The first national research of its type by the Gillard government's Fair Work Building and Construction inspectorate has found up to 13 per cent of the nation's building workers employed on ''sham contracts''.
This means they are working in conditions identical to being a permanent employee - but are being paid as if they are an independent contractor providing a service for a fee.
Hiring a worker who should be a permanent staff member on a sham contract is illegal, because it allows the employer to avoid paying superannuation and leave, and to avoid the risk of hiring permanent staff.
Leigh Johns, chief executive of the Fair Work Building and Construction authority that commissioned the research, estimated that 50,000 workers in construction could be on sham contracts.
"This means they are missing out on entitlements like annual and sick leave and their employer making superannuation contributions," he said.
The research finds that 9 per cent of all contractors in construction are working for one employer only. And the practice of illegally contracting instead of hiring permanent staff has become particularly prevalent among non-English speaking workers.
It follows a 2011 inquiry into unlawful contracting. Separate research in 2011 by the Construction Forestry Mining and Energy Union found up to 168,000 people on illegal contracts in the building industry.
The union's construction division national secretary, Dave Noonan, attacked employer groups, saying that some, such as the Master Builders Association, downplayed the problem.
''Companies that employ workers legitimately are becoming increasingly frustrated that the organisation that's meant to represent them and their interests are instead representing those who break the law,'' he said.
Stop the Sham!
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