Sham contracting job on AFAP
 

Why is the AFAP encouraging sham contracting of pilots by carrying ads for jobs that, according to the Fair Work website, would in no way be contractor positions. You’re either an employee or you’re not.

CONTRACTOR PILOT SKYDIVE AUSTRALIA NSW

Perhaps because it is a genuine method of employment. I have contracted to many aviation organisations during my flying career, including skydive operations. My contracting is legitimate and recognised by the ATO. Get your facts straight. I could contract for this mob tomorrow, issue them with a tax invoice and go home happy.

According to Fair Work, a contractor,

- Can delegate or subcontract the services to be performed to another person or business.
- Has a high level of control over the work they perform, their hours, work location and how they do the work.
- Bears the risk for making a profit or loss on each task. Usually is personally responsible and liable for poor work or any injury sustained while performing the task. As such, contractors generally have their own insurance policy.
- Uses their own tools and equipment

None of those apply to a pilot.

This is nothing more than a company trying to go cheap and not abide by the conditions of the award.

Balderdash 😀 Are you fresh out of school and feeling left out?

I'm pretty sure even the Army used Contractors when they had fixed wing assets as they didn't have the required staff qualified to do training or checking on their King Airs...

But how can it be that an operator engages pilots as independent contractors, when CASA says that the rules "contemplate" that commercial operations will be conducted by "employees who are in all respects agents of" the operator?

Leady, I have no idea about that but I have contracted on and off for 30 odd years, including as a CP with the blessings of CASA

As I have said before, there comes a time when the rules go on the shelf and the pilot goes aviating.

My understanding of it is that you can employ casual pilots for which you the company are responsible for. A casual pilot can be subject to an employment contract but that does not make him a contractor. To contract work out you would be hiring your equipment to an organisation who has their own AOC if required and is therefore responsible for the conduct of that operation.

What is most likely meant in the ad is for a casual pilot on a fixed term contract of employment.

Skydiving is a private operation, but where there is an ops manual and Chief Pilot or Head of Operations in a flying school the "contractor" doesn't have the "high level of control" that is required to fit the definition. Nor are they likely to provide their own aircraft. However sham contracting is still widely used to exploit instructors.

Well done on perpetuating the practice of sham contracting for decades!

I take my hat off to you, sir.

Those junior pilots at the beginning of their career, who are the people most likely to be forced into some sort of sham contracting early on, I'm sure appreciate it too.

A flying Instructor would be under a flying schools/check and training organisations operational control and therefore at least a casual employee of one of those organisations.

Can you give me an example of where that is not the case and defined as a sham contractor.

The rules never go on the shelf Bob.

There is a vast difference between a "casual employee" and an "independent contractor".

Understood, an independent contractor would hold their own AOC or be an employee of an organisation that does. There must be operational control/oversight and clear which organisation that is. Can someone explain an example of when that isn't the case.

When the operator engages the pilot/instructor under what purports to be a contract for service rather than a contract of service. Under a contract for service the contractor does not become any kind of employee and, therefore, the operator is not responsible for the person's superannuation or PAYG tax (provided the person has provided an ABN) etc. If you think these pilots/instructors hold their own AOC or are employees of another organisation, think again.

Whether the arrangement does or does not result in the pilot/instructor being an employee as a matter of law is a matter for a court to decide. The arrangement is treated by the parties as one with an independent contractor and not employee, which is why it is described as "sham contracting".

I see, I get it, so it's purely a method of avoiding employee entitlements under any workplace agreement. I see it as a risk to the "independent contractor" when there is an accident or any liability for that matter, there would be no requirement to keep the contractor safe from impunity.
This of course would be our youngest, least experienced most vulnerable. An operator who supports that practice is in my opinion morally bankrupt, shame on you, may every misfortune in life fall upon you.

Yep. An accident is often what precipitates the court proceedings to determine whether or not the person is an employee as a matter of law. The most recent examples are Uber-folk.

(I think the operator still owes WHS duties to independent contractors, even in the case of 'real' independent contractors.)

And back to the aviation safety regulation point I was making: I'll bet London to a brick that the contracts for service will include a clause that states the contractor is in no way, and must not represent him or herself as being in any way, an employee or agent of the operator. According to the people who crushed Glen Buckley into the ground: "The operational and organisational arrangement contemplated by CASR 141 [and Part 142] are based on a conventional business model, under which all of the operational activities conducted by the authorisation holder are carried out, for and behalf of the authorisation holder by persons employed by, and in all respects as agents of, the authorisation holder."

I must spoil my guys too much :) I operate a Kingair solely in private operations, wholly within the private company group. I employ 2 casual pilots because that's what suits them, they don't work for anyone else. I include IR renewals which is conducted by an independent organisation in a simulator, this is because I want proficiency in two specific exercises being the V1 Cut/Go and the low speed emergency descent. At mid 6 months in the off season all of us including our significant others go on a resort tour over several days for the purpose of recency and keeping up to speed with the more challenging aspects of the work, this way we get to assess each other and make sure we are all on the same page. The resorts are pretty good too.
I have an operations manual which is comprehensive and kept relevant. I occasionally take a call in the field for "what do you want me to do" but rarely if ever a "how do I" call.
Both Casual Pilots are covered by all the Insurance and Work Cover requirements.

I don't understand what a dodgy contractor arrangement really saves, we must be talking a sum that surely must ask the question, should this company be operating at all if it makes that much financial difference.

It 'saves' a bunch of stuff, when 'legitimate'.

Compulsory employer super contributions (you are paying those for your casual employee pilots, aren't you)

Obligations to the tax office (you have made your casual employee pilots fill out tax declarations and you've submitted them to the ATO, haven't you)

WorkCover (you've said your casual employee pilots are covered),

Access to a pathway to become a permanent employee (you have explained that pathway to your casual employee pilots, haven't you)

Long service leave (casual employees accrue long service leave entitlements in some Australian states and territories - you're across that and keeping track of your casual pilots' LSL entitlements, aren't you).

Casual loading (you are paying at least the casual pilot award rate, aren't you)

Etc, etc...

Well this could be embarrassing, I could be one of those rogue employers. happy to test it. Firstly I don't do the books myself, I have a really good administrator who does all that and knows all the employment laws way better than me. But here's my arrangement. Firstly the casuals I employ do it because they still want to fly really nice equipment and probably wouldn't care if they didn't get paid, the renewals and company jaunt around the resorts would be enough. I don't pay them for that but do cover all expenses and costs. That said I don't want to be a rogue employer taking advantage of anyone.

To my knowledge as per our arrangement, I pay $500 a day plus $50 per flight hour over 6 flight hours, plus any overnight or incidental costs, normally provided.

No long service leave, or any leave at all actually
No super payments that I am aware of. I'll check on that one.
Tax is deducted.
Indemnity Insurance included and paid by the company
Workcover included and paid by the company.
Casual loading or any reference to any award has not been considered.

OMG!!!! I might unintentionally be one of those dodgy operators. How does that stack up against an award.