A coalition of Australia’s business groups has launched a campaign against the Albanese government’s “same job same pay” reforms.
Employer groups representing small businesses, builders, farmers, the recruitment sector, the minerals and gas sectors, the Business Council of Australia and Australian Chamber of Commerce and Industry have united in alarm.
So what are the reforms, and is there substance to the employers’ objections?
What is proposed?
Before the 2022 election Labor promised to legislate to ensure labour hire workers were paid the same as employees doing the same job in the businesses where they work. It aims to enact the reform in the second half of 2023.
The Department of Employment and Workplace Relations consultation paper, released in April, says labour hire workers could be found to be performing the “same job” if they are doing the same duties as those employed under a workplace pay deal (an enterprise agreement), an award safety net, or “the same duties as a specific directly employed employee working in the host”.
The concept of “same pay” means the labour hire worker should get at least the same full rate of pay, which includes incentive-based payments and bonuses, loadings, monetary allowances and overtime or penalty rates.
The government is also considering “anti-avoidance measures”.
What do employers say?
According to material supporting the ad campaign launched by the business groups:
It means by law, employers will have to pay workers with little knowledge or experience exactly the same as workers with decades of knowledge and experience.
It means by law, you cannot earn better pay by working harder or longer, if your colleague does not share your ambition or work ethic.
This retrograde policy will deny Australian workers flexibility and the capacity to be treated individually. It will deny them the opportunity to negotiate more pay for harder work.
What basis is there for the claim?
The claim that workers with “little knowledge or experience” will be paid the same is extremely unlikely. Both workplace pay deals and awards contain different job classifications and grades so that more experienced workers or those exercising more skill are paid more.
The policy is directed at ensuring that people employed by two different methods – labour hire or direct employment – are not paid differently, not that all other distinctions, such as experience, are ignored.
But the Minerals Council of Australia chief executive, Tania Constable, defended the claim, saying the policy is “ill defined at this stage”.
“You can be employed by a business for six months and get the same pay as somebody that has been there for six years,” she told reporters in Canberra.
The Australian Chamber of Commerce and Industry chief executive, Andrew McKellar, said that “on average the people in labour hire are being paid more, in many cases, than the situation for direct employees”.
The policy guarantees they will be paid “at least” the same, meaning there appears to be no limit on paying labour hire workers more.
What do unions and Labor say?
The Australian Council of Trade Unions secretary, Sally McManus, said it was “crazy and bizarre” to claim the reform meant less skilled workers would be paid the same as more skilled employees.
The workplace relations minister, Tony Burke, told reporters in Canberra it was “just plain loopy” to argue employers would not be able to pay workers with experience more money. “Well, of course you can,” he said.
“The very specific examples they’ve given are examples I’ve heard for the first time in my life – it’s not something I’ve ever argued for.”
Burke said while the legislation is not complete, he had only ever referred to paying labour hire workers the same as those on enterprise agreements – a comment that seems to rule out broader options to compare labour hire workers to employees on individual contracts.
And the experts?
Prof Andrew Stewart, an industrial relations expert from the University of Adelaide, told Guardian Australia “there are options for legislating that could raise some of the concerns [employers are] trying to agitate about”.
“But if legislation is more narrowly drafted, I don’t see how they arise,” Stewart, a professor of law at university, said. “If all the legislation says is: you’re entitled to be paid the same as if you were directly hired by a host employer … under their enterprise agreement.
“There’s no issue about different skill levels, the comparison would be to a provision in the enterprise agreement, to be paid the same as someone with your skills or experience.
“If that’s the way it’s implemented, it is not a cause for concern … I’m not sure the fears can be justified.”
We will wait to see the detail after the bill is released, but so far employers seem to be jumping at shadows to talk down the policy.