News & Security Advice
National
Security industry sub-contractors require their own insurance
At Ausure Macarthur we have been managing insurances for the security industry and SPAAL members for over 12 years.
A common question we receive from those providing manpower and electronic security is “are my sub-contractors covered?”.
If you use sub-contractors in your security business, whether they’re sole traders or companies, you need to ensure that they have their own insurances. Typically, public & products liability and workers compensation. Let’s take a look at each separately.
Public & Products Liability
Public & Products Liability policies will exclude liability of sub-contractors. You will often be covered for your vicarious liability due to the actions of sub-contractors, however the sub-contractors themselves will not be covered.
For instance, you sub-contract crowd control security services for a national hotel contract to a regional security contractor. In the event that contractor causes injury whilst evicting a patron from a venue and a claim is brought forward, the sub-contractor will not find cover under your policy. You however may find cover if you are sued as well for the actions of your sub-contractor. For you to have any liability the claimant would need to demonstrate that you have been negligent in some capacity, but this may be an allegation that you did not ensure adequate training was being carried out, or perhaps they were working to your SOPs or wearing your uniform.
Whilst some underwriters will allow you to cover sub-contractors under your liability policy, usually only if they are specifically named on the policy, it is not recommended. Whether they work for you full-time or occasionally they are their own legal entity and liable for their own negligent acts and the costs associated with protecting themselves against claims. Also, any claims against sub-contractors named on your policy will affect your claims history and ability to negotiate competitive cover going forward.
So, you should ensure that all of your sub-contractors have a Public & Products Liability insurance policy, covering the activities they will be carrying out for you. You should sight their Certificate of Currency which confirms they have paid the premium. You should also have them note you as a “Principal” or “Interested Party” on their policy. This will provide a level of protection for you under their policy, where you may be sued due to the negligent actions of your sub-contractor whilst carrying out contract services for you.
Workers Compensation
If your sub-contractor is a company, they legally must have their own workers compensation policy. This will provide cover for workplace injuries sustained by their own employees – medical costs, rehab costs and loss of wages.
If your sub-contractor is a sole trader (or partnership) it is a little more complicated. Sole traders and partnerships do not qualify for workers compensation – that is, the sole trader or partners themselves. If they have employees, they must have a policy.
In some cases you will be liable for workplace injuries of these sole trader sub-contractors and you must include them in your own workers compensation declarations. Typically, if you pay them an hourly rate, if they are paid on a weekly or fortnightly basis like other employees, if you provide them a uniform & tools, if they are required to work regular & defined hours for you, they will be considered a “worker” under the Workers Compensation Act and you must include them in your own workers compensation declarations.
To determine if contractors are deemed workers, you can use the following test: http://workerstatus.workcover.nsw.gov.au/. Note this test is for NSW workers only, however the same principles generally apply to all other states as well. Contact us about other states and their requirements.
Where sub-contractors are liable for their own policies, you would be wise to have your sub-contractors submit a Sub-Contractors Statement – effectively, a declaration that the Sub-Contractor has paid all its obligations under the Workers Compensation Act, Payroll Tax Act and Industrial Relations Act. The Principal Contractor (i.e. you) may be liable for the payment of the workers compensation insurance premiums, the payroll tax and the entitlements of the employees unless the Sub-Contractor’s Statement is provided
Of course, there may be other insurance policies for you and your sub-contractors to consider. We recommend speaking with an insurance broker who will learn your business and provide tailored advice. At Ausure Macarthur, we can do just that.
Please do not hesitate to contact us on 1300 633 530 or www.ausuremacarthur.com.au with any questions.
SPAAL Member Insurance with AUSURE Macarthur – 5 Often Overlooked Insurance Policies
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Ausure Macarthur: 1300 633 530
www.ausuremacarthur.com.au
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FWO employer guide to family and domestic violence
The new guide helps employers understand their responsibilities towards employees experiencing family and domestic violence. It also helps them develop a workplace response to managing family and domestic violence.
National Centre for Vocational Education Research Report – ‘Do course durations matter to training quality and outcomes?
The National Centre for Vocational Education Research (NCVER) has released the attached report entitled ‘Do course durations matter to training quality and outcomes?
FWO Penalty for underpayment of Sydney security guards
The Fair Work Ombudsman has secured a penalty of $39,090 against a former Sydney security company operator for underpaying dozens of security guards.
The Federal Circuit Court imposed the penalty on Sydney man John Lohr, who formerly operated Brookvale-based companies Safecorp Security Pty Ltd and Safecorp Security Group Pty Ltd. The companies are no longer operating.
Mr Lohr was involved in the companies, underpaying 45 security guards employed on a casual basis at various sites a total of $35,540.84.
The underpayments were largely the result of the guards being paid flat hourly rates of $20 to $25, which at times did not cover their casual loadings, weekend, night work, overtime and public holiday entitlements.
The Court has ordered that the penalty be used to repay affected guards.
Fair Work Ombudsman Sandra Parker said employers who pay unlawfully low flat rates risk facing court action.
“The use of low, flat rates that undercut lawful minimums has been a persistent problem in the security industry and employers in this sector need to get the message that it is completely unacceptable,” Ms Parker said.
Judge Nicholas Manousaridis found that Mr Lohr was aware an Award applied to employees of the Safecorp Security companies but decided to pay the employees flat rates, not knowing whether the rates would be sufficient to meet Award obligations.
This resulted in underpayment of the penalty rates as well as underpayment of casual loadings and a broken shift allowance under the Securities Services Industries Award 2010. The biggest underpayment of an individual employee was $9,756.
The Fair Work Ombudsman discovered the underpayments when it investigated complaints lodged by employees. Pay slip laws were also contravened
Judge Manousaridis described Mr Lohr’s decision to pay flat rates as “reckless” and said there was no evidence he had taken corrective action, exhibited contrition or cooperated to any significant degree with the Fair Work Ombudsman.
“The penalty should be set to signal to employers generally the importance of complying with the Fair Work Act and with complying with awards that cover them and their employees,” Judge Manousaridis said.
New Award Pay Guides from 1 July 2109
The pay guides have the current minimum pay rates for full-time, part-time and casual employees in an award. They apply from 1 July 2019. They also include all the monetary allowances and the most frequently used penalty rates for each classification.
Security Services Industry Award 2010 [MA000016] Pay Guide
Transport (Cash in Transit) Award 2010 [MA000042] Pay Guide
Electrical, Electronic and Communications Contracting Award 2010 [MA000025] Pay Guide
New Security Award Pay Guides from 1 July 2019
The pay guides have the current minimum pay rates for full-time, part-time and casual employees in an award. They apply from 1 July 2019. They also include all the monetary allowances and the most frequently used penalty rates for each classification.
Security Services Industry Award 2010 [MA000016] Pay Guide
Transport (Cash in Transit) Award 2010 [MA000042] Pay Guide
Electrical, Electronic and Communications Contracting Award 2010 [MA000025] Pay Guide
Fair Work Ombudsman – Commonwealth Games security guards underpaid
Ten security guards from the 2018 Gold Coast Commonwealth Games have received more than $24,000 in unpaid wages, following a Fair Work Ombudsman (FWO) audit of security providers for the event.
The FWO conducted the audits in response to requests for assistance from security guards who were concerned about receiving their correct pay and entitlements.
Security arrangements for the Commonwealth Games were contracted out by the Gold Coast 2018 Commonwealth Games Corporation to four principal providers who in turn used sub-contractors to provide security for the 11-day event. This formed what is known as a labour supply chain.
Fair Work Ombudsman Sandra Parker said the FWO audited nine employers providing security services to the games, including principal providers and sub-contractors, and found none were compliant with workplace laws.
“The consistent issue we discovered was guards not being paid until well after they had completed their shifts. In some instances, guards had to wait months to get paid properly. This was a breach of employers’ obligations under the Fair Work Act to pay their employees on time,” Ms Parker said.
“The delays were caused by shortcomings in the electronic record keeping system used to record work hours, which meant guards’ shifts had to be manually reconciled before they could be paid.”
The FWO also found two security providers failed to properly pay overtime, weekend and public holiday penalty rates, which led to the underpayments for ten guards. Three of the audited security providers also did not keep proper employment records or provide correct pay slips.
In addition to recovering lost wages for affected guards, the FWO issued: four Infringement Notices, totalling $12,600 in penalties for record-keeping and pay slip breaches; contravention letters to all the audited businesses that required them to take action to rectify their non-compliance; and one Formal Caution, putting a security provider on notice about possible legal action for any future breaches.
“Large-scale events can provide challenges for some businesses to ensure they are properly meeting their lawful workplace obligations. It’s vital they recognise and plan around this complexity to ensure their staff are paid in full and on time,” Ms Parker said.
“Ensuring workers in labour supply chains get their correct pay and entitlements is a priority area for the FWO and businesses can expect more compliance and enforcement action in this area.”
Minimum Wage Review 2018-19
The Fair Work Commission has announced a 3.0% increase to minimum wages following its 2019 Annual Wage Review.
The increase applies to the base pay rates from the first full pay period starting on or after 1 July 2019
- Annual Wage Review Decision
- Annual Wage Review Summary
- Fair Work Commission – Annual Wage Review 2018 - 2019
SPAAL will provide members with the new Award pay guides when published by the Fair Work Commission.
ATO Tax deduction information for security workers
Designed to publish on your company website or display in staff rooms, this handy one-page poster outlines what security workers can and can’t claim at Tax Time.
Security workers work-related expenses poster
The following how-to guides describe what steps security workers need to take to correctly claim a range of common deductions. They are useful references to have on-hand not just during Tax Time but throughout the year, and help workers keep good records when making work-related purchases.
National Labour Hire Registration Scheme recommended for the Security Industry
The Migrant Workers’ Taskforce was established as part of the Government’s response to the revelation of significant wage underpayments in certain industry sectors.
The Government has accepted in principle the establishment of a National Labour Hire Registration Scheme for the security industry which was named as one of the four high risk industry sectors. The report's recommendations include extending criminal penalties for serious breaches of the Fair Work Act.and accessorial liability rules currently in place for franchisors be extended to "also cover situations where businesses contract out services to persons".
The National Labour Hire Registration Scheme would be an industry-specific, ‘light touch’ regulatory model to provide government with an important tool to better direct the enforcement of current laws by the existing regulators of labour hire operators. It would act as a form of negative licensing to prohibit labour hire businesses that contravene relevant laws from operating. Critically, it would complement other new and existing government measures that address the drivers of workplace exploitation.
The objectives of the Scheme should be to:
- gain visibility and accountability of labour hire operators operating in high-risk sectors
- extend accountability to hosts
- provide a means for government to encourage compliance and behavioural change
- reduce exploitation of vulnerable workers by labour hire operators and in supply chains.