Parliament should reject counter-productive amendment to Fair Work Act

The MCA urges the Australian Parliament to oppose the Fair Work Amendment (Same Job, Same Pay) Bill 2021.

This bill would require any business that provides labour services to another entity to provide pay and conditions above that required by their agreement or award.

The broad definitions contained in the bill risk capturing service contractors as well as labour hire workers, which would increase costs and regulatory burdens on a range of industries that supply or perform work on mine sites.

The bill would also impose onerous compliance obligations on businesses that use labour services, including:

• Requiring businesses that use labour hire to determine whether a direct employee is performing the same ‘quantity of work’ as the labour hire worker
• Requiring host businesses to effectively police labour hire providers by ensuring the latter are meeting their own legal obligations
• Requiring host businesses to provide labour hire workers with the same rights as direct employees over their hours and location of work.

Bluntly applying a ‘same job, same pay’ requirement would have adverse unintended consequences.

Requiring labour hire workers to receive the same above-award wages and entitlements as direct employees would reduce the capacity of companies to ramp up and down during different phases of demand and production, reducing labour efficiency and investment and ultimately costing jobs.

Deloitte Access Economics has estimated that if mining companies were required to grant labour hire workers and service contractors the same pay and conditions as direct employees, labour efficiency and future investment would decrease, with the result that:

• Employment in coal mining would decline (relative to where it would otherwise have been) by approximately 2,300 full-time-equivalent jobs a year to 2031
• Employment in minerals and other mining would fall by 4,900 jobs a year
• Employment in mining-related construction would contract by 4,000 jobs a year.

Australian mining directly employs 256,800 people in highly skilled, highly paid and secure jobs, predominantly in regional Australia.

84 per cent of mining workers are permanently employed, whether by minerals producers or by service contractors who typically have enterprise agreements.

Median weekly earnings for mining workers were $2,325 in 2020, double the median for all industries ($1,150).

The mining industry successfully employs a range of agreement options to drive productivity and incomes, with 99 per cent of mining workers earning above-award wages and conditions.

The MCA is opposed to any legislation or regulation that would require employers to pay workers doing the same (or similar) jobs the same wages above the award safety net, as this would undermine the flexibility benefits and performance incentives of enterprise bargaining at the very time the industry needs to be flexible, adaptable and competitive to support economic recovery.

ends

Deloitte Access Economics, Economic effects of changes to labour hire laws, report prepared for the MCA, 4 June 2019, p. 47f.

Australian Bureau of Statistics, Labour Force, Australia, Detailed, October 2021, released 18 November 2021, table 6. Employment figure is for 2020-21.

Australian Bureau of Statistics, Characteristics of Employment, Australia, August 2020, released 11 December 2020, table 3.

Australian Bureau of Statistics, Characteristics of Employment, Australia, August 2020, released 11 December 2020, tables 2 and 3.

Australian Bureau of Statistics, Employee Earnings and Hours, Australia, May 2018, released 22 January 2019, data cube 7.