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Agency and temporary staff (on-hire staff)

Published April 2, 2015 (last updated on June 28, 2024) | Adam Wyatt - Content Writer

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On-Hire Employees

When you employ temporary staff to work for your business it can open up a world of possibilities yet also present a few risks. As an employer, it is your responsibility to meet your workplace obligations and provide a safe working environment for both your temporary and permanent staff.

Under the Fair Work Act 2009 temporary staff are entitled to the same minimum employment rights as permanent staff, as well as the same work, health, and safety laws as well.

Furthermore, they are covered by the National Employment Standards (NES) and the entitlements of their specific Modern Award. Although, if the recruitment agency supplying the temporary staff has their own enterprise agreement, this may replace some or all provisions of the award in your business.

Approaching Employment Agencies

Choosing the right type of recruiting agency is key to reaching a positive outcome. Some agencies cater to a wide range of industries and job types. While other agencies focus on a niche field or industry, where they only offer registered employee who possesses a specialist set of skills, knowledge and experience. Generally speaking, specialist agencies charge higher fees and rates, but offer access to the specific pool of employees you seek.

Why should you approach employment agencies? That depends on your circumstances.

The most common reasons why other employers do it is so they can:

  • Quickly fill a role that has suddenly become vacant

  • Meet supply and demand during a special event (i.e. seasonal event, holiday, or unexpected surge in new projects)

  • Carry out a task that requires specialist skills (which no one else in the company currently has)

Regardless of why you approach an agency, you should be clear as to describe the kind of candidate you are looking for. Key details to mention include your preferred role, job title, specialist skills and experience, and a proposed commencement date of employment. With this information, the agency will draw from their pool of registered employees and present to you only the most qualified candidates for the job.

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Employment Agency Contracts

When you hire temporary staff through an agency, there will be two separate agreements in place: one between you (the employer) and the agency, and another between the agency and temporary staff.

The only agreement you need to be concerned about is the one between you and the agency. This agreement lays out a number of unique terms and conditions including the responsibilities of both parties. While the terms of an agreement vary considerably, the most likely provisions you will come across include:

  • Calculation of fees: Some agencies operate on a fixed-fee basis while other agencies operate on a commission basis. The agreement should clearly state the fee structure and describe how the total fee amount is calculated.

  • Recruitment services: This includes a detailed description of all the services to be provided by the recruitment agency. Depending on the agreement the list of services may include screening candidates, performing interviews, calling referees, and providing training.

  • Replacement guarantee: In some cases, a recruitment agency will offer some kind of replacement guarantee. This means if the first candidate either leaves early or is unsuitable for the position, the agency guarantees to find a replacement within a certain period of time.

  • Payroll services: The wage that the employment agency will pay the on-hire employee. In most cases, the employment agency is responsible for superannuation contributions and payroll tax. However, if you (the client) decide to create a separate employment contract agreement between you and the temporary staff, then you are responsible for payroll tax.

Benefits of Temporary Employment Agencies

There are many advantages to hiring temporary employees. While cost-cutting is one of them, the real calling card lies in the flexibility of the arrangement itself, as it can be modified to meet the specific needs of any business – regardless of size, type or industry.

Other key advantages to temp work and similar arrangements are:

  • Reduce downtime due to a vacant position

  • Reduce the burden and workload on permanent employees during busy periods

  • Take on a higher workload and successfully meet more project deadlines

  • Carry out specialist tasks that no permanent employee in the business can do themselves

Training Temporary Staff

Should your temporary staff already be trained? On a purely technical level, yes. However, they are unfamiliar with how your business does things and, likewise, your permanent employees are unfamiliar with your temporary staff too. If both parties are not on the same page it can raise a number of health and safety red flags.

That is why you need to prepare an employee training plan. Be sure to communicate your workplace policies and procedures to your new temporary staff. And let all permanent employees know ahead of time that a new employee will soon join the company to do temporary work.

If necessary, provide extra onsite training and support until the new employee is comfortable in their role.

Workplace Culture and Diversity

Workplace culture defines the character and personality of your business. It encompasses a number of attributes that make your business unique such as values, beliefs, traditions, behaviour, and attitudes.

For this reason, it is a good idea to define your workplace culture before you hire a temporary employee. This way, you are more likely to find a candidate who not only has the necessary technical skills and knowledge, but who also gets along with your other employees and the environment itself.

Keep an eye out for any instances of workplace bullying or discrimination brought against any temporary staff. Be sure you follow the correct management procedure in a fair and consistent manner.


For most temporary agreements, if you (the employer) are unsatisfied with the behaviour, performance, or conduct of an on-hire employee, you must give reasonable notice before you can legally dismiss them. Before taking action, it is prudent to check any agreements that are in place and your rights and obligations under those agreements.

Always closely review the terms and conditions of a temporary workplace agreement before you sign and before taking action under the agreement. Clarify any confusing terms or conditions so that you know exactly what the agreement means for you.

Peninsula can help you with any doubts you may have about employing agency or temporary staff. For peace of mind, please call our 24 hour help line now on 1300 651 415.

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