Building Service Contractors Association of Australia Ltd

WEBINAR: IR Law Update – Closing Loopholes Bill with Mark Diamond, Workplace Advisory Group

BSCAA Member Exclusive Webinar with
Mark Diamond, Workplace Advisory Group

Closing Loopholes Bill
Targeting Labour Hire and Sham Contracting

Wednesday 27 September 2023, 10:30am AEST

BSCAA is pleased to present Mark Diamond, Workplace Advisory Group who will discuss the Closing Loopholes Bill and the potential changes that may impact your business.

The Government’s Closing Loopholes Bill has been introduced to Parliament.  The Closing Loopholes Bill in Australia, as proposed by the Workplace Relations Minister Tony Burke, includes measures that address sham contracting and seek to enshrine the principle of “same job, same pay” as a means of discouraging the use of labour hire. The bill introduces tougher penalties for employers who engage in sham contracting. It also includes provisions that ensure that workers who are engaged as independent contractors are genuinely self-employed and not misclassified to avoid their entitlements.

The bill also enshrines the principle of “same job, same pay” with particular reference to the labour hire industry. What the Bill does is impose an obligation on businesses with an EBA to pay no less than those EBA rates of pay to service providers aka labour hire. Will this affect contract cleaning? It may, but at the moment, the Bill is still being debated in the Parliament, so the final outcome may look different than it does now.

  1. The defence available to an employer in a sham contracting prosecution has changed to an employer would not contravene the prohibition on sham contracting in subsection 357(1) of the FW Act if the employer reasonably believed that the contract was a contract for services. The sting in the tail here is that the burden of proof lies on the employer. For any cleaning business that thinks it can get individual cleaners working on ABNs and do so legitimately, there needs to be a massive reality check. This is no longer legally possible if indeed it ever was.
  2. Small subcontractors who are genuine labour suppliers to cleaning businesses can now dispute the terms of their subcontract in the Fair Work Commission. They have to fall below a high earnings threshold (which will be around $170K per annum), but that is an earnings threshold, not a revenue threshold. Cleaning businesses that use legitimate, smaller subbies need to be aware of this change. Subbies can now take you to the Fair Work Commission in the same way that employees can. It’s a big change.
  3. Unions are now empowered to make an application to the Fair Work Commission for what is called “ a regulated labour hire arrangement order”. This order mandates payment of a service supplier’s workers at the same rate as the host organisation would pay its workers. This would have significant ramifications if the union could prove that the host would pay more for cleaners or security if they directly hired them. If the union could prove their case, then FWC has the power to issue an order that directs the employees to be paid at that higher rate. This could be quite destructive to both contract cleaning and security services.


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