In 2015 the Department of Immigration and Boarder Protection granted an ‘amnesty’ to 7-Eleven employees who had worked over the hours allowed on their visas and who had also been victims of underpayment.
As a result, the number of complaints against 7-Eleven soared from hundreds to thousands.
RLC is currently assisting international students on similar issues where there are unscrupulous employers, who have failed to pay the correct hourly wage or have failed to make any payment at all. What RLC found is that international students are often reluctant to report unscrupulous employers for reasons including fear of deportation, need of income and threats of violence from the employers.
Additionally RLC has found that many international students are subject to sham contracting, a common form of unfair employment that can be difficult to identity.
A sham contract involves the employer deliberately disguising an employment relationship as an independent contract arrangement, instead of engaging the worker as an ongoing employee. The employer generally uses sham contracting to avoid paying the employee the award age, entitlements such as superannuation, workers' compensation, leave and taxes.
A sham contract is often started with the employer requesting the employee to provide them with an ABN (Australian Business Number), as having an ABN requires the ‘contractor’ to pay their own superannuation and tax and gives no leave entitlement to the ‘contractor’.
The distinction between contractor and employee can be a grey area, and there is no single identifying factor that is determinative. Rather, the nature of the work and working conditions are the central indicators of whether a person is classified an employee or an independent contractor.
The indicators of an independent contractor, suggested by Fair Work, include but are not limited to:
- The degree of control over the work;
- Flexibility of working hours;
- Expectation of work; and
- Method of payment, such as invoice issued for payment.
Amy's story
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Amy* is an international student in Sydney who was working for a technology company. She entered into an agreement with the company that required her to work as a contractor. Amy and the company agreed to a set an hourly amount, which did not include superannuation or holiday leave entitlements and stipulated she pay her own tax. Amy worked for a number of weeks under this agreement, but was not happy with her work contract or hourly rate of pay. She sought legal assistance from RLC. RLC advised Amy that based on the existing work conditions; set hours, working under supervision, providing all material necessary to achieve the work, she was in fact a part-time employee. The contract she had initially entered into was a sham contract. Redfern Legal Centre assisted Amy in recovering her underpayment of wages, totalling $4.00 per hour, as well as her superannuation contributions. This totalled $760.00 in underpayment of wages and superannuation contributions by her employer. *not her real name |
Sham contracting can appear in many industries – though it is particularly prevalent in the cleaning service industry. RLC’s International Students Advice Service can provide advice to International Students from across NSW in relation to sham contracting and other employment issues.
