Big business is outsourcing labour in Australia at rapidly rising rates, undermining wages, job security and conditions in all industries. The practice is rife in aviation, mining, manufacturing and transport, as well as hospitality, agriculture, meat processing, security and cleaning.

At least 600,000 workers, or 3.5% to 4.5% of the workforce, are employed through labour hire, new research by the ACTU finds. At the same time, Australian Bureau of Statistics (ABS) figures show growth in labour hire use and labour hire employees is outpacing employment growth.

“When two workers are working alongside each other and doing the same work, but one is on a much lower rate of pay because their employer has been clever enough to use a different company to employ one of them, this is not fair,” ACTU president Michele O’Neil says.

“When the labour hire industry has annual revenue of $30 billion to $40 billion while workers’ wages are going backwards because business has worked out how to game the system to cut wages and job security, this is not fair.

“Two people working alongside each other doing the same job should get the same pay. Nothing could be simpler or fairer than that.”

About 81% of labour-hire workers work full-time hours yet they do not have full-time jobs, meaning their ongoing employment is insecure. Some 84% of labour hire workers do not have paid leave and most have no guaranteed minimum hours. They earn about $4,700 a year less than ordinary workers when comparing the median hourly rate for a full-time worker, the ACTU research finds.

Labour hire was originally intended to fill short-term gaps, but big businesses are now using complex, multi-tiered, opaque structures to outsource then ‘re-source’ labour. This enables big business to erode job security and avoid the wages and conditions set in awards or enterprise agreements.

“Some big businesses are using loopholes in our current laws to get out of paying proper wages and entitlements, such as sick leave and annual leave. Businesses are upset that they have been exposed manipulating the system to cut wages and now we have a cost-of-living crisis,” Michele says.

“The Government must act to restore fairness. We need measures to ensure workers who do the same work are paid the same wages. If our laws are not updated to close the legal loopholes big business is using, workers and their families will continue struggling to keep their heads above water while big business posts soaring profits and CEO bonuses go up.”