Fair Work Australia and Sham contracting. Is Uber next ?

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  • This month we have seen yet another case of rampant Wage fraud case being investigated by Fair Work Australia. This time for wage fraud at Pizza Hut where delivery drivers have been forced into sham contracts and paid as little as $5.70 a delivery.

    This is a very important developing story which highlight “sham contracting” arrangements where Pizza delivery drivers are wrongly classified as independent contractors and not as employees of the company to avoid paying work entitlements.

    What is sham contracting:
    “A sham contract is when an employer deliberately disguises an employment relationship as an independent contracting arrangement, instead of engaging the worker as an employee. This is usually done to avoid paying employee entitlements such as superannuation, workers’ compensation, leave, and certain taxes.”

    Click this link to read the full story over The Age January 27 Edition

    An investigation by the Fair Work Ombudsman has busted Pizza Hut. The stores the ombudsman audited over the past year were riddled with non compliance and delivery drivers were the key victims.

    Pizza Hut drivers are forced to provide their own car, petrol, maintenance and insurance in return for peanuts. In some cases the pay amounts to $12 an hour before the various costs are deducted.

    Such fraudulent model very much resembles the Uber model where drivers are forced to use their own cars, take most risk and pay for all expenses, while being constantly micro managed by Uber. Uber calls their drivers “partners” and classify them as contractors.

    A number of recent court cases (UK, USA) suggest Uber drivers are employees of the company under sham contracting arrangements and should be compensated accordingly.

    RSDU can only hope Fair Work Australia looks into Uber fraudulent practices as soon as possible.

    For those who would like to file an official complaint please contact Fair Work Australia at this address https://www.fwc.gov.au/about-us/contact-us

    What do you think?…… Please leave your comments below.

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