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System rigged against contractors - CTU

Friday 8 Feb 2013 8:56 a.m.

Mainzeal contractors were left standing outside construction sites yesterday, blocked from entering even to retrieve their tools.

The collapse of the construction company could leave hundreds of contractors out of pocket, with seemingly little legal comeback.

President of the Council of Trade Unions Helen Kelly says the odds are stacked against contractors.

“It’s the nature of the engagement. Here you have a company but they offer no reciprocity in terms of an employment agreement, they simply contract them in. If those workers had been employees they would have been protected up to the first $20,000 of wages and holiday pay and other payments owing under the receivership law – they get priorities over the banks. But contractors are simply considered as unsecured creditors and are very, very vulnerable.”

Ms Kelly says that large companies such as Mainzeal use contractors to put a gap between them and the employment relationship.

“Not only do they get away with things like not having them as a priority creditor but they also avoid all of the employment responsibilities, the issues like minimum wage, holiday pay, [and] fair dismissal.”

Ms Kelly says the CTU considers the use of contracting a ruse for big companies to separate out their responsibilities.

Watch the video to see the full interview.

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