Same Job Same Pay for Labour Hire: A Host's Guide

Same job same pay is a Commonwealth scheme under the Fair Work Act that lets the Fair Work Commission order a labour hire provider to pay its workers at least what the host would pay its own employees under the host’s enterprise agreement. The order is called a regulated labour hire arrangement order. It only bites where the host has an enterprise agreement that would cover the work, and there are exemptions for small hosts, short placements, training arrangements and genuine service contracts. Orders can be made from 15 December 2023 and the pay obligation has applied since 1 November 2024.

This article is written for site managers and operations managers at civil contractors, manufacturers and distribution centres who use labour hire crews. It explains how an order works, when it cannot apply, what the protected rate actually includes, what a host has to hand over, and how it changes the conversation about charge rates. It is general information, not legal advice. If your business is named in an application, get advice on your own facts.

How it works

How an order comes about

Nothing changes on your site until the Commission makes an order that names your business.

Someone has to apply

An order is not automatic. An application to the Fair Work Commission can be made by the host, by a labour hire worker, or by a union representing workers. The application names the host and the labour hire providers that supply it.

Your enterprise agreement is the trigger

The Commission must be satisfied that a labour hire provider supplies workers to the host, and that an enterprise agreement or workplace determination covering the host would cover those workers if the host employed them directly. A host that relies only on modern awards has no agreement rate to match.

The order must be fair and reasonable

Even when the basic test is met, the Commission considers whether an order is fair and reasonable in all the circumstances, including how the arrangement is structured, the history of the industry and the relationship between the businesses involved.

The provider pays, the host informs

Once an order is made, the labour hire provider must pay its workers no less than the protected rate. The host must give the provider the pay information it needs to work out that rate. Both sides are covered by anti avoidance rules.

Warehouse aisle with pallet racking and stock on the shelves

Exemptions

When an order cannot apply

These are the situations the law carves out. Each one turns on the facts, not on what the contract calls the arrangement.

Small business host

A host with fewer than 15 employees is outside the scheme

No enterprise agreement

If no agreement or determination would cover the work, there is no agreement rate for an order to apply

Short placements

Work for the host of three months or less is generally outside the pay obligation, although the Commission can vary that period in some cases

Training arrangements

Workers placed under a genuine training arrangement, such as some apprenticeship placements, are excluded

Service contracts

Where the provider delivers a service, such as a scope of work it manages and controls, rather than supplying labour, an order cannot be made

Not fair and reasonable

The Commission can decline to make an order where it would not be fair and reasonable in the circumstances

The rate

What the protected rate includes

The base rate the worker would receive under your enterprise agreement for the classification that fits the work actually being done.
Incentive based payments and bonuses that your directly employed staff would receive for the same work.
Loadings, including shift loadings that apply under the agreement to the hours being worked.
Monetary allowances under the agreement, such as site, tool, leading hand or industry allowances where they apply.
Overtime and penalty rates at the agreement’s rates, not the award’s.
The order is about pay. Non pay conditions such as rostering, leave policies or redundancy terms are not carried across by the order.

Where using the full agreement rate would not be appropriate, the Commission can set an alternative protected rate. In practice, the classification step causes more disputes than anything else, because a provider has to match each worker to the role an employee doing the same work would hold.

On site

What it means for a host in practice

For a civil contractor with an enterprise agreement, the question to ask first is whether your labour hire crews are doing the same work as people covered by your agreement. A labourer on a drainage crew under your foreman, working your hours, is the kind of placement an order is aimed at. A specialist subcontractor delivering a defined scope with its own supervision is closer to a service contract. Manufacturers and distribution centres face the same question on the production line and in the warehouse, where agency pickers and process workers often work side by side with permanent staff.

If an order is made, the provider will ask you for the information it needs: the agreement that applies, the classification structure, allowances, shift patterns and how overtime is triggered. Answer promptly and keep a record of what you provided. The provider carries the payment obligation, but a host that withholds information or restructures arrangements to dodge an order is exposed under the anti avoidance rules.

The charge rate conversation changes too. A labour hire rate is built on the wage the worker is paid, plus the on costs that follow it, such as superannuation, WorkCover, payroll tax and leave or casual loading. If an order lifts the wage to your agreement rate, the charge rate moves with it. That is not the provider padding the margin. Ask your provider to show you which components move with the wage, and budget for the change from the date an order takes effect, not from the next tender.

A few practical steps help. Know which of your sites and roles are covered by an enterprise agreement. Track how long each labour hire worker has been with you, because the three month point matters. Keep supply contracts clear about whether you are buying labour or a managed service, and make sure the paperwork matches what actually happens on site. Talk to your provider early if an application is lodged, rather than when the first adjusted invoice arrives.

Same job same pay sits alongside Victoria’s labour hire licensing scheme, not in place of it. A host must still use a provider licensed by the Labour Hire Authority, as covered in our guide to what a Victorian labour hire licence means for host employers. Bluestone Labour Group holds Victorian Labour Hire Licence VICLHL11535, and we supply civil labourers, warehouse staff and production workers across Melbourne.

Questions

Frequently asked questions

No. It applies only where the Fair Work Commission has made a regulated labour hire arrangement order covering the host. Without an order, labour hire workers are paid under their own award or agreement. Orders also cannot apply to hosts with fewer than 15 employees, genuine service contracts or training arrangements.

Yes. The order works by applying the host’s enterprise agreement or workplace determination rate. If no such instrument would cover the workers if the host employed them directly, there is no rate for the order to apply.

The labour hire provider pays its workers the protected rate. The host must provide the information needed to calculate it. In practice the higher wage and the on costs that follow it are passed through in the charge rate.

Generally, yes. Work for a host of three months or less falls outside the pay obligation, although the Commission can vary that period in some cases. Hosts should not rotate workers to stay under the threshold, as the anti avoidance rules are aimed at exactly that.

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Same Job Same Pay, What It Means for Your Site