Ai Group welcomed the opportunity to make a submission in response to the Department of Employment and Workplace Relations (DEWR) consultation paper on the Government's 'Same Job, Same Pay' proposal.
The Consultation Paper describes the 'Same Job, Same Pay' proposal as "ensuring that labour hire workers are paid at least the same as directly engaged employees doing the same work".
The 'Same Job, Same Pay' proposal has caused alarm amongst labour hire businesses. There is widespread concern that it represents an unfair attack on labour hire businesses that comply with relevant workplace laws and which are providing a valuable and legitimate service.
The 'Same Job, Same Pay' proposal has also caused alarm amongst a wide range of manufacturing, construction, maintenance, ICT, consulting and other businesses, small and large, that have entered into contractual arrangements with client businesses to provide services which include a labour component.
There is a major risk that any 'Same Job, Same Pay' requirement will disrupt countless business-to-business contracting arrangements to the detriment of the relevant businesses, their employees and the broader community.
Thousands of small and medium-sized businesses which supply services to larger businesses would be forced to increase the remuneration they pay to their employees in order to comply with the 'Same Job, Same Pay' requirement. This would substantially increase their costs. It would be naïve to assume that these businesses would be able to fully recoup those cost increases from their clients through charging higher prices for their services.
A 'Same Job, Same Pay' requirement could destroy many small businesses and the livelihoods of many business owners.
A 'Same Job, Same Pay' requirement could also result in widespread job losses amongst labour hire employees because client businesses would have little incentive to engage labour hire businesses due to the increased regulatory burden, uncertainties and risks involved in complying with the 'Same Job, Same Pay' requirement.
In addition, the 'Same Job, Same Pay' requirement would be a strong disincentive for labour hire businesses to bargain because of the major problems that will result from trying to comply with their own enterprise agreement as well as with inconsistent remuneration terms in each client's enterprise agreement.
The Government’s 'Same Job, Same Pay' proposal is not in anyone's interests and needs to be abandoned.
This submission addresses the questions and issues raised in the Consultation Paper and is put forward in the event that the Government decides to proceed with its 'Same Job, Same Pay' policy despite industry's strong opposition. Our answers should not be interpreted as in any way indicating that Ai Group agrees with the policy. As stated above, the policy is not in anyone's interests and should be abandoned.