Workforce management company, ISG Management (now known as Tandem) is facing what’s being dubbed as the ‘largest class action lawsuit in Australia to date’ for its contracting practises.
A class action lawsuit has been filed in the Federal Court against ISG Management (ISGM) from Shine Lawyers, and believes that more than 4,000 workers could be eligible to join in the class action.
Funded by Litigation Lending Services, it has been alleged that ISG Management “misrepresented the true nature of a contractor’s employment arrangements, leading them to financial and personal hardship.”
“Our investigations have revealed that telecommunications workers who were purportedly employed under sub-contracting arrangements, were actually employees of ISGM and therefore entitled to benefits such as wages, leave, allowances and overtime payments under the Commonwealth Fair Work Act and the relevant Telecommunications Services Award,” said Shine Lawyers’ special counsel for class actions, Vicky Antzoulatos.
A Tandem spokesperson said the company was aware of the claims being made, and will vigorously defend them.
“We believe that our subcontractor model provides flexibility, choice and competitive returns for Australian small businesses," a Tandem spokesperson said.
"Further, these arrangements have previously been reviewed by relevant regulators with no adverse findings made. Our contractors are free to provide services to others, have the right to delegate work, have the right to refuse to perform work for Tandem, provide their own equipment and insurance and are paid per job.
"Many of our contractors engage workers. The relationship has all the hallmarks of an independent contractor relationship."
Among many items, the claim will allege ISGM took advantage of a taxpayer funded scheme ‘Australian Apprenticeships Access Program’ to train prospective telecommunications workers, to provide services to ISGM as telecommunications technicians working on the Telstra network.
According to Shine Lawyers, a number of these workers, who had little business experience, were required to set up their own companies in order to receive work from ISGM, and had to take out large personal loans to pay for tools and a vehicle in order to conduct the work.
“In our view, ISGM exercised total control and direction over the employment of these workers including where they worked, the jobs they worked on, the clothes they wore to work, the branding on their vehicles, the methods of work they were required to follow, such that they were actually employees rather than independent contractors,” Antzoulatos said.
“We believe that over 4,000 workers could be eligible to join this class action. This could be the largest employment class action that has been commenced to date in Australia.”
In response to this, the Tandem spokesperson pointed out that through this partnership, 350 out-of-work people were provided with the opportunity to develop new skills and establish their own business.
“There was no guarantee of work and no compulsion to sub-contract with us at the conclusion of the program,” the spokesperson said.
“We acknowledge that running your own business is not always easy and may not be for everyone. And that there is always room for improvement with such social initiatives.
"However, of these 350 participants, more that 200 of them are now successful small business operators sub-contracting with us. Some of these have gone on to grow and develop into significant businesses."
One particular contractor, Bill Makalovski worked for ISGM for four years between 2012 and 2016, and detailed how the company controlled almost all elements from the hours they worked, the computers and software to be used, and even the uniforms.
It was alleged that ISGM reduced certain codes that contractors were able to claim for, reducing their earning capacity up to 40 per cent.
“We had to make a living so we did what we were told even if we thought we were being wronged,” Makalovski said.
“While pay reduced 30-40 per cent, our operating costs increased due to the distances we were required to travel from job to job.”
It has also been claimed that as ISGM tried to change the contracts mid-term they told contractors that if they didn’t sign by a certain date, they wouldn’t get work.
ISGM is expected to file its defence within months.