Same Job, Same Pay: Closing the labour hire loophole

14 March 2024

Labour hire is a big problem in local government. Too many labour hire workers work side-by-side with local government employees, doing the same work but getting less pay. This is a threat to our hard-won conditions and local government jobs.

The ASU, working with the ACTU, has delivered new legislation to fix this problem. The Federal Government recently passed in Closing Loopholes Act to stop employers and labour hire providers ripping off Australian workers.

The idea is that labour hire can never be cheaper than a direct local government employee.

This is how it will work:
  • If a local government uses labour hire, they will become a ‘Host Employer’.
  • The ASU can make an application to the Fair Work Commission for an order that the ‘protected rate of pay’ applies to the labour hire workers. This order can apply to more than one labour hire provider, including future labour hire providers.
  • The ‘protected rate of pay’ is based on the full rate of pay for an employee doing the same work covered by the host employer’s enterprise agreement. This includes shift rates, penalty rates, allowances and overtime.
  • The labour-hire provider will then be required to pay the labour hire employees at least the protected rate of pay.
  • A host employers must give labour hire providers information that enables the labour-hire provider to comply with the order. This includes telling tenderers that they will need to pay the protected rate of pay.
  • These provisions became operative from 15 December 2023. The Fair Work Commission has powers to make orders that commence from 1 November 2024.
If you think this might apply to a worker in your workplace, please fill out the workers details in this short ASU survey: