‘Same job, same pay’ case could turn outsourcing on its head, recruiter says

A “same job, same pay” application lodged by an ATO phone operator could upend Australia’s labour outsourcing industry, a recruitment specialist has said.

Last week, the Fair Work Commission (FWC) held a preliminary hearing for a “same job, same pay” case lodged by an Australian Taxation Office (ATO) phone line operator employed by business process outsourcing (BPO) firm Probe Operations.

James Witcombe, director of SMAART Recruitment, told HR Leader’s sister brand, Accountants Daily, that the case could upend the business model that made labour outsourcing profitable and set a precedent across the Australian contact centre industry.

“The ATO outsources this type of work for a number of reasons, but one of the large reasons is these providers can do the work more cheaply, basically. It’s certainly not the only reason, but it is definitely one of the main reasons. And they have to pay their own staff a lot more than these BPOs do,” Witcombe said.

“So if that advantage is removed, then you’re looking at a really big change to the whole landscape of outsourcing for labour.”

SMAART Recruitment’s 2025 Contact Centre Best Practice report found that the average customer service agent working in the public sector was paid $70,475 plus super in 2025, while the average BPO customer service agent was paid $53,240 plus super.

The Community and Public Sector Union (CPSU), which has joined the ATO phone operator’s “same job, same pay” application, estimated that the ATO employed up to 2,000 contract workers at any given time through for-profit call centres Probe, Concentrix, and Serco.

Extrapolating the salary differences across these 2,000 workers, the labour costs for BPO firms could increase by approximately $34.5 million annually if contract workers were to be paid the same as public sector employees.

If the FWC application were to be successful, Witcombe predicted that the ATO would foot the bill, as BPOs would likely be unable to afford to match public sector salaries without significant adjustments to their existing contracts.

“At the end of the day, if Probe has to pay the same salary as the ATO, then in some ways it … changes the large advantage for needing to use an organisation like Probe, and it will put a lot of the responsibility back onto, in this case, the ATO,” Witcombe said.

“Whoever is going to have that contract now has to pay their employees a lot more, they have to charge the ATO a lot more. The margins are extremely thin on these contracts. So Probe Group, the only way they make money off a contract like this is because they’re literally handling hundreds of thousands of calls.”

He added that low remuneration contributed to staff turnover at BPOs such as Probe Group, likely contributing to declining service quality observed by tax agents in recent years.

“There’s no doubt they have high turnover. But again it’s because BPOs pay the lowest in the whole contract centre industry. So if you’ve been at a BPO contact centre and you’ve been there for six months and you’re on $55,000, it’s not that hard to move to a job that’s paying $60–65,000,” Witcombe said.

“That’s why you probably get lower service from Probe Group. But it’s not because the employees there are any worse. Their average tenure is just far shorter because they want to go and work somewhere where they’re going to get paid more.”

In a recent review of the ATO’s tax agent phone line, Tax Ombudsman Ruth Owen found that tax agents were overwhelmingly dissatisfied with the ATO’s service and reported “inconsistent advice and a lack of suitably skilled staff”.

External contractors answered over 85 per cent of agents’ calls to the ATO, and only 44 per cent of contractors had a tenure exceeding 12 months, the review found. The Ombudsman estimated that approximately 50 per cent of agents’ calls were handled by less experienced officers.

The next FWC hearing for the “same job, same pay” case is due to be held in mid-February 2026, according to the CPSU.

The union said it would argue that the contract workers performed “core work” for the ATO, that their work overlapped with that of the ATO employees, and that the ATO set the day-to-day tasks, workflow priorities and KPIs of the contract workers.

The CPSU noted that the application could fail if the work performed by the employee was deemed to be the supply of a service to the ATO, not a supply of labour, or if the FWC found it wouldn’t be “fair and reasonable” to make a regulated labour hire arrangement order, given the circumstances.

Witcombe said the government’s tendency to offer contracts to the lowest bidder had incentivised labour hire firms to pay their workers as little as possible.

“My own personal opinion is that the government has caused this problem themselves because they will go out to tender and say, hey, we want a call centre to help us with this overflow of calls. And they nearly always award it to the lowest bidder … because that’s going to represent the greatest dollar savings back to the government,” he said.

“The government has asked them to quote lower and lower, and then you end up with any employee on a very low salary. And that has got us to the place we’re in now.”

This article first appeared on HR Leader’s sister brand, Accountants Daily.