CEO of the Queensland Trucking Association (QTA) Gary Mahon addressed the Road Transport Industry Roundtable in Parliament House, Canberra, about the critical issue of sham contracting and its detrimental effects on the road freight industry.
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Underpinned by a tripartite compact between Employers, Unions, and Government, Mahon highlighted the industry’s long-standing commitment to fairness, safety, and excellence, and noted the establishment of the Road Transport Division within the Fair Work Commission in 2024, as a testament to this commitment.
Mahon says the continuous rise of ABN-based employment sees workers treated as contractors, denying them basic entitlements and circumventing employee protections.
“This illegal activity not only erodes workers’ rights but destabilises the entire supply chain, creating a two-tier system that favours cost-cutting over safety and fairness,” he says.
The QTA CEO highlighted that the widespread use of ABNs to halve labour costs creates an unbalanced market, jeopardising the sustainability of the industry and suppressing wages and safety standards, while noting that while recent Federal legislation aims to uphold Award protections, the use of ABNs remains a significant loophole.
Mahon says all fleets should take proactive steps in combating this illegal practice.
“Fleets can help eradicate sham contracting by undertaking thorough due diligence with the subcontractors they engage and by questioning how those subcontractors are engaging their workers,” he says.
Urgent action was called upon to address weaknesses in the Closing the Loopholes Amendments, particularly concerning the “Barn Door size” loophole in the reasonable belief defence within the Fair Work Act 2009.
Mahon says the supply chain faces unprecedented strain, with rising costs, insolvencies, and legal evasions threatening safety and industry stability.
“Fleets that survive will simply be those who can weather bad terms and unfair practices the longest,” he says.
Mahon says the use of TPAR (Taxable Payments Annual Report) to detect labour misuse, is unrealistic, and urges the ATO to find better solutions.
The transport industry plays a major role in Australia’s economy, employing 640,000 Australians and contributing 8.6 per cent to the GDP, Mahon says that the erosion of the statutory framework would undermine industry stability, lead to revenue losses, and hamper the capacity to fund essential public services.
Together with other Associations at the roundtable, QTA plans to continue advocating for the practice of sham contracting to be addressed and for stronger laws to prevent it in the transport sector.
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