Sham contracting, tax evasion and phoenixing within the formwork industry in the Australian Capital Territory should all be the subject of major government body investigations, a union leader says.
In a letter to the Fair Work Ombudsman, the Australian Taxation Office and the Australian Securities and Investments Commission written on July 3, Construction, Forestry, Mining and Energy Union ACT branch secretary Dean Hall urged all three organisations to intervene and to adopt a whole-of-government approach toward sham contracting, under-reporting of wages and phoenixing across the formwork sector within the Territory, according to Fairfax Media reports.
The call follows an injury sustained by an employee of a formwork company contracted to provide labour for an ACT company. The union says the employee was admitted to hospital after being struck by an unfastened shutter which fell over in the wind.
According to the union, a subsequent investigation revealed that the man had been underpaid and not provided entitlements such as penalty rates or allowance, and that the effect of this was that his workers compensation entitlements were being paid on the basis of what had been declared on the payslips as opposed to either the cash amount or the amount that was due under the agreement.
“Unfortunately the case … is not rare. It is all too common,” Hall’s letter stated, according to Fairfax Media reports. “It is for this reason that we are now writing to you so as to ask you to co-ordinate a whole-of-government approach to the issues raised in the formwork sector within the ACT.”
Hall also encouraged FWO and ASIC to probe a number of companies he said had collapsed only to resurface with the same directors under a new name soon thereafter, citing possible phoenix company activity which may have robbed workers of superannuation entitlements and creditors, including the tax office, money and entitlements.
Recognised as a significant problem for many years, the subject of how to stop phoenix companies in Australia, especially within the construction sector, has been the subject of considerable levels of debate through the Senate Inquiry into construction sector insolvencies.
These developments come as more than 50 construction workers, including eight formwork companies and their workers, protested outside the ACT CMFEU’s offices against what they claim are union efforts to force them out of work.
“Our members reported that union officials had been on sites over the past two weeks telling these small businesses that they were no longer allowed to work in the ACT and that their workers had to apply for jobs with larger formwork operators with union EBA’s,” said Kirk Conningham, executive director of the MBA ACT.
Conningham said all law-abiding businesses should be allowed to fail or succeed based upon the value they being to clients as opposed to ‘the whims or an outside entity with its own commercial interests.’
“Even more importantly, these workers should be allowed to choose who they want to work for, not be told who they must work for,” he said. “The union is removing this fundamental choice from the very people they are supposed to support.”