...take your contracts to a lawyer if you're unsure...
That may apply in NZ, but in Australia no "Contract" can over ride Australia's industrial legislation, unless it is a registered EBA granting as a minimum, Award conditions.
The frustratingly annoying aspect of this unlawful practice is that you are giving your employer, who is nothing but a despicable shonk, a financial advantage over a legitimate competitor who is paying his Award obligations and not breaching or requiring his "contractors" to breach civil aviation regulations.
Sorry, no sympathy here for "contract pilots" or the grubs that "employ" them!