Enterprise update: Are you at risk? Personal liability for sham contracting

Overview

Sham contracting is an issue that is currently attracting a great deal of attention not only from the media but more significantly from the Government bodies charged with ensuring compliance with industrial laws. Leigh Johns, ABC Commissioner has very recently expanded on his proposal for a sham contracting inquiry and roundtable, indicating the process could lead to a code of conduct and practice for labour hire in the building and construction industry. The Construction Forestry Mining and Energy Union (CFMEU) has also called for a round table to address the issue of sham contracting.

The predecessor to the Fair Work Ombudsman (FWO) was recently successful in its first prosecution under the sham contracting provisions. Not only was the FWO successful in securing a finding against the company involved but also against the director and owner and the Human Resources Manager personally under the accessorial liability provisions. The FWO will be targeting