Fair Work report to come next week as Ombudsman cracks down on sham contracting

The Federal Government will reportedly release the Fair Work review next week, although businesses and entrepreneurs are still in the dark about what changes Workplace Relations Minister Bill Shorten will announce, with questions surrounding whether there will be any changes at all.

The imminent release of the report comes just days after the Fair Work Ombudsman cracked down on a Brisbane beauty and photography businesses for alleged sham contracting – an area the report is expected to cover in some detail.

The Ombudsman said last week that Bryan Charles Bedington, the owner and sole director of Brisbane-based New Image Beauty Salons, was allegedly involved in breaching sham contracting provisions by misclassifying seven employees.

This is the second time Bedington has been targeted by the Ombudsman – he was hit with a prosecution for allegedly underpaying a worker $19,000, with that case to be heard in July.

The company went into liquidation last year, which means the Ombudsman can’t take legal action against it.

The employees, five of whom were photographers and the other two make-up artists, weren’t paid $8,288 in annual leave entitlements during 2011.

“The alleged breaches were discovered last year during the Fair Work Ombudsman’s national auditing campaign focusing on sham contracting,” the FWO said.

“Mr Bedington allegedly knew the correct classification for the workers was as employees because the Fair Work Ombudsman formally cautioned him in 2010 about misclassifying employees as contractors.”

The FWO says the workers should have been classified as employees because of the type of work they were doing. Ombudsman Nicholas Wilson said in a statement the sham contracting is a “serious matter”, and that Bedington is facing a maximum penalty of $6,600 per breach.

The FWO also wants a court order that any fine imposed must go towards paying the underpayments of the workers. That case will be heard before the Federal Magistrates Court in Brisbane.

Meanwhile, new reports suggest the government’s response to the Fair Work review will be released next week.

SmartCompany contacted the Department of Employment, Education and Workplace Relations this morning to confirm the report, but a spokesperson only said the report would be released “soon”.

According to The Australian Financial Review, the government will publish the review next week, but Workplace Relations Minister Bill Shorten will consult with industry before making any recommendations.

The review was made up of three members, including former Reserve Bank board member John Edwards, former judge Michael Moore and legal academic Ron McCallum. The trio were told to examine how government labour laws have affected industry and whether any changes could be made.

Sham contracting is expected to take a front seat in the review, with employers opposing restrictions on contractors, although employers and legal experts are also calling for changes to adverse action and unfair dismissal provisions.

Employers and business groups have also called for a bigger role at the enterprise bargaining table, while unions and employee advocacy groups want Fair Work to have a bigger role in arbitration, along with more protections for delegates.

The release of the report will culminate a six-month process, after the review panel was announced in December 2011. The Fair Work legislation originally took effect from July 2009.