KX Pilates stands up to sham contracting

Sarah Stowe

In the wake of the liability dilemma surrounding a hospitalised client of Snap Fitness and a contracted personal trainer (PT), fitness franchise KX Pilates announced that all its trainers are to become PAYG employees and receive associated benefits.

“KX has done this to give back to, and benefit, our trainers,” said CEO founder Aaron Smith.

“The fitness industry for years has accepted sham contracting as the norm.

“It’s easier for trainers to be contractors as employers can fire them easily, don’t have to worry about paying their payroll tax, and also get out of paying Work Cover and Private Indemnity Insurance.

“So basically, business owners are saving money whilst their trainers are being exploited,” he added.

The move won’t be easy or cheap for KX. It will mean additional bookkeeping expenses for payroll tax as well as Personal Indemnity and Work Cover costs. It also means that KX will no longer be able to end a relationship with a trainer in a week, but will have to performance manage and afford them time and training to get up to scratch, with significant notice if they are to be let go.

Despite this, Smith said the decision was a “no brainer”, not just for the benefit of the trainers but also to truly play within the Fair Work rules.

“If you asked any accountant or did the ‘Contractors vs Employees’ test on the ATO website, our trainers are not contractors. They are employees,” continued Smith.

“They start and stop at times we tell them, they do the same shifts every week, they wear our uniforms, they have a manager and the studio provides all their equipment.

“It’s pretty black and white, and I bet you would find it’s the same for many other gyms and fitness studios as well,” he said.

Smith said he hopes the move will encourage the fitness industry to follow suit.

The switch to PAYG employment contracts at KX across its franchises will come into effect immediately and will be strictly monitored by the franchisor.

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