This month there seems to be ads everywhere for and against the “Same Job, Same Pay” policy, but what does it mean, and will it impact you or your business?

In short, “Same job, Same pay” is mainly relevant to workers and employers in the Labour hire industry. That is, employees who are engaged by a third party labour hire service to perform work for a host company.

The reason that “Same job, same pay” is in the news right now is because the Federal Department of Employment and Workplace Relations has released a consultation paper about the policy, seeking feedback about the key components. In this post, we will explore what the Same Job, Same Pay policy is, and how it could impact businesses whose workforce includes labour hire contractors.

What is it?

Prior to the 2022 election, the Labor party promised to legislate the Same Job, Same Pay policy. The policy amends the Fair Work Act 2009. The proposed amendments seek to ensure that all workers engaged through labour hire companies receive the same wage as employees who are directly employed by the host company. For most businesses, this won’t mean any changes, but the government proposes that the amendments will “address the limited circumstances in which host employers use labour hire to deliberately undercut the bargained wages and conditions set out in enterprise agreements”.

There has been some concern from businesses using temp and similar staff, asking how this might affect them. Overall, the policy is guided by four main principles:

1. Business 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 in the Fair Work Commission; and
4. Targeted anti-avoidance measures are needed to protect Same Job, Same Pay entitlements and ensure long lasting behavioural change.

What does this mean for employers?

This new law, if introduced, is intended to work as an anti-avoidance measure to ensure that employers aren’t outsourcing their work to subcontractors as part of an effort to avoid paying out the entitlements which would be paid an employee to complete the same task.

The changes will mostly impact workers and businesses where the two workforces (labour hire workers and employees) are working alongside each other, and both are doing practically the same job. In some situations, it is not uncommon that one workforce is made up of workers employed directly by the company in accordance with its enterprise agreement, and the other is retained through a labour hire company on different terms and conditions. These amendments are likely to impact those arrangements, and employers will need to consider the pay and conditions of their labour hire staff, compared to any directly employed workers.

We recommend that businesses keep an eye on the progress of these amendments, and proactively seek professional advice if you think it might impact your workplace.