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Since its introduction, the proposed Fair Work Amendment (Same Job, Same Pay) Bill 2021 (Cth), also known as “Same Job, Same Pay Bill”, has caused a buzz in the media. Whilst some have welcomed it as an instrument to promote fairness and equality in the pay rates, others have criticised it. However, there is a significant number of people and businesses, who have misunderstood the bill due to its name. The literal interpretation of the proposed bill’s name could suggest that any two employees performing the same duties in the same position for an employer must be paid exactly the same regardless of their qualifications or experience. This misunderstanding has caused serious concerns among employers.

However, contrary to this misunderstanding, the proposed Bill in its current form as well as the explanatory memorandum suggest that the Bill is introduced to prevent the employers from undermining the integrity of their enterprise agreements, and ensure that the labour hire employees are not underpaid than what they are required to be paid under the enterprise agreement that applies to the employer’s employees. For example, many of the businesses/employers that are parties to enterprise agreements. These agreements usually require the employers to pay higher pay rates than what are prescribed under the Modern Awards or NES (especially for certain shifts such as night shifts) and also, require the business/employer to provide additional facilities and conditions which are not required under the Awards or NES. Employees sourced through labour-hire companies are usually not covered under these enterprise agreements, and thus, paid at lower rates (in accordance with either Modern Awards or the NES), and not provided the conditions and facilities required under the enterprise bargain.

This bill is not passed yet, and is in its early stages. It has actually lapsed at the dissolution for now. But if it becomes legislation, it would ensure that the labour hire employees are not paid any less and not provided any inferior work conditions than what the employer’s direct employees are entitled to. However, there are some exceptions that are provided in the bill for small business, or for labour-hire of employees who cover temporary positions of less than 3 months (such as when hired to cover an internal employees’ leaves).

If legislated, the new law would require employers to pay the externally sourced employees such as labour hire employees equally as their internal employees performing equivalent roles. Our understanding is that this would be minimum pay rates and conditions guaranteed for under the enterprise agreements for particular positions/classifications. Therefore, it would be of utmost importance for employers to define its positions and classify them properly and carefully by specifying the duties, job requirements, conditions of work and qualifications required, etc and ensuring consistent and fair pay practices are observed.

Whilst the principle of “Same Job / Same Pay” focuses on pay equality, it is important to consider that factors such as experience, qualifications, performance, and seniority can still be taken into account when determining an individual’s salary within a specific job category. We believe that this bill would regulate the minimum entitlements only. Thus, an employer should still be able to pay their employees higher for their superior experience, qualifications, seniority or performance. The Bill also does not affect the operation of most Modern Awards as most of the Awards cover the labour hire employees.

In conclusion, the bill, if legislated, seeks to bring leverage of the minimum pay and work conditions for labour hire employees in comparison to their company employed counterpart rather than it being a mechanism of enforcing equal pay for all employees performing a similar role.

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