Green field and people harvesting while working on a plantation outdoors, under the sun, copy space. Collection of strawberries by a group of workers in boxes. Seasonal harvest in the village.

Closing the Labour Hire Loophole Introduced to Parliament

The Australian government has made moves intended to “close labour hire loophole”, preventing 67,000 workers from being ‘ripped off’ by employers.

The government plans to close a loophole that allows employers to hire cheaper labour, in a series of workplace reforms it deems “life-changing”.

Under the proposed laws, companies with more than 15 workers will be required to pay labour-hire staff the same wages as those engaged under enterprise agreements.

The Fair Work Commission will be given the power to make orders forcing businesses to pay the same wage to directly employed and labour-hire workers, while also preventing them from taking action to avoid their obligation.

The new laws, if passed, won’t take effect until November 2024, allowing businesses to prepare for the new payment obligations.

Under these changes, the FWC would need to consider a range of factors, including whether the enterprise agreement would apply to the labour-hire worker if they were directly employed by the company.

A default three-month exemption period will apply, allowing for surge work and temporary replacements.

Workplace Relations Minister, Tony Burke, noted that surge work, short-term arrangements, and specialist staff may require labor hire arrangements. However, closing the loophole is important for those adversely affected by the current laws.

“These changes will affect a small number of workers. But for the workers this affects, closing this loophole will be life-changing,” Burke said.

“The Liberals and Nationals refused to close the labour-hire loophole when they were in government – and they still refuse to even acknowledge there’s a problem,” he said.

“They call it a ‘made-up issue’. It’s not a ‘made-up issue’ for the workers getting ripped off.”

The bill’s other key features centre around beefing up the commission’s powers to protect workers.

References: Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, The Guardian

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