The horrible reasons why big business loves labour hire

Published: 30/05/2023
Category: Job security
Published: 30/05/2023
Category: Job security

‘Labour hire’ may sound unassuming but behind the label hides terrible wages, unreliable jobs, and poor conditions creeping into all industries.  

Labour hire is when a ‘host’ employer hires a worker from a labour hire agency. Initially, employers did this to fill short-term gaps. But over time, ‘host’ employers have learnt to game the system. 

This way of outsourcing workers – rather than directly hiring employees – is a loophole that large corporations use to skirt around wages and conditions set in Awards or enterprise agreements

The practice is rife in aviation, mining, manufacturing and transport, as well as hospitality, agriculture, meat processing, security and cleaning. But it’s not limited to these industries. 

A report from the ACTU has found that big business is outsourcing workers in Australia at rapidly rising rates. At least 600,000 workers are employed through labour hire.  

At the same time, Australian Bureau of Statistics figures show increase in labour hire use and labour hire employees is outpacing employment growth. When you consider how much labour hire rips off workers, that’s a major concern.

How does labour hire rip off workers?

What makes labour hire so attractive for big business is how deeply unfair it is on workers.  

Labour hire workers who perform the same job as direct employees are excluded from receiving the same pay and conditions as the direct employees. It’s also unfair on direct employees whose own pay and conditions are undermined when their employer uses labour hire.  

What does this unfairness look like?  

It’s when two workers work alongside each other and do the same work, but one is on a much lower rate of pay: labour hire workers earn about $4700 a year less than ordinary workers.

It’s when 81 per cent of labour-hire workers work full-time hours yet they do not have full-time jobs – their employment is insecure and unreliable.

It’s also when the labour hire industry has annual revenue of over $30 billion while workers’ wages go backwards. 

And it’s when some big businesses use loopholes in our current laws to get out of paying proper wages and entitlements, such as sick leave and annual leave – some 84% of labour hire workers do not have paid leave and most have no guaranteed minimum hours.

Big business has worked out how to exploit the system to cut wages and job security. They might think it’s clever but it’s simply exploitation of workers via legal loopholes.

It doesn’t have to be this way

Wages are going backwards and have been for 10 years. Add to this the cost of living and the housing crisis and many people are really struggling. 

Too many jobs have been contracted out or made insecure.   

Big companies like Qantas have used loopholes in workplace laws to drive down wages, contract out work, and take away working conditions.   

Australia’s workplace laws need updating to protect workers from loopholes used by some big business to drive down wages and conditions.

Support same job, same pay

Cover photo credit: Verne Ho on Unsplash

The horrible reasons why big business loves labour hire

The horrible reasons why big business loves labour hire