Labour hire

Labour hire is a form of employment in which a company (“host”) hires a worker from a labour hire agency (“provider”) to perform duties. 

While the term ‘labour hire’ is relatively new, the use of agencies or companies specialising in the supply and provision of outsourced labour in Australia has existed for decades. What started as a last resort for employers that found themselves in unpredictable emergency situations, has since exploded into a key feature of the organisational structure of many Australian businesses. 

It’s now estimated that at least 600,000 workers are employed through labour hire, with the majority in the financial, health care, airlines and mining industries. 

Labour hire workers are often paid less than directly employed workers, and they may not be entitled to the same conditions and protections. These labour hire loopholes are exploited by unscrupulous employers to game the system and underpay workers on labour hire contracts who are doing the same job as their directly employed workmates. 

But thanks to union campaigning, new rights have come into effect that mean workers who are employed through labour hire could be legally entitled to the same pay and conditions, as they would be if directly employed. This removes the financial incentive to outsource permanent jobs to lower-paid labour hire workers. 

Same job, same pay

Workers employed by a labour hire company who do the same job as directly employed workers should receive the same pay. It’s that simple.  

That’s why the union movement fought for – and won! – the labour hire provision into the Fair Work Act. You might have heard this being referred to as “Same Job, Same Pay”, and was part of the Fair Work Legislation Amendment (Closing Loopholes) Act passed in December 2023. 

These new laws mean that unions can apply for a Fair Work Commission order which ensures that workers from the labour hire company must be paid in the same way as workers who are directly employed by the host employer. 

There are several tests that need to be met for the Fair Work Commission to grant an RLAO, including: 

• Work is being performed for a regulated host and they are not a small business 

• The presence of a covered employment instrument (i.e. Enterprise Bargaining Agreement) which applies to the host and the directly employed workers 

Workers are winning, one workplace at a time

These new laws came into effect in December 2023 and the Mining and Energy Union (MEU) has already had two wins applying the new laws! 

In May, the MEU made a Same Job, Same Pay application to the FWC to address the significant pay gap between directly employed workers and labour hire workers at the Mount Pleasant coal mine in the Hunter Valley, NSW. The MEU later withdrew the application, after the employer agreed to employ the labour hire workers directly, resulting in a pay rise of more than $30,000 and permanent jobs. 

And hundreds of labour hire workers at Batchfire’s Callide mine at Biloela, Queensland are in line to get a pay rise from 1 November, after the Fair Work Commission decided in favour of issuing the first order under the Same Job, Same Pay laws in July. 

It means their pay must be lifted to match rates under the Enterprise Agreement that covers permanent employees; with some workers set to receive up to an extra $20,000 per year. 

These cases set a powerful precedent for other labour hire workers to also be paid fairly and win secure, permanent jobs. 

Many more Same Job Same Pay applications have now been filed across a range of industries, including in airlines, meat processing and warehousing. 

Reach out to your union if you think labour hire workers are being unfairly underpaid in your workplace. 

Already a union member?

Reach out to your union for more specific information about how labour hire rights apply to you and your workmates in your workplace. 

Not yet a member of your union?

Joining your union will ensure you’re getting the pay and conditions that you’re entitled to as a labour hire worker.