Albanese Labor Government to Close the labour Hire Loophole

The Albanese Labor Government will protect Australian workers from having their pay undercut – by closing the labour hire loophole. 

The labour hire loophole is where an employer and employees have agreed in an enterprise agreement to a particular rate of pay for particular work – but then the employer brings in different workers through labour hire to undercut that rate of pay because they’re technically employed by a different employer.

The loophole is only relevant where there is an enterprise agreement – already in place and signed up to by the workers and the employer.

Having agreed to that rate of pay with workers and registered it – it’s currently legal for an employer to undercut the agreed rate of pay through the use of labour hire.

That’s a loophole – and the Albanese Labor Government will close it, as part of its Closing Loopholes Bill to be introduced to Parliament on Monday.

There will always be a place for labour hire – when it comes to surge work, short-term arrangements and specialist staff. This legislation does nothing to change that. These changes will affect a small number of workers. But for the workers this affects – closing this loophole will be life-changing. Under our legislation:

• Employees, unions and hosts can apply to the Fair Work Commission for an order that labour hire employees be paid at least the wages in a host’s enterprise agreement.
• Exemptions apply where the host is a small business employer, and a default 3-month exemption period will also apply, to avoid impacting labour hire arrangements for surge work and temporary replacements.
• The Commission must not make an order if it is not fair and reasonable in the circumstances, including where an arrangement relates to the provision of specialist or expert services.
• Businesses will be prohibited from taking action to avoid their obligations or prevent a Commission order being made.
• Applications can be made to the Fair Work Commission once the legislation has passed, however businesses will have around a year to prepare for new payment obligations that will not take effect until November 2024.

The Government announced this policy when we were in Opposition two-and-a-half years ago and we took it to the Australian people last year.

Our reform will not stop employers from rewarding their employees for their skills, qualifications and hard work.

This legislation comes after dozens of meetings with employer groups and unions this year to strike the right balance with this reform, with exclusions for host employers that are small businesses, and labour hire employees under training arrangements. 

The Liberals and Nationals refused to close the labour hire loophole when they were in Government – and they still refuse to even acknowledge there’s a problem. 

They call it a “made up issue”. It’s not a “made up issue” for the workers getting ripped off. It’s a real issue and the Albanese Labor Government is determined to fix it.

Last year we passed our Secure Jobs, Better Pay laws. Those laws were about improving job security and getting wages moving again.

This year’s legislation is about closing the loopholes that undermine job security and wages – including the labour hire loophole.