Major employer groups are banding together to oppose the next phase of the federal government’s industrial relations reforms involving labour hire workers.

The government is seeking to close a loophole that allows companies that have negotiated a pay rate with their workers to then pay labour hire contractors less for the same job.

But the eight industry groups representing hundreds of businesses said the ‘same job, same pay’ reform is a retrograde policy that will deny contract workers the ability to negotiate ‘more pay for harder work’.

‘It means by law, employers will have to pay workers with little knowledge or experience exactly the same as workers with decades of knowledge and experience,’ they said in a joint statement on Monday.

‘It means by law, you cannot earn better pay by working harder or longer, if your colleague does not share your ambition or work ethic.’

Industry groups say the "same job, same pay" reform will take away incentive for workers.

Industry groups say the "same job, same pay" reform will take away incentive for workers.

Industry groups say the ‘same job, same pay’ reform will take away incentive for workers. 

‘Same job, same pay’ will take away worker incentive and reduce productivity, they argued.

‘This is not fair for workers or their employers.’

The employer groups are the Australian Chamber of Commerce and Industry, Australian Petroleum Production & Exploration Association, Business Council of Australia, Council of Small Business Organisations Australia, Master Builders Australia, Minerals Council of Australia, National Farmers Federation and the Recruitment, Consulting & Staffing Association.

‘Claims that labour hire workers across the economy are paid less than employees are patently false,’ ACCI CEO Andrew McKellar said.

‘On average, labour hire employees are earning more than their permanent counterparts.’

National Farmers Federation CEO Tony Mahar said the change would create red tape for farmers who ‘don’t have lawyers or an HR department’.

Minerals Council of Australia CEO Tania Constable said it wasn’t fair that a worker with six-months’ experience could demand the same pay as someone with six-years’ experience.

Master Builders Australia Acting CEO Shaun Schmitke said the use of independent and subcontract workers in the industry was a long-standing and legitimate arrangement.

‘The policy is not about closing a ‘loophole’ rather it ties the hands of the building and construction industry at a time when communities are crying out for more housing and projects to be delivered,’ he said.

The workplace reforms are due to come into force by the end of the year.

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