Workplace umpire rules against BHP, sending shock-waves through industry and jeopardising thousands of jobs

The unions have leveraged the Albanese Government’s controversial labour hire reforms to win a landmark decision against BHP, which is set to have a “flow-on effect throughout the mining industry”. A ruling by the Fair Work Commission means BHP will now have to fork out an extra $66 million in wage rises per year to more than 2,000 workers at three of its Queensland coal mines. “Around 2,200 mine workers are now in line for annual wage rises in the order of $30,000 in the most significant win so far by Australian Unions using ‘same job, same pay laws’ to secure wage rises,” the Australian Council of Trade Unions said on Monday. “This decision will have a flow-on effect throughout the mining industry and well beyond that, as employers realise that using labour hire rorts to undercut wages is no longer lawful.” A BHP spokesman warned the decision, which was sought by the Mining and Energy Union, will “have implications for our business”. “Operations services, as a mining services provider, is delivering compelling job opportunities and career pathways for 3700 people, and productivity-enabling value for BHP,” he said. “We note the FWC ruling, and we are studying the decision and will comply with any orders made. Clearly this will have implications for our business.” BHP lost a similar case at the FWC earlier this year for its Mt Arthur coal mine in New South Wales, but the Queensland case was seen as a key litmus test of the contentious ‘same job, same pay’ legislation. It has essentially killed off employers, like BHP, getting carve-outs for specialised contractors to be exempt from FWC orders relating to the controversial legislation. ‘Same job, same pay’ came into effect in October and was the headline policy reform of the Albanese Government’s second tranche of industrial relations laws. It was touted as a way to stamp out the overuse of labour hire firms to pay lower wages, but industry groups have warned unions are using the laws to overreach. BHP previously said the laws impact thousands of jobs and the dividend payments more than 17 million Australians receive directly as investors or indirectly through their superannuation. BHP’s former chief financial officer David Lamont in 2023 estimated more than $1 billion would be wiped from the Big Australian’s earnings each year. “That $1.3b (impact) will come directly off our earnings for the year that will then flow directly to dividends,” Mr Lamont said. “We estimate that to be about 30¢ on a dividend pay out. And that will . . . impact the 17 million Australians that hold BHP shares either directly or through their retirement savings. “Another way to look at it (is) that $1.3b is equivalent to around about 5000 jobs at BHP.” Minerals Council of Australia chief executive Tania Constable on Monday said the group was “deeply concerned” by the “incredibly disappointing” precedent set by the national workplace umpire. “This is an incredibly disappointing decision that will directly threaten thousands of specialised contractors who play a vital role in mining operations across the country,” Ms Constable said. “Unlike labour hire, these businesses exist to provide a specialised service, not just workers, and should never have been covered by these laws. “The Commission’s ruling confirms what the MCA has long argued; that the government’s legislation goes well beyond its original promise to target only the ‘limited circumstances’ where ‘labour hire’ is used to deliberately undercut wages.” Federal Minister for Employment Amanda Rishworth said the Albanese Government “welcomed” the decision made by the FWC. “The decision will lift the pay for thousands of workers across Central Queensland and is a direct result of our changes to workplace laws,” Ms Rishworth said. Shadow Minister for Employment Tim Wilson said the decision shows “Labor tricked parliament” to pass laws that “hurt business competitiveness”. “Today’s decision shows the reality of the laws Labor tricked business and the Parliament to support saying it was solely focused on labour hire — unions get their payback, while Australians pay,” Mr Wilson said. Acting WA Premier Rita Saffioti was reticent to pick a side. “It’s absolutely essential we get the balance right to progress better outcomes for workers while also ensuring we support the mining and resources sector, which plays such a critical role to both the state and national economy,” Ms Saffioti said. “Everyone in the industry — both employers and unions — have a responsibility to do the right thing by workers and the broader WA community.”