The Same Job Same Pay Bill aims to close the legal loopholes that allow employers to pay labour hire workers less than someone permanently employed directly through an employer, when performing the same role. This is prevalent amongst larger employers who seem to deliberately curve agreed rates offered in Enterprise Agreements, by outsourcing work to labour hire contractors and engaging in enterprise bargaining.
The Fair Work Legislations Amendment (Closing Loopholes) Bill 2023 aims to address this issue. If this Bill is passed in Federal Parliament later this year, it will allow workers and their Unions to apply for a ‘protected rate of pay’ based on the host employer’s Enterprise Agreement.
It is the host employer's responsibility to ensure they provide the labour-hire business with all required information aka ‘Protected rate of pay,’ to ensure such agencies who are responsible for paying employees do so fairly, and on par with someone employed directly through the host employer doing the same job.
There is a misconception that workers who are more experienced or have longer tenure in their roles will be paid less. Resulting in some businesses facing challenges surrounding budgets, competitiveness and retention. However, this is highly unlikely as there are awards and pay deals in place that include different job classifications and grades that the Enterprise Agreements take into consideration.
Additionally, it is common for casual employees to be paid more than their full-time counterparts to compensate for the lack of entitlements. Therefore the bill will include a fair definition of ‘casual’ work to ensure that casuals in long-term, on-going roles can access entitlements and prevent exploitation.
About one in 50 people employed in Australia are employed through labour hire.
How can using a labour hire agency assist with navigating this policy?
Employers should continue to utilise labour hire agencies to effectively manage short-term needs, unexpected demand surges and absenteeism.
Whilst there are some sectors that are likely to be unaffected by Same Job Same Pay such as Administration, Tech and Healthcare there are concerns that these firms can still face large compliance costs and create more red tape. Due to an obligation being placed on employers to ensure labour hire agencies are fed the right information for any pay differences and paid correctly and fairly.
Streamlined payroll processes to minimise errors, therefore reducing the likelihood of employers enduring large-scale back payments.
Employers often use labour hire agencies to engage casual workers, often opting for temp-perm hires, meaning employers can ‘try before they buy’ allowing these casuals to be bought on full-time after 3-6 months. Therefore, employers have flexibility to place these casuals in the business where they need, without having to pay an agency an upfront lump sum fee.
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