‘’Same job, same pay’’ laws (SJSP) require Australian labour hire workers to receive the same pay as their host company’s permanent employees performing the same job, if specific requirements are met. The labour agency hires labour hire employees to perform a job for a host company. The host company pays the labour agency for provided labour, and the agency pays the workers.
Overview of the ‘’same job, same pay’’ framework
As part of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth), ‘’same job, same pay’’ laws amend the Fair Work Act 2009 to guarantee equal pay to labour hire workers and host company direct employees in the same roles.
As of December 15, 2023, labour hire employees and unions can apply for the ‘’regulated labour hire arrangement order’’ with the Fair Work Commission (FWC), which guarantees the protection of these entitlements.
The new legislation was passed by the Albanese government at the end of 2023, and the ‘’same pay’’ orders took effect on November 1, 2024.
The FW Commission must make an order if:
- A labour hire entity provides a qualified workforce to a host company; and
- A host company adheres to the enterprise agreement or other employment instrument, which would also apply to labour hire workers if regularly employed at the host company.
Once the order is made, the labour hire company must provide the full rate of pay to their workers, defined under the host employer’s enterprise agreement. Labour hire entities who fail to comply with these regulations may face legal penalties.
The full rate of pay, also referred to as the protected rate of pay, covers the following:
- Monetary allowances
- Penalty rates
- Incentive-based loadings
- Overtime
There are exceptions to the framework. The Commission can’t make a labour hire arrangement order if the application shows that:
- The host company has fewer than 15 employees
- The labour hire workers provide a service, not labour
- The labour hire employees are hired at the host company short-term, up to three months
- The labour hire employees are working at the host company under training arrangements
The first application: The Mining and Energy Union
The Mining and Energy Union (MEU) made the first application for a “regulated labour hire arrangement order” under the “same job, same pay” law. The MEU’s application was on behalf of workers hired by WorkPac Mining Pty Ltd, who provided labour to Batchfire (Batchfire Callide Management Pty Ltd).
Batchfire’s team comprised 237 permanent production and 100 maintenance employees, along with administrative, technical, and supervisory staff, protected by the Callide Mine Union Enterprise Agreement 2021. Additionally, they hired 324 production workers through WorkPac to address operational needs.
The Fair Work Commission ordered in favour of the Mining and Energy Union, which resulted in a pay increase of up to $20,000 for over 300 WorkPack workers supplied to the Batchfire coal mine.
When examining the application, FWC considered the following:
- The MEU was authorised to act on behalf of the WorkPack labour hire workers.
- WorkPac employees provided production work rather than service—they were not specialists or experts.
- The work done by Batchfire’s direct employees and WorkPac’s workers was similar. Also, they attended the same daily pre-start meetings, used the same equipment and machines, and wore identical uniforms, among other similarities.
- WorkPac had no authorization to supervise or direct workers’ performance while they worked at Batchfire.
- Batchfire is not a small business employer.
- Batchfire assigned tasks, managed rosters, and evaluated the labour hire workers’ performance.
Once the FWC made an order, both parties received a copy of the order draft and were asked to submit their comments within two weeks, given it was the first application submission under the new law.
Employers in Australia and SJSP going forward
Employers should regularly review labour hire arrangements to ensure compliance with new laws. They are responsible for:
- Staying up to date with SJSP-related obligations to ensure their existing workforce agreements will not put them at legal risk, forcing labour hire workers to commence the application process and seek protection under the labour hire arrangement order.
- Adjusting their budget to account for additional costs associated with SJSP. Labour hire arrangements tend to become more expensive due to national pay increases. Noncompliance may also be costly.
From now on, employers should always take into account SJSP amendments when negotiating new enterprise agreements, as they may be subject to labour hire arrangement orders.
FAQ about SJSP (same job, same pay)
What are anti-avoidance measures in ‘’same job, same pay’’ laws?
Anti-avoidance measures prevent employers from bypassing ‘’same job, same pay’’ laws by modifying employment arrangements, job titles, and duties. These measures are designed to ensure that labour hire workers receive fair and equal pay compared to the host company’s direct employers performing the same job.
How do ‘’same job, same pay’’ laws affect pay rises?
SJSP laws ensure that labour hire workers are eligible for the same pay rises granted to the host company’s direct employees. This prevents cost-cutting at the expense of the labour hire workers, promoting fair and equitable treatment of workers in the same roles, regardless of their employment agreement.
Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.