Professionals Australia is running a test case on behalf of a software engineer who is claiming over than $100,000 in leave entitlements owed to him as a result of misclassification as a contractor by IBM Australia.

While the engineer was engaged on a permanent full-time basis in 2010, from 1999 until that year IBM engaged him as a contractor in 1999 on a flat hourly rate of $58. In 2010, he says IBM engaged him as a permanent full-time employee and in 2017 it made him redundant. The claim is for around $120,000 worth of untaken annual and long service leave the software engineer says should have accrued between 1999 and 2010.

Professionals Australia chief executive Jill McCabe said the union anticipates “there could be many employees engaged in the IT industry as contractors who may be able to claim employment benefits if his case succeeds. These forms of long-term contracts that misclassify employees as contractors are not uncommon for IT professionals.”

The member’s actual work arrangements displayed a range of characteristics that were indicative of an employment relationship including requiring him to work 40 hours a week for 46 weeks in a year, to be in the office for core hours between 10am to 3pm on weekdays, reporting to IBM managers, participating in annual performance reviews, being supervised and instructed on work to be performed on a daily basis, providing all tools and equipment including office space and furniture, issuing him with an IBM Corporate credit card for work-related travel expenses, preventing him from marketing himself as being in his own business, precluding undertaking work outside his IBM role and being asked to assign inventions or ideas to IBM if he developed them during the course of his work.

McCabe says “employers engaging professionals as contractors when they should be engaged as employees has been a common practice in the ICT sector over the past decades. It results in professionals being deprived of standard employment entitlements such as sick leave, annual leave and long service leave”. Calling on information technology companies to “strengthen their compliance systems to ensure that employees are receiving the correct pay and conditions”, McCabe says the union is also encouraging workers in the sector to consider joining the union.