the Australasian Talent Conference that employers and recruiters were using social media websites every day to find out more about individual job seekers.

Duggal noted that in the current privacy guidelines for social media users, the Australian Privacy Commission acknowledged that: “potential employers could look at [a candidate's] MySpace or Facebook page and perhaps base their decisions on what they see there”.

The Commission goes on to warn social media users: “You have probably seen some of those media reports where people have applied for a job and found that their MySpace or Facebook page has let them down… So, think carefully about what information you publish about yourself.”

Duggal said the Commissioner’s statements suggested it was “permissible” for prospective employers and recruiters to make judgements about candidates based on what they saw on a social networking site, but he noted that any large organisation that collected and stored personal information would then be required to tell the candidate they had collected it, and explain how they had used it.

For this reason, he said, it was wise for potential employers to apply a “look, but don’t touch” policy to personal information found through social media.

In any case, Duggal said, in an instance where an employer had come across some unfavourable information about a candidate online, the simple and obvious route to avoiding any kind of legal action was to stick with a customary rejection letter.

“I’d be using a standardised line – ‘On this particular occasion we didn’t feel that you fully met our criteria’. (And it had nothing to do with you being in a state of undress in your Facebook profile photo.) To me that’s just common sense.”

What to do when the client is asking you to discriminate?

Recruiters were frequently told by their clients and hiring managers not to put forward certain types of candidates for a role, Duggal said, which left them in the position of having to carry out potentially discriminatory instructions.

“It’s the reality of life that people have a mindset of who they might want in relation to a particular role, but what’s important is what you then disclose to candidates. I’m just being pragmatic and realistic here.”

He said he had heard of cases where recruiters had told candidates they had all the right experience but were “just too old”.

“To some people those statements can seem relatively innocent. But those are eminently actionable claims. So if you are put in a position where you’ve got those instructions from a client, do not then relay them to candidates.”

Even if a candidate was rejected for other, non-discriminatory reasons, he said, as soon as they launched a discrimination claim the company had “already lost”.

“It’s a no-cost jurisdiction [for the claimant] and it’s going to cost the employer money to defend the claim, even if they’ve got a defensible position.”

Despite the pitfalls, Duggal said, employers shouldn’t shy away from making the most of social media, whether as a sourcing and assessment tool or to promote themselves to job seekers.

“In my view the risks associated with social media are very manageable, and provided you just put some basic benchmarks in place, there is a lot of opportunity and advantage for employers.”

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Link to Original Article

THE number of building subcontractors rorting the system has reached epidemic proportions, Australia’s largest construction union says.

The CFMEU says subcontractors are forcing labourers to register as a “business” before giving them work on building sites, so that they don’t have to pay them sick leave, holiday pay or superannuation.

CFMEU national secretary John Sutton says he want the Rudd government to stamp out the practice by setting up a multi-disciplinary taskforce to tackle the issue.

“There is a widespread culture now out there of no ABN, no start,” Mr Sutton said.

“There is an epidemic of sham contracting that’s hit the industry.

“It’s the worst I’ve seen in 30 years.”

Some 116,000 people with Australian Business Numbers (ABNs) describe themselves as labourers, the CFMEU secretary said.

Over the last decade 600,000 ABNs have been issues to labourers, tradespeople who are employees, temporary migrants and backpackers.

Mr Sutton says the commonwealth has lost billions of dollars in tax revenue over that period.

“The issuing of business numbers has to be tightened up so that they’re only issued to real businesses,” he said.

“The tax law has to be changed to penalise people who are fraudulently calling their workers self-employed when in fact they’re bogus arrangements.”

The CFMEU wants a multi-disciplinary taskforce established bringing together the tax and immigration departments, along with the corporate regulator ASIC.

Mr Sutton says immigration rackets often occur alongside sham subcontracting, with temporary overseas workers on 457 or student visas being “manipulated and abused”.

Workplace Relations Minister Julia Gillard says she’s aware of the concerns and the Fair Work Act provides strong protections against sham contracting.

Immigration Minister Chris Evans says the government has already passed separate laws strengthening protections for overseas workers.

“It gives us greater powers to ensure that overseas workers are treated properly but also that we can deal with any breaches by employers of their obligations,” Senator Evans told ABC TV last night.

Link to Original Article

Link to Fair Work Online Sham Contract Information

The Fair Work Ombudsman is prosecuting Land Choice Pty Ltd – which traded as Kingsford First National Real Estate – and the company’s sole director, Sugiharto Sugiharto (correct), of Maroubra.

Documents lodged in the Federal Magistrates Court in Sydney allege the salesperson signed an agreement with Land Choice titled “Independent Contractor Agreement” under which she was to receive only commission payments.

It is alleged the woman then worked an average of 40 hours a week from March to September 2007, but Land Choice paid her a total of only $1414.

The Fair Work Ombudsman claims the salesperson was wrongly classified as an independent contractor.

It says the woman should have classified as a full-time employee and been paid wages and various entitlements totalling about $22,000.

Court papers allege Land Choice should have paid the salesperson at least $14.38 an hour plus annual leave entitlements, locomotion allowance and payment in lieu of notice on termination of her employment.

The Fair Work Ombudsman will also tell the Court that Land Choice failed to maintain proper employment records.

Executive Director Michael Campbell says the decision to prosecute was made because of the seriousness of the alleged breaches of workplace law and the failure to rectify the alleged underpayment.

The Fair Work Ombudsman aims to promote harmonious, productive and co-operative workplaces. It also monitors compliance and investigates breaches of national workplace laws.

Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fwo.gov.au.

Click here for link to original article

SymbionHR Admin

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Desperate jobseekers fooled by fake ads

AN IT training company that lured candidates with the promise of “guaranteed jobs” has been banned from making false and misleading claims under threat of jail for its directors.

The Federal Court found Zanok Technologies and its directors Darley Stephen and Vanitha Darley gave the jobs guarantee – along with other lies – while selling courses that cost up to $4700.

The company targeted Indian students desperate to obtain permanent residency in Australia by placing fake IT job ads on websites.

It even offered scholarships and a $200 referral fee to entice more victims, the court found.

At least 80 people were affected by the company’s conduct.

Justice Richard Edmonds branded the conduct “unconscionable” and banned the company and directors from making similar false and misleading representations to job-seekers.

The court heard Zanok had placed the fake ads on websites including MyCareer, Seek and Gumtree between February and May this year.

Despite assurances from Zanok and its agents, there was no guarantee of a job at the end of the training course – itself described as “unstructured, disorganised and of no value” by the agency that initiated the case, the Australian Competition and Consumer Commission.

The court found that Zanok and its directors knew, or should have known, that each job-seeker was “typically a temporary resident or on a bridging visa and required employment in the information technology industry to become a permanent resident.”

Justice Edmonds ruled that the company lied about the availability of IT scholarships and a $200 referral fee for students who signed up others.

The company had also falsely claimed it was a global company that developed and sold functional IT software products, he found.

ACCC chairman, Graeme Samuel, said in a statement: “This case sends a clear message that the ACCC will not hesitate to take action against persons who seek to take advantage of, or mislead, international students and those seeking residency in Australia about training courses or job opportunities.”

IT message boards such as the Whirlpool forums have been flooded with complaints about the company for months.

Link to original news.com.au article

SymbionHR Admin

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Consultant wins $58,000 in unpaid commissions

Sydney IT recruitment company Geller & Associates has been ordered to pay a former consultant more than $58,000 after a court found it withheld commission payments and mishandled his superannuation contributions.

In a decision handed down in the New South Wales Supreme Court this week, Justice David Davies said the consultant had been employed by Geller & Associates from March to November 2007.

The judge said that a few months after the consultant joined Geller the
company issued staff with a “Policies and Procedures Manual”, stipulating among other things that when an employee left the business, they would only be paid commission on invoices which had been paid by their last day.

When the consultant left the business later that year, Geller withheld commission payments worth $52,617 on the basis that these had not been settled by the client before his last day – and also, it argued, because the consultant had failed to complete an administrative folder for each of the placements.

Lawyers for Geller argued that although there had been no mention in the employee’s contract of commissions only being paid on invoices settled before the person departed, the Policies and Procedures Manual constituted an update to the employment contract.

But Justice Davies said he did not consider that Geller was “entitled to alter the basis of the employment contract by means of the Policies and Procedures Manual, formulated some months after the employment contract was entered into”.

The judge said he accepted that previous case law allowed for employers to introduce new policies; however they were required not to “act capriciously” or “act unfairly towards the employee” and by imposing this change on the consultant, Geller had done so.

He also rejected Geller’s argument that it withheld the commissions because the consultant didn’t complete the placement folders, even though his contract stated that he was required to do this.

“Certainly, his failure to complete the placement folders was a failure, as he accepts, to comply with a lawful direction [in] the employment contract.

“However, nothing in the employment contract links that failure to the entitlement to commission.”

Agency unaware of superannuation obligations

Lawyers for Geller told the court the company was not aware of its legal obligation to pay superannuation on commission payments, until a meeting with its accountants in September 2007.

Prior to that, it had been paying superannuation only on its consultants’ base salary.

Justice Davies said that when Geller became aware of its full super obligations, it decided to “make commission payments inclusive of superannuation”, and deduct the super amount from the commission paid.

When the consultant was informed of this and said he was unhappy with it, his manager told him: “Having just given you a 20% pay rise, and with the best commission scheme in town, the business can’t give you a 9% pay rise on your bonus.”

In total $5,957 was deducted from the consultant’s commissions, as superannuation contributions.

Geller argued in court that its employment contract with the consultant contained an implication that commissions were inclusive of super, but the judge rejected this.

It was impossible for the contract to contain an implication that the employer itself had been unconscious of, and what it did contain, he said, was “an agreement to pay to the plaintiff the commission… without deduction”.

Justice Davies ordered Geller to pay the consultant the unpaid commissions, and the deducted super amount.

Geller & Associates director Josh Geller told Shortlist the company planned to appeal.

Akmeemana v Murray & ors [2009] NSWSC 979 (29 September 2009)

Link to Shortlist Article

SymbionHR Admin

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New OHS laws will further clarify duties of labour hire employers

The new national model OHS law will provide greater clarity and focus on the duties of recruitment companies and host employers in a labour hire arrangement, says specialist OHS lawyer Michael Tooma.

Tooma, a partner with Deacons, told a webinar for Shortlist’s sister publication OHS Alert today that the draft Model Safe Work Provisions expressly listed “labour hire worker” among the model definitions of worker for the proposed legislation.

The model provisions will form the basis for state governments to enact matching legislation to harmonise OHS laws on a national basis.

Tooma told the webinar that the fact the model act expressly included labour hire worker meant that legislators accepted this was a common form of employment and that on-hire workers should be specifically covered by the legislation.

He said under current legislation in most states, the duty of care for the safety of on-hire workers applied to both the recruitment company and the host employer, and the proposed legislation re-affirmed and clarified that position.

Link to original Shortlist Article

SymbionHR has significant experience in this area and can assist agencies and organisations with policies and procedures aimed at mitigating risks associated with co-employment. Contact Us today to discuss.

Former IPA temp wins first battle in crucial legal challenge

In a case which could become a watershed for the recruitment industry on the critical legal concept of “joint employment”, the Australian Industrial Relations Commission has ordered that a client of IPA Personnel be added as a second respondent in an unfair dismissal case.

Joint employment status between labour hire companies and their host employer clients is commonly accepted in the United States, but the concept has never been adopted in Australian law.

The case before the AIRC involves an on-hire worker who worked continually at the Australian Quarantine and Inspection Service (AQIS) for four and a half years. His employment was terminated in January 2009.

He had been transitioned to IPA in September 2008, from AQIS’s previous labour hire provider, Workforce International.

AIRC senior deputy president Brian Lacy said the applicant was seeking to have either AQIS listed as his true employer, or both AQIS and IPA listed as joint employers.

The worker presented evidence that throughout the entire term of his employment, AQIS had directed and managed him. AQIS had also initiated the termination of his employment, he said.

Counsel for IPA and AQIS argued that AQIS could not be joined in the case, because the concept of joint employment was not accepted under Australian law.

IPA said it was the employer of the worker, but because he hadn’t completed his six-month qualifying period (IPA took over the business in September 2008) to qualify as an ongoing employee, he was a casual and barred from taking an unfair dismissal action.

But SDP Lacy said he didn’t believe the worker had been a casual employee at the time he was dismissed, nor that he had failed to complete his probation.

“[The worker] worked full-time hours. Apart from the fact that he was called a casual employee, there is no evidence to support the contention he was a casual employee.”

Joint employment gaining acceptance: AIRC deputy president

SDP Lacy said although joint employment was a “generally accepted” legal concept in the US, there existed “no definitive ruling by a court on the doctrine” here.

He noted, however, that the doctrine had “gained some acceptance” in the AIRC, and in the industrial relations commissions in WA and NSW.

SDP Lacy said there was an increasing use of labour hire arrangements in Australia, and while it increased workforce flexibility for employers, “the process has the potential to undermine collective bargaining, occupational health and safety, vicarious liability, accountability, job security and workplace harmony”.

He said it also presented significant problems in determining unfair dismissal actions.

“The fundamental question is whether two, otherwise unrelated, legal entities share or co-determine those matters governing essential terms and conditions of employment.

“If not, it is necessary to determine who the employer is and who is responsible for the termination of employment.”

SDP Lacy said he found that the applicant was not a casual employee at any relevant time. He was “an employee of either IPA or AQIS; or both of them”, he said.

“In the absence of any clear evidence about [the worker's] employment status in the transitional period of the change of the labour hire service provider it is arguable that IPA or AQIS; or both of them were the employer in that period.

“I am satisfied that AQIS is a necessary party to resolve the issue of liability for the termination of [the worker's] employment.”

He granted an order for AQIS to be added as a respondent to the applicant’s unfair dismissal case, and said the matter would be set down for a directions hearing in due course.

View the Shortlist article here.
View the AIRC ruling here.