“Same Job Same Pay” orders are coming in thick and fast from the Fair Work Commission, particularly in Queensland, and will take effect from 1 November 2024.
One order will result in a 60% pay increase for mine workers at a North West Qld mine and Qantas will incur a $60m cost this financial year in response to several applications.
In-house labour suppliers are not exempt from the orders.
When will an order apply?
The FWC can make an order if:
- the employer is covered by an enterprise agreement;
- if the employer were to employ the labour hire workers directly, those workers would be covered by the agreement;
- the employer is not a small business (less than 15 employees); and
- the labour hire workers are paid less than the employees.
Further detail is available in our earlier article here: Mythbusting the Same Job, Same Pay Legislation
There are limited exceptions, including if the worker is genuinely engaged for 3 months or less or a company is providing a service as opposed to labour hire (see below).
Recent orders
Recent orders include:
- A 60% pay increase for a haul truck labour hire driver who received a flat rate of $45 per hour compared to $75 for direct hire employees at South32’s Cannington silver, lead and zinc mine in Queensland.
- A 25% pay increase for labour hire abattoir workers at a Queensland meatworks.
- An $8 – $12 per hour increase for labour hire casual warehouse staff at Kmart’s distribution centre in Lytton, Queensland.
- Increases for 800 Qantas short-haul flight attendants. Qantas will bring another 2450 employees from an in-house supplier (a Qantas subsidiary) into direct employment by its parent company, resulting in a $60M cost to the company for the 2025 financial year alone.
In each of these cases the employer either did not oppose the application or reached a consent arrangement, suggesting a clear-cut case of labour hire workers being paid less than their enterprise agreement covered colleagues.
What about the contractor exemption?
There is an exemption if a company provides a service rather than labour hire. For example, where a subcontractor provides wet-hire to perform specialist work and maintains control/direction over the workers.
However, a wet-hire arrangement where the worker is subject to the host company’s direction is likely to remain a labour hire arrangement, susceptible to a same job same pay order.
The FWC will consider factors including:
- Involvement of the host company in the performance of work
- Extent of the host company’s direction, supervision or control of the workers
- Extent of use of host company’s systems, plant or structure
- Extent to which work is specialist or expert
BHP is currently opposing a same job same pay order arguing this exemption. This test case has been listed for a two-week hearing next year.
What should employers do?
Employers who use labour hire and have an enterprise agreement should consider their susceptibility to a same job same pay order, and whether they can rely on an exemption.
If they are susceptible, they should consider building clauses into their contracts to pass these costs upstream.
In house arrangements – for example creating a subsidiary to lend labour to a parent – are susceptible to an order. The BML Employment & Safety team is advising clients on their risk in relation to same job same pay orders, and updating contracts accordingly.
