Sham contracting cuts trucking prices 25-30%, honest firms say
Australian trucking operators report losing contracts to competitors. These competitors use sham contracting. It cuts labour costs by up to 30 percent.
Legitimate trucking businesses lose work to competitors who wrongly classify drivers as independent contractors, avoiding employer duties. Queensland Trucking Association (QTA) CEO Gary Mahon says sham contractors undercut honest operators by 25 to 30 percent.
The Fair Work Ombudsman is investigating 24 active cases. It has issued 39 infringement notices, including 25 in road transport.
Sham contracting means wrongly treating an employee as a contractor, which avoids superannuation, paid leave and workers compensation. The QTA estimates more than 40,000 of Australia's 600,000 transport workers work this way.
They use Australian Business Numbers instead of being hired as employees. Labour costs drop by 22 percent through sham arrangements.
Legitimate trucking margins are 5 to 6 percent. Mahon warned the industry faces a race to the bottom.
Honest businesses struggle to compete.
- 25 to 30 percent lower contracts
- Price undercut
- 22 percent via sham arrangements
- Labour cost reduction
- 5 to 6 percent
- Legitimate industry margins
- Over 40,000 of 600,000 transport workers
- Workers affected
Why it mattersDrivers lose workers' compensation, superannuation and leave time. Honest businesses face unfair pressure to cut corners.
AustraliaFor Australian truck drivers and owner-operators, widespread sham contracting threatens wages, safety protections and industry viability. For customers relying on freight, pressure toward these arrangements could eventually harm service quality.
✓ Claims checked against the source. checked 2 h ago
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