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Writer's pictureBrian AJ Newman LLB

Unions Seek Fair Pay for Labour Hire Workers at Metcash Distribution Centres

In a landmark move towards wage equity, the Shop, Distributive and Allied Employees' Association (SDA) and the United Workers Union (UWU) have jointly filed an application under section 306E of the Fair Work Act 2009 (Cth) ("the Act") to secure Same-Job, Same-Pay (SJSP) orders. These orders, if granted, could significantly increase the pay of on-hire workers at Metcash distribution centres by up to $12,700 per annum.


The Legal Basis: Section 306E of the Fair Work Act

Section 306E of the Act allows unions to apply for orders ensuring that workers employed through labour hire arrangements receive the same pay as those directly employed by the host company, provided that they perform substantially similar work. This provision is crucial in addressing wage disparities that often arise in industries reliant on labour hire firms.


The unions' application targets four labour hire companies: Asset Personnel, Fluid Recruitment, Omni Recruit, and Manpower Services. These companies supply workers to Metcash’s Gepps Cross distribution centre in Adelaide, where the workers perform various tasks such as picking, packing, storing, receiving, dispatching, and forking, which are categorically defined as "storeworker work."

Unions Seek Fair Pay for Labour Hire Workers at Metcash Distribution Centres

Pay Disparity and the Legal Argument

According to SDA SA Branch Secretary Josh Peak, on-hire workers at Metcash are paid approximately 20% less than their directly engaged colleagues, despite performing identical tasks. This disparity is at odds with the principles of the Fair Work Act, which aims to provide equal remuneration for work of equal value.


The unions are seeking an increase of $6.50 per hour for on-hire workers, a rise that would amount to an additional $12,666 per annum for a standard 38-hour workweek. The application references the Metcash Trading Limited South Australian Food & Liquor Enterprise Agreement 2023, which sets the terms for directly employed workers at the distribution centre.


Relevant Case Law

The application draws upon precedents in Australian employment law where the courts have upheld the principles of equal pay for equal work. One such case is CFMEU v BHP Coal Pty Ltd [2017] FCAFC 35, where the Full Federal Court held that labour hire workers should receive comparable pay to directly employed workers if they perform similar duties under comparable conditions.


The case of CFMEU v BHP Coal Pty Ltd centres on a dispute over the pay and conditions of workers employed at the BHP Billiton Mitsubishi Alliance's (BMA) mines in Queensland. Specifically, the Construction, Forestry, Mining and Energy Union (CFMEU) brought the case against BHP Coal Pty Ltd, arguing that BHP had breached the Fair Work Act 2009 by engaging labour hire workers under terms and conditions that were less favourable than those of directly employed workers.


The CFMEU argued that the labour hire workers, supplied by Chandler Macleod and Hays Specialist Recruitment, were performing the same work as BHP's directly employed workers, but were receiving lower pay and less favourable conditions. This discrepancy was claimed to be in breach of the relevant enterprise agreements covering BHP's employees.


The Full Federal Court ruled in favour of BHP Coal Pty Ltd, holding that the company had not breached the enterprise agreements. The court found that the enterprise agreements applied only to the employees directly employed by BHP and did not extend to labour hire workers employed by third parties, such as Chandler Macleod and Hays.


The court reasoned that the enterprise agreements specifically covered BHP’s employees, and since the labour hire workers were not employed by BHP, they were not entitled to the same pay and conditions under those agreements. The court noted that BHP was entitled to engage workers through labour hire companies under different terms, provided those terms were lawful and did not breach any specific contractual obligations.


The decision in CFMEU v BHP Coal Pty Ltd has significant implications for the use of labour hire workers in Australia. The ruling clarifies that enterprise agreements apply strictly to the employees of the company bound by the agreement and do not extend to workers employed by third-party labour hire firms, even if those workers are performing similar tasks under similar conditions.


This case underscores the challenges unions face in securing equal pay for labour hire workers, particularly when those workers are employed under different contractual arrangements. The ruling also highlights the limitations of the Fair Work Act in addressing wage disparities between directly employed and labour hire workers.


Another pertinent case is Kucks v CSR Ltd (1996) 66 IR 182, where the Industrial Relations Commission emphasised the need for fairness in pay and conditions for all workers, irrespective of their employment arrangements. These cases underscore the legal framework supporting the unions' application, highlighting the importance of equitable remuneration in maintaining fair work practices.


To gain a comprehensive understanding of the Kucks v CSR Ltd (1996) 66 IR 182 case and its impact on wage equity in Australia, you can read the full case [here](https://jade.io/article/328365?at.hl=Kucks+v+CSR+Ltd+(1996)+66+IR+182). This case provides valuable insights into the legal foundations of fair pay in the workplace.


Implications of the Application

If the Fair Work Commission grants the SJSP orders, the outcome could set a significant precedent for labour hire workers across Australia, reinforcing the principle that all workers deserve fair compensation, regardless of their employment status. This would also send a strong message to employers and labour hire companies about the importance of adhering to equitable pay practices as mandated by the Fair Work Act.


Conclusion

At 1800ADVOCATES, we recognise the critical importance of this application and its potential to influence future employment practices. The pursuit of fair pay for all workers is a fundamental aspect of our advocacy work, and we will continue to monitor and support efforts to ensure that justice is served in all workplace matters.

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