Farmers join alliance to fight against 'same job, same pay' laws

The government is seeking to introduce "same job, same pay" laws, which would close loopholes allowing companies that have negotiated a pay rate with their workers to then pay labour hire contractors less for the same job.

The alliance of major employment groups say the proposal would not reward experience or loyalty, and deny contract workers the ability to negotiate "more pay for harder work".

National Farmers' Federation chief executive Tony Mahar said the proposal was "unfair, unreasonable and actually unrealistic".

"What it will do is remove the incentive for hard work, it'll remove the recognition for experience, expertise and initiative," Mr Mahar said.

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Farmers don't have "HR departments to work out contracts", Mr Mahar said, they used labour hire firms, which would have their capacity to operate limited under the reforms.

"It will add another layer of complexity to what is already an incredibly difficult and unworkable IR system," Mr Mahar said.

"If this continues in this direction, we'll undermine our global competitiveness from an agricultural industry point of view. This same job, same pay scheme will undermine that process and potentially means our farmers are not globally competitive."

Nationals leader David Littleproud said the conflict boiled down to "fairness and reward for effort".

"You take away one of the mechanisms that businesses have to reward their employees financially, in differentiating them for their efforts," Mr Littleproud said.

"Somebody working on a farm, factory or construction site for six years, but someone who just walks in and started with no experience and in six months is on the same pay.

"There's no premise around showing initiative, showing a reward for effort. That's just something that I think tears away at the very heart of our society and what has driven productivity."

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Treasurer Jim Chalmers said the IR overhaul wasn't about stopping businesses rewarding experience, it was about "closing loopholes" to ensure labour hire and casual workers were used in the way they're intended.

"We recognise that there's a role for labour hire, whether it's expert work, whether it's surge capacity; we know that there's a role there," Mr Chalmers said.

"But we don't want to see it used as a sort of ongoing way to undermine and undercut people's pay and conditions that have been negotiated with employers. That's our motivation here."

The workplace reforms are due to come into force by the end of the year pending the laws passing parliament.