Your EBA can change labour hire pricing, but not automatically and not for every booking. An enterprise agreement, often shortened to EBA, is a workplace agreement that applies to one business or a group of businesses and sets minimum employment conditions for the employees it covers. The Fair Work Ombudsman notes that some employers and employees are covered by an enterprise agreement and not an award. Whether your agreement reaches a labour hire worker on your site depends on who employs that worker and on whether a specific order is in place.
This guide is for managers in manufacturing, warehousing and trades who buy labour hire in Melbourne and across Victoria and want to read a quote against their own agreement. Chandler Personnel is a labour hire and permanent recruitment business in Melbourne, and its page on labour hire in Melbourne gives the service background. For the general sum that turns a wage into an hourly cost, see labour cost per hour budgeting. This guide stays on what your agreement adds.
What an EBA sets that a quote must respect
An EBA sets the pay and conditions for the employees your business employs. A labour hire worker is employed by the provider, not by you. The Fair Work Ombudsman says labour hire employers hire their employees and are responsible for providing them with their pay and entitlements.
That means the starting point for a quote is usually the provider's own award or agreement, not yours. Fair Work also says employees must not receive less than the minimum pay and entitlements from their award, enterprise agreement or other relevant workplace instrument.
Your agreement still matters. It is the yardstick if an order is ever made for your site, and it shows what your own crew is paid for the same shift.
Read quotes carefully for a cost reason too. Fair Work warns that businesses in a contracting chain can be held responsible when workers miss their minimum entitlements, as its page on labour hire and supply chains explains. A rate that looks too low to cover lawful pay is a question for the provider, not a saving.
Classifications and allowances that move the rate
The parts of an enterprise agreement that move a labour hire rate are the same parts that move your own payroll. Fair Work lists them when it explains how a protected pay rate is worked out: the employee's minimum wage under the host's instrument, plus any additional amounts based on hours of work and working conditions.
Pull the clauses from your agreement and work through this list:
- Classification level. The level a worker is placed at sets the base rate. Two people with the same job title can sit at different levels.
- Penalty rates. Evening, night, weekend and public holiday work can attract higher pay. Your agreement defines which hours count.
- Loadings. Casual employment and some conditions of work can carry a loading over the base rate.
- Allowances. These are extra amounts paid for particular conditions of work. EBA allowances for labour hire only matter if the work on your site triggers them, so list the ones your own crew receives.
- Overtime. The agreement sets when overtime starts, and a long roster pushes a rate up.
- Incentive payments and bonuses. Fair Work includes these in the protected pay rate.
Give that list to every provider you ask for a price.
When a same job same pay order ties pay to the host instrument
A regulated labour hire arrangement order is the legal tool that links a labour hire worker's pay to the host's agreement. It is often called same job same pay, but it works only where an order has been made. It does not apply to every labour hire booking.
According to Fair Work, employees, unions and host employers can apply to the Fair Work Commission for an order. When an order applies, labour hire employees working for that host must be paid no less than the pay rate they would receive under the host's enterprise agreement or another relevant workplace instrument. That is the protected pay rate.
The order names the host, the labour hire employer, the employees it covers, the workplace instrument and the start date. Fair Work explains the detail on its page about protected pay rates for labour hire employees, including exclusions for certain kinds of employers.
Two points matter for pricing. The protected pay rate is the total the worker would get if employed directly by you, so penalties, loadings, allowances and overtime come with it. And the provider's own award or agreement can still apply alongside the order, so read how Fair Work says the two interact.
If an order covers your site, the wage line of a quote for that work should be built from your agreement. If none does, the quote can be built from the provider's instrument, and your agreement is a benchmark rather than a requirement.
What still sits outside the wage line
A protected pay rate fixes the floor for what the worker is paid. It does not fix the charge rate, which is the hourly figure a provider quotes you and carries more than wages.
- Employment oncosts. Super, WorkCover and payroll tax sit under the wage. An agreement can set a higher super rate than the legislated minimum, so check yours. The labour cost per hour post linked above shows how these lines are built.
- Paid time that produces no work. Leave and training time are paid by the employer, and the quote has to recover them somewhere.
- Provider margin. This is the provider's own charge for running the service. It differs between providers, so no figure is given here.
- Service scope. Inductions, replacement cover and out-of-hours contact can sit inside a rate or be priced as extras. Chandler Personnel, for example, runs site inductions on behalf of clients, so ask any provider whether that is included.
Industry changes the mix. A manufacturing labour hire booking on a shift roster leans on penalties and allowances, while a warehousing labour hire booking may swing on overtime in peak weeks.
Questions to ask before you accept a quote
A quote should let you trace each part of the rate. Put these questions to the provider in writing before you accept:
- Which instrument is the wage built from? The answer should name the award or agreement and the classification level.
- Does an order cover this work? If one does, the wage must reflect your agreement. If none does, ask the provider to say so.
- Which penalties, loadings and allowances are priced in? Match the list to the clauses in your own agreement.
- What assumptions sit behind the hours? Ask about the roster, overtime and any minimum engagement.
- Which oncosts are inside the rate, and which are extra? A provider should be able to show the build.
Our post on contract clauses before first shift lists the terms hosts usually want settled before work begins. To read your own agreement again, start from the Fair Work page on Fair Work enterprise agreements.
Related Resources
- Fair Work enterprise agreements
- Protected pay rates for labour hire employees
- Labour hire and supply chains
- Labour hire in Melbourne
- Labour cost per hour budgeting
- Contract clauses before first shift
- Request staff
Common Questions About EBAs and Labour Hire Pricing
1. Does every labour hire booking follow our EBA rates?
No. The provider employs the worker and is responsible for their pay and entitlements, so the wage normally follows the provider's own award or agreement. Your EBA rates apply only where a regulated labour hire arrangement order covers your site.
2. What is a protected pay rate for labour hire employees?
It is the total a labour hire employee would receive under the host's workplace instrument if they worked directly for the host. Fair Work says it starts with the minimum wage under that instrument and adds penalty rates, loadings, allowances, overtime, incentive payments and bonuses that apply.
3. Do allowances and penalties in our EBA affect the charge rate?
They can. Where an order applies, your penalties and allowances form part of the protected pay rate, and the provider recovers them through the charge rate. Where none applies, the provider's own instrument sets those lines, and your agreement is a benchmark.
4. Who pays super on labour hire workers under an EBA site?
The labour hire provider is the employer, so super is normally the provider's cost, recovered through the charge rate. Your quote should show whether super sits inside the hourly figure or is listed separately.
5. Where do I check if a regulated labour hire arrangement order applies?
The Fair Work Commission publishes a list of regulated labour hire arrangement orders made, and each order names the host and the labour hire employer. Your provider should also be able to tell you in writing whether an order covers the work.
Read the Instrument Before the Quote
A fair comparison of labour hire pricing starts with the document behind the wage. Read your own agreement, find out whether an order covers your site, and ask each provider to name the instrument and show how the rate is built. When you are ready to brief a provider, start from the request staff page.
