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Labour Hire Laws Set To Change This Year

Changes are coming to labour hire laws with a consultation paper released earlier this month for the proposed ‘Same Job, Same Pay’ policy.

The consultation paper, released by the Department of Employment and Workplace Relations (DEWR), details the Australian Government’s plans to introduce new legislation into the Fair Work Act 2009.

Dubbed ‘Same Job, Same Pay’, the measures have been proposed as a way to “address the limited circumstances in which host employers use labour hire to deliberately undercut the bargained wages and conditions set out in enterprise agreements made with their employees”.

According to the paper, the development of the policy will be informed by four guiding principles:

  1. Businesses should be able to access labour hire for genuine work surges and short-term needs.
  2. Labour hire workers should be paid at least the same as directly engaged employees doing the same work. 
  3. Disputes about Same Job, Same Pay obligations and entitlements should be dealt with quickly, economically and fairly by the Fair Work Commission. 
  4. Targeted anti-avoidance measures are needed to protect Same Job, Same Pay entitlements and ensure long-lasting behavioural change.

What Issues Is the Policy Addressing?

According to ABS data, labour hire workers represent around 2.3 per cent of employed people in Australia, as of June 2022. 81% of these workers were employed for full-time hours but earns less than a directly employed worker.

Currently, under the Fair Work Act, a labour hire worker and an employee performing the same work for the same employer can have different instruments setting the terms and conditions of their employment.

The policy is seeking to address instances where a business has two workforces side by side. One is directly hired by the organisation and another through a labour hire company, often on lower terms and conditions.

The proposed changes follow a raft of recent updates to the Enterprise Bargaining Framework and Fair Work Act 2009.

How would ‘Same Job, Same Pay’ Work?

DEWR has detailed the proposed measures to calculate if a labour hire worker is doing the same work and receiving the same pay as an employee in the consultation papers.

This calculation is “considering the merits” of identifying a ‘same job’ when a labour hire worker is performing:
duties that align to a classification, job, or duties set out in or covered by an enterprise agreement that applies to the host employer and directly hired employees; and/or
the same duties as an employee covered by the modern award; and/or
the same duties as a specific directly employed employee working in the host.

The paper uses the example of Jane, a labour hire worker who works the same job as an employee at a food production company.

Jane is paid according to the relevant modern award by the labour hire provider, but the company has an enterprise agreement that has better pay for the classification that covers the work that Jane does.
Same Job, Same Pay measures will apply, and the labour hire provider will have to pay Jane at least the same pay that employees doing the same work under the enterprise agreement are paid.

When calculating the ‘same pay’ a labour hire worker would be entitled to, the Department proposes comparing labour hire workers’ wages with employees’ ‘full rate of pay’, as defined in the Fair Work Act 2009. This definition includes incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates and “any other separately identifiable amounts”.

The Department of Employment and Workplace Relations is now seeking feedback on the direction the government should take in implementing the Same Job, Same Pay measure. Feedback can be provided via a written submission to WRSubmissions@dewr.gov.au. You can choose to remain anonymous.
Closing date: Submissions close at 11:00 pm AEST on Friday 12 May 2023.

Sources: Same Job, Same Pay Consultation Paper

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