'The labour hire loophole has been used for far too long to undermine agreed wages,' says minister
Thousands of labour-hire workers across Australia are set to receive significant pay increases as the federal government’s ‘Same Job, Same Pay’ legislation takes effect, requiring that they be paid on par with direct employees of the companies they work for.
Beginning Friday, the new workplace law mandates equal pay for labour-hire workers performing the same roles as permanent staff, a change expected to impact a range of industries.
Under the initial agreements approved by the Fair Work Commission, pay increases will apply to more than 2,000 airline cabin crew, approximately 200 meat processing workers, and over 350 miners, said Yahoo News.
Workplace Minister Murray Watt emphasized the reform’s role in addressing wage stagnation.
“There is a legitimate place for labour hire, especially to address surge or seasonal workforce needs, but the labour hire loophole has been used for far too long to undermine agreed wages, and our reform will put an end to this for good,” he said.
Watt noted that the new law will ensure workers who “are doing the same work, wearing the same uniforms and turning up to the same shifts week after week” will no longer be paid significantly less than their direct-hire counterparts, said Yahoo News.
“It’s attractive to the host employer to use less costly labour,” DLA Piper partner Rick Catanzariti recently told HRD. “[The law now says] for a host employer using labour hire, that labour can’t be cheaper than what it pays employees for the equivalent work.”
In addition to the first wave of approvals, another 40 pay agreements are under review by the Fair Work Commission. Notably, Qantas labour-hire workers will see wage increases of up to 28%, reflecting the substantial adjustments this legislation aims to achieve in pay equity.
The Australian Council of Trade Unions (ACTU) has expressed optimism about the legislation’s potential to correct longstanding pay disparities in industries with high labour-hire employment, said Yahoo News.
ACTU Secretary Sally McManus voiced support for the new laws, stating, “Pay rises for working people are the reason why some companies abused labour hire as a way of cutting wages. It means in the future workers won’t have to go through the situation where they are working alongside others and do the same work but for less pay.”
McManus also acknowledged union concerns that some corporations may challenge the new rules in court, aiming to delay pay rises through legal action, said Yahoo News.
“A lot of cashed-up employers would like this loophole back open and are lobbying political parties with a federal election coming up,” she said, suggesting that some companies may use their financial resources to resist changes until the next federal election, due by May.
Representatives from sectors directly impacted by the changes have welcomed the reform. Teri O'Toole, Federal Secretary of the Flight Attendants' Association of Australia, highlighted the importance of wage parity for labour-hire employees.
“Some of our cabin crew can earn significantly less than directly employed crew despite doing the same job, all because they are technically employed by a labour-hire company,” she said, adding that the pay rises would “go a long way in restoring dignity to our profession.”
While the government has enacted the legislation, the opposition has announced plans to review these industrial relations reforms if elected, potentially reopening the debate over the ‘Same Job, Same Pay’ policy.
