Same job, same pay measures ‘a compliance minefield’

The government’s proposed reforms regarding labour hire arrangements will lead to onerous and impracticable compliance obligations, according to the BCA and the Recruitment Consulting and Staffing Association (RCSA).

The same job, same pay measures, released in April for consultation, seek to address circumstances where host employers use labour hire to deliberately undercut the bargained wages and conditions set out in enterprise agreements made with their employees.

Under the proposed reforms, amendments will be made to the Fair Work Act to introduce a direct entitlement for labour hire workers to receive at least the same pay as directly engaged employees.

The entitlement would apply subject to relevant “same job” criteria being met.

BCA said the measures will have the practical effect of restricting the use of labour hire by employers in all but the most limited circumstances by imposing “unreasonable costs and administrative burdens”.

“The SJSP measure is an attempt to prevent the legitimate practice of different companies within businesses adopting best fit workforce arrangements,” it stated.

“These decisions are made to meet their unique operational requirements, and the ability to make such decisions is key to ensuring the long-term future of businesses and their workforces.”

RCSA chief executive Charles Cameron said the measures would be a “compliance minefield” and unfairly impact the labour hire and professional contractor sector.

“Requiring staffing firms to source, assess and apply the variable pay rates of their client’s employees across every industry and every workplace scenario is unfeasible and unfair,” said Mr Cameron.

“What is most frustrating is that it creates the problem across thousands of scenarios where labour hire workers are already paid more than their direct hire counterparts.”

RCSA said the labour hire and professional contracting sector is a critical component of Australia’s employment landscape.

“It employs over 350,000 people across a variety of industries. It enables businesses to respond to peaks and troughs. It gives Australians the choice to work flexibly and have greater autonomy over their working lives,” said Mr Cameron.

“Businesses engage staffing firms for the value they bring as expert workforce advisors and managers, not as an opportunity to reduce wages and conditions. If there is evidence of isolated examples where this is not the case, of course we support targeted regulation to address those issues.”

Business associations are also warning the broad interpretation of what the ‘job means’ under the proposed reforms will result in labour hire workers without the specific experience and training of the host’s direct employees to be paid the same.

“It will fail to recognise that many host employer arrangements have evolved to reward the skills and experience of a long-standing workforce, and this recognition will be undermined if those arrangements are applied to external workers without those attributes,” the BCA submission stated.

“There is an innate unfairness in these reforms.”

The RCSA submission said while “same job, same pay” is a great idea people can get behind conceptually, its application is fraught.

“What is the ‘same’ when it comes to work? Should people doing accounting or administrative work in every workplace be paid the same rate of pay regardless of the organisation they work for?” said Mr Cameron.

“Is it fair that someone brand new to a role be paid the same as a person who has been doing that job for 10 years? How should you pay an agency worker, placed in a team where there are multiple people doing the same work but all being paid differently?”

Mr Cameron said this concept ignores the crucial factors influencing a person’s remuneration, such as education, skills, experience and length of service – it completely ignores individual circumstance or performance.

Alternate solutions

The BCA submission noted there are a number of other reforms being progressed which would also tighten controls around the operation of the labour market which may achieve the desired outcomes.

This includes the establishment of a National Labour Hire Licensing system to regulate rogue labour hire companies and the government’s review of the migration system which responds to the specific concerns regarding matters raised by the Migration Workers’ Taskforce.

“The MWT Report recommendations were narrowly focused to target the sectors where there was evidence of a greater likelihood of exploitation,” it stated.

The submission also highlighted there are already protections in place for labour hire workers.

“In all cases, the agreements of labour hire enterprises will have passed the Better Off Overall Test (BOOT), and in many cases will pay significantly in excess of award rates,” it stated.

“If an employer breaches any obligations in respect of enforceable minimum wages and conditions established by the Fair Work Act including those in enterprise agreements, the FW Act already contains a comprehensive enforcement and penalty regime.”