The Department of Employment and Workplace Relations (DEWR) has announced a proposal to amend the Fair Work Act 2009, which will allow employees and unions to apply to the Fair Work Commission for an order that labour-hire employees must be paid at least what they would receiver under a host business's enterprise agreement.

Described as 'closing the labour-hire loophole', the proposed changes have links to the Federal Government's proposed 'Same Job, Same Pay' reforms whereby workers who perform the same job alongside each other receive the same pay.

Clearly, these changes, if passed by the Federal Parliament, will have significant impacts on those who enter third-party workforce arrangements. The need to engage professional recruiters that will not damage your business reputation is crucial. That involves them being on top of all legislation and equipped to implement the correct processes, systems and pay rates to employees and arrangements with employers.

Of course, at SiteForce Recruitment, we're all over this topic. Not only have we already been doing this for years (yes, we're usually ahead of the game and trendsetters in the industry), but we highly value our teams and pay our labour hire correctly. That's part of our secret sauce of success – treating people well. We work with employers who value their talent and know great teams deliver great results.

Let's explain the changes below and give you some tips on questions that you need to ask from your labour hire provider: -

What do the proposed changes mean?

The department advises that "Labour hire employees covered by an order of the Commission will be entitled to be paid at least what they would receive under the host's enterprise agreement or equivalent public sector determination.

This proposal will not impact the wages of host employees or labour hire employees already being paid more than what they would receive under the host's enterprise agreement.

Labour-hire employers will be required to pay affected employees at least the wages payable under the host's enterprise agreement for all labour-hire employees when covered by an order. Labour hire employers can request information from hosts to assist their compliance with this obligation, where information is needed to calculate the correct rate of pay, and hosts must comply."

The aim of the proposed change:

The aim of this reform is to ensure that employers who supply their employees to perform work for a 'regulated host' pay their employees the same rate of pay as employees of the host who perform work of the same kind. Hosts must also provide sufficient payroll information to those employers to enable them to comply with their new payment obligations, and the Bill introduces penalties for businesses who attempt to avoid any orders made by the Fair Work Commission. A regulated labour-hire arrangement order can be sought wherever:

• an employer, that is not a small business, supplies or will supply, either directly or indirectly ("labour hire employer"), an employee ("regulated employee") to perform work for another person or entity ("regulated host");
• an industrial instrument other than a modern award applies to the regulated host, and
• the instrument would apply to the regulated employee if they were employed by the regulated host, on any basis, to perform work of the same kind that the regulated employee performs under their labour-hire arrangement. The Fair Work Commission cannot make a regulated labour-hire arrangement order unless it is satisfied that it is 'fair and reasonable' to do so, considering:
• the current and historical coverage and application of the industrial instrument.

What Your Labour Hire Recruiter Should be Asking You

1. What the pay should be for your workers on their jobs if they have specific enterprise agreements. The labour-hire arrangement and rates will then pick up that rate and apply it to those workers on top of the usual commission rate applied;
2. The amount to which employees are entitled to be paid under any industrial instrument;
3. The nature of the work required to be performed by a regulated employee – such as expertise, professional industry, and the extent to which the regulated host supervises the regulated employee and has control over their work on a daily basis;
4. Meeting any other potential criteria specific to the role;
5. Small business definitions and exclusions do apply under the legislation where enterprise agreements are not in place, and the modern award provisions apply. Your recruiter needs to know these, and be able to advise on, and clarify this for you.

If these questions are not being asked and you are offered a fixed charge, I would recommend that you resist such requests as it may put you at risk. DEWR advise that the legislation will also contain prohibitions on avoidance behaviours, including behaviour intended to prevent the Commission's orders from being made.

Red Flags In the Industry

I've written extensively about the cost of time and money when you engage the wrong person. This is one major factor in ensuring you are working with and engaging the right recruiter. But this article goes deeper. If the recruiter is also not asking you for details about the job you are hiring for in terms of compliance with the worker's rights, that must be a red flag for you that should be pinging off your alarm bells. That has the potential to not only make a mistake in the placement, but also negatively affect your reputation.

There are careless recruiters in the industry that are either uninformed, inexperienced, or greedy. Some are not engaging or paying workers properly, and undercutting genuine quality providers, like us. Some are accessing an international hiring pool to try to save on labour costs. These pools are from a country with an abundance of workers with certain skill sets and lower labour costs.

Whilst employment laws and entitlements vary from country to country, however it is clear that the Australian Fair Work Act applies to all workers in Australia. There are also very strict rules on whether the workers are contractors or employees to the recruiter, and misclassifying this imposes penalties. It is crucial before hiring that you consider whether any federal or state laws apply – both employment and taxation. It is also crucial for your reputation that you engage a recruiter who is in complete compliance with the laws.

Here are some tips on what to ask below.

What You Should Be Asking Your Labour Hire Recruiter – Now and in the future

1. Are you a registered Labour Hire provider?
2. Are you in complete compliance with all employment legislation?
3. How do you recruit and select candidates (interviewing, skill testing, reference checking, etc)?
4. Are your workers employees or contractors?
5. Do you pay your employees their correct wages, including penalty rates, allowances, overtime, and casual loading?
6. Is your employee superannuation paid in full and up to date?
7. Do you have a current Workers' Compensation Policy for your employees?
8. How do you deal with safety in the workplace?
9. How are performance issues or dismissals handled?
10. Have you ever been investigated by the Fair Work Ombudsman, and if yes, what was the outcome?

At SiteForce Recruitment, we are proud to confirm that we are in complete compliance with the law and on top of all employment legislation and proposed legislation changes. Whilst this has added an extra layer to an already complex employment environment, engaging us makes things easier. When our clients request details and proof to back this up, we are 100% transparent.

Whether you are a business looking for a reliable and compliant labour hire provider, or permanent placements of skilled construction workers or management and support staff, then get in touch.

Our Superpower

Our leading 'superpower' is attracting and retaining quality team members who share our values of honesty, integrity, diligence, and service, allowing us to deploy quality team members on client sites quickly.

Our team member's superpower is being motivated, prepared and ready to enthusiastically contribute to the projects at hand, more than just a pair of hands.

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Read other informative articles for both employers and workers at:
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Chantal Penny is the Director with Superpowers of SiteForce Recruitment. A thought leader in the industry, Chantal, based on her expertise and industry perspective, offers unique guidance, inspiration, and influence in the industry. Chantal Penny is also a thought leader in the industry with her Podcast, Talent Instinct, which is available at:
https://talentinstinctpodcast.libsyn.com/site

At SiteForce Recruitment, we specialise in labour-hire and permanent recruitment in the construction industry. We are committed to valuing people, safety and wellbeing, collaboration, trust and, of course – results!

CONNECT with us via our contact page or bookings links on our website if you are looking to recruit for, get your dream job, or join our amazing labour force team.

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