In what appears to be a first for regulated employers across Australia, MST Lawyers have successfully defeated an application for a Regulated labour Hire Arrangement Order (RHLAO) under the Fair Work Act 2009.
This decision provides useful guidance on when an arrangement will be considered labour hire, as opposed to the provision of a genuine service.
Background
The Australasian Meat Industry Employees’ Union (AMIEU) sought to apply the ‘same job same pay’ provisions to a specialised cleaning company, TCS (AUS) Pty Ltd ATF TCS Trust, trading as Cleaning Edge Solutions (TCS).
TCS provides cleaning services to a poultry processing facility operated by Bartter Enterprises Pty Ltd (Bartter).
Under the “same job same pay” regime, a RHLAO can require labour hire workers to be paid the same rate of pay as directly employed workers. A key issue in this application was whether TCS was supplying labour to Bartter or instead providing a specialised service.
Specialised cleaning is the provision of a service, not labour
The Fair Work Commission determined that the cleaning work performed by TCS employees was the provision of a service, rather than the provision of labour.
In reaching this conclusion, it was observed that:
- TCS supervised, instructed, rostered and trained its workers at the processing site;
- Bartter was not involved in the direction, training or supervision of TCS employees;
- Bartter had no involvement in the development of TCS policies;
- The work performed by TCS was specialised in nature; and
- Bartter engaged TCS as an expert cleaning provider to meet its food safety obligations
Having regard to these factors, Deputy President Saunders dismissed the application.
Why this matters
This decision reinforces the distinction between workers are truly part of a labour arrangement and workers who are delivering a specialised service. Where an employer retains control over its workforce and delivers a specialised service, the arrangement is less likely to be characterised as the provision of labour.
It confirms that:
- not all outsourced work will fall within the same job same pay regime;
- the level of control, supervision and independence remains critical; and
- properly structured service arrangements may fall outside the scope of a RHLAO.
For businesses, this highlights the importance of how arrangements are structured in practice – particularly in industries where outsourcing is common.
How MST Lawyers can help
Businesses who have concerns about whether the same job same pay rules apply to their arrangements should seek tailored legal advice.
MST Lawyers’ Employment Law team can assist with:
- advising on RHLAO risks;
- reviewing labour hire and service arrangements; and
- representing businesses in proceedings before the Fair Work Commission
If you have any questions in relation to this article or employment practices more broadly, please reach out to MST Lawyers’ employment law team or request a consultation with MST Lawyers.Article by Micheal Niu, Lawyer Employment Law Team
