The Dark Cloud Of Questionable Employment Arrangements Is Hanging Over The Workforce.

The George Calombaris story is all over the news this week.

[For those who do not know, George Calombaris is a TV celebrity chef.]

The story, in a nutshell, is that George’s company has been fined $200,000.00 for underpaying staff working at his restaurants.

Following an investigation by the Fair Work Ombudsman, it was established that his company had underpaid 515 current and former employees at one restaurant a total amount of $7.83 million and another nine employees  at another restaurant were short paid $16,371.

There are calls from Union leaders and also politicians that this is a significant act of theft and that the fine is a poor substitute for what really should be a punishment of gaol time.

Michele O’Neil, President of the Australian Council of Trade Unions said:

“While anyone else would face prison time for theft of millions of dollars, employers routinely steal huge amounts from working people and get away with simply returning the money they have stolen and paying a paltry fine.”

Interestingly, Calombaris’s company actually self-reported to the Fair Work Ombudsman in 2017 admitting that they had underpaid a significant number of their employees.

And the company has since repaid all these employees.

Currently there is a Federal Court judgement that a Dental Service provider has failed to pay an employee their due entitlement of superannuation.

This is in line with a decision years ago by the Australian Federal Government to pay and backpay superannuation to their part time dentists working for Australian Defence Services.

It is my contention after researching the ATO website that dentists employed in dental practices are being misrepresented as contractors and business owners when in fact all they are exchanging is their labour for money.

The Federal Court ruling supports this contention.

And it is my belief that this judgement will also be shared across to annual leave and long service leave entitlements. Just take a look at the ATO website.

It is pure fantasy to suggest the existence of a business for these EMPLOYED dentists when their supposed businesses have no equipment, no supplies and in essence, no customers.

These dentists are engaged in what is clearly a SHAM CONTRACT arrangement.

In light of the George Calombaris decision handed down this week there must be serious ramifications for owners of dental practices relying on these fantasy arrangements.

The law of the land is the law of the land.

The existence of some convoluted paper arrangement cannot overrule the law of the land.

Just ask Glenn Wheatley.

These sham contractor arrangements that large companies are using to pay doctors and dentists are rife in the health profession and create an unfair competitive advantage for these entities when compared to the operations of the solo-operating medico or dentist.

Now I am well aware that no member of the public will EVER have sympathy for any story where dentists or doctors are being hard-done by.

But here are the consequences:

Ultimately, these sham contracts are set up by employers to avoid paying significant amounts of payroll taxes.

Very significant amounts of tax.

So the community has to make up that payroll tax shortfall in other ways.

Companies failing to adequately superannuate employed dentists and doctors create a serious retirement income shortfall that future governments and communities will be burdened with when these employees reach retirement age.

The sham contractor arrangements are blatantly just that. 

They are a sham.

These employed dentists and doctors ARE NOT  running a business as these companies contend… they are simply providing labour to patients owned by the facility on equipment owned by the facility.

The parent corporation companies make their employee dentists and doctors work using an ABN. The corporations then generate sham invoices on behalf of the employees in a feeble attempt to disguise these false arrangements.

On top of this, in some of these organisations there exists a culture of bullying that would put the military to shame.

This historic bullying hovers like Vesuvius over these organisations, just waiting for the right time to erupt.

And erupt it will.

And don’t get me started on the practice acquisition processes, which are really just poorly disguised glorified Ponzi schemes.

I suggest that Calombaris’s company isn’t Robinson Crusoe.

There will obviously be other restaurants found to be underpaying their employees.

And there will be other industries.

I wonder, if George ever does end up going to gaol, will he be made to work in the prison kitchens?

And I’m thinking there might be a few very nervous other business owners and former business owners, and executives out there….

We live in interesting times.

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