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Sham contracting is the most egregious form of wage theft .
Sector ’ s ‘ dirty secret ’
NTEU to take wage theft case to the federal court .
By Wade Zaglas
A wage theft scandal has rocked the higher education sector , with the National Tertiary Education Union ( NTEU ) beginning proceedings against private higher education provider JMC Academy in the federal court .
The NTEU is alleging that the academy ’ s “ employment practices for its lecturers are an illegal sham ”. JMC Academy provides courses in the creative , dramatic and visual arts at its campuses in Victoria , NSW and QLD .
“ JMC engages its lecturers in a way that avoids minimum employment conditions ,” NTEU national president Dr Alison Barnes said .
“ It is flat out wage theft of the most egregious kind . JMC made a business practice of underpaying JMC staff and undermined their retirement income by failing to pay superannuation .”
The NTEU has named four former JMC lecturers who are willing to be involved in this “ test case ”. “ These members have bravely decided to stand up to JMC ’ s exploitative practices with the aim that it will mean a fairer deal for their colleagues ,” Barnes said . The union alleges that the academy ’ s employment conduct constitutes a serious contravention of the Fair Work Act , primarily because JMC failed to comply with the Educational Services ( Post-Secondary Education ) Award 2020 .
The NTEU will allege that such contraventions were “ done knowingly ” and formed a “ systematic pattern of conduct affecting one or more people ”.
The stakes for JMC Academy could be high , with court ordered penalties of up to $ 133,200 per contravention for an individual and $ 666,000 per contravention for companies .
“ NTEU believes these employees are entitled to back-pay for the roughly half of the Award rate that they have not been paid , their superannuation and a declaration from the Court that JMC is breaching the sham contracting provisions of the Fair Work Act by engaging their lecturers as contractors when they are in fact employees ,” Barnes argued .
“ Our aim is that JMC Academy is forced to end its exploitative practices and employ its staff properly .”
JMC Academy ’ s response to the claim is due by early December 2020 .
This latest alleged wage theft scandal comes after an ABC investigation into what some insiders are calling higher education ’ s “ dirty secret ”, with plans for senate hearings next year . A recent union survey found that 78 per cent of higher education respondents claimed an underpayment of one form or another .
According to the ABC investigation , the JMC Academy employees “ involved in the lawsuit were hired as independent contractors , an employment arrangement where employees are engaged as contractors and treated as an independent business ”.
NTEU national assistant secretary Gabe Gooding likened the practice to “ sham contracting ”.
“ It ’ s where an employer disguises a genuine employment relationship as a relationship between two businesses , where one contracts the other for a service ,” Gooding told the ABC .
“ We say sham contracting is the most egregious form of wage theft .”
The NTEU alleges JMC employees received no superannuation , no sickness insurance , workers compensation or leave , and Gooding believes such employment practices are increasing in the sector .
The Sydney-based academy is yet to file a defence or release a comment , citing the impending court case .
One of the individuals seeking compensation is music teacher Stephen Baker , who enjoyed a successful career and toured with the US group The Supremes . He was employed at JMC Academy for 18 years to teach singing .
However , the ABC was told that in November last year Baker received a diagnosis of thyroid cancer and his employment situation with JMC Academy left him with no sick leave to access .
“ I ’ ve really got nothing to show for [ almost ] 20 years ,” he said . “ There was no net for me .”
The music teacher was then hit with a second life-changing-blow – a rare stomach cancer diagnosis – and required Centrelink assistance . Baker told the ABC that it “ took three requests for JMC Academy to even respond to Centrelink , which said it needed confirmation from his employer he had a job ”.
However , once the academy finally replied , Baker ’ s request for assistance was declined .
“ There were so many redactions in the Centrelink form ,” he said .
“ They [ Centrelink ] said we can ’ t proceed with this because every word where it says employee or employer , they ’ ve redacted it .”
Baker is now seeking 18 years of unpaid superannuation with interest , as well as compensation for being paid “ significantly below the award rate while a contractor ”.
Following the ABC investigation , the NTEU conducted a survey of 2,174 professional and academic staff at every university , except Charles Darwin University in the Northern Territory . The survey found that 78.4 per cent of academic respondents said they were not paid for all of their marking hours outside of class time .
The survey also found that 39.1 per cent of academic staff alleged underpayment through tutorials being described as “ information sessions , seminars , practice classes or workshops ” to attract a lower rate of pay . ■
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