The Fair Work Amendment (Equal Pay for Equal Work) Bill 2022 was introduced by One Nations’ senator Malcom Roberts with the innocuous aim of bridging the pay gap between full-time coal miners and labour hire employees who do the same job. Sounds fair and equitable, right?

Not exactly. The Bill’s ambiguous definition of the term ‘labour hire’ would disrupt thousands of businesses across a variety of industries that use contractors, consultants and flexible business-to-business arrangements to provide specific skills. Yes, that’s right, that might just include your favorite cleaning company who work their magic after hours.

But here’s where it gets interesting…

How will the Bill change my business?

So, what does the Same Job / Same Pay bill actually mean for businesses?

Stricter regulations on flexible workforce. This means that there will be more stringent definitions surrounding who is classified as a casual employee, and how many fixed-term contracts a business can include in their workforce before having to create permanent positions and bring staff on board full-time.

Same pay, same conditions. The Bill would require business owners to provide not only the same pay for contractors and on-hire workers, but also the same conditions. For example, if your business offers its employees benefits like discounts, incentive schemes and share structures, then you will be required to provide these same benefits to your flexible workforce.

That’s not all…

The Bill also proposes a portable entitlement scheme which will require employers to provide leave entitlements such as sick pay, annual leave and long service leave to labour hire staff and contracted employees to emulate the conditions of full-time staff.

Higher labour hire costs. Not only will labour hire be significantly harder for businesses to utilize, it will also mean that businesses will be more out of pocket when they do engage labour hire services.  Even though at present, the larger proportion of on-hire staff in most industries actually receive a higher take-home rate of pay than that of their full-time counterpart, the introduction of the new Bill will mean that benefits and incentives will now be applicable at that same rate, driving up the total cost to businesses for labour-hire services to an all-time high.

The question is could this Bill be the end the labour hire market?

So who will be impacted by the Bill?

The introduction of the Bill, which was aimed at levelling the playing field amongst the mining industry, will have far-reaching implications that will negatively impact Australian businesses and small to medium enterprises (SME’s) across a wide variety of industries. So, who will bear the brunt of these implications?

• Businesses and SME’s who use third-party services to innovate and grow
• Companies who use non-permanent labour hire to support infrastructure and projects
• Industries that contract their workforce in response to rising commodity prices

• Businesses and SME’s who structure their business model on a flexible workforce (Let’s spare a thought for Uber!)

Who benefits?

As previously stated, The Fair Work Amendment (Equal Work for Equal Pay) Bill 2022 will benefit those flexible staff in the mining industry who are unhappy with the current project-to-project structure and are seeking permanency in their employment. However, the national response from industry, business and the vast majority of labour hire employees has been one of resistance and angst. Which begs the question, is this Bill really the best solution?

So will the Bill really pass?

There is widespread backlash regarding the proposed Bill, which seemingly overlooks the broader implications for the national labour market, has raised the question as to whether it will be passed by parliament on 24^th of October, 2022. Further considerations and amendments will more than likely be needed prior to the Bill being rolled out.

Summary.

The seemingly noble Fair Work Amendment (Equal Work for Equal Pay) Bill 2022 fails to adequately consider the implications to businesses and the broader labour market at large with its imposed sanctions that will affect every service your business uses, from your caterer to your cleaner.

If you have questions or are concerned about what implications the Fair Work Amendment (Equal Work for Equal Pay) Bill 2022 could have on your business, contact your HR Guru today!

Written by HR Guru – Molly Takle