Cape Air Transport (Torres Strait)
Join Date: Aug 2000
Location: (Not always) In front of my computer
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Micky C,
Great to hear they are paying the award. Is the superannuation and 6 weeks paid annual leave built into the rates? How about insurances and taxes?
The issue is whether it is paid as wages or contractor payments equivalent to the award.
Here's a link to a recent article which demonstrates the power and resolve of the Fair Work Commission. The Happy Cabbie example is very similar to pilots being paid as contractors. A quick $300K in fines. If the ATO, WorkCover and the Fair Work Commission all had a go at once there would not be much left.
The Fair Work Commission has recently been making full use of its powers to prosecute employers who employ people as 'sham contractors'.
The practice of 'sham contracting' generally involves employing someone as a contractor, who is more properly described as an employee. What’s the difference? Well, a 'contractor' is a business-person or company who offers their services to another business. They are generally not paid a wage/salary/superannuation (but are rather paid a fee), are not entitled to leave, and usually have an ABN, supply their own tools, are mostly self-directed in their work, and may advertise their services. An 'employee', is however someone who is generally the opposite in all these aspects - is controlled by the employer, paid a wage, receives leave and other workplace entitlements, and will usually wear the employer's uniform. Some of Fair Work's recent handiwork helps illustrate the difference, which is not always straightforward.
In one case, the 'Happy Cabby' Company paid bus drivers a fixed fee to drive its busses. Despite being called 'contractors', the drivers wore Happy Cabby uniforms, used Happy Cabby busses (fuelled by Happy Cabby), used Happy Cabby supplied mobile phones, and were assigned shifts from a weekly roster. Fair Work argued that the drivers were 'sham contractors', and prosecuted Happy Cabby. The Federal Court agreed, and fined the Happy Cabby company $252,120.00, and its director $47,784.00 for multiple breaches of the law (underpaying workers, breach of award, etc.). The cabby's were happy, Happy Cabby not so much.
In another case, a company employed 'contractors' to sell kitchenware. The workers used their own vehicles to attend clients, paid for their own petrol, did not wear uniforms, and could largely set their own hours. The workers were however required to attend frequent training sessions at the company, received regular instructions from company headquarters, had to request approval for leave, and were paid on commission, but were otherwise paid regularly on 'payday'. The Court looked at the 'totality' of the relationship, and found that the degree of control the company had over their work meant that the workers were employees rather than contractors, and were therefore employed through a 'sham contracting' scheme. The Company was fined $161,700.00.
Here's another link for the employers to help them decide if they have employees or contractors.
There are a number of factors which may contribute to determining the difference between an employee and an independent contractor. However, it is important to note that no single indicator can determine if a person is a contractor or an employee. Each determination is based on the individual merits of the work arrangement in place. Courts always look at the totality of the relationship between the parties when determining the status of a person’s employment.
There are some common indicators that may contribute to determining whether a person is an employee or independent contractor:
The other issue is the poor pilot who for example, has a landing accident, writes off the plane, injures passengers and requires 12 months rehabilitation himself to return to work. I wonder how all that would pan out? Probably a good result for all, or just the Lawyers and the Principal? I sincerely hope that the passengers, pilots nor principal has to face this scenario.
.
.
Great to hear they are paying the award. Is the superannuation and 6 weeks paid annual leave built into the rates? How about insurances and taxes?
The issue is whether it is paid as wages or contractor payments equivalent to the award.
Here's a link to a recent article which demonstrates the power and resolve of the Fair Work Commission. The Happy Cabbie example is very similar to pilots being paid as contractors. A quick $300K in fines. If the ATO, WorkCover and the Fair Work Commission all had a go at once there would not be much left.
The Fair Work Commission has recently been making full use of its powers to prosecute employers who employ people as 'sham contractors'.
The practice of 'sham contracting' generally involves employing someone as a contractor, who is more properly described as an employee. What’s the difference? Well, a 'contractor' is a business-person or company who offers their services to another business. They are generally not paid a wage/salary/superannuation (but are rather paid a fee), are not entitled to leave, and usually have an ABN, supply their own tools, are mostly self-directed in their work, and may advertise their services. An 'employee', is however someone who is generally the opposite in all these aspects - is controlled by the employer, paid a wage, receives leave and other workplace entitlements, and will usually wear the employer's uniform. Some of Fair Work's recent handiwork helps illustrate the difference, which is not always straightforward.
In one case, the 'Happy Cabby' Company paid bus drivers a fixed fee to drive its busses. Despite being called 'contractors', the drivers wore Happy Cabby uniforms, used Happy Cabby busses (fuelled by Happy Cabby), used Happy Cabby supplied mobile phones, and were assigned shifts from a weekly roster. Fair Work argued that the drivers were 'sham contractors', and prosecuted Happy Cabby. The Federal Court agreed, and fined the Happy Cabby company $252,120.00, and its director $47,784.00 for multiple breaches of the law (underpaying workers, breach of award, etc.). The cabby's were happy, Happy Cabby not so much.
In another case, a company employed 'contractors' to sell kitchenware. The workers used their own vehicles to attend clients, paid for their own petrol, did not wear uniforms, and could largely set their own hours. The workers were however required to attend frequent training sessions at the company, received regular instructions from company headquarters, had to request approval for leave, and were paid on commission, but were otherwise paid regularly on 'payday'. The Court looked at the 'totality' of the relationship, and found that the degree of control the company had over their work meant that the workers were employees rather than contractors, and were therefore employed through a 'sham contracting' scheme. The Company was fined $161,700.00.
Here's another link for the employers to help them decide if they have employees or contractors.
There are a number of factors which may contribute to determining the difference between an employee and an independent contractor. However, it is important to note that no single indicator can determine if a person is a contractor or an employee. Each determination is based on the individual merits of the work arrangement in place. Courts always look at the totality of the relationship between the parties when determining the status of a person’s employment.
There are some common indicators that may contribute to determining whether a person is an employee or independent contractor:
In summary, it is inviting trouble to confuse contractors and employees! The prospect of underpaid employees, excluded from basic entitlements such as the minimum wage, WorkCover and leave, means that Fair Work comes after employers, hard, if they employ an employee as a contractor – even unintentionally. It is important to bear in mind that a prosecution by Fair Work (even without an eventual fine) will nearly always cost more than could be saved by an average 'sham contractor scheme' (including ramifications for business reputation and a hefty "back-pay" bill) – so it really doesn’t pay to break the law. When in doubt, ask for professional help – it could really save you more in the long run!
The other issue is the poor pilot who for example, has a landing accident, writes off the plane, injures passengers and requires 12 months rehabilitation himself to return to work. I wonder how all that would pan out? Probably a good result for all, or just the Lawyers and the Principal? I sincerely hope that the passengers, pilots nor principal has to face this scenario.
.
.
Last edited by Two_dogs; 30th Sep 2014 at 05:05.
lets say that BN2 drivers are getting $150 per day. They don't get paid leave. FACT.
$150 x 322 days = $48,300 (taking 6 wks leave)
$150 x 322 days = $48,300 (taking 6 wks leave)
Good start but you're not going far enough.
1/. Is this a permanent full time job or is it a casual gig? Payment per day suggests to me it is a CASUAL job.
2/. Minimum payment for a CASUAL job is TWO HOURS flight pay, or FOUR hours flight pay, or payment for actual hours flown, whichever is greater. Yes, you should be paid two hours flight pay just for turning up (even if you don't turn a blade).
3/. If it is a FT gig, you are supposed to be PAID for those six weeks off... they don't get deducted from your salary!
Base Salary: $40,470 (2994kg)
MECIR: $5303
That should be a salary of $45,773.
The Casual bongo driver should be paid 1/800th of that PLUS 25% loading to cover the leave, public hols etc that he/she won't get.
...so that's an award rate of $71.52 for every hour flown, and $143 before tax just for turning up, or a minimum of $286.08 assuming you put in more than 4 hours work for the day.
Assuming you turn up for 4.1 hours/day for 5 days/week, that should come to $1430/week or $68,659.50 per annum.
I am certain that
a) you guys put in more than 5 days x 4 hours/week; and
b) The other Bongo operator up there is paying his pilots the legal minimum entitlements (or maybe more).
On top of that, your employer is obliged to pay 9.5% superannuation on top of your ordinary time earnings + allowances.
This means you guys are accepting $136.98 per day BEFORE tax, equivalent to a salary of $35,616.
THAT makes it all worth it, I am sure.
Good luck
Last edited by Horatio Leafblower; 9th Mar 2015 at 04:37. Reason: Just Super!
