From 1 November 2024 employers may be subject to Same Job Same Pay orders, requiring labour hire contractors to be paid the same as employees under certain circumstances. The following article covers the changes, the first few orders issues and what businesses can expect over the next year. 

Background 

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 introduced Part 2-7A into the Fair Work Act (FW Act), granting the Fair Work Commission (FWC) the authority to issue orders concerning labour hire arrangements. Before their introduction into the FW Act, these orders had been commonly referred to as Same Job Same Pay orders. 

The FWC, upon application, may issue a regulated labour hire arrangement order if it is satisfied that:

1. an employer supplies, or will supply, their employees to a regulated host (other than a small business) to perform work for the benefit of the regulated host or its enterprise; and 
2. A covered employment instrument, such as an enterprise agreement or workplace determination, would apply to the employees if they were employed directly by the regulated host for the same work; and 
3. The regulated host is not classified as a small business employer. 

Once an order takes effect, the regulated employees covered by it must receive at least the protected rate of pay, which is the rate they would receive if they were directly employed by the regulated host under a covered employment instrument.  

The FWC also has the power to extend, vary, and resolve disputes regarding regulated labour hire arrangement orders, as well as other orders related to alternative protected pay rate arrangements. 

Although the FWC has the authority to issue regulated labour hire arrangement orders since December 2023, they can only take effect starting from 1 November 2024. 

Orders already sought 

As of 11 October 2024, it is understood the FWC has received at least 17 applications for regulated labour hire arrangement orders through unions. Of these, two applications have resulted in an order.   

Application by the Mining and Energy Union 

The FWC made its first decision in July 2024.

The Mining and Energy Union (MEU) submitted an application to the FWC for a regulated labour hire arrangement order concerning labour hire workers assigned to Batchfire Callide Management Pty Ltd’s (Batchfire) black coal mine. These workers were supplied to Batchfire by WorkPac Pty Ltd and WorkPac Mining Pty Ltd (collectively referred to as WorkPac). 

The FWC ruled in favour of the MEU, resulting in pay increases of up to $20,000 for more than 300 WorkPac employees at Batchfire’s mine, effective by 1 November 2024. 

In applying the relevant criteria under the new SJSP framework, the FWC determined the following: 

• The MEU had the standing to represent the labour hire workers in question. 
• WorkPac supplied employees to perform production work at Batchfire’s mine. 
• Batchfire is not classified as a small business. 
• WorkPac provided employees specifically for labour purposes rather than services, as evidenced by: 
• WorkPac’s lack of involvement in matters relating to the performance of work, other than supplying production workers. 
• WorkPac does not and will not direct, supervise, or control the production employees it provides; these functions, including managing rosters, assigning tasks, and assessing work quality, are handled by Batchfire. 
• The production employees use Batchfire’s systems, equipment, and facilities, not WorkPac’s, to carry out their work. 
• There is no evidence WorkPac is or will be subject to industry or professional standards regarding the production employees supplied to Batchfire, beyond its standard work health and safety obligations as an employer. 
• The work performed by the labour hire employees is not of a specialist or expert nature. 
• The roles of Batchfire’s and WorkPac’s employees at the mine were found to be substantially similar, as indicated by factors such as attending the same pre-start meetings each day, performing identical production tasks, operating the same Batchfire-owned or leased equipment, wearing the same Batchfire uniforms, and adhering to Batchfire’s instructions and inductions. 

Application by the Mining and Energy Union 

The FWC made its second decision in September 2024.

The Australasian Meat Industry Employees Union (AMIEU) made an application to the FWC for a regulated labour hire arrangement order concerning labour hire workers assigned to Australian Country Choice Production Pty Ltd (ACC). These workers were supplied to ACC by Task Labour Services Pty Ltd. 

The FWC ruled in favor of the AMIEU, resulting in pay increases of approximately 25%. The court followed the same criteria as in MEU Application above. 

What to expect over the next 12 months 

As above, at least 15 other orders have been sought, many of which will not be opposed by the businesses involved. The orders sought surround several large employers, including 

• Qantas  
• BHP Coal  
• Peabody Energy  
• Whitehaven Coal  
• Anglo Coal  
• Metcash 

Further applications are expected. 

These orders have all involved union support for the application, in which case it is expected that as orders are made, there will be further pressure on host businesses to directly hire regulated workers by unions.  This has already seen to have occurred in one case.  

In May, the MEU sought a regulated labour hire order for Programmed labour hire workers placed with Thiess at its Mount Pleasant coal mine. Rather than oppose the application, Thiess offered the labour hire workers jobs directly. The union subsequently withdrew their case. 

It took approximately five months for the FWC to issue an order in the first successful application, suggesting a lengthy wait for the remaining known applications. It also means many orders may be far into the process and likely to be made before 1 November 2024. 

What can businesses do 

If a business engages labour hire workers in roles that would be covered by employment instrument, such as an enterprise agreement or workplace determination, it is recommended  they seek industrial relations advice immediately to discuss their operations. As seen so far, orders have been sought by unions in coordinated efforts, but it is expected that once orders become more commonplace, orders will likely start coming from non-unionised workers or from unions in less coordinated manner. It will be important for businesses to know, in advance, whether they would oppose such orders and on what grounds.