Thousands of traditions have been warned they could be sued for $ 642 million if they win a class action lawsuit against a Telstra contractor.
Shine Lawyers is making a huge claim against ISG Management, also known as Tandem, claiming that the workers should have been treated as workers.
Instead, they worked as individual contractors, paying for their tools and transportation to and from locations where they performed Telstra maintenance.
The lawsuit, led by former contractor Robert Mutch, demands reimbursement of sick leave, annual leave and retirement in accordance with the relevant pay.
However, ISGM warned it would be forced to go against all traditions if the claim was successful, as it paid them far more than the reward.
Tradies have until May 7 to unsubscribe, according to a letter they will be sent, or they will automatically become part of the lawsuit and can be prosecuted.
Thousands of traditions have been warned they could be sued for $ 642 million if they win class action lawsuit against Telstra contractor
Documents filed by ISGM in federal court in Melbourne claim it paid more than $ 1.55 billion to 3,450 employees in 2011 to 2020.
The company’s models suggested that the subcontractors got an average of $ 61 an hour, compared to an incidental pay rate of just $ 35 an hour.
On average, they earned $ 113,718 per year in fiscal 2018, compared to $ 59,000 plus pension for a no-obligation full-time shift.
“This would mean that ISGM would, in effect, reclaim up to $ 1.55 billion, paid to thousands of Australian small businesses over the past nine years, and then pay the price-based workers’ rights to individual workers,” he said.
“This can be disastrous for small business operators.”
ISGM said it could not afford to pay workers twice effectively for the same work, and would have no choice but to sue the difference.
“A preliminary analysis shows that ISGM paid the corporate entities more than $ 600 million more than it would have paid if group members had been hired as employees under the relevant award,” he said.
“Group members should be told honestly about the effect of the counterclaims, which is that money may need to be repaid.”
Employees were hired as individual contractors and had to pay for their tools and transportation to and from locations where they performed Telstra maintenance
Shine Lawyers is funding the claim through Litigation Lending Services, a third-party financier, which would account for 25 to 30 percent of each court payout, according to ISGM.
After the attorneys also take their fees, contractors will be left with far less and even more out of pocket if prosecuted.
Traditions will also not be paid their legal fees to pursue their money, or defend counterclaims from ISGM, which Shine did not mention on its website.
Shine Lawyers disputed ISGM’s models and that there were ‘over the award’ payments to subcontractors.
“Whether the company has the right to recover amounts paid … is an issue to be determined at trial in October,” said Vicky Antzoulatos, leader of the class action.
“We cannot say what the total claim is worth as each technician’s claim must be assessed individually.”
ISGM’s comment also addressed statements by Shine in a draft opt-out letter and statements to news outlets in the course of the case.
It objected to Shine telling traditions to “not worry” about counterclaims until they were considered misleading.
The company also objected to Shine, saying subcontractors could receive “ compensation for anxiety, stress, depression, and distress ” when personal injury was not part of the claim.
Documents filed by ISGM in federal court in Melbourne (pictured) state that it paid more than $ 1.55 billion to 3,450 employees from 2011 to 2020
Shine claimed that the workers were employed under a ‘sham contracting’ arrangement, where they were in effect workers but forced to work as independent contractors.
According to the claim, they had lost all their leave and retirement rights, but still had no control over their working hours like real contractors.
Ms. Antzoulatos previously claimed that many ISGM workers were ‘overwhelmed’ by working conditions, debt and low wages, and suffered from mental health and marital problems, with some even attempting to commit suicide.
ISGM denied that “sham contracts” existed and that all workers were legitimate subcontractors.
In a similar case last October, Judge Michael Lee dismissed Adero Law in federal court, saying that employees would become “ diddly squat ” once the attorneys and litigation funders took their part.