A looming court battle involving Airservices Australia is set to expand to cover allegations of “sham contracting” and the use of outlawed “zombie agreements”.
In June The Canberra Times revealed almost 80 employees had registered for a class action against the government entity, centred around a controversial redundancy process that slashed more than 500 jobs last year.
Former staff of Airservices Australia are launching a class action against the government entity. Photo: James Morgan
At the time lawyers alleged that a number of staff members had been made redundant while employed on unlawful contracts, and could therefore be eligible to claim up to $130,000 in additional payouts.
Rory Markham, the employment litigation director at the Canberra-based Chamberlains law firm, said the class action was now likely to expand to cover additional concerns.
“We have multiple claimants that have raised concerns about sham contracting arrangements being undertaken at Airservices in the period of 2010 to date,” he said.
“In certain situations, people have been made redundant after between 10 and 30 years of employment with Airservices and then re-employed in a matter of weeks on the same or comparable duties under an independent contractor agreement.”
Impacted workers could be due additional compensation for the alleged use of such “strictly forbidden” practices, Mr Markham said.
A further 10 individuals had come forward with allegations that the redundancy program was used to make them accept cheaper contracts while performing the same job, he added.
“We have received instructions from at least 10 individuals that the redundancy process was in fact no more than an option to take a pay cut of approximately $20,000 to do the same duties, or to be made redundant without further consultation.”
If true, such allegations showed the redundancy program was a cost-cutting exercise with little connection to whether jobs were actually needed or not, Mr Markham said.
Lawyers were also investigating the alleged use of so-called “zombie” Australian Workplace Agreements, a form of individual contract discontinued by the Federal Government in 2008.
“The only relevance for the existing AWAs appear to be to prevent employees becoming a part of the enterprise agreement and receiving higher redundancy benefits,” he said.
“It would be highly embarrassing to the Commonwealth to continue to engage people on AWAs in these circumstances.”
The total bill for the action, including corporate penalties, could sting Airservices as much as $12 million.
To date 116 individuals had registered for the class action, with Chamberlains currently retained by 45 individuals.
Mr Markham said he was currently engaged with representatives of Airservices in a bid to resolve the dispute before it went to the Federal Court.
If no settlement was reached in these discussions, it was likely the class action would be filed in late July, he said.
A spokeswoman for Airservices Australia said the entity was, and always had been, a responsible employer.
“We have a total commitment to our duty of care for all Airservices employees,” she said.
“As The Canberra Times is fully aware, a number of issues have been foreshadowed as part of potential legal actions and these issues will be examined and determined as part of that process.
“We are not aware of any additional claims of the nature you raise.”