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What are the general protections against sham contracting?
A ”sham contract" arises when an employment relationship (contract of service) is misrepresented as an independent contracting arrangement (contract for services).
Workers who are common law employees are protected against various forms of “sham contracting” by the provisions in Pt 3-1, Div 6 of the Fair Work Act 2009 (Cth) (FW Act).
These prohibit employers misrepresenting an employment relationship as a contracting relationship or dismissing an employee to re-engage the employee as an independent contractor. Civil remedies, including penalties, may be imposed upon an employer in respect of breaches of these provisions. It can also be a source of underpayment claims and several class actions have been commenced on this basis.
See What are the general protections against sham contracting?.
