• Media Release

Service contractors captured in IR net

Senior officials from the Department of Employment and Workplace Relations have today confirmed that thousands of service contractors and millions of Australian workers will be unwittingly captured by the Albanese Government’s so-called ‘Same Job, Same Pay’ legislation, despite Employment Minister Tony Burke’s repeated claims to the contrary.

The Minister’s own department today revealed the truth about the broad and pervasive reach of its industrial relations upheaval, admitting that service contractors can be captured by the Same Job, Same Pay component of the bill, unless they can litigate their way out through the Fair Work Commission.

The confirmation completely contradicts Employment Minister Tony Burke’s repeated claims that his so-called Same Job, Same Pay legislation excludes service contractors.

“Completely, completely. Service contractors have been deliberately excluded,’’ Minister Burke said on September 3.

At the Senate’s Education and Employment Committee estimates hearing today, department officials confirmed that merely “the intent is to exclude them through Fair Work Commission’s discretion’’, but that “there is no strict provision in the bill preventing (their inclusion)”.

After suggesting that there was “not a strict prohibition against the inclusion of service contractors,’’ one department official told the hearing:

“The practical reality is they might be asked (to litigate their way out of being captured). They might be asked to demonstrate to the (Fair Work) Commission why and how it is a service contract rather than a provision of labour.’’

“We are aware it’s an issue,’’ the official confirmed.

As the business community has long stated, contractors will be required to lawyer up, head to the Fair Work Commission and prove via a complex 12-point test that they shouldn’t be captured by the legislation. And even if they can satisfy the Commission that they are a service contractor, there is no guarantee that they will escape the clutches of Same Job, Same Pay. It is simply one element of the 12 point multi-factor test.

For those that fail the test _ and given the broad definitions and vagueness of the test, many will _ they will be required to pay their employees the same full-rate of pay and entitlements, including bonuses, share entitlements, and health care of a full-time worker in that host business.

No matter the experience, age or qualification level.

It is a burden that will crush small to medium businesses, making many contractors simply unviable.