Announcement date
4 September 2023
Link to announcement
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7072
Problem being addressed
As part of its Secure Australian Jobs Plan, the Australian Government made an election commitment to ensure that workers employed through labour hire companies receive no less than workers employed directly.
The workplace relations framework currently allows bargained wages in enterprise agreements to be undercut by the use of labour hire. This problem arises when businesses bargain with their employees for minimum rates of pay and then use labour hire employees who are paid less than those minimum rates.
Proposal
The Government’s ‘Closing the labour hire loophole’ proposal will amend the Fair Work Act 2009 so that employees, their representatives, and host businesses can apply to the Fair Work Commission for an order requiring that labour hire employees covered by the order are paid at least what they would be paid if they were directly employed by their host and paid under the host’s enterprise agreement.
Assessed IA outcome
Impact Analysis Equivalent
Assessment comments
Consistent with the Government's Impact Analysis (IA) requirements, the Department of Employment and Workplace Relations has certified the following reviews as meeting the requirements of an IA:
- Victorian Inquiry into the Labour Hire Industry and Insecure Work (Report, 31 August 2016)
- Senate Select Committee on Job Security, Third interim report: labour hire and contracting (Report, November 2021)
- Senate Education and Employment Legislation Committee, Fair Work Amendment (Equal Pay for Equal Work) Bill 2022 (Report, October 2022)
The Office of Impact Analysis (OIA) does not assess the quality of reviews and IA Equivalent documents used in lieu of an IA. Impact Analysis Equivalents are assessed by OIA for relevance to the recommended option(s) and for the coverage of the 7 Impact Analysis questions conducted. The OIA assessed that the options analysed in the certified reviews are sufficiently relevant to the regulatory proposal. The Impact Analysis Equivalent contains additional analysis prepared by the Department of Employment and Workplace Relations to address IA question four to seven (inclusive).
Regulatory burden
The Department of Employment and Workplace Relations estimates an increase in regulatory costs of $0.2 million per year, averaged over ten years.