In an effort to appease the union movement the Government has initiated changes to the Fair Work Act to ensure that employers do not use labour hire workers to undercut more expensive direct employees.

The Closing Loopholes Legislation has introduced new rules in respect to engaging Labour Hire ‘workers’. Labour hire workers are engaged through a business-to-business commercial contract.

These changes are largely aimed at high paying industries where long term industrial muscle has provided overly ‘favourable’ terms and conditions of employment for employees.

To prevent employers from engaging Labour Hire workers to undercut employee’s wages, employees or unions can apply to the Fair Work Commission for an Order that Labour Hire workers be paid the same as the employees covered by the Enterprise Agreement of the host employer.

For this Order to be made the Commission must be sure the host employer’s Agreement would cover the Labour Hire workers. Where the Agreement is between a Pty Ltd entity (the host) and their direct employees this could present some interesting legal hurdles.

Employers paying Labour Hire workers at least the same as their employees do not need to take any actions.

The Fair Work Commission will gain the ability to make such Orders from November 2024. This change does not apply where an employer has less than 15 employees.

Employers should review their optimum mix of casual, permanent and labour hire resources and how they are remunerated.

Give me a call anytime to talk it through.

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Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

Industrial Relations - Employment Law - Workplace Performance