Regulated labour hire arrangement orders

We can make an order that requires labour hire employees working for a host business to be paid at least the same rate of pay as employees of the host business who are doing the same kind of work.

We can only make these orders if someone asks us to do so (applies).

This type of order is called a regulated labour hire arrangement order.

• The employees covered by the order are called regulated employees. 
• The host business is called the regulated host. 
• The rate of pay is called the protected rate of pay.
• An enterprise agreement or other covered employment instrument that applies to the regulated host, and would apply to labour hire employees if the regulated host were to employ them directly, is called the host employment instrument.

You can apply for a regulated labour hire arrangement order if you are:
•    a regulated employee
•    an employee of the regulated host
•    an employee organisation (union) that can represent a regulated employee or an employee of the regulated host
•    the regulated host.

Labour hire employers (of the regulated employees) cannot apply for an order.

When someone applies for a regulated labour hire arrangement order, we must make the order where:

• an employer supplies, or will supply, either directly or indirectly, one or more employees to a regulated host to perform work for the regulated host
• the regulated host is not a small business employer, and
• the host employment instrument would apply to those regulated employees if the regulated host were to employ them directly to perform work of that kind. 

We must not make a regulated labour hire arrangement order if: 

• the performance of the work is, or will be, wholly or mainly (principally) providing a service, instead of supplying labour, or 
• it is not fair and reasonable in all the circumstances to do so.

The protected rate of pay is generally the full rate of pay that would be payable to a regulated employee if the host employment instrument applied to them.

If an employer needs more information to calculate the protected rate of pay, they can write to the regulated host to ask them to provide the information they need. The regulated host must provide the information that the employer asks for.  

Exceptions to paying at least the protected rate of pay  

The protected rate of pay requirements do not apply:

• to trainees, or
• if an exemption period applies.

Exemption periods

The protected rate of pay requirements generally do not apply to short-term arrangements (engagements of 3 months or less).

This is called an exemption period.

However, we can, if someone asks us to (applies), decide that:

• a longer or shorter exemption period applies
• a recurring extended exemption period applies, or 
• no exemption period applies. 

We can do this:

• while an application for an order is still being decided (is before the Commission), or
• after an order has been made.

You can apply for a different exemption period if you are: 

• the regulated host
• an employer covered by the order
• a regulated employee covered by the order who performs, or will perform, work for the regulated host, or
• an organisation (such as a union or employer association) that can represent any of those people or businesses.

We can change (vary) a regulated labour hire arrangement order in certain circumstances.

If a regulated host enters into an arrangement with a new employer(s) to supply employees to perform the same kind of work for them, the host must apply to change the existing order to include any new employers and their employees.

You can apply for a variation any time, but it cannot come into force until 1 November 2024.

We will publish new forms soon. Until then use our General application form (Form F1) to apply.

Where a regulated labour hire arrangement order is in force and the host employment instrument is replaced by a new instrument, the order will have effect as if the new instrument were the host employment instrument. This is subject to certain conditions.

As this is a new area of law, we are developing guidelines to help parties understand how regulated labour hire arrangement orders work.

We will consult broadly as we develop these guidelines. We encourage you to subscribe to Announcements to stay up to date with the consultation process.

We will publish the guidelines by 1 November 2024.