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Small Business Commission comes to George’s rescue

Here’s one story of how a Small Business Commissioner helped an ICA member:

Recently, one of our members, George, reported to us an incident involving a telecommunications company in Sydney.  George was engaged to deliver several IT projects for the company's clients.  

George was initially engaged for 3 months and was working away from home so had to pay his own accommodation, food and additional transportation to fly interstate to work. His contract was arranged through a recruitment firm that acted as intermediary between George and the company.  

In typical fashion George was provided a contract the day before he commenced. George requested that he review the contract but was told that it had to be signed ASAP.  One of the clauses allowed the recruitment firm to terminate immediately but required George to provide a week’s notice. George requested that he be given some notice in the event of termination and the recruitment firm reluctantly agreed to also give him 5 days’ notice.     

Towards the end of the 3-month term the company requested that George stay for an additional three months.  It is commonplace in the IT industry to be drip-fed work in this way. George agreed and made plans to continue on in Sydney.  

Two weeks before the end of his initial term George was contacted by a manager at the company and told that one of the permanent employees had become available and that his services would not be required for the next 3 months.  He was told that he should finish up his contract by the end of  the week once he had brought the  employee up to date and transferred all his files.  

George stated that he was entitled to 5 days’ notice but was told that the current week was it.  The manager indicated that the company did not see why they should have to keep him on for another week until the end of the contract when they could save themselves the expense. That week George did as directed and then handed over the company’s equipment and access card and left.

George contacted ICA to see whether he was able to do anything about recovering at least the final week of the contract. We see this situation quite often where a company and recruitment firm ride roughshod over a contractor’s rights.  All too often contractors are muscled into signing unfair contracts and then muscled out of work without any come-back. We referred George to the NSW Small Business Commission to intervene on his behalf.

The NSW Small Business Commission has statutory powers to investigate unfair conduct involving small business. Independent contractors come within the ambit of small business and so George directed his enquiry to them. He was advised to compile an account of what had happened and state the grounds for why he believed he had a case against the company and what he thought would resolve the matter.

After reviewing George’s material, the Commissioner’s staff advised that he did have grounds and that they could act as a mediator to resolve the dispute.

The Commission contacted the recruitment firm to request that they attend mediation.  Although not compulsory, if a party does refuses or does not attend, then if the matter goes down the path of subsequent legal action, the courts will take a very dim view and order mediation at the party’s expense. The Commissioner also has power to refer the matter to court.

The recruitment firm agreed to participate but then subsequently rang George to berate him for involving them.  In the recruitment company's view they had done nothing and it was their client that was at fault.  This is also a typical ploy in contracting where one party blames the other in order to claim vindication.  The recruitment company argued that it did not have the time for such a trivial matter and that George should simply cop it and walk away.  Of course this meant George would lose several thousand dollars in income.

George made representations to the company that had terminated his contract and sought to involve them in the mediation.  The mediation session was set down at a location convenient to both parties and George was requested to prepare his case. The same advice was given to the recruitment firm.   

George was then sent a letter from a Sydney law firm with the partner of that firm advising George that he had no grounds and that his client was not responsible for any loss.  George was given this advice by a qualified specialist in employment law.  George disagreed, yet the letters from the lawyer kept coming.  A week later George was contacted by the recruitment company and told that they would pay his invoice for the final week of his contract.  They paid.

Although this resulted in a positive outcome for George it involved him in a lengthy and protracted campaign to recover one week’s income. The company terminating his engagement sought only to save themselves the cost of George’s services.  In the end the recruitment firm paid simply because it was more cost-effective to pay George than turn up at a mediation session.  

Without the availability of the NSW Small Business Commissioner George would have faced a large Sydney law firm and had to engage his own lawyer at significant cost.  His action could have lasted more than a year and even if he did win, he would not receive all his costs.  Companies and recruitment firms rely on this legal intimidation to push contractors to back down and go away.  

George recovered his one week’s income but he also faced being out of work as he had relied on the representations that the company was going to engage him for a further three months.  

We really have to wonder about the ethical integrity of recruitment firms and companies that see people only in terms of cost and have little or no regard for the consequences of their actions.  But now with the Small Business Commissioner’s dispute-resolution powers small business people have a fair, cheap and quick process ‘on their side’.

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