A Shorten Labor government will change the Fair Work Act so that employers must pay labour hire the same as direct employees,
The Opposition Leader made the commitment in a speech to union leaders at the Australian Council of Trade Unions’ Congress in Brisbane, as part of a broader crackdown on labour hire and “insecure” work if Labor wins government.
“We need to make sure that when it comes to labour hire across Australia’s worksites, it’s a very straightforward principle: if you do the same job, you get the same pay. That’s what we’ll do.” he said.
However, the change “will not affect small businesses using labour hire companies to source workers on a temporary basis or to deliver specialist skills”.
Labour hire companies, host employers, unions and other stakeholders will be consulted as the new laws are drafted and transitional arrangements are made, in the controversial move that could restrict competition.
The promise mirrors so-called “jump up clauses” commonly pursued by the militant Construction, Forestry, Maritime, Mining and Energy Union in the construction sector and which require principle contractors to impose union pay and conditions on labour hire and subcontractors.
The Turnbull government’s new building code recently banned the clauses for any construction company working on a Commonwealth-funded project because of concerns they were restrictive.
A Shorten Labor government would review the definition of “casual” work and will set an objective test for deciding when a worker is a “casual”.
Labor has already said it will also introduce a national labour hire licensing scheme to set a floor for standards and to protect workers from exploitation. It will require all labour hire companies to be licensed.
Companies that are based overseas and supply labour to Australian firms, either directly or through other companies, will also have to be licensed to do business here.
Mr Shorten said “there is no such thing, in a future Labor government, as a permanent casual”.
Stephen Smith Ai Group head of National Workplace Relations said the Fair Work Act and modern awards apply to labour hire companies, as they do to other employers. Employees of labour hire companies also have the right to bargain for an enterprise agreement like other employees.
“Legislating to require that labour hire companies pay the same rates as their clients is not appropriate,” he said. “The proposal would take away vital flexibility for labour hire businesses and their clients. It would reduce the competitiveness of Australian firms and potentially have an adverse impact on employment.
“The labour hire industry employs hundreds of thousands of employees, many of whom prefer the flexibility that labour hire employment provides.”