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  Issue No 99 Official Organ of LaborNet 15 June 2001  

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Legal

Dot.Com Casualties

By Louise Beard - APESMA (NSW Branch)

The high profile collapse of One.Tel had significant implications for its employees. But what about its contractors?

 
 

One.Tel Workers on the Street

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The relationship between a contractor and a company is very different to that between a company and its employees. As there is no employment relationship between the former, a contractor is paid a fee for service (either by the company or through an agency) as opposed to a salary. When the contract is terminated due to circumstances such as the liquidation of a company, the absence of an employment relationship means the contractor is not entitled to a redundancy payment.

But this does not mean that a contractors fees for work already performed and invoiced should not be paid. While obvious problems exist for those who contracted directly to One.Tel (given the lack of money), the majority of contractors affected were contracting to One.Tel via a recruitment agency, and are entitled to payment from the agency.

In the aftermath of the collapse of One.Tel, it came to APESMA's attention that various agencies were behaving unethically and unlawfully in relation to the contractors they had placed at One.Tel.

APESMA was recently approached by some of its contractor members seeking advice on their rights following the advice given to them by their respective agencies.

Unfortunately, it appears that some agencies are taking advantage of the issue and advising their contractors that they cannot be paid for recent work for One.Tel, even though the work has been signed off and invoices were submitted to the agency prior to One.Tel's liquidation.

The agencies have provided the explanation that because the agency will not be paid by One.Tel's administrators, the agency has no obligation to pay the contractor. But in each of the cases APESMA has reviewed this is blatantly untrue.

APESMA has reviewed the contracts between the contractors and their respective agencies and found that the contracts create an obligation for the agency to pay the contractor, not One.Tel. And the payment of fees is by no means contingent on the agency being paid by the client (ie One.Tel).

In some cases a contractual clause may give an agency the right to withhold payment to a contractor in the event that the client is dissatisfied with the contractor's work and withholds payment to the agency as a result. But this has no bearing on a situation such as the One.Tel collapse, despite the misleading conduct of some agencies who would have their contractors believe otherwise.

Last week APESMA wrote to the agencies concerned, outlining their legal obligations and demanding payment for the members concerned. At this stage we have had positive feedback from one member, who says his agency has now agreed to pay him for 80 hours fees previously withheld. The member says he will not be dealing with this particular agency again, however.

Other claims are currently on foot as the Association awaits the agencies' response. Should they continue to withhold unpaid fees, the matters will need to be dealt with on the members' behalf in the small claims court.

Contracts between contractors and agencies do vary, but it is only in very rare cases that a contract gives the agency the right to withhold payment to a contractor.

Contractors affected by the One.Tel collapse are therefore strongly encouraged to contact at APESMA (NSW Branch) if they have not yet done so.


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*   Issue 99 contents

In this issue
Features
*  Interview: In Defence of the Umpire
Australian Industry Group chief Bob Herbert on why the Industrial Relations Commission is worth fighting for.
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*  Unions: Diary of a Dude
One.Tel worker Warren Manners thought he had a dream job and no need for a union. That was until the money ran out.
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*  Legal: Dot.Com Casualties
The high profile collapse of One.Tel had significant implications for its employees. But what about its contractors?
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*  Industrial: The Shopfloor, United
Chris Christodoulou argues that without an active union membership, workplace democracy is just a pipe dream.
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*  International: A Saharawi Woman's Plea
Sydney unionist Stephanie Brennan travelled to Africa to witness first-hand the struggle for independence in West Sahara.
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*  History: Once Were Tuckpointers
Trawling through the files, Paul Howes stumbles upon some unions that represented workers long departed.
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*  Politics: Out Of The Comfort Zone
In his new book, Brett Evans argues that while Labor is honing its reform agenda, it is still struggling to reform itself.
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*  Satire: World Domination
The US has threatened not to pay the UN the money it doesn’t pay anyway.
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*  Review: Wiped Out
Bread and Roses is a new movie about the struggle of invisible office cleaners to gain dignity and respect at work. Pity you won’t see it here.
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News
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»  NRMA Learns From the Big Boys
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»  Diggers’ Records to be Outsourced?
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»  Unions Back Religious Freedoms in Vietnam
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»  Blair's Britain - An Insider Speaks
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»  Workers Online 100th Issue Bash
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»  Activists' Notebook
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Columns
»  The Soapbox
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»  The Locker Room
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»  Trades Hall
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»  Tool Shed
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Letters to the editor
»  The May Day Wash-Out Explained
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»  What's Wrong With Compo?
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