SHALOM House says it no longer requires residents entering its drug rehabilitation centre to set themselves up as self-employed contractors when they join the program.
Residents are required to work five days a week for the duration of their stay at the Swan Valley rehab centre, initially as volunteers and then in paid employment.
Residents were previously required to register for an ABN so they could be treated as individual contractors, rather than employees, on the books of the centre’s Shalom Works landscaping and construction business and Shalom Labour Works, a labour hire firm.
But Shalom House has confirmed that the residents, most of whom were on Centrelink benefits when they joined the program, were now treated as employees by the two businesses.
Shalom board member Stephen Wilkinson, an accountant, declined to comment on whether the decision to change the system was due to a crackdown on contracting by the Australian Tax Office and Fair Work Ombudsman.
“They (residents) no longer register for ABNs and now they work as employees,” Mr Wilkinson said.
“From my records, the residents began to be employed by Labour Works in the quarter ended September 2017.
“Guys working for Shalom Works/Labour Works on permanent wages receive super and leave and guys working on a casual basis receive super but no leave and a higher hourly rate.”
Shalom House founder Peter Lyndon-James, who is campaigning for a WA Senate seat as an independent, said Shalom Labour Works made residents more attractive and employable to businesses by reducing the administration workload involved in hiring them.
“The reason we decided to have the residents working through labour hire is to make sure they are fully insured, that all the benefits they are entitled to receive, they do receive, including workers comp and superannuation,” he said.
“Our labour hire rate is $22.50, as per the Government’s minimum wage.
“100 per cent of that income goes to the individual, plus 30 per cent which covers the cost of the staff doing the administration of Shalom Labour Works, distributing pays, placing residents, finding new employers, as well as residents’ superannuation and insurances.
“Money earned from private employment through Shalom is used by participants to pay off debts and help them set up a productive life after graduation.”
UnionsWA assistant secretary Owen Whittle said contracting arrangements involving complex corporate structures that required people to work under contract using an ABN risked being exploitative.
“UnionsWA is not in a position to comment on the specific practices of this charity, its corporate structures or relationships with its participants, residents or employees,” Mr Whittle said.
“Obviously those participating in a program of alcohol and drug rehabilitation are likely to be vulnerable.
“All business and organisations, including charitable organisations have ethical, if not legal, responsibilities to be transparent.
“The WA Government is currently considering law reforms that would apply a more common sense definition of an employee, however consideration is also urgently needed for a licensing system to ensure that labour hire firms adhere to best practice labour standards.”
Any profits from Shalom Works and Shalom Labour Works go towards running the faith-based, not-for-profit Shalom House program, which claims to be the strictest in Australia.