The Fair Work Commission (FWC) has made its first ruling under the new Same Job, Same Pay framework, after finding that the labour hire workers employed by a Queensland coal mine performed essentially the same work under the same conditions as the mine’s permanent employees.

As a result, more than 300 labour hire workers servicing the mine are set to receive pay increases of up to $20,000 per year as of November this year, when Same Job, Same Pay orders will come into effect.

Particularly for organisations in heavily unionised sectors, this decision serves as a reminder to evaluate employment practices to ensure compliance with the new legislation.

Labour hire workers perform the same work, argues union

The employer in this case, a Queensland-based open-cut coal mine, currently employs approximately 350 permanent employees who are covered by an enterprise agreement, and supplements its workforce with approximately 320 labour hire workers. 

Earlier this year, the Mining and Energy Union (MEU) put forward an application under the Same Job, Same Pay framework arguing that the labour hire workers’ roles were indistinguishable from those of the permanent employees, and they were thus entitled to the pay rates set out in the host employer’s enterprise agreement.

In its ruling, the FWC noted that the labour hire workers and permanent employees attended the same pre-start meetings each day, performed the same production work using the same equipment, wore the same uniforms and followed the same procedure for requesting annual and personal leave, among other similarities.

“If they’re being treated the same as employees on the site in terms of the nature of the work itself and the operational aspects, that’s where it becomes very compelling,” says Aaron Goonrey, Partner at Pinsent Masons.

The FWC was ultimately satisfied that the labour hire employees were entitled to the same rate of pay as their permanent counterparts.

Significantly, neither the labour hire company nor the host employer opposed the application, acknowledging these similarities and accepting the order to bring the labour hire workers’ pay rates in line with the host employer’s enterprise agreement.

“The decision is not contentious in the facts – these people did the same role,” says Goonrey.

“But there will likely be some upcoming applications which will be more complicated because they will be defended by labour hire companies or by the host company.”

The MEU has expressed its intent to assess the circumstances for labour hire workers at each work site and make further applications under the Same Job, Same Pay framework.

“This decision is going to be part of the case law that helps guide employers who use labour hire companies in terms of how they can avoid an order like this being made,” he says.

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Understanding the Same Job, Same Pay framework

The Same Job, Same Pay legislation was passed by the Albanese government in December last year as part of the Closing Loopholes Bill. The laws are designed to prevent employers from using labour hire to undercut the wages and/or conditions afforded to permanent employees via their enterprise agreements.

The legislation applies to businesses which have 15 or more employees, are covered by an enterprise agreement, and whose workforce is supplemented with labour hire workers. Sectors like construction, manufacturing, transport and healthcare in particular are likely to be impacted.

Under the new laws, the FWC can order labour hire companies to pay workers the same amount that would be paid to them under the host employer’s enterprise agreement, if they have been working for the host employer for more than three months and perform the same work as permanent employees.  

While Same Job, Same Pay orders will not kick in until November this year, applications can still be submitted beforehand, as occurred in this case. Any pay increases ordered by the FWC will become effective in November.

Anti-avoidance provisions have also been put in place to prohibit schemes that prevent the FWC from making a Same Job, Same Pay order or avoid the application of an order. 

A possible example would be trying to engage labour hire workers as contractors to deprive them of the new protections, or intentionally turning over the workers to stay under the three-month placement period. Deliberate attempts like this to skirt the new laws or game the system could attract significant civil penalties. 

“If they’re being treated the same as employees on the site in terms of the nature of the work itself and the operational aspects, that’s where it becomes very compelling.” – Aaron Goonrey, Partner at Pinset Masons

Is this the end of labour hire? 

This ruling signals the first of many decisions with significant financial impact on employers who use labour hire, particularly in heavily unionised industries like mining. Goonrey says this may prompt some employers to reevaluate their use of labour hire and its benefits.

“A lot of companies that use labour hire may be resigned to the fact that they will now have to pay a premium for that labour hire. Or, they’ll go to market and employ employees directly, which is part of the reason [why this policy was introduced] – to try and give more permanency.”

With that said, he disagrees with the notion that this policy will signal a “death knell” for labour hire. 

“There will still be a place for labour hire. I think a lot of companies will simply say, ‘We’re willing to pay the premium just for that flexibility.’ And there are a number of companies that are already paying their labour hire providers the same as what they’re paying their employees.”

For employers who engage labour hire workers and have an enterprise agreement in place, Goonrey suggests conducting a thorough analysis of the makeup of the labour hire workforce and the potential ramifications of a Same Job, Same Pay order to determine whether it would be beneficial to adapt or reduce the use of labour hire.

“It will become a finance issue, an operational issue and ultimately a business issue… [So], realistically, what you should be doing is bringing all the relevant business stakeholders together – finance, HR, operational – and working out, if an application was made, how much would this cost you?

“You’re better off being armed with the information about what the ultimate cost could be, as opposed to saying, ‘Let’s wait and see what happens.’”

Take your employment law expertise to the next level with AHRI’s new Advanced HR Law short course.

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Reading this article might spark a sense of déjà vu for some people: another busy year drawing to a close with the promise of significant industrial relations changes awaiting them in the new year.

This time last year, many HR professionals and employers were wrapping their heads around the Secure Jobs, Better Pay Bill. Now, it’s the Closing Loopholes Bill that they need to familiarise themselves with.

“These changes are a reflection of the changing business and industrial landscape. For instance, while it’s not part of this tranche of changes, the regulation of gig workers is a product of an evolving economy and society. It’s about ensuring that workplace relations laws keep up,” says Michael Byrnes, Partner at law firm Swaab.

Part one of this Bill was passed by the Senate on 7 December 2023, with more controversial aspects tabled for further discussion in 2024. More on that in a moment.

First, here are some of the most significant aspects of the Closing Loopholes Bill.

Criminalising wage theft

In just over a year, by 1 January 2025, employers could face fines up to $7.8 million and 10 years in jail for deliberate acts of underpayment. 

The new legislation will also include provisions for the underpayment of superannuation, following a deal struck with the Greens party to support the Bill. 

Greens Senator Barbara Pocock said superannuation theft should not be treated as an “optional extra” and that Australian employees are currently losing $1,700 in “intentional non-payment of their superannuation”, according to estimates from Industry Super.

The rest of Australia will join Queensland and Victoria, which criminalised the deliberate underpayment of employees (wage theft) in September 2020 and July 2021 respectively. 

Byrnes believes this will be the most significant aspect of the first tranche of IR changes. 

“This has been an important issue for some years, particularly since the introduction of the serious contravention provisions of the Fair Work Act, which were significant enough, but this takes it to another level.

“Even though I suspect there won’t be many prosecutions, the fact that employers face the possibility of criminal penalties, including imprisonment, will certainly focus the minds of employers on ensuring they’re compliant in terms of their payment obligations.”

“While it might seem daunting at first blush, it’s a matter of stripping it down and looking at the amendments that actually impact your business.” – Michael Byrnes, Partner, Swaab.

As has been emphasised in both government communications and media reporting, these new laws will only pertain to employers who deliberately underpay their people.

“A court will look at the knowledge, conduct and intention of executives of the business. They will look at whether or not they knew this was happening,” he says.

Importantly, Byrnes says if your business is currently on notice for underpayment – even if, in this instance, it was an accidental underpayment – and doesn’t remedy this by the time the new legislation is effective in 2025, that could be deemed a deliberate act of underpayment.

“It could be said that they are continuing a practice of underpaying employees with knowledge of it.”

Byrnes says HR and employers should treat this as a warning to “double down” on compliance exercises around payroll.

He recommends:

• Ensuring you have compliance measures in place to identify which industrial instrument applies to an employee’s role.
• Checking that employee classifications are accurate.
• Implementing sound record-keeping processes.
• Ensuring you’ve remedied any existing, historical underpayment notices before the new legislation is enacted.

Small businesses (those with fewer than 15 employees) will also be protected before this legislation is enacted.

“As part of this process, the crossbench Senator Jacqui Lambie demanded, as a condition of support, that small businesses be provided with some additional support and assistance in order to ensure they weren’t inadvertently caught up in the web of these wage theft provisions.”

These resources include the development of a small business Code of Conduct, to be created prior to the wage theft laws coming into effect, and extra funding for the Fair Work Ombudsman to assist in communicating these new obligations to small businesses, according to a report from Smart Company.

Read about the Victorian restaurant that was the first Australian business to face criminal wage theft charges.

Labour hire: same job, same pay

Employers who engage labour hire workers, such as airlines, mining companies and warehouses, will soon have to pay them the same as full-time workers. 

While the law is expected to receive Royal Assent and be implemented either late in 2023 or early 2024, the Fair Work Commission won’t be empowered to make ‘Regulated Labour Hire Arrangement Orders’ until late 2024.

“Applications might be able to be made prior, but the applicable orders  can’t be made until November 2024,” says Byrnes.”This is to give the Fair Work Commission [and employers] time to prepare.”

However, he notes that the anti-avoidance provisions will take effect upon implementation.

“If an employer is engaging in conduct to avoid these provisions, that conduct could be looked into.”

This might look like purposefully misrepresenting the nature of the work the labour hire workers are doing to suggest an enterprise agreement at the host employer does not apply, for example.

The government has estimated that around 66,000 labour hire workers could receive a pay increase based on this new legislation, and Byrnes says the industries most likely to be impacted by this are construction and mining.

This has sparked pushback from many people in the business community, including Australian Industry Group. Its CEO Innes Willox said, “The sad result will be uncertainty for businesses across a raft of crucial sectors that will need to grapple with how they respond to this unworkable legislation.

“Employers will now inevitably need to decide between navigating costly litigation before the Fair Work Commission in order to argue why they shouldn’t be caught by the new laws or simply reassess their willingness to offer job opportunities.”

According to a report from The Guardian, Workplace Relations Minister Tony Burke was able to get two powerful business groups over the line – Australian Hotels Association and the Australian Resources and Energy Employer Association – by excluding service contractors from the changes.

“This draws on the distinction between employees and independent contractors, to some extent,” says Byrnes. “The rationale is that it should only apply to labour hire workers who are being used as de facto employees or a supplementary workforce. You don’t want it to apply to people who are genuine contractors providing a specific service.”

To determine if someone is a “de facto employee” or genuine contractor, he suggests considering the following as a general guide:

• Is it a provision of a service as opposed to a supply of labour? If yes, then they are likely a service provider.
• Does the employer direct, supervise or control the work? If not, then they are likely a service provider.
• The extent to which the worker uses the employer’s systems, plants or structures. If they’re not using them consistently, then they are likely a service provider.
• Is the work of a specialist or expert nature? If yes, then they are likely a service provider.

“In some ways, it draws on the principles that have traditionally applied in distinguishing an employee from an independent contractor.”

If your organisation is one that relies on labour hire workers, Byrnes says it would be advisable to look at your enterprise agreement and do a mapping exercise to determine if there is crossover between the work of your labour hire workers and the work that’s covered by the enterprise agreement.

“It’s also worth assessing the potential economic impact that [this new legislation] could have on your supply of labour.”

Criminalising industrial manslaughter at a Commonwealth level

New Commonwealth industrial relations changes are unlikely to have a wide-reaching impact, says Byrnes, as workplace health and safety legislation is largely governed at a state level.

Most Australian states and territories have existing industrial manslaughter legislation in place, or are in the process of passing it.

“[The new law] applies to government employers who are covered by the Commonwealth system.”

As with the state-based legislation, this will apply to officers and persons conducting a business or undertaking (PCBUs) that demonstrate “a high degree of recklessness” or negligence to safety that result in an employee’s death.

The consequences of this could involve fines of up to $18 million for body corporates or the Commonwealth and a maximum imprisonment of 25 years for individuals.

Read about an employer who was jailed for an employee’s death in Western Australia.

PTSD supporters for first responders

Under the Bill, the onus of proof for first responders (emergency service workers, paramedics, etc.) to prove they have experienced post-traumatic stress disorder will be reversed.

Under the current system, it can be challenging for these workers to navigate workers compensation claims, as it requires them to prove that the nature of their work was a contributing factor to their deteriorating mental health – which only becomes more challenging if they are still recovering.

“[This change] is incredibly significant and important for the people affected, and a positive development so they can get the compensation and support they need,” says Byrnes.

“It’s essentially a rebuttable presumption that if you’re a first responder and have PTSD, that your work was a significant contributor to that PTSD.”

These reforms will cover Commonwealth and ACT government first responders, including Australian Federal Police employees, ambulance officers, paramedics, firefighters, emergency services communication operators, State Emergency Services operators and all other roles covered under the Emergencies Act 2004 (ACT).

The second act: controversial aspects of the Bill

While some would argue that the details outlined above are controversial, the most divisive elements of the proposed Bill are yet to be passed.

In September this year, when the Government first introduced the Closing Loopholes Bill, it faced significant backlash from both business groups and members of the crossbench, namely Jacqui Lambie and David Pocock. 

Both wanted to see the Bill split, as they felt it was unwieldy and that certain aspects required further discussion.

After agreeing to hold off on provisions of the Bill related to reforms to the gig economy, road transport industry and casual workforces, the government was able to get its other changes over the line in the final sitting week of 2023.

Byrnes notes that while the government opted to take an expedited step in getting some of the less controversial aspects of the Bill passed quickly, that’s not to say the rest of the Bill will be forgotten about.

“The most controversial and broadest change of all will be the casual employment changes, if [they’re] implemented. It will potentially impact a significant majority of employers.”

He also notes that the gig economy changes are interesting, as they will introduce regulation to a previously unregulated space.

“It will broaden the conception of what employment and workplace relations law is about in some ways, by extending it to [include] ’employee-like’ workers.”

He suggests that the second tranche of the Bill will be a priority in 2024, but we’re probably unlikely to see further changes until the Senate Committee’s inquiry is complete in February.

Getting across the details of all these changes might feel like a daunting and time-consuming task, which is why Byrnes suggests HR professionals take a high-level view of these changes.

“While it might seem daunting at first blush, it’s a matter of stripping it down and looking at the amendments that actually impact your business. 

“There are a raft of changes, but not all of them apply to all businesses. It’s important to be across these changes at a high level, but you don’t need to dig into the minutiae of them all.

“Compared to the changes from a year ago, which did have, by and large, universal application, this tranche of changes applies to more specific situations.”

He says wage theft is the main change that employers should be across, but notes that most employers would already have many of the appropriate safeguards in place.

“This is something that businesses should have already turned their minds to, so it’s just a matter of making sure that compliance is strict. The prospect of criminal prosecution also gives HR a card to play with senior management about the importance of ensuring there are resources and support for HR to implement the processes necessary for compliance.”

Keep an eye out for AHRI’s new Advanced HR Law short course in the new year, which will focus on a range of HR law topics, including Industrial and Employment Relations. In the meantime, browse AHRI’s existing suite of short courses that are on offer.

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Editor’s note: The Senate committee report on the Closing Loopholes Bill has now been delayed until February 2024.

The government is determined to ‘close loopholes’ around pay and working conditions with its latest tranche of industrial relations reforms. Stronger sanctions will be put in place for deliberate acts of underpayment – including jail time – and gig workers could see a boost in the protections and rights afforded to them, should the legislation get passed.

The Closing Loopholes Bill, which was introduced on Monday 4 September, also includes a federal approach to criminalising industrial manslaughter and new obligations around converting casual staff members.

None of these announcements are particularly surprising. We knew these things were in the pipeline. But they have still been met with concern from some parties.

Employer Groups say the new rules could create “uncertainty and complexity” for millions of casuals, contractors and labour hire workers, and claim that the first round of IR changes (Secure Jobs, Better Pay Bill) “resulted in deeply flawed change to the system that industry is still struggling with”.

To this, Tony Burke, Minister for Employment and Workplace Relations, and Minister for the Arts, told the Canberra Press Gallery, “When Secure Jobs, Better Pay legislation was introduced to the Parliament last year, we were told it would lead to unemployment. We were told it would lead to strikes. We were told it would fail in getting wages moving.”

He goes on to list the positive results to come out of the bill so far: less industrial action, 85 per cent of newly created jobs are full-time and more women are in full-time employment.

“This legislation is making a difference,” he said. And he’s confident this next suite of changes will be no different.

Here are the big-ticket items in this new Bill that HR should be across.

Jail time for wage theft

Employers who deliberately underpay their staff could face a maximum of 10 years in jail or million-dollar fines (capping out at $7.8 million, or three times the amount that was underpaid if that exceeds the maximum fine).

“It is and should be a criminal offence for the worker to be taking money from the till,” said Burke. “But it is not a criminal offence, in most of Australia, for the employer to be taking money from the wages.”

Penalties won’t apply to employers who make “honest mistakes”, Burke has clarified. Support will be afforded to employers who self-report accidental underpayments and the

Fair Work Ombudsman will be able to use its discretion in instances where it doesn’t pursue criminal proceedings, such as if the employer elects into a ‘cooperation agreement’ to right their wrongs.

The government has also announced an increase to the maximum penalties available for civil breaches of underpayment-related provisions (as advised by recommendation 5 of the Migrant Workers’ Taskforce report) which will come into effect on 1 January 2024, if the Bill is passed.

“It’s unlikely that a person will be jailed if they can prove that they have taken all reasonable steps to ensure that workers are being paid correctly.” Aaron Goonrey, Partner, Pinset Masons

Aaron Goonrey, Partner at Pinset Masons, says that the legislation could target anyone who was involved with purposefully withholding payments. Without seeing details of the Bill in full, he speculates this could include the company director, a CEO, payroll officer, legal advisor, accountant or an HR manager.

In determining what constitutes a deliberate underpayment, he says “consciousness and intent” will need to be proved. 

“Under the Victoria Wage Theft Act, the test to prove ‘dishonesty’ of a person in underpayments is “according to the standards of a reasonable person”.

“It may be a similar test to the existing accessorial liability provisions under the Fair Work Act. Accessorial liability occurs when a person is involved in the contravention of a workplace law.”

A contravention occurs when someone:

• Assisted, recommended or caused the contravention
• Influenced the contravention
• Was knowingly concerned in or a party to the contravention
• Conspired with others, which resulted in the contravention

Jonathon Woolfrey FCPHR, Chair of AHRI’s Industrial and Employer Relations Advisory Panel says, “Most employers will have little to fear in regard to ‘deliberate acts of underpayment’, but they will want to ensure they aren’t “reckless”, which may bring them within the parameters of the proposed bill.”

A detailed understanding of the National Employment Standards and Modern Award obligations is critical, he adds.

“It’s a common misconception to assume that paying at, or above, Modern Award rates automatically meets an employer’s obligations. A more thorough assessment is needed,” says Woolfrey, who is the Managing Partner at Talenting and an AHRI Board member and State President.

To prepare for these potential changes, Goonrey says regular payroll audits and due diligence around time and record-keeping should be a key priority for employers.

“It’s unlikely that a person will be jailed if they can prove that they have taken all reasonable steps to ensure that workers are being paid correctly.”

Woolfrey adds that employers could also implement or revise a remuneration framework that outlines an organisation’s salary, superannuation and other compensation strategies.

“[HR could also implement] ongoing monitoring mechanisms, such as regular reports to management or the board, to adapt to the dynamic IR environment, or [perform] scenario tests to assess how the organisation handles complex employment situations and whether it meets or exceeds legal requirements.”

Woolfrey says “no HR professional would argue against the broad intent of wage theft legislation”, but feels it misses broader issues.

“[The legislation] essentially serves as a distraction from the fundamental issue – the complexity of the industrial relations system. Ironically, given the rapid pace of IR reform over the past year, this new legislation contributes to that complexity. While Minister Burke has assured that the “objective is not to send people to jail,” the legislation’s big-stick approach seems to sidestep the real concerns of businesses.”

Small businesses (those with fewer than 15 employees) will be exempt from this new law.

“Ideally, you want the same rights for people in every workplace, but we have to take into account the fact small businesses don’t have an HR department,” said Burke.

The Government is pledging $32.4 million over four years to act on its plans to criminalise wage theft, which could include a “strong and visible” regulator. If passed, these changes are said to come into effect no later than 1 January 2025.

Closing loopholes for gig workers and labour hire

The Fair Work Act currently doesn’t define what an “employee” is. Instead, the courts have been referring to the ZG Operations v Jamsek case as precedent, which determined that what’s stated on an employment contract is what determines employment status.

The new Bill will include an official definition of an employee, which will also make it clearer who constitutes as “employee-like” (i.e. gig workers). Burke says the FWC will assess if someone is “employee-like” by asking:

• Do they have low bargaining power? 
• Do they have low levels of control over the work they do? 
• Are they being paid less than they would get if they were being employed as an employee? 

If the answer is ‘yes’ to these questions, then they may be entitled to further workplace rights.

For example, these “employee-like workers” (rideshare drivers/delivery riders) currently don’t have access to things such as sick leave, annual leave and minimum rates of pay.

Under the proposed laws, which would come into effect in November 2024, the Fair Work Commission will be given new powers to set minimum standards, via applications from relevant parties, including pay, penalty rates, superannuation, payment terms, record keeping and insurance.

“It’s likely that unions will take a leading role in this exercise,” says Goonrey.

“Gig economy workers will keep their status as independent contractors and the FWC will not be able to set standards on terms such as overtime rates, rostering arrangements or to change how a worker is engaged,” he adds. 

This would go against the very nature of gig work, which attracts some people due to its flexible nature.

Gig workers will also have access to a new jurisdiction within the FWC where they can claim “unfair deactivation” (an iteration of unfair dismissal) if they believe they were banned from a particular platform (e.g. UberEats app) without a fair reason.

These new rules are designed to make conditions safer for gig workers and to afford them with minimum standards for employment.

“It’s got to be possible to have 21st-century technology without having 19th-century working conditions,” said Burke.

As well as protections for gig workers, certain employers (excluding small businesses) will also no longer be able to introduce labour-hire workers to undercut the wages of those working under an enterprise agreement. 

Employees, unions and host employers will be able to apply to the FWC for an order that labour hire employees be paid at least the wages outlined in the host employer’s enterprise agreement, says Goonrey.

“Employers will be banned from taking action to avoid their obligations or prevent an order being made,” says Goonrey.

Head of the Minerals Council of Australia, Tania Constable, told the SMH that she believes these proposed changes – originally captured under the Same Pay, Same Job Bill – have the potential to “damage the economy”, stating it could “potentially smothers the entire economy, capturing every business that provides workers, services or skills to another company”.

But Burke says the legislation is likely to only impact 67,000 workers and that he’s not trying to turn every worker into an official employee. The changes are aimed at larger organisations, with the government citing the mining and aviation industries as key focus areas.

“If you are an employee, you have a whole series of rights. If you’re not an employee, all of those rights – all of them – fall off a cliff,” said Burke.

“What we want to do is turn that cliff into a ramp. So, for people in the gig economy, [we would] have a situation where you don’t get all the rights you would have as an employee, but you do have some minimum standards.”

Burke stated that there will still be a place for labour hire and gig workers to manage short-term fluctuations in demand and/or when a situation calls for a specialist skill set, so has included a three-month exemption period for these circumstances.

“A set-and-forget approach was a risky approach before, but now it’s not a viable approach for any employer.” – Jonathan Woolfrey FCPHR

Greater legal protection will also be created for independent contractors. Burke said since the Independent Contractors Act was introduced 17 years ago, it has only been used 68 times and the court has only made a ruling in three of those cases. 

He believes this is because it requires independent contractors to engage in expensive legal battles, which was unrealistic for the average contractor.

He plans to introduce a threshold for ‘no-cost’ jurisdiction within the FWC, which would make it more affordable for some contractors to enforce their rights.

Goonrey says “now is the time for both labour hire and host employers to assess their current arrangements and consider how these may need to adapt going forward to ensure contractual compliance while also seeking flexibility.”

Permanent pathways for casuals

The legislation proposes that casual workers who engage in regular and systematic hours should have access to leave entitlements and guaranteed hours by changing their employment status to permanent should they wish to.

“There would be no back pay of wages or entitlements prior to the period of conversion,” says Goonrey. “In essence, it would be another pathway for casual employees to convert to more permanent employment.”

Currently, an employee may request casual conversion any time after their 12 month anniversary of engagement, he says. 

Woolfrey says the new law would see employers required to offer a pathway to permanent work within the first six months.

“It’s estimated that this may allow up to 850,000 current casual employees the opportunity to request permanent work, which could have significant impacts on many employers. 

“This, combined with proposed changes around the use and payment of gig and labour hire workers, mean that HR practitioners need to have a thorough understanding across the various modes of employment their employer uses and ensure they’re fully aware of the employment situation and contract of each and every worker they directly or indirectly engage. 

“A set-and-forget approach was a risky approach before, but now it’s not a viable approach for any employer.”

Small business owners will be given a 12-month service period window before their casual employees can access new voluntary conversion pathways.

Read more on casual conversion here.

Criminalising Industrial manslaughter

Ninety-one workers have been killed on a worksite in 2023 so far and the government wants to introduce laws to bring that number down to zero in future years.

Industrial manslaughter legislation is already enshrined in most states and territories – or is in its proposal stages. The new Bill will introduce a federal approach.

Industrial manslaughter will become a criminal offence under Commonwealth work health and safety laws and  individuals could face 25 years in jail and body corporates could face up to $18 million in fines if “gross negligence or recklessness” is found to have contributed to the death of a worker. These changes could come into effect from 1 July 2024.

The contents of the Closing Loopholes Bill are likely to be debated over the coming weeks. If the proposals are passed, it’s likely we won’t see the majority of changes come into place until mid to late 2024.

What do you think about the proposed changes? Let us know in the comment section.

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In a consultation paper released earlier this month, the Australian Government Department of Employment and Workplace Relations unveiled the details of its plan to introduce a ‘Same Job, Same Pay’ provision to the Fair Work Act.

The measure has been proposed as a way to “address the limited circumstances in which host employers use labour hire to deliberately undercut the bargained wages and conditions set out in enterprise agreements made with their employees”.

According to the paper, the development of the policy will be informed by four guiding principles:

1. Businesses should be able to access labour hire for genuine work surges and short-term needs.

2. Labour hire workers should be paid at least the same as directly engaged employees doing the same work. 

3. Disputes about Same Job, Same Pay obligations and entitlements should be dealt with quickly, economically and fairly by the Fair Work Commission. 

4. Targeted anti-avoidance measures are needed to protect Same Job, Same Pay entitlements and ensure long lasting behavioural change.

Here’s what else HR needs to know.

What issues does this policy seek to address?

According to ABS data, labour hire workers represent around 2.3 per cent of employed people in Australia, as of June 2022. The majority of these workers (81 per cent) worked full-time, but were likely to earn less than a directly employed worker.

Currently, under the Fair Work Act, a labour hire worker and a directly engaged employee performing the same work for the same host employer may have terms and conditions of employment set by different instruments. 

According to Michael Byrnes, Employment Partner at law firm Swaab, the inherent issues with this policy have grown clearer in recent years.

“[Labour hire] is not something that’s occurred in the last two or three or even five years – it has been around for decades,” he says.

“However, there seem to be more and more cases where businesses have two workforces working side by side, and they’re ostensibly doing the same work. But one will be employed by the company itself under its enterprise agreement, and [the other] is procured through the labour hire company on different, lower terms and conditions.

“[This proposal] is about saying: if you do the same work, perform the same job, have the same classification, then you should be paid the same. It’s a way of dissuading businesses from seeking to structure their affairs in a way that undermines the applicable industrial instruments.”

The proposal comes in the footsteps of recent changes to the Enterprise Bargaining Framework, which seek to make enterprise bargaining agreements (EBAs) more accessible to employers who have not traditionally engaged in collective bargaining. 

If passed, this policy could bolster the reforms by making it harder for employers to skirt the terms of their EBAs by increasing their usage of labour hire workers.

“Labour hire can be very useful in circumstances where you have a strong period of demand, a big call for your services, or you acquire a contract affecting the need for labour for a limited period,” says Byrnes.

“But I think it has expanded and evolved to include attempts to structure the workforce in such a way as to lower terms and conditions and avoid payments and benefits that would otherwise be applied to employees by reason of an enterprise agreement.”

“It’s a way of dissuading businesses from seeking to structure their affairs in a way that undermines the applicable industrial instruments.” – Michael Byrnes, Employment Partner at law firm Swaab

How would ‘Same Job, Same Pay’ be classified?

In the paper, the department lays out the proposed measures to calculate whether a labour hire worker is doing the same work and receiving the same pay as an employee.

The department is “considering the merits” of identifying a ‘same job’ when a labour hire worker is performing:

• duties that align to a classification, job, or duties set out in or covered by an enterprise agreement that applies to the host employer and directly hired employees; and/or
• the same duties as an employee covered by the modern award; and/or
• the same duties as a specific directly employed employee working in the host.

The paper uses the example of Jane, a labour hire worker who works the same job as an employee at a food production company. 

Jane is paid according to the relevant modern award by the labour hire provider, but the company has an enterprise agreement that has better pay for the classification that covers the work that Jane does. In this case, the Same Job, Same Pay measures will apply, and the labour hire provider will have to pay Jane at least the same pay that employees doing the same work under the enterprise agreement are paid.

Meanwhile, when calculating the ‘same pay’ that a labour hire worker should be entitled to, the paper proposes comparing labour hire workers’ wages with employees’ ‘full rate of pay’, as defined in the Fair Work Act. This definition includes incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates and “any other separately identifiable amounts”.

What challenges could these measures pose for HR?

While the proposed measures have been heralded by some as a step forward in increasing job security and ensuring fair wages, others have questioned the impact that the policy could have on employers who have a legitimate and appropriate need to engage labour hire workers.

For instance, AI Group released a statement following the paper’s publication expressing concern that the policy ‘represents an unfair attack on labour hire businesses that comply with relevant workplace laws and provide a valuable and legitimate service to other organisations, employees and the broader community’.

As well as adding a layer of complexity to the legitimate engagement of labour hire workers, there are also question marks surrounding how easy these measures would be to enforce, says Byrnes.

“One complication is that you’re imposing an obligation on the employer in relation to workers who are employed or engaged by another company – the labour hire company,” he says. 

“There’s an obligation proposed for the employer to take reasonable steps to ensure that the labour hire workers are being paid in accordance with the industrial instrument. However, the employer is not ordinarily the entity actually paying the labour hire workers. Usually they’re paying the labour hire company. 

“Therefore, there’s only so much an employer can do to ensure that these workers, who are not their employees, and with whom they have no direct contractual relationship, are actually being paid in accordance with the terms of the employer’s enterprise agreement.”

In order to make these obligations feasible for employers, the host company must engage in appropriate and regular communication with the labour hire company, he says.

“[The host company] would have to take steps such as having the labour hire company agree in their contractual arrangements that they will pay their workers the full rate of pay in accordance with the enterprise agreement.”

It might also be necessary to implement an auditing system to ensure the labour hire company is following through on this agreement, he says.

“[In terms of] the labour hire company itself, it will need to apprise itself of the enterprise agreement, its terms and the way in which it’s applied in the host employer’s workplace, so they can ensure there is absolute parity between the workers that they’re providing, and the employees of the employer in the workplace.”

The Department of Employment and Workplace Relations is now seeking feedback on the direction the government should take in implementing the Same Job, Same Pay measure. Feedback submissions close at 11:00pm AEST on Friday 12 May 2023.

Need help brushing up on HR laws and compliance? AHRI’s short course will give you an understanding of the key elements of legislation, regulation and practices HR needs to be across.

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A few years ago workforce planning was the flavour of the month. Now, it’s being overtaken by strategic workforce planning. There is a difference between the two. While there are a number of definitions of what constitutes strategic workforce planning (or workforce strategy), I like this one:

“A workforce strategy is a form of asset management, the sum of actions taken to acquire, retain, develop, motivate and deploy human capital in the service of an organisation’s mission.”

This asset-based (ie treating people as an asset) approach is more than a suite of HR policies, talent management, succession planning and workforce planning (supply and demand forecasting), ad hoc HR initiatives, etc. It’s a whole-of-workforce plan that extends over the employment life cycle.

Yet not all organisations have developed a comprehensive workforce strategy, and others aren’t clear about their workforce strategy claims. To find out whether you really have developed a strategic workforce strategy, take this test:

Complete these 10 questions by answering True or False

1. Most roles aren’t paid at the same market mid-point.
2. Recruitment involves different assessment processes for different roles.
3. The Employment Value Proposition isn’t the same for all roles.
4. We have a made-to-order approach to HR policies and practices.
5. Turnover isn’t just reported for the organisation as a whole.
6. We don’t segment the workforce on the basis of organisational level/hierarchy.
7. There is a defined methodology for identifying critical roles.
8. “Make”, “buy” and roles suitable for outsourcing have all been identified.
9. The link between the importance of various roles to the business strategy is well understood.
10. The existing workforce strategy is focused on strengthening the critical capability(s) and core competencies of the organisation.

What does your score mean?

If you answered True to all of these questions, then 
it’s likely you’ve developed a comprehensive workforce strategy, even if it’s not in the form of a documented plan.

If you answered False to only one or two of these questions, then you are well on the way to developing a workforce strategy.

If you answered False to three or more of these questions, you probably aren’t differentiating your workforce roles sufficiently and it’s doubtful you have developed a comprehensive and effective workforce or human capital strategy.

People management challenges in the contemporary workplace

Many people are ‘locked’ into models and mindsets that are now either obsolete or of limited utility.

That’s a problem because the people management challenges in the contemporary workplace are many and varied. If you have ad hoc approaches 
 to problem solving, you’re probably treating the symptoms and not the cause of your issues.

The adverse consequences without a workforce strategy

If you don’t have a workforce strategy, you’re opening yourself up to a host of adverse consequences including:

• A lack of insight and poor, inconsistent or ad hoc people decisions;
• A waste of resources (e.g., could include paying the wrong people too much and the right people too little);
• An issue where you lock in low performers by over-delivering, and push out high performers by under-delivering on expectations;
• Operational inefficiencies, poorer performance, excessive vacancies and reduced capabilities resulting in dissatisfied customers;
• A lack of labour flexibility;
• Lower engagement levels and increased turnover;
• Ignorance of people risks; and
• A lower ROI in people.

If you’d like more information, an Advanced Workforce Strategies white paper on the above topic can be downloaded from: www.advancedworkforcestrategies.com

Colin Beames, managing director of advanced workforce strategies, is an international presenter, author and global thought leader on strategic workforce planning.

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Possible amendments to the Fair Work Act

The amendments posited the following three possibilities:

• That individual labour contracts be subject to a “better off overall test”.
• Giving a choice between union and non-union negotiated labour contracts.
• Enabling greater flexibility in the use of contractors and labour-hire employees.

The responses were somewhat mixed with the largest percentage of respondents to each question replying ‘No impact’. However, the response to the third option of allowing for greater use of contractors and labour-hire employees was the one most strongly favoured by the 691 anonymous respondents who answered the detailed survey. To be specific:

• 40 per cent of respondents thought it likely that greater use of contractors and labour-hire employees would ‘improve productivity’.
• 36 per cent thought it likely to ‘improve willingness to hire new employees’.
• 19 per cent thought the amendment would be likely to ‘improve workplace fairness and equity’.
• The majority of scores in all cases were neutral.

Recommendations to be made

In the 40 per cent approval figure, there is plainly a significant minority of HR practitioners who believe the proposed amendment would be good for workplace productivity, and AHRI will be making this point in its submission to the FWA review. In addition to the potential contribution to productivity of an amendment on the matter of contractors and labour hire, it is also apparent that the issue has a strong connection with employer flexibility. A number of respondents made observations very similar to the following:

• Our projects are cyclical and in two years’ time we may face a different situation [from the one we face now].
• Working with contractors is attractive to cater for these peaks and troughs.
• As long as the introduction of these initiatives did not encourage the exploitation of employees they would work well.
• At present, there is a strong sense of transparency and fairness with our enterprise agreement, so the use of other employment instruments or tools needs to be carefully planned.

Fair Work Act Review

AHRI has used the findings from its recent study in making a submission to the Government’s FWA Review because the findings are from HR practitioners who are working with the Act every day, and who can see the impacts that the legislation in its present form is having on the businesses in which they operate. On issues such as the one described above, it is believed the review panel will need to:

• Exercise judgement.
• Find more appropriate ways to satisfy the demand for improvements in productivity.
• Balance more even-handedly the flexibility desires of employees with the business realities of employers.

On other matters, the evidence from the study is very clear. Matters such as managing underperforming employees in the context of reports of more robust union activity, increasing incidents of vexatious unfair dismissal claims and adverse action claims, as well as the impost on business of significantly greater costs involved in seeking legal advice and managing record-keeping under the FWA are constraining potential business growth, and little evidence is available from our research that they are making workplaces fairer.

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