Key Points
1. The federal government plans to legislate equal pay requirements designed to protect labour hire and other casual workers in order to prevent them from being paid less than others to do the same jobs.
2. The government plans to legislate in Spring 2023, meaning drastic employment market changes are just around the corner.
3. This legislation only impacts employers who are currently paying casual employees less than their full-time counterparts or engaging them under a different award or agreement.
4. Employers need to review their workforce agreements now and ensure there is wage parity across their sites
The federal government plans to follow through on their election promise to push same job same pay legislation through parliament among a raft of sweeping industrial relations changes forming part of their key election platform.
The same job pay legislation is targeted specifically at employers who utilise labour hire companies, or directly employed casuals, to circumvent their EBA agreements and pay workers less to perform the same tasks as full-time workers on sites engaged under an EBA. Under current legislation, this is perfectly legal, the new legislation is designed to close this current 'loophole'.
In our experience, the vast majority of employers do not deliberately attempt to circumvent their EBAs and pay casual employees less to perform the same work. Reputable employers also rarely pay casual employees the same as their full-time counterparts, due to casual loading. Casuals are always paid more than their full-time counterparts to compensate for the lack of entitlements.
Employers also often use labour hire casuals as a 'try before you buy' option with a view of bringing these casuals on as full-time employees after 3-6 months, once they have found their place in the company and mesh well with the team. This gives employers the flexibility to move the casual between teams or sites and find where the casuals are most productive, without having to pay an agency an upfront lump sum fee.
Engaging casual employees, including labour hire casuals, under the site EBA rather than under an award has the following benefits:
1. EBA rates and pay conditions including rostering and breaks make it much easier to attract better quality staff, boosting your transition rates to permanent and reducing attrition.
2. There will be fewer disputes on the site as casual employees will be receiving a higher rate than the full-time staff, which they will then sacrifice when they move to permanent employment with the client in exchange for entitlements under the EBA.
3. Engaging all staff under one agreement reduces the margin of error when processing payroll, making it less likely that employers will have to suffer large-scale back payments as we have seen recently with Woolworths, BHP and others.
4. Less pressure from unions will be placed on employers if they are engaging all staff under an EBA
5. Retention will improve as rates and conditions are superior in most cases to the award, reducing hiring costs which will more than compensate for the increase in pay rates.
Utilising enterprise agreements for casual workers has an overall positive impact on the workforce by boosting retention and attracting a higher calibre of workers. This new legislation can be leveraged by employers to overhaul their recruitment strategy and pivot towards a focus on long-term retention strategy and the cost savings involved in reduced attrition.