Thread: Well here is a scam.

The mob I work for works in a similar way. They employ labourers "that know what they're doing" instead of tradesmen.

Originally Posted by Hall

The other method of exploitation is all legal but not in the employee`s best interests. A couple of places that I have in the past worked have now said that they will only employ me as a sole trader. So I have to set up a full business . This is fine if I have constant work. But I will only be getting the odd weekend. Also it is individual work place agreements by stealth. As each sole trader has to tender a rate that the company will accept. One place in particular has sole traders working permanently there. They work on a flat rate that is good during the week but the rate is averaged out so week ends are not much different. But if I work on the week ends there as a sole trader at there rate I lose and the company wins. Plus I have all the associated paper work, doing my own tax, chasing my pay for a few weeks work in a year. A accountant once did the maths for me and said there is not that great a margin the labour hire firms have when hiring us out. Which is why there is over eighty odd labour hire firms in Melbourne.
Cheers Hall

All fine and a perfectly legitimate way to work as long, as you say, you have constant work and the rate reflects your additional costs.

These people are trying to be smart and contract out their legal obligations to their employees. What they don't realise is that they will still most likely fail the common law tests for what constitutes an independent contractor vs an employee so infact still have the same legal obligations to you.

Cheers,
Jon

Originally Posted by jon3950

What they don't realise is that they will still most likely fail the common law tests for what constitutes an independent contractor vs an employee so infact still have the same legal obligations to you.

Cheers,
Jon

correct...

I know of a company thats about to go through the wringer because of a security breach by someone they sub contracted.....

they're trying to write it off as a sub contractors fault, not their problem. Its not going well for the primary contractor at this point in time.

This has been going on for years here in the newcastle region and labour hire company's sprang out of the woodwork about 15 years back and this is part of what is killing off the manufacturing industry here

Becoming a sole trader is the only way forward I see that will work best for me this way I deal direct wit the customer have less over heads than the big guys and can do the work at a better price for the customer

Lots of the bigger company's here in the area are getting rid of all the contractors now and going back to employees to get a better quality employee at a better price

Same thing in education - I teach full time at TAFE and part time uni. At TAFE you used to need a degree or graduate diploma in education and a qualification above the the one you were teaching (partly cos of snobbery and partly so (hopefully) you couldn't be caught out by some smart arse student) but now its a certficate 4 in teaching and TAFE is moving towards firstly a part time workforce and "teaching assistants" who are not qualified and paid a pittance of a teacher and they expect quality - it seems to be happening everywhere and the only pockets we are lining with all these savings are the pollies and international countries who expect (but don't rely upon) our misguided generosity

My experience of TAFE some 30 years ago was people standing at the front of a room reading to you from the text book for a couple of hours 2 nights a week. Did not inspire me and left as was not getting anything out of it and could work without the qualification which realistically with not all subjects available each year and course changes making subjects you had already passed no longer count was going to take 10 years to achieve.

Here in the UK it is rare to find a fixed pay scale it is all about what you can market yourself at. Pay is a big secret because of this. Have known there to be a £10k difference in annual pay for 2 people doing the same job in same location.

With the number of unemployed here plenty of employers are using this to pay less to new hires. Some are even complaining about lazy people who do not want to work for these lower pay rates. Latest one is a zero hour contract. They do not promise to give you any work however you have to work when ever they call. If you do not come when called no work next roster.

Have seen a couple of local employers here where they have needed to build a new function into the business attempting to find people who are keen enough to work for about 30% under the going rate. For some reason they cannot find candidates to fill the position with the required skills/experience.

Originally Posted by Chops

This has been going on for many years.
Another problem is when you do find someone good, who wants to become a full timer, you cant get them unless you pay big dollars to the hire Co for reimbursement.

Yes I was in that position once, worked as a permenant casual for 3 years then I was sold like a slave by the labour hire company. I must admit though I was treated a lot better and humanely when I became a fulltime employee, the cat of nine tails was not used any more and I was spoken to as a human being, and equal not a slave.

The main reason they go to "sole trader" is that it relieves them of most of their OHS, Super, overtime penalty rate and notice/retrenchment costs.
As a sole trader all of that responsibility and cost becomes your problem. You also become a subcontractor so in the case of a liquidation of the company you are working for you will get paid out LAST. (Tax 1st, then wages then salaries and subcontractors last)
The only advantage that I can see is a possible tax reduction if you get the books right.
I realise there is little choice but if you go down that road please make sure you have a good accountant and lawyer.

Phil.