“Same Work Same Pay” - Changes to Workplace

Employment Law: 06 November 2024

Author: Stephen Curtain - Our People

This element of the Closing the Loopholes legislation is intended to deter employers from employing labour hire workers (“regulated employees”) to do the same job as permanent employees for less remuneration.

However, this does not apply:

• to small businesses, defined as those which employ fewer than 15 employees;
• where the work being performed by the regulated employees is in the nature of services rather than labour; or
• when it is not fair and reasonable.

In determining whether the work being done is in the nature of services or labour the following are to be considered:

   (a) the involvement of the employer in matters relating to the performance of the work;

   (b) the extent to which, in practice, the employer directs, supervises or controls, or will control, the regulated employees when they perform the work, including by managing rosters, assigning tasks or reviewing quality of the work;

   (c) the extent to which the regulated employees use or will use systems, plant or structures of the employer to perform the work;

   (d) the extent to which either the employer or another person is or will be subject to industry or professional standards or responsibilities in relation to the regulated employees; and

   (e) the extent to which the work is of a specialist or expert nature.

In determining whether it is fair and reasonable for the same pay to be paid to regulated employees the Commission has the power to consider whatever it considers relevant including:

(a) the pay arrangements that apply to employees of the employer and the regulated employees, including:

   (i) whether the host employment instrument applies only to a particular class or group of employees;

   (ii) whether, in practice, the host employment instrument has ever applied to an employee at a classification, job level or grade that would be applicable to the regulated employees; and

    (iii) the rate of pay that would be payable to the regulated employees if the order were made;

(c) the history of industrial arrangements applying to the regulated host and the employer;

(d) the relationship between the regulated host and the employer, including whether they are related bodies corporate or engaged in a joint venture or common enterprise;

   (da) if the performance of the work is or will be wholly or principally for the benefit of a joint venture or common enterprise engaged in by the regulated host and one or more other persons:

    (i) the nature of the regulated host’s interests in the joint venture or common enterprise; and

     (ii) the pay arrangements that apply to employees of any of the other persons engaged in the joint venture or common enterprise (or related bodies corporate of those other persons);

(e) the terms and nature of the arrangement under which the work will be performed, including:

   (i) the period for which the arrangement operates or will operate; and

   (ii) the location of the work being performed or to be performed under the arrangement; and

   (iii) the industry in which the regulated host and the employer operate; and

   (iv) the number of employees of the employer performing work, or who are to perform work, for the regulated host under the arrangement;

The Commission can, after consultation, make a determination to add additional employers and additional regulated employees on its own initiative or on application by interested parties, including relevant unions, unless satisfied it is not fair and reasonable to do so.

The Commission can also make orders applying protected rates of pay to casual employees not otherwise covered by an employment instrument such as an award.

There are exceptions to the obligation to pay the protected rate of pay including where there is a training arrangement and where the arrangement to work is for no longer than 3 months in certain circumstances.

The Fair Work Commission has wide powers of governance of this new area of law and parties should ensure to familiarize themselves with them and comply as penalties apply for failure to comply.

If more information or advice is required please contact Bianca Mazzarella or Stephen Curtain at Aitken Partners.