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Master Builders supports recommendation on sham contracting
Released 30 November 2011

The approach taken in the Sham Contracting Inquiry Report issued yesterday by the Australian Building and Construction Commissioner (ABCC), Leigh Johns has been praised by Master Builders Australia.     

Master Builders Australia CEO Wilhelm Harnisch said Master Builders in particular supports Recommendation 2 for a further detailed study into the extent and depth of sham contracting in the industry.

“Master Builders pointed out to the inquiry that sham contracting is not commonplace and that the majority of contractors in the industry are bona fide. Most complaints emanate from the unions as they have a direct interest in reducing the number and growth of independent contractors because that activity decreases their pool of potential members.

He said the Master Builders’ long held view is that clarity in the legal distinction between an employee and contractor across all relevant laws is absolutely essential.
Harnisch said the Master Builders welcomed Recommendation 9 of the report that consideration be given to a negative licencing scheme which would allow bona fide individuals to seek registration as a contractor.

He said such an initiative will go some way to providing greater certainty.

“Contractors want certainty. The status of a contractor is a consequence of the nature of the relationship that is formed,” he said.

According to Harnisch a building industry participant may be a worker for a specific period but then enter into a different relationship that provides them with the status of an independent contractor.

“This chopping and changing is common in the industry. Hence the system which will be given consideration by the ABCC is based upon self-regulation of independent contractors for the purpose of specific projects.”