SGM TANDEM BANKRUPTED
The following is extracted from the Australian Financial Review.

Exclusive - IFM-backed contractor folds over sham contracting claims -
David Marin-Guzman Workplace correspondent Jul 7, 2021
An industry fund-backed contractor for Telstra and Foxtel has folded in the face of a $400 million sham contracting claim, leaving hundreds of contractors without work and dozens of employees owed millions of dollars.
Directors representing IFM Investors, the $150-billion investment arm of 27 industry superannuation funds, are understood to have put Tandem Group into administration last week as a class action throttled the field service contractor's attempts to win work or re-finance.
Tandem's collapse effectively stays the court case, which was set for trial in October, and the company will likely avoid paying out alleged entitlements to up to 4000 eligible contractors if the case had been successful.
However, part of Tandem will survive through a related entity not subject to the class action called Tandem Networks, which was set up a year after the court case was lodged and recently signed a new $30 million contract with Telstra starting on July 1.
Shine Lawyers practice leader Vicky Antzoulatos, who ran the class action, said her group members were shocked and angry about the decision to put Tandem in administration.
"They thought they were going to hold this company to account over its system of work that has caused a lot of them extreme hardship and they also may well have missed out on employment entitlements they might have otherwise got," she said.
"This is an affront to workers around the country quite frankly."
IFM, chaired by ex-ACTU secretary Greg Combet, declined to comment on the decision. The IFM directors were the only two left on the board of Tandem Corp after the remaining directors quit about three weeks ago.
About 1,000 contractors are understood to be affected by the collapse and 86 sacked staff are owed an estimated $3 million in wages, redundancy and leave entitlements. Hundreds more employees are facing an uncertain fate.
At a town hall meeting last week, sources said the company told workers they could claim their entitlements through the federal government's Fair Entitlements Guarantee.
A spokesman for Tandem said that the companies can gone into voluntary administration "despite the best efforts of Tandem Corp's management and board".
"The boards and management of Tandem companies not in administration are working with the administrators to seek to achieve the best outcome for creditors (including employees) and stakeholders, including a potential sale of those companies owned by Tandem Corp," he said.
"There will likely be no return to Tandem Corp shareholders as part of the administration process."
IFM denied `stranded asset'
Tandem, formerly known as Infrastructure Services Group Management, operates a platform that connects field service contractors with jobs faster.
At its peak, the company was turning over more than $500 million a year and engaging up to 7000 contractors on an average pay of $130,000.
But some contractors - many ex-Telstra staff or long-term unemployed - claimed the high amounts they had to borrow for vehicles and equipment meant they were overwhelmed by work conditions, debt and low pay.
Shine argued the level of control the company exercised over the contractors meant they were really employees entitled to millions of dollars in annual leave and redundancy pay.
Tandem denied the claims and even brought in advisory firm KordaMentha and an ex-Federal Court judge who calculated the workers had been paid $642 million over what they would have earned under the award minimum.
A key matter to be decided in court was how much of this could offset conditions such as superannuation or annual leave, which must be paid separately.
A Fair Work Ombudsman spokesman said it investigated Tandem several years ago but "as there was no formal enforcement outcome from this investigation, it is not appropriate for us to comment further".
The class action, supported by the telco workers' Victorian union, was a huge embarrassment for IFM, which purchased its 50 per cent stake in Tandem in 2016.
IFM representatives were involved in mediation and Mr Combet is understood to have pushed for the case to be dropped due to the potential brand damage.
Sources said the stigma attached to the class action meant the banks would not refinance loans, the company's work was dramatically reduced and IFM refused to put in more money.
The class action also killed off a potential IPO and no dividends were distributed to investors as millions of dollars were instead diverted to defending the legal action.
Despite this, then-IFM chief executive Brett Himbury told a parliamentary inquiry in late 2019 that he did not regard the Tandem as a "stranded asset" and that it was "potentially a long-term positive contributor to investor returns".
Ms Antzoulatos said the group was still determining what recovery actions they would take.
The law firm has a similar action against listed telco contractor BSA but it is still in the early stages.

WHAT IS THE CLASS ACTION ABOUT

The claim in simple terms is that while technical workers have an ACN and ABN etc and are called "contractors", it is alleged that they are in fact employees. If the Court so decides, then Tandem is liable for employee payments for the past 6 years. The payments will include superannuation, overtime, wages, car expenses, long service leave, annual leave, sick leave etc. Looking at the numbers this could exceed $100,000 per "contractor".

ISGM TANDEM - $400 MILLION CLASS ACTION

A Telstra and Foxtel contractor ... is facing a $400 million class action for allegedly underpaying thousands of technicians through sham contracts. Tandem, formerly known ISGM ... has an "innovative" workforce management model that has won it field work contracts at Telstra, NBN Co and Foxtel. But the class action alleges the company's business model is premised on treating independent contractors as employees but without minimum wages, leave, overtime or other entitlements.
See ... More at AFR
See ... More at ABC News
See ... Watch video ABC 7.30 Report ...

CLASS ACTIONS - SOME FACTS

Tandem (and even the CWU NSW Postal Branch at Parramatta) is misleading you in relation to the class action initiated by Shine Lawyers.

The other Branches of CWU have been fighting for ISGM/Tandem members for years. We at least know the facts. Here are some important facts:

• When a class action is initiated, you are automatically included
• You must opt out if you do not wish to be covered
• You do NOT have to register with the NSW Postal (Parramatta) Branch
• The NSW Postal Branch is not involved
• Other CWU Branches have been involved
• See the 7.30 report link above
• We will provide updates via our weekly bulletin. Email us to be on the distribution list.

  Contact us if you wish to receive more information.
  Email us at reception@cwunion.net

  EXTRACT FROM SHINE LAWYER WEB PAGE

  Shine Lawyers have launched a class action against ISG Management Pty Ltd (ISGM), a subsidiary of Tandem Corporation, on behalf of telecommunication workers who, since 2011, suffered financial losses after entering into sub-contracting arrangements with ISGM.

  In the action, Shine Lawyers will allege amongst other things that:

  • The sub-contracting arrangements between workers and ISGM breach the Fair Work Act and Independent Contractors Act in that ISGM misrepresented to workers that they were employed as sub-contractors rather than employees; and
  • That ISGM took advantage of the 'Australian Apprenticeships Access Program', a tax payer funded scheme, to train workers to provide telecommunications sub-contracting services to ISGM, working on the Telstra network amongst other things.

    If you have suffered losses due to the alleged misrepresentations of ISGM you may be entitled to compensation. Our class action lawyers have brought an action against ISGM on behalf of thousands of telecommunication workers, including vulnerable unemployed, homeless and indigenous Australians, and can advise you of your legal rights and options.

    Shine Lawyers are encouraging all telecommunication workers who, since 2011, provided telecommunications technician services to ISGM, purportedly as independent contractors, to register their interest in participating in the claim.

  See Shine Web Page

  26-11-18 ISGM TANDEM FIGHTS BACK

  Not surprisingly, Tandem is fighting back. They have launched a campaign to convince their staff (or contractors) that they should not contact Shine Lawyers. See the letter below.

  Unfortunately for Tandem, they may be in breach of the Fair Work Act. Shine may take action against them.

  TANDEM - CWU T&S MEDIA RELEASE:

  Legal Action against Telstra Contractor Tandem, largest sham arrangements case in Australia:
  The CWU Victorian and NSW T&S branches welcome the announcement of a class action against Telstra contractor Tandem (formerly ISGM). We have always believed this contractual arrangement to be an employment relationship that was grossly unfair to the workers involved, many of them made redundant by Telstra. In more recent years Tandem utilised a traineeship that targeted very vulnerable long-term unemployed people.
  "This type of alleged sham arrangement has been a blight on the industry for too long. It is wage theft on a grand scale. Workers in the industry have foregone their legal entitlements under an award and to work in the industry had to buy themselves a job" said Len Cooper National President of ACWA (& former CWU National President).
  The CWU Vic branches have run a number of unfair dismissal cases on behalf of these workers and they have always settled before they got a hearing on the jurisdictional question of employee v contractor said Val Butler (CWU Vic Industrial Officer) who along with Dan Dwyer ran most of the cases. "We are very happy that this question will finally be fully ventilated."
  The CWU tried a number of times between 201-15 to bring these matters before a court on the question of sham arrangements supported by CWU National Secretary Dan Dwyer but for various reasons a case could not be commenced.
  CWU Vic Asst Sec John Ellery said "we are delighted to be involved in this case, it has been a long time coming for our members and other workers in the industry. The case is made much more compelling because these workers had to work on a seriously aging and damaged network which made their task so much more difficult. This also made it very challenging for them to make any sort of a decent living under this sham dressed up as contracting."
  The union expects that most of the members that worked under this arrangement for Tandem/ISGM will join the class action.

  TANDEM LETTER TO STAFF