Labor to unveil next wave of workplace change as business warns of ‘economic damage’

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The federal government will limit the scope of its controversial labour hire laws to fend off a fierce campaign from business groups to scuttle the changes in the Senate, citing new figures to claim the looming changes will affect only about 67,000 workers.

Employment Minister Tony Burke will promise to target big companies that use labour hire firms to undercut the wages they pay their other workers under enterprise bargaining agreements, in the fourth major element of his workplace changes.

Employment and Workplace Relations Minister Tony Burke argues that workers need protections such as a “same job, same pay” regime to ensure fairness.Credit: Alex Ellinghausen

The promise takes on business fears that the impact could cascade throughout the economy by capturing companies that use outsourcing or smaller firms that rely on labour hire when they do not use the enterprise agreements in place at bigger companies.

“There will always be a place for labour hire when it comes to surge work, short-term arrangements and specialist staff. This legislation does nothing to change that,” Burke said ahead of the introduction of his draft workplace bill this week.

“These changes will affect a small number of workers. But for the workers this affects, closing this loophole will be life-changing.”

Tania Constable, head of the Minerals Council of Australia, which is funding a campaign against the new bill.Credit: Alex Ellinghausen

The government is relying on estimates from the Department of Employment and Workplace Relations that the change will affect only about 67,000 workers, meaning the change would have a “negligible” economic impact.

But the Minerals Council of Australia, one of the peak groups funding an advertising campaign against the changes, expects the impact to be much broader over time.

“The scope of the ‘same job, same pay’ legislation is extraordinarily broad and the potential damage to the economy [is] devastating,” council chief executive Tania Constable said.

“It potentially smothers the entire economy, capturing every business that provides workers, services or skills to another company.

“It is a potential dagger to the heart of investment in this country.”

The government has previewed the introduction of its draft law, called the Closing Loopholes Bill, by revealing how it would make it a criminal offence for chief executives to underpay staff, make it easier for casual workers to become permanent and give “gig economy” workers the right to seek higher pay.

The labour hire changes are the fourth major element of the draft law and aim to stop employers from bringing in workers from a labour hire firm to undercut the pay offered to workers who are working under an enterprise agreement.

The latest statements from the government aim to counter claims that the changes would curb all forms of labour hire, such as when companies need a “surge workforce” or when they use an outsourcer for specialist work or for short-time work.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar.Credit: Alex Ellinghausen

The message from the government is that there would be no impact on employers when the labour hire arrangement offers higher pay than the enterprise agreement, but business groups are warning about the challenge in defining “same job” or “same pay” when labour hire services are ubiquitous across the economy.

As well as the four major elements with changes on wage theft, casuals, the gig economy and labour hire, the draft law includes greater power for the Fair Work Commission in setting minimum standards for trucking, a new offence for industrial manslaughter, greater powers to ensure workplace safety with silica and workplace protections for survivors of family violence.

“Most workers will be unaffected by what happens this year, but for those who are affected – this will be life-changing,” Burke said.

The Australian Chamber of Commerce and Industry warned about the broad impact of the four major elements of the draft law after Burke acknowledged on Sunday that households could pay more for food delivery as a result of the higher pay for drivers.

“It appears that the government is just making it up on the run, making arbitrary distinctions between platforms and occupations, and leaving businesses to deal with the mess,” chamber chief Andrew McKellar said.

“The minister has already conceded that these proposals will increase the cost of food and other service deliveries, but we think other legislators will be alarmed that they are being asked to increase the cost of living and add complexity for business.”

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