WHY WE NEED TO CLOSE THE LOOPHOLE
Same Job, Same Pay is a potential law change in Australia. It aims to ensure that labour hire workers, who do the same job as the company’s regular employees, are paid equally. Currently, a loophole allows companies to pay these temporary workers less, despite doing the same work, thereby driving down wages.
The focus of Same Job, Same Pay is to address situations where big companies hire workers from agencies at a lower rate than agreed in collective agreements.
Mining is not the only industry where labour hire is misused to pay some workers less. However, the mining industry offers a stark example because it is so widespread and because of the significant difference between permanent and labour hire employees performing the same work.
By outsourcing permanent jobs, mining companies are able to drive wages back to Award levels and claw back the gains workers have achieved through collective bargaining.
In many industries and workplaces, labour hire workers are used legitimately to meet peaks in demand or supply specialist skills. However, in mining and some other industries, labour hire is used on a widespread basis and are consistently paid less than permanent, direct employees.
On a conservative estimate, 40% of coal industry production workers are employed through labour hire companies, typically earning $30,000 to $40,000 less than permanent employees of mine operators on Enterprise Agreements.
Labour hire companies operating in the mining industry include WorkPac, Programmed, PIMS and BHP’s Operations Services (OS). Despite promoting OS workers as part of the BHP ‘family’, these labour hire workers have wages and conditions that fall far short of BHP collective agreements covering direct employees. The ‘Same Job, Same Pay’ laws aim to close this wage gap, lifting wages for labour hire workers and ensuring they are not used to undercut the wages of permanent workforces agreed through bargaining.
Same Job Same Pay would lead to some labour hire wages rising, if they have been paid less than permanents doing the same job at the same worksite. It would also boost workers’ bargaining power by removing the financial incentive for an unfair employment model that divides workers.
Contrary to some misconceptions, Same Job Same Pay is not about setting a uniform pay rate for all workers, regardless of their experience. It is targeted at circumstances where labour hire workers are engaged to perform the same work as direct employees for less money and therefore undermine wage rates agreed between workers and employers through collective bargaining.
The bill isn’t about restricting productivity or incentives for hard work. Rather, it’s about closing a loophole that allows big companies to pay some workers less. The Minerals Council is campaigning against Same Job Same Pay on behalf of mining companies because many of them have used this loophole; and Same Job Same Pay would see their wage costs rise.
The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 is aimed primarily at preventing the exploitation of temporary, gig, labour hire and casual workers.
Same Job Same Pay for labour hire workers is one component of the Bill. It aims to ensure that labour hire workers, who do the same job as the company’s regular employees, are paid in line with rates in the relevant Enterprise Agreement at the host site.
If the Bill passes both houses of Parliament and becomes law, workers and their Unions could apply to the Fair Work Commission for a ‘Same Job Same Pay’ order at a site. A ‘protected rate of pay’ would be determined based on the host employer’s Enterprise Agreement.
There are exemptions for registered trainees and apprentices, short-term placements of less than three months, small businesses and genuine specialist contractors (subject to a multi-factorial test applied by the Fair Work Commission).
Orders issued by the FWC would not be able to be implemented until November 2024, however applications could be made as soon as the Bill is passed through Parliament.
Alongside the SJSP provisions, the Closing Loopholes Bill:
· Aims to improve job security by clarifying the definition of a casual employee to end the ‘permanent casual’ rort.
· Introduces a new criminal offence for intentional wage theft and adds further mechanisms to ensure that victims of wage theft are properly repaid.
· Allows the FWC to set minimum standards for ‘employee-like’ workers, including in the gig economy.
· Requires the definition of ‘employer’ and ‘employee’ to be determined by considering the substance of the relationship between the parties, as opposed to an inflexible legal definition.
The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 was introduced to the House of Representatives on 4 September 2023. It must be passed by both houses of Parliament before becoming law.
The Senate has referred the Bill to an Inquiry, which is not due to report until 1 February 2024. The Liberal National Coalition, under pressure from the business lobby, is pushing to delay the passage and introduction of these laws. However, we will keep campaigning until they are in place and delivering better rights and pay for workers.