Too often the discovery of ‘sham contracting’ arrangements on construction sites and in the labour hire industry, shows us that even with these often ill-fated arrangements, no proper contracts are prepared to eliminate this activity.
Sub-Contractors are a wide-spread culprit and in some cases their Principals are aware and take advantage of the situation for short term profits.
The Federal Circuit Court takes a dim view of the practice as evidenced by the penalties handed down to offending parties.
Directors of companies concerned are fined for liability as well as having to pay employees all their entitlements including rates of pay pursuant to an Award.
In addition, HR advisers and / or Legal teams can be fined for accessorial liability.
Pre-Qualification Criteria is the solution to this problem as the identification of the industrial instrument for the employees performing the work will be a priority issue. See below for more detailed view of this criteria.
Where there is no Fair Work compliant instrument the pre-qualification process eliminates that entity without looking at other criteria such as track record, financial capacity and other elements which can carry deep and extensive paper trail searching, and is time costly to all those involved.
Pre-qualification Criteria (PGC) for Clients, Contractors and Sub–contractors.
Clients utilise PGC to obtain a systematic approach to pre-qualification and selection of contractors. the criteria is focused on the capacity of the contractor to complete a proposed project in terms of time, cost and quality.
In turn the client’s financiers will be assured through this disciplined process of assessment whereby the financial and technical risks of a proposed project are minimised, thereby optimising the predicated financial returns.
Contractors in complying with PGC are establishing a consistent platform upon which to tender or negotiate for projects. Further, the platform can be utilised to market the contractor’s abilities against an objective framework