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MPAV Press Release – Misuse Of Sub Contractors

The surface coating industry, including tilers and plasterers have for many years provided employment on a sub contract basis.  Many smaller contractors that provide employment on a subcontract basis may not be meeting their obligations under industry and Australian Tax Office requirements especially when working on commercial sites.  The misuse of subcontractors can have serious consequences if found to be in breach of these legal requirements.  

Simply labeling a worker as a sub contractor does not relieve an employer of his obligations to workers engaged to carry out a number of tasks over an extended period.  It is thought that the subcontractor, by supplying an ABN number makes them a legitimate subcontractor, this is incorrect. Although an agreement may have been reached by both parties and most time only verbally, this agreement still may not be legal if the recommendations by the ATO are not followed.

It is important to understand that a subcontractor must able to work independently and be free to come and go and be paid on a task base only. The use of subcontractors to reduce your wage bill and there by undercutting another competitor who is meeting the industry requirements is not good business practice and allows builders and developers to play one contractor against another. I would like to see the principle contractors take some responsibility in this area by only employing contractors that are fulfilling their responsibilities in the surface coating industry.

It is a ridiculous situation that we have created and that some of the quotations are far below what is required for a contractor to meet statutory obligations and to obtain a healthy working profit on a commercial site which benefits everyone in our industry.  As an industry we must work together to stop irresponsible contractors that are destroying our industry by presenting ridiculous quotations to win contracts.

To ensure you meet these obligations it is important to understand when a contractor is deemed to be an employee and what your payment obligations are in relation to them. Such as CBUS, Incolink,  Coinvest, holiday pay and sick leave.

Employers must withhold PAYG payments made to employees, directors, office holders and independent contractors you have a voluntary agreement with and individuals under a labour hire arrangements. This includes withholding PAYG from termination payments and compensation, sickness or accident payments you make. You must also withhold an amount from payments you make to other businesses if they don’t quote their ABN to you on an invoice or other documents required.

For small contractors that wish to enter the commercial field, it is important that before tendering on work you obtain a complete understanding of what is involved to undertake commercial work.  e.g. is site allowance applicable

Mark Amos JP


Master Painters Association of Victoria/Tasmania

User Comments - MPAV Press Release – Misuse O...

Posted on 7th June 2011 - 3:08 pm by 477VIC

What is the difference between Permanant Part Time & Casual Employment?

Posted on 7th June 2011 - 4:15 pm by masterpainters

This information below was sourced from the Fair Work website.

•Full-time: employees generally work 38 hours a week, and have a continuing contract of employment. Benefits such as paid sick leave, annual leave, holiday pay, long service leave and carers or other types of leave apply.
•Part-time: employees work regular hours each week, but fewer hours than full-time employees. They’re usually given the same basic entitlements as full-timers, based on the hours worked (this is called pro rata).

If working full-time or part-time, any accrued entitlements such as annual leave should be paid when the employee leaves. If they’re dismissed or made redundant, they may be entitled to notice of termination or payment in lieu of notice (except in cases of serious misconduct) and redundancy pay.
•Casual: employees are usually employed on an hourly or daily basis and don’t usually get paid sick leave or annual leave. They generally get additional pay called a casual loading to make up for this. Casual workers are also less likely to have regular or guaranteed hours of work. Notice periods do not apply to casuals upon termination of employment.

Posted on 10th June 2011 - 5:20 pm by 3735TAS

Why not pay people a lump sum to achieve a result?-the most important change in the painting industry that the Master Painters Association of Victoria /Tasmania could achieve is the registration of painting contractors to clean up our industry and there is only one body or group of people that are trying to achieve this is the MPA Vic/Tas C.E.O namely Mark Amos and his staff with the support of all members in both states

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