Same Job, Same Pay: What to expect from the FWC

Under section 306E of the FW Act, the FWC must, on an application by an eligible person or organisation make a RLHAO if the FWC is satisfied that:

1. An employer supplies or will supply, either directly or indirectly, one or more employees of the employer to perform work for a regulated host; and

2. A covered employment instrument that applies to the regulated host would apply to the employees if the regulated host were to employ the employees to perform work of that kind; and

3. The regulated host is not a small business employer.

However, the FWC is prohibited from making an order:

1. Unless it is satisfied that the performance of the work for the host is not or will not be for the provision of a service, rather than the supply of labour.

2. If satisfied that it was not fair and reasonable in all the circumstances to do so, having regard to submissions from affected businesses and employees.

The Full Bench of the FWC determined that:

1. For the purposes of section 306E(7)(c) of the FW Act, the MEU is an employer organisation that is entitled to represent the industrial interests of the employees of WorkPac who are supplied to perform work for Batchfire at the Mine, and the interests of the employees of Batchfire who work at the mine. The MEU therefore had standing to make an application for a RLHAO.

2. It was required by section 306E(1) that the FWC make the RLHAO sought by the MEU because:

• WorkPac supplied employees of WorkPac to perform production work for Batchfire at the Mine; and
• The Agreement would apply to those employees if Batchfire were to employ the employees directly to perform production work at the Mine; and
• Batchfire is not a small business employer (i.e. it has greater than 14 employees).

3. The FWC was also satisfied that, for the purpose of section 306(1A), the performance of work by the production employees supplied by WorkPac to Batchfire is not and will not be for the provision of a service rather than the supply of labour. In determining this, the FWC considered the following factors, which were found to be indicative of WorkPac supplying labour and not a service to Batchfire:

• WorkPac had no involvement in the Mine other than supplying its workers;
• WorkPac did not direct, supervise or control the production employees it supplied to the Mine. It was Batchfire and its employees that performed these functions;
• WorkPac employees did not use WorkPac systems, plant or structure to perform their work. It was Batchfire’s systems, plant and structures which were utilised;
• There was no evidence that WorkPac is or will be subject to industry or professional standards or responsibilities in relation to the production employees it supplies to Batchfire (other than the usual employer work health and safety obligations). Conversely, Batchfire has obligations under the Coal Mining Safety and Health Act 1999 (Qld) as to the safe operation of the Mine and, for that purpose, maintains a Safety and Health Management System which applies to the production employees supplied by WorkPac;
• The production work performed at the Mine, which involves the use of plant and equipment, is not of a specialist or expert nature.

4. The FWC was also satisfied that there was no material before it to allow it to make a finding that it is not fair and reasonable in all the circumstances to make the order sought.

5. The FWC therefore concluded that the Callide Mine Union Enterprise Agreement applied to the labour hire workers, meaning they must receive the same pay and conditions regardless of whether they are directly employed by Batchfire or by Workpac.

The RLHAO comes into effect on 1 November 2024, which is the earliest date an order of this type is permitted to come into effect.

Businesses which use or supply labour hire employees are likely to see an increase in applications of this nature, and should be planning for the consequences of such a decision, including considering how the business will deal with:

• the financial burden of increased employee entitlements; and
• the administrative burden of establishing payroll systems which ensure employees receive at least the minimum entitlements under the applicable enterprise agreement.