Journalists at risk of sham contracting

How to be on your guard against sham contracting in the media.

MEAA is concerned with the increasing number of reported sham contracting arrangements in the media industry that in particular target young journalists.

Recently, a major media organisation was ordered to pay out a substantial back pay claim when they were found to have been hiring young employees on sham contracting arrangements. This organisation was paying these young employees as little as $16 an hour.

A sham contracting arrangement occurs when an employer attempts to disguise an employment relationship as an independent contracting arrangement.

What is an independent contractor?

In order to identify a sham contracting arrangement, it’s important to understand what constitutes a genuine contracting relationship.

Under a contracting relationship, the contractor generally (although not always):

•  has a high level of control over their work;
•  dictates their hours and is not bound to one company;
•  engaged for a specific task over a specific timeframe;
•  pays their own superannuation;
•  does not receive any paid leave entitlements;
•  uses their own tools and equipment;
•  pays their own GST to the tax office;
•  bears the risk for making a profit or loss for each task.

Sham contracting

It can be difficult to identify the difference between a contractor and an employment relationship, because there is no single indicator that determines whether a person is a contractor or an employee. However, there are some key identifiers for sham contracting arrangements.

If you are employed as a contractor but

•  you have standard hours that are dictated to you by an employer;
•  you have to submit leave forms or ask permission from the employer to take leave;
•  you perform work under the direction and control of the employer with little autonomy;
•  you are paid under the award minimum rates;
•  you may be hired under a sham contracting arrangement.

What do I do if I need advice?

If you suspect that you are or know somebody that might be hired on a sham contracting arrangement, it’s important you seek advice from MEAA right away by calling your organiser, or if you don’t know who that is, Member Central on 1300 656 513.

There are major penalties under the Fair Work Act for employers that contravene these provisions with a maximum penalty of $54,000 for each contravention.