New legal protections for gig and labour-hire worker: Here's what you need to know

The Australian government’s new legislation aimed at providing fairer working conditions for labour-hire and gig economy workers is a game-changer for these sectors. With thousands of workers across the country set to benefit, this new law represents a significant step toward ensuring that workers receive the same rights and pay as their direct-hire counterparts, addressing longstanding issues of wage inequality and poor working conditions.

A new era for labour-hire workers: ‘Same job, same pay’ legislation

Labour-hire workers in Australia have long been subjected to pay disparities despite performing the same roles and tasks as their full-time, direct-hire colleagues. However, beginning on Friday, a major shift has occurred with the introduction of the government’s ‘Same Job, Same Pay’ legislation. This new law mandates that all labour-hire workers be paid on par with the permanent employees of the companies they work for, a move that’s set to affect a range of industries, including airlines, meat processing, and mining.

Under the Fair Work Commission’s initial approvals, more than 2,000 airline cabin crew, 200 meat-processing workers, and 350 miners are expected to receive significant pay increases. These increases vary in size, with some workers set to see wage hikes of up to 28%.

Addressing wage inequality in labour-hire

The driving force behind the reform is the government’s effort to close the loopholes that have allowed employers to exploit workers in the labour-hire industry. Workplace Minister Murray Watt highlighted that while there is a legitimate place for labour-hire to meet seasonal or surge demands, the system had been used for too long to undercut wages.

“There is a legitimate place for labour hire, especially to address surge or seasonal workforce needs, but the labour hire loophole has been used for far too long to undermine agreed wages, and our reform will put an end to this for good,” Watt stated.

The law now requires that workers performing the same tasks, wearing the same uniforms, and showing up for the same shifts week after week, must be paid the same as their direct-hire counterparts. In the past, this wasn’t the case, with labour-hire workers often paid significantly less for doing identical work.

Rick Catanzariti, partner at DLA Piper, commented that the legislation was a necessary move to ensure fairness in pay. “It’s attractive to the host employer to use less costly labour,” Catanzariti said, “but now the law says that labour hired from an agency cannot be paid less than the direct employees for the same work.”

This legislation is expected to have a far-reaching impact across industries that rely on large numbers of casual or outsourced workers. Over 40 more pay agreements are currently under review, and union leaders are optimistic that the law will correct years of pay disparity. The Australian Council of Trade Unions (ACTU) has long lobbied for changes like this, with Secretary Sally McManus voicing strong support for the law.

“This is a win for workers,” McManus said. “It means workers won’t have to go through the situation where they are working alongside others and doing the same job but for less pay. This law will ensure fairer pay for those who do the same work but have been treated unequally for far too long.”

Union concerns and legal pushback

While unions and many workers are welcoming the law, there are concerns about how employers might react. Some large, cash-rich companies have the resources to challenge these new rules in court, potentially delaying or limiting the impact of pay increases. McManus also warned that employers could use the lead-up to the next federal election to lobby against the changes, seeking to reinstate the loopholes.

Despite this, the union movement is prepared to defend these changes. Teri O'Toole, Federal Secretary of the Flight Attendants' Association of Australia, expressed the importance of these reforms for the aviation industry. “Some of our cabin crew can earn significantly less than directly employed crew despite doing the same job, all because they are technically employed by a labour-hire company,” O'Toole said. “These pay rises will go a long way in restoring dignity to our profession.”

A new frontier for gig economy workers

While the labour-hire sector is seeing significant changes, the gig economy is also experiencing a transformation. Gig economy workers, particularly those in food delivery and transport, have long been plagued by low pay, no job security, and a lack of essential worker protections like sick leave. For many gig workers, the promise of flexible work has been overshadowed by exploitation, with companies like Uber and Deliveroo profiting off the backs of underpaid, unprotected workers.

In December 2023, the Australian government passed new legislation that defines gig economy workers as ‘employee-like’ and extends key rights and benefits to them. For the first time, gig workers are entitled to the same protections as other employees, including fair pay, safe working conditions, and access to benefits such as sick leave.

From August 26, 2024, gig economy workers are being classified as ‘employee-like workers’ under Australian law, which means that digital platforms like Uber must meet the same legal standards for their workers as any other employer. This includes the right to a fair wage, safe working conditions, and the ability to take disputes to the Fair Work Commission if necessary.

A long time coming

For years, gig economy workers have operated without the safeguards that traditional employees benefit from. Companies that operate in this space have used legal loopholes to avoid paying workers minimum wages, denying them worker’s compensation, and failing to ensure their health and safety. These exploitative practices have resulted in tragic accidents, with workers in the transport and delivery sectors facing dangerous working conditions and, in some cases, losing their lives while on the job.

However, with the passing of the new laws, these protections will be extended to those working in the gig economy. The Transport Workers Union (TWU), which has long campaigned for these changes, wasted no time in acting. In the days following the law’s passage, gig economy workers lodged their first complaints with the Fair Work Commission.

The new law gives the Fair Work Commission the power to assess whether gig workers are being paid fairly, and to ensure that digital platforms meet the minimum wage standards. Workers can now expect better pay and conditions, as well as the ability to negotiate their terms and receive appropriate workplace protections.

What does the future hold?

These legislative changes are only the beginning. As more gig economy sectors are brought under the ‘employee-like’ classification, the full impact of these changes will become clearer. Already, the TWU is preparing to file more applications that will cover all areas of the transport industry.

While the government’s reform efforts are seen as a victory for workers, there is still much work to be done. The road ahead will require ongoing vigilance, as companies attempt to push back against these changes. Legal challenges are expected, and unions are ready to stand firm in the face of these challenges.

For workers in the labour-hire and gig economy sectors, this is a moment of significant change. These reforms are designed to address deep-rooted inequality and improve working conditions for some of the most vulnerable workers in Australia. As the ‘Same Job, Same Pay’ and gig economy legislation rolls out, workers can look forward to a fairer, more equitable future in which they receive the pay and protections they deserve.

The bottom line

In the long term, these reforms are expected to improve the financial stability and quality of life for many Australians working in these sectors. The new laws are a response to the growing demand for fairer wages and better working conditions, and they are part of a broader global trend toward recognizing and protecting the rights of gig and contract workers.

As more industries come to terms with the changes and more gig workers step forward to assert their rights, Australia’s labour market is set to undergo a transformation that could ripple out far beyond the gig economy and labour-hire sectors. These new rights and protections for workers are expected to serve as a model for other countries looking to tackle similar challenges of inequality and worker exploitation.

Ultimately, this is a win for Australian workers and a step forward in creating a fairer and more sustainable workforce for the future.