Application by the Mining and Energy Union [2024] FWCFB 299 (1 July 2024)

On 1 July 2024, the Full Bench of the Fair Work Commission (FWC) issued its first order under the new ‘same job, same pay’ (SJSP) provisions of the Fair Work Act 2009 (Cth)(FWA).

The order could potentially see a pay rise of up to $20,000 for labour hire workers at Queensland open-cut coal mine company Batchfire Callide Management (Batchfire). The success of this order could see many more businesses being ordered to pay their workers more, especially employers in the business of using labour hire workers.

The decision by the FWC comes as a result of an application made by the Mining and Energy Union (MEU) on behalf of labour hire workers at WorkPac who were supplied to Batchfire. The MEU alleged that the WorkPac employees were receiving $10,000-$20,000 less pay per year than employees directly employed by Batchfire.

The decision was made on the papers as neither Batchfire or WorkPac opposed the application or filed any evidence or submissions. The FWC published a draft order to take effect on 1 November 2024. As this is the first order to be made under the new SJSP laws, the FWC has given interested parties 2 weeks to comment on the draft order before it is finalised.

What is the new ‘same job, same pay’ laws?

Parliament introduced new changes to the FWA as part of the “Closing the Loopholes” legislation (Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth)).

One key change is the ‘same job, same pay’ provisions which aim to give labour hire employees a protected rate of pay which is no less than what they would have received under the host’s enterprise agreement (or another relevant workplace instrument) if they were employed directly by the host employer.

The changes mean that, with effect from 1 November 2024, the FWC can make regulated labour hire arrangement order (orders) that require employers to pay all labour hire workers they employ the same pay rate as an employee who is directly employed by them doing the same job.

Employees, unions and companies can make an application to the FWC to make a regulated labour hire arrangement order.

Consideration

In considering whether the exemption applied, and in concluding that the WorkPac employees were supplied for labour not the provision of services, the Full Bench considered that WorkPac doesn’t:

• Get involved in performance related matters;
• Direct, supervise or control employees;
• Provide systems, plant or structures for employees to perform their work; and
• Need to comply with any industry or professional standard in relation to the employees (other than their usual work health and safety obligations as an employer).

On the other hand, these things related to Batchfire meaning the employees worked as employees for Batchfire and not as service providers to Batchfire.

The Full Bench also noted that the work performed by the WorkPac employees didn’t require any expertise or specialist knowledge or skill. This further added to the Bench’s conclusion that this amounted to a ‘supply of labour’ and not a provision of services.

The Full Bench said that in considering whether the WorkPac employees performed the same job as the direct Batchfire employees, they observed that both types of employees:

• attended the same pre-start meeting each day and are allocated work and equipment by Batchfire in the same way;
• performed the same production work and operate the same Batchfire-owned or leased machines and equipment;
• Wore the same Batchfire uniforms;
• are equally required to comply with Batchfire’s instructions, usually communicated by Batchfire’s supervisors;
• must undertake the same site induction, conducted by Batchfire, before commencing work at the mine;
• operated pursuant to the Safety and Health Management System established by Batchfire for the safe operation of the mine pursuant to its obligations under the Coal Mining Safety and Health Act 1999 (Qld);
• operated under the same Batchfire standard operating procedures and other policies and procedures;
• are rostered on the same rosters and allocated into the same production crews by Batchfire;
• took annual leave only when determined by Batchfire, and must notify Batchfire of any personal or carer’s leave that is taken;
• took breaks at times determined by Batchfire and share the same crib facilities;
• undertook the same training provided by Batchfire; and
• used personal protective equipment and consumables provided by Batchfire.

This meant, under the new SJSP laws, Batchfire was required to pay the WorkPac employees the same protected rate of pay that the direct Batchfire employees doing the same job were receiving.

Implications for employers

This order provides guidance for employers on what factors the FWC will consider when determining whether a labour hire employee is:

1. Doing the same job as a directly hired employee; and
2. The difference between a ‘supply of labour’ and the ‘provision of services’.

Employers that use labour hire works should assess whether any labour hire employees that work for them are doing the same job as direct employees. Employers should be aware that they must match the pay of labour hire employees with that of their direct employees if they are doing the same job.

While the factors listed above is not an exhaustive list of attributes which determine if 2 different employees are doing the same job, it is a good guide for determining this.

If you would like to discuss these or other workplace issues, please contact Andrew Bland or call 02 9412 3077.