Following negotiations between AREEA and the federal government, contracting businesses delivering services to resources, energy and all other sectors of the Australian economy will be exempt from proposed new labour hire regulation.
In significant amendments to the government’s Closing Loopholes Bill, set to be introduced to the Lower House of the Australian Parliament, the Fair Work Commission (FWC) will be unable to make labour hire pay orders where businesses are providing a service to a client rather than supplying labour.
AREEA Chief Executive Steve Knott AM said: “This is the guarantee AREEA has fought long and hard for on behalf of the Australian resources and energy industry.
“With the government committed to passing its “Closing Loopholes Bill” into law, protecting the resources and energy sector supply chain has been the overwhelming priority for AREEA and its broad national membership.
“The industry cannot operate without contract mining and petroleum production services, maintenance service contractors, shutdown service providers, facilities management providers and other specialist service providers – none of which are ‘loopholes’ to circumvent client enterprise agreement rates.
“These contracting arrangements are essential to the resources and energy projects that account for 15 per cent of national economic output, which enabled the federal government to deliver its $22 billion Budget surplus and, according to the ATO, pay more tax than all other sectors combined,” said Knott.
The amendments to Part 6 of the Closing Loopholes Bill will prevent the FWC from making a labour hire pay order unless it is satisfied the arrangement is not for the provision of a service, and instead is supply of labour to a client.
Tight criteria will direct the FWC to focus only on factual matters of supervision, control, provision of equipment, statutory obligations and whether the work is of a specialist or expert nature.
The improvements to the bill come after constructive talks with Employment and Workplace Relations Minister Tony Burke and department officials, where AREEA and executives from key members provided the government with practical examples on the differences between service contracting and labour hire in the resources sector.
“AREEA’s century-long expertise in industrial relations was pivotal in consultations with government as we brought forward a compelling case to carve out specialist service contractors from the proposed labour hire legislative reforms,” said Knott.
Knott stated that these negotiations have been complex, extensive and not without challenges, however, AREEA and Minister Burke have engaged in such consultations in good faith.
“Legal review has confirmed the negotiated amendments would significantly strengthen the service contractor exemption and ensure only businesses providing labour hire to clients could be captured by future orders,” said Knott.
