Should business plan for the Same Job Same Pay (SJSP) legislation?

Yes, despite full implications being at this stage unknown, businesses should keep an eye on the passage of the SJSP legislation as industry groups have warned of the likelihood of added wage pressures and skill shortages it will create.

When SJSP legislation  was first introduced in November 2021, it was heavily criticised by business representatives and voted against by the previous government. Since then, little has been mentioned about this. Given the ALP’s recent success in the Federal Election and their demonstrated commitment towards the labour agenda, it is likely for the SJSP bill to be passed through the Senate after support from the Greens and One Nation.

The SJSP obligation

The obligation is intended to ensure that labour hire workers, performing work for the host, receive pay and conditions that are no less favourable than those that apply to other employees doing the same work, where those other employees are directly employed by the employer or an associated entity. 

Additional obligations will be placed on the hosts to:

1. provide labour hire businesses with all information needed so they can comply with the obligation;

2. not engage with a labour hire business unless they agree to comply with the obligation;

3. prohibit arrangements with labour hire businesses which prevent offering employment and access to information about vacancies (with the host) to a labour hire employee working at the workplace;

4. ensure that labour hire workers have the same access to amenities and collective facilities and training opportunities as its owns employees; and

5. provide labour hire workers with the same rights as direct employees over the determination of hours and location of work, including but not limited to, rights to consultation, reply and notice.

Small businesses (fewer than 15 employees) will be excluded from the obligation together with specific labour hire arrangements relating to the:

1. temporary replacement of workers who are on leave for three months or less; and

2. temporary supplement of the host’s workforce for three months or less because of a surge in capacity (demand for goods).

Complexity

Unfortunately it is unclear whether the SJSP obligation would:

1. extend beyond employees covered by an enterprise agreement or beyond base rate of pay for annualised salaries;

2. deal with differing rostering arrangements between labour hire and employees; and

3. differentiate between competing enterprise agreements

We will update businesses as to their obligations as more details become known.

Actions

In anticipation of this amendment, we recommend businesses:

• review their current labour hire arrangements to understand the extent of these arrangements;

• assess the financial cost based of SJSP on their current enterprise agreement rates or base rate pay for annualised salaries as a best case scenario;

• commence discussions with their current labour hire provider with an aim to be ready to develop responses and contingencies when more details are known;

• stay tuned for future updates.

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