The Guardian • Issue #2058

Labour hire = Super exploitation

Construction worker with safety helmet and gear on.

Photo: Ben Kerckx –

Labour hire has become a business model where workers are paid less and denied rights that other workers have. The Albanese government plans to address some of the gaping inequalities under labour hire arrangements with Same Job Same Pay legislation under the Fair Work Act. Without seeing any legislation, employer bodies have launched a multi-million-dollar campaign based on lies to protect inequality.

Around 80 per cent of labour-hire workers work full-time hours yet do not have full-time jobs – their ongoing employment is insecure. Almost 85 per cent of labour hire workers do not have paid leave. Most have no guaranteed minimum hours.

Usually a labour hire company supplies workers to undertake work at a host employer’s business. The workers are not directly employed by the host company they work for. Their employer is the labour hire company.

Another, more insidious form is where the labour hire company supplies “independent contractors” or “self-employed” workers to a host company.

In both instances labour hire can be a means to deunionise workplaces, drive down wages and deny workers rights hard-won over decades of struggle.

Labour-hire companies are big business, hiring mainly casual and temporary workers on behalf of large organisations such as the public service and government agencies. The 12 largest labour hire outfits are among the top 30 largest commercial employers with combined revenues of about $20 billion.

They are essentially a law unto themselves with few regulatory restrictions and little clarity over the carve-up of responsibilities between themselves and the companies that use their services. Labour hire workers have few rights and can be sacked with an hour’s notice even after two or three years in a job.

The ACTU estimates that at least 600,000 workers are employed through labour hire. Workers are treated like a commodity to be sold by a labour hire company and bought by another company where they work. The purchasing company takes no responsibility for their wages and other entitlements. There is no transparency. They are cheap labour, quite often migrant, visa, and other vulnerable workers.

In the construction industry it is not uncommon for 90 per cent of workers on a building project to be labour hire. While they are not employed directly by the host company, they are under instructions from that company in relation to what they do, how they do it, and what hours they work.

Labour hire is also common practice in logistics, cleaning, stevedoring, mining, manufacturing, education, nursing, the public service, government agencies, and numerous other sectors of the economy.


Labour hire workers are paid lower wages, and denied entitlements and protections that other workers doing the same job and working alongside them have. It can severely weaken the negotiating power of trade unions through deunionisation.

The ACTU cites the example of two truck drivers working the same hours for the same company where the one directly employed by the company is paid $40,000 per annum more than the labour hire employee.


BHP claims the proposed legislation will cost the company an additional $1.3 billion extra per annum for labour. That says it all! It shows the extent to which its labour hire workforce is being ripped off and could benefit if the proposed legislation does not have loopholes and is enforced.

“If you close a loophole to stop workers being ripped off, it will result in an increase in the wages budget of any company that was using the loophole. We make no apologies for that,” Workplace Relations Minister Tony Burke said.

According to the ACTU, Qantas uses around 14 labour hire companies, many owned by the airline itself. It illegally sacked 5000 employees and replaced them with 9000 part-time workers employed through its own subsidiaries and other labour hire firms. Qantas no longer hires any new permanent ground operations workers.

Qantas now has flight attendants on less than $3 per hour through labour hire companies in Thailand.

Companies such as Serco, ISS, and Stellar have taken over many functions and operations of the public service and government agencies. There is no transparency as to the extent this has occurred and how much more it is costing the public purse as these parasites make huge profits.


In April the government released a consultation paper on Same Job Same Pay which sets out guiding principles for the legislation. These include:

  • Business able to access labour hire for genuine work surges and short-term needs
  • Labour hire workers paid at least the same as directly engaged employees doing the same work
  • Targeted anti-avoidance measures.
  • The legislation defines “same job” in terms of duties set out in or covered by an enterprise agreement or award that applies to the host employer.

“Same pay” means the labour hire worker should get at least the same full rate of pay, which includes incentive-based payments and bonuses, loadings, monetary allowances and overtime or penalty rates.

There is no suggestion that workers with different skill sets or years of experience must be paid the same. Wage rates and responsibilities based on qualifications and years of service are usually specified in awards or agreements.

This puts the lie to the outrageous campaign being waged by employers. (See page 5)


Same Job Same Pay is a step in the right direction, but its sole focus is on labour hire. It does not address the hundreds of thousands of workers in the gig economy who have even fewer rights than labour hire workers.

ACTU President Michele O’Neill says 45 per cent of transport workers in the gig economy are paid less than the minimum wage. Like other gig workers, they are usually responsible for their own insurance, workers’ compensation, superannuation, PAYG tax and other payments. They have no leave entitlements.

It is left open whether the legislation will cover so-called “self-employed” contractors and subcontractors who must also pay for their own insurance, workers’ compensation, leave, etc.

Same Job Same Pay needs to be extended to all workers regardless of their form of employment with guaranteed job security for ongoing work. It should also go beyond pay to cover working conditions, and leave entitlements including long service leave, and workplace health and safety.

What is needed is: Same Job, Same Pay, Same Conditions.

Ultimately, the contradiction between labour and capital will only end with the organisation and struggle of labour and the elimination of the exploitative wage system.

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