Federal budget 2023: Bosses demand Tony Burke drop ‘same job, same pay’ plan

Innes Willox says thousands of businesses would be forced to pay more in wages and many could be ‘destroyed’.

Australian Industry Group chief executive Innes Willox.

Employers are demanding the federal government abandon its proposed “same job, same pay” labour hire laws, claiming thousands of businesses would be forced to pay more in wages and many firms could be “destroyed”.

The “same job, same pay” policy is designed to crack down on worker exploitation by labour hire firms and is a key plank of Labor’s second wave of industrial relations changes to be introduced later this year.

Employment and Workplace Relations Minister Tony Burke says workers doing the same job at the same site should get the same pay.

While the government said there were legitimate uses for labour hire, particularly when companies needed a seasonal or surge workforce, some companies were deliberately using cowboy labour hire firms that exploited casual workers.

But Australian Industry Group chief executive Innes Willox, a long time critic of the proposal, is now calling for it to be “abandoned”, claiming it is “not in anyone’s interests”.

“Thousands of small and medium-sized businesses which supply services to larger businesses would be forced to increase the remuneration they pay to their employees in order to comply with the ‘same job, same pay’ requirement,” he said.

“This would substantially increase their costs. It would be naive to assume that these businesses would be able to fully recoup those cost increases from their clients through charging higher prices for their services.

“A ‘same job, same pay’ requirement could destroy many small businesses and the livelihoods of many business owners.”

He said the proposal, if legislated, could result in widespread job losses among labour hire employees because client businesses would be discouraged from engaging labour hire businesses due to the increased regulatory burden, uncertainties and risks involved in compliance.

“In addition, the ‘same job, same pay’ requirement would be a strong disincentive for labour hire businesses to bargain because of the major problems that will result from trying to comply with their own enterprise agreement as well as with inconsistent remuneration terms in each client’s enterprise agreement.

“We urge the government to be mindful of the frankly crippling labour shortages that many sectors currently face. This is simply the wrong time to even contemplate making it harder and more costly for businesses to find the workers they need to keep our economy moving.”

Responding to the claims on Thursday, Mr Burke said, “We said we’d close the labour hire loophole and we’ll be doing that this year”.

ACTU secretary Sally McManus said Mr Willox did not like the fact that employers had been caught out using labour hire to push down wages.

“Two people working alongside each other doing the same job should get the same pay. It is hard to get simpler or fairer than that,” Ms McManus said. “Some big businesses have used labour hire as a way of driving down wages and have used loopholes in the laws to do this. Big business is upset that this has been exposed.”