FWO | Sham Contracting

Question

Background: A Roundtable meeting was held on 5 November 2025 convened by Senator Sterle to address 'sham contracting' concerns. Documents released to Senator McKenzie under FOI by the Infrastructure Department raise concerns the DEWR is not leading action on sham contracting as anticipated by industry. 1. On 13 March 2026 the Fair Work Ombudsman and Australian Taxation Office issued a joint media release on sham contracting in particular in the building and construction and road freight industries. Sham contracting has been a specific concern of the road transport industry. How many specific allegations of sham contracting in the road freight industry is the Fair Work Ombudsman currently investigating? 2. Of those, how many cases of alleged sham contracting is the Fair Work Ombudsman currently prosecuting? 3. Over the past year, how many successful prosecutions has the Fair Work Ombudsman secured for sham contracting in the road freight industry? 4. What penalties have been imposed on road freight operators found guilty of sham contracting? 5. The media release of 13 March 2026 refers to 800 tip offs made to the ATO regarding the road freight industry last year {2024-25) of which ''nearly 25%'' refer to sham contracting. How many of those cases were referred by the ATO to Fair Work Ombudsman? 6. How many of those tip offs have been substantiated? 7. Transport industry stakeholders have expressed concerns about so-called ABN drivers as sham contractors - these are typically individuals who do not own a truck but are willing to contract themselves out as a driver with an ABN instead of signing on as an employee. Are there circumstances where ABN drivers may be legitimate independent contractors? And if so, what are the circumstances where those arrangements might change to look more like a sham contracting arrangement? identified any sham contracting structures or practices like these? If so, how many such structures are currently under investigation or being prosecuted? 8. Has the Fair Work Ombudsman made any recommendations for change to the review of the Closing Loopholes legislation with specific relation to alleged sham contracting in the road freight industry? 9. How frequently is the FWO office engaging with peak transport sector organisations and what is FWO doing to provide the road transport industry confidence that concerns and allegations of sham contracting are being acted on?

Answer

Please see the attached PDF.

Documents

• Question with answer (PDF) (opens in a new tab)
• SQ26-001777.pdf (opens in a new tab)