Same job same pay for labour hire is not a blanket rule that attaches to every booking. It works through regulated labour hire arrangement orders made by the Fair Work Commission. When an order applies to a host, the labour hire employees working at that host must be paid no less than they would receive under the host's enterprise agreement or another relevant workplace instrument.
This guide is for Melbourne and Victorian businesses that use labour hire in manufacturing, warehousing and trades. It covers who can ask for an order, what an order does, what the protected rate includes, when the Commission cannot make one, and what to check before your next booking. Victoria's own rules are covered in our post on the labour hire definition in Victoria, so this guide stays with the federal pay rule.
What same job same pay means in plain English
Same job same pay is shorthand for a labour hire pay rule in the Fair Work Act. The Fair Work Ombudsman says that under regulated labour hire arrangement orders, a labour hire employee cannot be paid less than they would get if they worked directly for the host employer. The rule is about the pay rate, not about who the employer is.
Two points keep expectations sensible. First, the rule works through an order, not automatically across every booking. Second, the provider remains the employer. Fair Work says labour hire employers hire their employees and are responsible for providing them with their pay and entitlements, and the worker is sent to the host but paid by the provider.
How a regulated labour hire arrangement order works
The Fair Work Commission makes these orders. Employees, unions and hosts can apply, and the order regulates how labour hire employees are paid by their labour hire employer. Because someone has to apply, an order is made case by case for a particular host, not for an industry or a postcode.
Fair Work says each order must outline five things:
- the host
- the labour hire employer
- the employees covered by the order
- the relevant workplace instrument
- when the order starts
That detail matters for hosts. Fair Work says a host must apply to the Commission to change an order so that it covers new labour hire employers and their relevant employees. A host covered by an order must also answer a written request for information from a covered provider as soon as possible, within a period that lets the provider pay correctly. During tendering, hosts must tell potential and successful tenderers in writing that an order applies and how it may affect them.
Anti-avoidance rules apply too. Hosts and providers cannot act to stop an order being made, or avoid the protected rate by engaging other employees or independent contractors, or by entering other labour hire agreements.
What a protected pay rate includes
The protected pay rates for labour hire employees page defines the rate as the total amount the workers would get under the host's workplace instrument if they worked directly for the host. It starts with the minimum wage under that instrument, then adds amounts that follow from the worker's hours and conditions: penalty rates, loadings, allowances, overtime, incentive-based payments, bonuses and other additional amounts.
The protected rate is a floor, not a replacement. The provider's own award or agreement can still apply, and the total paid must be the higher of the payments under the provider's instrument and the protected pay rate. The provider must check both and pay the higher amount.
Casual workers receive the casual rate in the host's instrument where it has one. Where it does not, Fair Work sets a different method, so read the page for your case. On application, the Commission can also decide that an alternative protected pay rate applies, based on a more appropriate instrument, such as one that better reflects the type of work performed. For the cost side, a separate guide in this series shows how to calculate the true cost of labour hire under an EBA.
When an order may not be made
Fair Work lists three situations where the Commission cannot make an order: a service is being provided to the host rather than just labour, the host is a small business employer, or an order is not fair and reasonable in the circumstances. Check the Commission's guidance for the current small business definition rather than assuming you fall inside or outside it.
The first situation separates labour hire from a services contract. Fair Work describes a services contract as one business taking on part of another's work and managing its own employees. Labour hire supplies workers to work for you. Fair Work's page on labour hire and supply chains sets out the difference.
Even where an order applies, the provider does not have to pay the protected rate to every employee. Fair Work says exceptions include employees on a training arrangement and those engaged for a short-term period, usually three months or less. The Commission can vary the rules for short-term employees.
Practical checks for hosts that use labour hire
- Ask whether an order covers you. Ask your own team and your providers whether an application has been made or an order exists for your site. If one exists, read it: it names the host, provider, employees, instrument and start date.
- Know your instrument. Identify which workplace instrument would apply if the workers were your direct employees. The Fair Work Ombudsman notes that some employers and employees are covered by an enterprise agreement and not an award.
- Keep information ready. A written request from a covered provider needs a prompt answer, so name one person who owns it.
- Watch for a new agreement. If your agreement is replaced, Fair Work says an order is taken to refer to the new instrument from when it applies, and you must tell the provider and give them the information to update pay.
- Question prices that look too low. Fair Work warns that a business paying a contract price it suspects cannot cover lawful entitlements may be involved if the provider underpays.
Pay is one check among several. The provider's licence status is another, and our guide to the licence register for hosts covers it. Chandler Personnel supplies labour hire in Melbourne, including manufacturing labour hire and warehousing labour hire. Whichever provider you use, ask which instrument it pays under and whether it has been told of any order covering your site.
Related Resources
- Labour hire in Melbourne
- Labour hire definition in Victoria
- Licence register for hosts
- Manufacturing labour hire
- Warehousing labour hire
- Protected pay rates for labour hire employees
- Fair Work enterprise agreements
Common Questions About Same Job Same Pay for Labour Hire
1. Does same job same pay apply automatically to every labour hire worker?
No. It operates through a regulated labour hire arrangement order, and the Fair Work Commission makes an order only after someone applies. Each order covers a particular host, provider and group of employees. Until an order applies to your site, the protected pay rate does not.
2. Who can apply for a regulated labour hire arrangement order?
Fair Work says employees, unions and host employers can apply to the Fair Work Commission. The Commission cannot make an order where a service rather than just labour is provided, where the host is a small business employer, or where an order is not fair and reasonable in the circumstances.
3. What is a protected pay rate?
It is the total amount labour hire employees would receive under the host's workplace instrument if they worked directly for the host. It includes items such as penalty rates, loadings, allowances and overtime. The provider pays the higher of that figure and what its own instrument requires.
4. Does same job same pay change who employs the worker?
No. The labour hire provider remains the employer and stays responsible for paying wages and entitlements. The order regulates how the provider pays the worker, and the provider stays responsible for that pay. The host does not become the employer through an order.
5. Where do I read the official guidance?
Start with Fair Work's pages on protected pay rates for labour hire employees and on labour hire and supply chains. The protected pay rates page also points to the Fair Work Commission's section on labour hire protected rates of pay and its guidelines for regulated labour hire arrangement orders.
Check for an Order, Not a Slogan
Same job same pay is a real obligation, but it applies through orders, not through the phrase itself. Find out whether an order covers your site, know which instrument it would point to, and keep your pricing honest in the meantime. When you are ready to book, request staff with your roster and role detail ready. For the wider picture, see labour hire in Melbourne.
