Sham Contracting and Fair Work Act 2009 in Australia

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
Name of the Student
Name of the University
Author Note

1HUMAN RESOURCE MANAGEMENT
Introduction
Sham Contract is a way of disguising unemployment relationship to make it look like an
independent contractor in relationship. It can be defined as a deliberate misrepresentation an
already existing employment relationship between the employer and employee It is a way to
avoid payment by the employer to the employee. It is considered an unlawful act and the
Australian law does not permit contracting. More often than not sham contacting is done against
the will of the employees. The employees are bullied into signing an agreement which is a
contracting agreement. The bullying done against a worker in a workplace is also called
workplace bullying. Therefore instead of respecting the position of the employee as a worker in
the company he is treated as an independent contractor and as a result of that the employer is
freed from his duties to pay entitlements to the employee. The national employment standards
entails that a worker has to be paid in accordance with the statutory and the legislative
regulations. These entitlements include compensating the worker paying his superannuation and
also recognizing his legal rights under the Australian law.
Issue 1
It is the duty of the employer to pay the above mentioned entitlements to the employee
but if he is made to work as an independent contractor the employee will not have to pay any
extra amount of money or pay the entitlements of the employee. This is called a contracting
agreement because it is a façade whereby the employer escapes is liability to pay to the employee
the special entitlements that he is obligated to pay to the employee. The Fair Work Act 2009 is
an Australian legislation that acts as a shield for the employees and prevents them from sham
contracting and ensures that they get proper entitlements that they are deemed to get under the
Australian law. Under the Fair Work Act 2009 it is clearly stated that sham contracting will be

2HUMAN RESOURCE MANAGEMENT
treated as an unlawful agreement between the employer and the employee. Under the provisions
of the legislation the main this contract in arrangement is illegal it is imperative for the
employees to keep in mind that he cannot tell the employee that he is an independent contractor.
If the employee does not want to add an independent contractor the employee cannot force his
opinions on him and cannot use force on exertion to make him act like an independent
contractor. The employee cannot threaten the employee if you does not wish to become an
independent contractor and also cannot make him do the works of an independent contractor
which she had already performed as an employee. It is found that the works of the independent
contractor and the employee at the same and the employer cannot in anyway mislead the
employee into believing that he can walk like an independent contractor and cannot also force
him to perform the functions of an independent contractor even though he is in the position of an
employee. In Australia there are strict legislations that punish and employee who indulges in
such unlawful activities and makes an employee walk like an independent contractor even
though he doesn't wish to. The fair work ombudsman is obligated under the Australian lost to
take strict actions against an employee who makes an employee work under such compelling
situations and makes them worked as an independent contractor to make sure that the employees
does not have to pay then that payments. Under the Fair Work Act, 2009 if an employee
misrepresents to a person about the employment contract then it is an unlawful activity and the
employee shall be held liable.
Issue 2