New bill aims to 'limit the use' of labour-hire contracts
A new bill has been read in the senate that would amend the Fair Work Act 2009, requiring the pay rate for certain labour-hire workers under modern awards to be “the same or greater” as directly employed workers.
For employers, the bill would require them to pay certain labour-hire workers at least the same pay rate as other employees performing the same work.
In its explanatory memorandum, the bill said it is “designed to limit the use of labour hire contracts by removing the incentive for employers to do so, which is lower wages.”
The bill hopes to encourage employers to “make improved provision for their labour requirements” by retaining existing staff in permanent work arrangements while training new staff through apprenticeships and traineeships.
It would also provide “guidance and instruction” for the Fair Work Commission’s dealings with enterprise agreements, as it will require an “equal pay for equal work provision” to be included in the said agreements under certain awards.
The bill clarified that the “flexibility” to acquire labour-hire contracts for “unexpected labour demands,” such as site closures, will remain. The difference is – the bill explained – the “cost” of said contracts “will no longer be borne by the employee through lower wages.”
The new provision could also be employed where there has been “a failure of balanced market power” to restore “fairness.” The choice of awards where the provision will apply will be based on two factors:
(1) a known failure in the market;
(2) acting to prevent the potential for labour-hire contracts to affect industries covered by awards that do not provide for casual employment.
Another amendment would also allow the Minister to add additional awards through “disallowable instruments” while will give the Minister “a quick response framework” if a market failure appears.
Suppose employers are using a mix of contract and directly-employed employees; in that case, the bill allows a labour hire arrangement to replace all of the workers on a roster with contract employees. The pay offered by that labour-hire contract would be assessed against similar pay rates for directly employed workers in that industry.
The amendments relating to the pay rate will not have a retrospective application.
Senator Malcolm Roberts sponsored the bill and introduced it on 10 February.
