Illegal Sham Contracts are Booming and Drivers are Paying the Price
Sham contracting has boomed since the COVID-19 pandemic. It’s illegal, yet it’s spreading like wildfire through the transport industry.
Too many drivers are being stitched up by employers who tell them they’re “contractors” instead of employees.
The result?
No superannuation. No workers’ compensation if they’re injured. No annual leave. No sick leave. No long service leave.
Drivers are being pushed to work under an ABN while doing set hours, driving company vehicles and working overtime without proper pay — the exact same work an employee would do, just without the employment protections.
These are protections that every worker in Australia is entitled to.
According to the Australian Council of Trade Unions (ACTU), workers stuck in sham contracts earn on average $111 less per week than employees doing the same job. They’re also pocketing $243 less than genuine independent contractors.
So, who’s winning here?
Companies are knowingly misleading workers and, in some cases, threatening to sack them if they don’t go along with it. it’s about time these companies are weeded out or forced to do the right thing.
Australia is already facing a serious driver shortage, yet instead of lifting standards to attract workers, some companies are racing to the bottom through sham contracting.
Law-abiding transport businesses are being undercut and forced to slash their contract rates just to stay in the game.
Too often, migrant and foreign workers with limited knowledge of Australia’s workplace laws are targeted, leaving them vulnerable and exploited and shifting the cost onto taxpayers.
Where Do We Go from Here?
In 2024, transport workers fought hard for reform — and we won important changes through the Closing the Loopholes legislation, which tightened parts of the law around independent contracting.
But the fight is far from over.
Sham contracting has become so brazen that businesses are now openly advertising for “employee drivers with ABNs” on major job sites like Seek.
The lack of proper oversite has led to urgent calls made by the industry last November for the Federal Government to crack down on companies doing the wrong thing.
It’s clear, they are compromising our road safety and de-valuing the hard work transport workers do every day.
It’s time to start holding these companies to account by calling out the shortcuts and exposing the bad behaviour.
When we shine a light on it, governments are forced to act.
The TWU is here to ensure our members receive the entitlements they deserve and work under safe and humane conditions.
If you think you’re being pushed into a sham contract, our legal team can help you take the next step.
Reach out to your organiser today or fill out the below survey to find out if you are an employee or being treated like one without the rights.