Landmark case involving BHP to test Same Job, Same Pay laws

Fair Work Commission hears case against BHP on labour hire workers

Landmark case involving BHP to test Same Job, Same Pay laws

Mining giant BHP is in the spotlight as hearings begin as part of a landmark case that will test the Same Job, Same Pay laws.

The Mining and Energy Union (MEU) has filed a case seeking to boost the wages of 1,600 BHP labour hire workers across three Queensland mines. These workers, at Peak Downs, Saraji, and Goonyella Riverside, claim they are earning $10,000 to $49,000 less than their permanent counterparts, despite doing the same work.

This legal battle could decide whether BHP's labour hire staff, including those working through its subsidiary Operations Services (OS), should receive Same Job, Same Pay entitlements, ABC News reported.

Same Job, Same Pay reforms

Last year, the Australian government passed industrial reforms in a bid to address the labour hire loophole that puts some workers at a disadvantage when it comes to pay. The loophole refers to a situation where labour hire workers are paid significantly less despite performing the same job and working the same shifts with other regular employees whom they work with.

These labour hire workers are engaged by a labour hire employer, who sends them to a host employer, with the labour hire employer responsible for their pay and entitlements.

"These workers are doing the same work, wearing the same uniforms, and turning up to the same shifts week after week, yet are paid significantly less than other staff they work alongside," said Employment and Workplace Relations Minister Murray Watt in a previous remark.                                                                           

To address the issue, the government introduced the Same Job, Same Pay rule to ensure that labour hire "cannot be used purely to undercut enterprise agreements reached by host employers."

BHP's case at the FWC

BHP has argued that employees under the OS model are not classified as labour hire workers, but as service contractors performing specialist tasks, with their pay tied to performance metrics instead of hours worked.

The company's submission to the Fair Work Commission (FWC) stresses that the work these employees do is distinct from simple labour supply.

BHP's OS model has provided more than 4,000 permanent, well-paid jobs, complete with job security, training, and growth prospects, according to the mining giant. It noted that over 200,000 people have applied for these positions, said ABC News.

In response to applications made by the MEU and the Australian Manufacturing Workers Union (AMWU) for Regulated Labour Hire Arrangement (RLHA) Orders under section 306E of the Fair Work Act 2009 (Cth), BHP argues that the work arrangement constitutes the provision of a service, citing several factors:

Service provision model:

    • OS entities operate under Framework Agreements and Site Work Packages (SWPs), with performance metrics tied to production and maintenance outcomes rather than labour hours.
    • The agreements outline specific deliverables and performance targets, with financial penalties for underperformance, indicating service provision rather than labour supply.

Operational structure:

OS Production and OS Maintenance have their own organisational structures, management teams, and operational control, including recruitment, training, rostering, and performance management.

    • The businesses operate independently and offer full-time employment with unique training programs such as the "Future Fit Academy" and the "Mastery" upskilling initiative.

Involvement in mine operations:

    • OS entities participate in mine planning, day-to-day operations, and incident management alongside BHP, demonstrating a higher level of engagement than traditional labour hire models.

Distinction from labour hire:

    • OS competes with specialized mining service providers like Thiess and BUMA rather than labour hire firms.
    • Employees use dedicated facilities and operate separately from BHP employees in various aspects of site operations.

Legal and regulatory framework:

    • The respondents assert that the unions fail to meet the burden of proof required under section 306E(1A), which mandates a binary determination between service provision and labour supply.
    • They highlight that BHP’s compliance with statutory safety regulations does not imply direct supervision of OS employees' work.

The submission concludes that the applications should be dismissed as the unions have not demonstrated that the work arrangement constitutes labour supply.

The case comes after Watt recently unveiled that the Same Job, Same Pay reforms are delivering "significant wage rises" to various sectors in Australia, including in mining, meat processing, aviation, and more.

Same Job, Same Pay comes to Qantas

In the aviation sector, Qantas reached an agreement with the Flight Attendants Association of Australia (FAAA) in 2023 to implement the Same Job, Same Pay framework for its cabin crew.

This includes an agreement for pay increases for up to 800 short-haul cabin crew members, according to Qantas.

"The decision to support the Qantas Domestic Same Job Same Pay applications will result in wage increases for hundreds of our short haul cabin crew," said Qantas Group Chief People Officer, Catherine Walsh, in a previous statement.

Grahame Kelly, general secretary of the MEU, said major players like Qantas have accepted that the labour hire rort is "no longer lawful or in line with community expectations."

"It's very disappointing to see our biggest, wealthiest mining company BHP fighting tooth and nail to continue using labour hire to suppress wages," Kelly said in a statement. "But we are committed to continuing the fight to deliver wage justice for labour hire mineworkers."