The NSW Government has announced it is taking action to protect the pay and conditions of council workers employed by labour hire firms, with new legislation that would prevent workers being paid less than if they were employed directly by councils.
The Local Government Amendment (Labour Hire) Bill 2026 which was introduced to NSW Parliament this week, would require councils to be satisfied that workers will receive at least the same level of remuneration before entering into or amending a contract with a labour hire business.
This would include applicable overtime and penalty rates, incentive-based payments and bonuses.
Currently, there is nothing preventing council park, maintenance or road workers, and many others, being replaced with a labour hire workforce doing the exact same job at the same place and same time, but on lower pay and conditions, said Minister for Industrial Relations, Sophie Cotsis.
“These reforms mean that labour hire workers will now be paid the same pay as workers on the council payroll because two people doing the same job side-by-side deserve the same pay, no matter who is paying them,” said Minister Cotsis.
“These reforms give councils the flexibility they need in using labour hire while making sure those workers are paid properly.
“This is about fairness for workers, and confidence in the people who deliver local government services to our communities.”
The reforms close a regulatory gap that allows labour hire arrangements to undercut council rates of pay, while retaining councils’ flexibility to engage labour hire workers.
This legislation recognises that when councils have legitimate reasons to use labour hire firms over hiring staff in-house, these workers should receive the same renumeration for doing the same job, at the same time, in the same place.
“People doing the same job for the same council should not be paid less simply because they are employed through a labour hire firm,” said Minister for Local Government, Ron Hoenig.
“Councils will still have flexibility to manage their workforces, but using labour hire should not be a way to undercut pay.
“Council workers deliver services our communities rely on every day. Councils need to build and retain skills and experience in their own workforce, and providing secure, fairly paid jobs is an important part of that.”
United Services Union General Secretary, Graeme Kelly said the legislation was long overdue.
“Many councils across NSW have continued to outsource work ordinarily done by councils day labour employees,” said Mr Kelly.
“These jobs go to the lowest bidder delivering insecure employment undercutting pay and conditions.
“This legislation will ensure that any contractors seeking to operate in NSW pay the equivalent award rates in accordance with the Local Government State Award.
“The United Services Union congratulates the Minns Government on this legislation.”
Amendments will be made to the Local Government Act 1993 and as part of this legislation, will make proceedings available in the Land and Environment Court to prevent or remedy breaches.
