On November 1 new ‘same job, same pay’ laws come into effect, requiring labour hire workers to be paid the same as host company employees if certain criteria are met. Here's what you need to know:
How does ‘same job, same pay’ work?
Under the changes to the Fair Work Act, the Fair Work Commission (FWC) has the authority to issue a “regulated labour hire arrangement order” requiring an employer to pay labour hire workers at least the same as their host company’s direct workforce if those labour hire employees are classified under the host company’s enterprise agreement.
Construction, mining and resources and other industries using labour hire firms are particularly impacted by this change to regulated labour hire.
However, the same job, same pay laws do not apply:
- if the host company has less than 15 employees;
- if labour hire workers are providing a service rather than their labour; or
- they are covered by a training arrangement or working for a host company for a short period (three months or less).
Protected rates of pay and penalties for non-compliance
The FWC will have the power to issue orders for protected rates of pay.
A host company or its employees, labour hire workers or a union can apply to the FWC for an order.
If an order is made, labour hire workers will receive the same "full rate of pay" as host company employees, which includes monetary allowances, overtime or penalty rates and incentive-based payments and loadings.
Failing to comply with the “same job, same pay” legislation exposes businesses to significant penalties, including fines and potential legal action from employees or unions.
What do I need to do to comply with ‘same job, same pay’?
Employers who use labour hire workers should be prepared for the changes to ensure compliance.
Importantly, host companies cannot avoid the “same job, same pay” laws by entering into an alternative arrangement or by hiring other types of workers.
As of October 23, the FWC has received more than a dozen applications for regulated labour hire arrangement orders.
In its first decision in July, the FWC ruled in favour of the Mining and Energy Union in an application concerning labour hire workers supplied by WorkPac Mining Pty Ltd to Batchfire Callide Management Pty Ltd’s black coal mine in Queensland.
The decision resulted in pay increases of up to $20,000 for more than 300 WorkPac employees, effective November 1.
A second decision in September concerned an application from the Australasian Meat Industry Employees Union (AMIEU) for an order relating to labour hire workers assigned to Australian Country Choice Production Pty Ltd in Queensland by Task Labour Services Pty Ltd.
The FWC ruled in favor of the AMIEU, resulting in pay increases of about 25%.
You should review existing labour hire contracts to determine if you are captured under the new legislation and are paying labour hire workers correctly, and consider the impact of the laws to your bottom line.
How our team can help with:
The CCIWA Legal Services team can help with:
- Contractual negotiations and drafting agreements
- Wage and remuneration audits
- Representation in the Fair Work Commission
- Reviewing and updating contracts
Our legal team can provide practical legal advice to ensure your business stays compliant and minimise commercial impacts arising from these changes. Please contact our legal team at [email protected] or call (08) 9365 7746.