New rights for labour hire workers
A labour hire employee (the employee) is defined as a person who enters a work contract with a labour hire agency (the agency). The agency has a commercial contract to supply labour with a host business (the employer).
The employee performs work for the host firm. The host employer pays the labour hire agency, and the labour hire agency then pays the employee. The employee does not have an employment contract with the host employer and because of this cannot make an unfair dismissal claim against the host employer.
A review of previous cases has shown that the involvement of a labour hire agency does not create an employer-employee relationship between the agency’s clients and the workers provided by the agency. In these instances, the labour hire agency typically handles the interviewing, selection, and determination of remuneration for the workers, independent of the client’s influence.
There may be some situations where the labour hire agency and the host employer may be related entities. In this case, the host employer may be found to be the employer, regardless of the contract for work with the labour hire agency.
New rules relevant to labour hire employees (Closing the Loopholes)
Labour hire employees can now apply to receive a protected rate of pay no less than what they would receive if they worked directly for a host employer.
Employees, unions, and host employers can apply to the Fair Work Commission (Commission) for a regulated labour hire arrangement order (an order).
When an order applies, labour hire employees working for a particular host employer must be paid no less than the same pay rate they would receive under the host’s enterprise agreement (or another relevant workplace instrument). This is referred to as a ‘protected pay rate’.
Hosts and labour hire employers cannot behave in a way that:
- stops, or tries to stop an order from being made, or
- avoids paying the protected pay rate to eligible employees by:
- engaging other employees or independent contractors, or
- entering into other labour hire agreements.
Have questions about a labour hire arrangement or employee entitlements under these arrangements? Please contact us at [email protected] or 1300 720 004.
