What are the proposed same job, same pay laws
Unions have backed the proposed laws but employers are crying foul. Here’s what you need to know about the policy.
The Albanese Government is consulting with unions and employers about its proposed second wave of industrial relations changes to be introduced into parliament this year. The next wave include measures to tackle wage theft, the creation of a fair test to determine when a worker can be classified as a casual; and a proposed extension of the Fair Work Commission’s powers to include employee-like forms of work, notably gig economy work. But it is the same job, same pay policy that has generated significant opposition from the business community.
What is the same job, same pay policy?
Before the 2022 federal election, Labor promised to legislate to ensure labour hire workers were paid the same as directly employed employees doing the same job at the same work site.
Why are the proposed laws necessary?
The government says the proposed laws will 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.
How prevalent is labour hire?
According to the Government’s consultation paper on the changes, labour hire workers represent around 2.3 per cent of employed people in Australia As at June 30 last year, there were 13,195 actively trading labour hire providers operating in Australia. However, the Department of Employment and Workplace Relations says it is unclear how many businesses enter into traditional labour hire arrangements and use
externally sourced labour, or how many businesses use other arrangements, such as in-house labour hire. The ACTU says there are now more than 600,000 labour hire workers nationally.
Who will be affected?
Employment and Workplace Relations Minister Tony Burke says the proposed laws will apply to businesses covered by enterprise agreements that use labour hire. But business groups say the proposed laws could go way beyond enterprise agreement covered companies using labour hire. Employers point to the consultation paper that says “traditional labour hire arrangements are no longer the only type of labour hire arrangement being used by Australian businesses”. It says they may include contractor management services and recruitment and placement services. Employers say any business that engages service contractors will be captured while unions and the Fair Work Commission will have the power to reach into internal commercial structures to equalise terms and conditions.
How will the same job be identified?
When considering whether labour hire workers are doing the same job as directly employed employees, the department is looking at whether their work is the same as performed by a worker covered by an enterprise agreement, an award or they are doing “the same duties as a specific directly employed employee working in the host”. It cites the example of Jane, a production worker employed by a labour hire provider to work for a major food production company. Jane is paid according to the relevant modern award by the labour hire provider. The food production company has an enterprise agreement that has better pay for the classification that covers the work that Jane does. Under the new law, 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.
How will same pay be calculated?
Once a host employer and labour hire provider have identified that a labour hire worker is performing
the ‘same job’ as a directly engaged employee, the ‘same pay’ payable to the labour hire worker must
be calculated. The department is considering the merits of calculating the ‘pay’ that a labour hire worker should be entitled to (unless their usual pay is higher) with reference to any amounts that fall within the
definition of ‘full rate of pay’ as defined by the Fair Work Act. The full rate include incentive-based payments and bonuses; loadings; monetary allowances; an overtime or penalty rates. Employers want the policy confined to base rate of pay.
Will employers by law be required to pay employees with little knowledge or experience the same as workers with a lot of knowledge and experience?
This is the central claim in the new advertisements funded by employers. Tony Burke denies that will happen. “It‘s just not true. Not something I’ve ever said. I went back to the consultation documents they were given. It’s not in there. All I can presume is that they know that this loophole is indefensible, and they’ve decided to argue against something else.”
Do the employer claims stack up?
University of Adelaide law professor Andrew Stewart says while the consultation paper does not categorically rule out the employer claims, it was hard to see how the allegations could be correct given Mr Burke commitment. However, he added: “It’s impossible to say anything definitive about the impact of this policy because while the slogan is clear, the policy isn’t until we see the legislation”.
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