Labour hire

Labour hire is the term applied (especially in Australia) to provision of outsourced skilled and unskilled blue-collar workers hired for short- or long-term positions. It is known by other names such as supplementary staffing, labour supply or temping.

The workers, known as contractors, field employees, temps, on-hired employees or even just employees, are employed by the labour hire organisation. They are not employed by the company to whom they provide labour. This is an important distinction for the purposes of Occupational Healthy and Safety (OH&S) purposes, in particular who has legislative responsibility for ensuring a safe working environment. This has been tested in court (see below).

A lot of the time builders have their own interpretation of a schedule of rates.

An essential component of any labour hire organisation are the two fundamental concepts of pay and charge rates. The pay rate is the per-hour wage paid to the employees. The charge rate is the fee levied on the client to whom labour is provided. Although this sounds very basic, many factors must be considered when calculating these two items.

The following items have a bearing on the determination of pay rates:

The following items have a bearing on the determination of charge rates:

The gross margin is generally calculated as a percentage value of the pay rate. In certain circumstances, it may be calculated as a specific dollar markup.

A schedule of rates is typically quoted to the client which includes

The charge rates for physical hours of time (ordinary plus overtime) are typically quoted for the position at discrete classification increments, for example, level 1, level 2, etc.

COSATU is one of the few unions in the world that take a strong stand against labour hire or labour brokering as it is termed in Africa. http://www.cosatu.org.za/show.php?ID=8118

Most legal proceedings against labour hire companies fall into one of two broad categories. The first is unfair dismissal. There are few successful such cases because of the nature of the industry and because organisations are generally careful to emphasise that the work is casual and periodic and cannot be guaranteed. Many labour hire companies are careful to avoid terminology on their staffing systems that may imply an employee has been "terminated" because that can corrupt a defence against unfair dismissal, namely that the employee has not been terminated, there simply has just been no recent placement opportunities.

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