Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd
[2025] FWCFB 53
•13 MARCH 2025
| [2025] FWCFB 53 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.306E - Application for a regulated labour hire arrangement order
Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd
(C2024/4711, C2024/4712)
| VICE PRESIDENT GIBIAN | SYDNEY, 13 MARCH 2025 |
Application for regulated labour hire arrangement orders in respect of CoreStaff NSW Pty Ltd and Skilled Workforce Solutions (NSW) Pty Ltd in relation to work performed at the Bengalla Mining Operations for the Bengalla Mining Company Pty Ltd – Parties accept that requirements in s 306E(1) and (1A) are met – Whether making a regulated labour hire arrangement order with respect to Skilled would involve acquisition of property otherwise than on just terms – Section 39 of the Fair Work Act 2009 (Cth) and s 51(xxxi) of the Commonwealth Constitution – Whether the Commission should be satisfied making the orders sought is not fair and reasonable in all the circumstances – Host employment instrument does not provide for part-time or casual employment – Whether difficulties in determining the protected rate of pay for labour hire employees – Whether dispute procedures in ss 306P and 306Q available to resolve any difficulty – Whether the Commission should make an order that covers some, but not all, regulated employees – Orders made.
Introduction
On 21 June 2024, the Mining and Energy Union (the MEU) filed two applications for regulated labour hire arrangement orders under s 306E of the Fair Work Act 2009 (Cth) (the Act). The orders sought by the MEU would apply to labour hire workers employed by CoreStaff NSW Pty Ltd (CoreStaff) and Skilled Workforce Solutions (NSW) Pty Ltd (Skilled), respectively, who perform work for Bengalla Mining Company Pty Ltd (Bengalla) at the Bengalla Mining Operations (the Bengalla Mine or the Mine). The host employment instrument is the Bengalla Enterprise Agreement 2022 (AE517092) (the Bengalla Agreement).
The Bengalla Mine is an open cut coal mine located approximately four kilometres southwest of Muswellbrook in New South Wales. Bengalla employs approximately 560 employees as technicians performing production and engineering work at the Bengalla Mine. In addition, labour hire employees are supplied to perform work for Bengalla by CoreStaff and Skilled. At the time the evidence was prepared, Skilled indicated that it provided 156 workers to perform work at the Mine and CoreStaff indicated that it employed 35 workers who were assigned to work at the Mine.
The making of regulated labour hire arrangement orders as sought by the MEU is opposed by Bengalla, Skilled and CoreStaff. We will set out the relevant provisions of the Act below. It is appropriate to indicate at the outset that all parties accepted that the Commission should be satisfied that the requirements which trigger the obligation to make a regulated labour hire arrangement order in s 306E(1) are met and that the Commission should be satisfied that the performance of work at the mine by employees of CoreStaff and Skilled is not for the provision of a service, rather than the supply of labour, for the purposes of s 306E(1A).
The making of the orders sought is opposed on three grounds:
(a)First, Skilled submits that a regulated labour hire arrangements order would give rise to an acquisition of its property otherwise than on just terms for the purposes of s 51(xxxi) of the Commonwealth Constitution and the Commission, as a result, has no jurisdiction to make the order sought by operation of s 39 of the Act. Bengalla and CoreStaff did not join in making that submission.
(b)Second, Bengalla, CoreStaff and Skilled each contend, albeit for somewhat different reasons, that the Commission is prohibited from making a regulated labour hire arrangement order in either case because it should be satisfied that it is not fair and reasonable in all the circumstances to do so for the purposes of s 306E(2).
(c)Third, Skilled contends that the form of order sought by the MEU is deficient and not sufficiently specific and that, if an order is made, it should exclude certain groups of workers, including employees who perform work involving “car washing”, trainees performing work as part of a training arrangement and future employees if they perform work for the provision of a service, rather than the supply of labour, within the meaning of s 306E(1A).
For the reasons that follow, we are satisfied that the requirements in s 306E(1) and (1A) are met. Section 39 of the Act would not be engaged by a regulated labour hire arrangement order that covers Skilled’s employees and does not deprive the Commission of jurisdiction to make an order which would apply to Skilled. We are also not satisfied it is not fair and reasonable in all the circumstances to make orders with respect to CoreStaff and Skilled employees who perform work at the Bengalla Mine for the purposes of s 306E(2). As a result, the Commission is required by s 306E(1) to make regulated labour hire arrangement orders covering CoreStaff and Skilled employees performing work for Bengalla.
Background to the applications
The following summary represents uncontroversial facts derived from the evidence and sets out the findings of the Full Bench based on that evidence. The Bengalla Mine is a single pit open cut mine which uses a dragline, truck and excavator mining method and operates 24 hours a day, seven days a week. The production process at the mine involves coal extraction and its transport to the Coal Handling and Preparation Plant. In broad overview, the production process involves stripping the top layer of dirt and soil using excavators and haul trucks, drill and blast operations to break up the overburden, the removal of the overburden using a dragline and dozers and the use of excavators and haul trucks to dig and load the coal and transport it to a hopper or designated coal stockpile area. The coal then undergoes crushing, washing and treatment at the Coal Handling and Preparation Plant and is loaded onto rail cars for transportation.
The operational workforce at the Bengalla Mine is divided into four groups being production, maintenance, coal handling and preparation and blast crew. The various steps involved in the extraction of coal involve the use of plant and equipment by production workers employed by Bengalla, CoreStaff and Skilled, including dump trucks, dozers, graders, water trucks, rubber tyred dozers, dragline, production excavators, ancillary excavators/loaders, production front end loaders, service carts and overburden drills. Bengalla owns and operates all the plant and equipment.
Bengalla, CoreStaff and Skilled employees work alongside one another in the same crews, use the same plant and equipment and the same crib facilities. Bengalla is responsible for determining which plant and equipment workers use, including employees of CoreStaff and Skilled and ensuring that employees have undertaken relevant training and assessment. The same training is required to be undertaken by the Bengalla, CoreStaff and Skilled employees and is conducted by Bengalla.
Supervisors and managers at the mine are all employed by Bengalla and all supervisory responsibilities, including task allocation and performance monitoring, are managed by personnel employed directly by Bengalla. The Bengalla supervisors report to Bengalla’s production superintendent who, in turn, reports to its mine manager who, in turn, reports to the general manager of Bengalla. Bengalla supervisors supervise the crews and the production work, one of whom is an open cut examiner and is required to be appointed consistent with the obligations imposed by the Work Health and Safety (Mines and Petroleum Sites) Act 2013 (NSW).
Bengalla controls the sign in and sign out procedures for all workers to the mine and all workers are issued swipe cards recording their name and an identification number by Bengalla. CoreStaff and Skilled employees participate in the same sign in/sign off procedure as other workers. Bengalla, CoreStaff and Skilled employees all attend pre-start meetings together when they commence at the same time and those meetings are conducted by a Bengalla supervisor. All the employees receive their duty assignments in the same manner from Bengalla.
Policies and procedures at the mine are required to be adhered to by all workers, including those employed by CoreStaff and Skilled, and are developed and enforced by Bengalla. Training packages required to be undertaken by workers at the mine are Bengalla’s, and Bengalla ensures that all workers at the Mine are trained in accordance with the training packages. Bengalla monitors and keeps track of the training undertaken by each worker. Bengalla has also implemented a drug and alcohol policy and testing regime at the mine which applies to all workers including CoreStaff and Skilled employees.
CoreStaff and Skilled, respectively, have some involvement in the work of their employees assigned to work at the mine. CoreStaff representatives communicate with Bengalla in relation to absences and disciplinary or performance issues concerning its employees. CoreStaff provides an online induction process prior to an employee undertaking on-site work in addition to the on-site induction provided by Bengalla and provides some online training modules to its employees. It also provides uniforms and personal protective equipment to its employees although they are the same as those used by Bengalla employees.
The terms and conditions of employment of Bengalla employees performing work at the mine are governed by the Bengalla Agreement. Clauses 1.2 and 1.3 of the Agreement set out the coverage of the Bengalla Agreement in the following terms:
1.2 This Agreement is one of a range of employment instruments at Bengalla. This Agreement covers all technicians other than those who remain under their existing Australian Workplace Agreements (AWA) or Individual Transitional Employment Agreements (ITEA).
1.3 This Agreement will cover:
(a) Bengalla Mining Company Pty Ltd (ACN 053 909 470) (Bengalla);and
(b) Bengalla technicians on ITEAs or AWAs who after the commencement of this Agreement elect to be covered and bound by the Agreement in accordance with clause 1.4; and
(c) Bengalla technicians who do not have an ITEA or AWA.
The concept of a “technician” is dealt with in clause 1.9 as follows:
1.9 In this Agreement Bengalla technicians means those persons designated by Bengalla as technicians and performing production and engineering work within the classifications in Schedule A of the Black Coal Mining Industry Award 2020.
Clause 4 of the Bengalla Agreement provides for the remuneration of employees. Clause 4.1 provides that a technician’s remuneration package comprises an annual base salary component “which encompasses all entitlements to payments, industry allowances and overtime payments which may arise under any Award or Agreement”, a Work Pattern Allowance paid in monthly instalments, a Performance Payment paid annually as a lump sum and superannuation. Clause 4.2 describes the concept of “salary” for the purposes of the Agreement, including:
4.2 The concept of a salary entails being paid for the role to be performed rather than time at work. Generally however a technician’s hours of work will be determined by a technician's Work Pattern plus any additional attendances, which may be a full or part shift, as required by a technician 's work.
A technician's Work Pattern includes an average of 35 ordinary hours per week over a 12 month period plus reasonable additional hours in accordance with the terms of the FW Act.
Schedule A is entitled “Remuneration & Work Patterns” and sets out the “Annual Base Component” and “Work Pattern Allowance”. The Annual Base Component is identified as a gross annual sum with a different annual salary depending on the sick or personal leave arrangements which apply to the employee. Jonathan Lawler, who made a witness statement for the purposes of the proceedings, explained that the Agreement contained two salary streams, one for employees who are covered by the now grandfathered Accrued Sick Leave Scheme and another for employees who are covered by the less beneficial Bengalla Personal Leave Scheme but instead receive higher salaries. Mr Lawler indicated that only nine employees continued to be covered by the Accrued Sick Leave Scheme. Clause A2 of Schedule A provide that technicians who are required to work different work patterns will be paid an allowance in addition to the base component.
Schedule C then sets out general conditions applicable to employees covered by the Agreement. Clause C4 provides for hours of work, work patterns and shift work which contemplates that employees will work reasonable additional hours and that compensation for shift work is contained in the rates applicable to each work pattern. Clause 4.1 of Schedule C provides:
4.1 Technicians agree to work the work patterns nominated by Bengalla which may include rotation and/or work over seven days of the week and up to twelve and a half (12.5) hours per shift. Indicative examples of work patterns are contained in Schedule A.
Additional or substitute roster systems may be developed by Bengalla consistent with this Agreement.
Technicians acknowledge that a technician's Work Pattern includes an average of 35 ordinary hours per week over a 12-month period plus reasonable additional hours in accordance with the terms of the FW Act.
As will be apparent from these provisions, the Bengalla Agreement provides only for full-time employment and not for part-time or casual employment and that full-time employees are remunerated by way of an annual salary which incorporates payment for additional hours, overtime and shiftwork. Mr Lawler gave evidence that Bengalla had put forward a proposal to include part-time employment in the Bengalla Agreement during bargaining in 2021, but that the MEU had indicated the proposal would need to be included in the log of claims to be considered. Bengalla did not pursue the issue further.
The MEU points out that the Bengalla Agreement does provide a mechanism which permits the determination of the pay to be received by an employee who works a lesser number of hours than a full-time employee. Clause 7.3 of Schedule C provides:
7.3 Where in the course of a pay period a technician is absent and that absence does not attract payment, Bengalla may deduct such amount from the technician’s Normal Salary for that pay. If the technician has already been paid for that pay period , Bengalla will follow an overpayment repayment agreement process in line with legislative requirements.
The amount to be deducted under this sub-clause is determined by the period of absence as a proportion of the technician's rostered hours to be worked in a month multiplied by the technician's Normal Salary for a month.
Clause C8 of Schedule C also provides for additional payments to be made to employees for extra shifts required to be worked in addition to rostered hours and hours included in the base salary and work pattern allowance.
CoreStaff indicated that, as of November 2024, it assigned 35 production employees to work at the Bengalla Mine. Renee Kearney, who made a witness statement for CoreStaff, gave evidence that, of those employees, 14 are permanent employees of which 13 are full-time permanent members of the production crew and one is a permanent part-time “crib relief employee”. There are also 21 casual employees, including 10 production crew members, 9 crib relief employees and two who are referred to as “floaters”. The crib relief employees provide coverage for production crew staff while they are on their crib break to ensure that the machines run continuously. The floaters are engaged to work to cover shifts across all production crews and crib relief employees where an employee is unavailable to work their rostered shift. CoreStaff employees assigned to work at the Bengalla Mine are covered by the CoreStaff NSW Black Coal Enterprise Agreement 2018 (the CoreStaff Agreement). All except one of the CoreStaff emloyees are classified as Mineworker Production Level 2A in the CoreStaff Agreement.
As of November 2024, Skilled supplied 156 employees to perform work at the Bengalla Mine. Joel Cribb, who made a witness statement for Skilled, indicated that 73 of those employees are trainees performing work as part of a training arrangement under the Apprenticeship and Traineeship Act 2001 (NSW). Of the remaining 83 employees, 69 are employed in the classification of Mineworker Level 3 of which 53 are permanent full-time employees, 7 are permanent part-time employees performing crib relief work, 8 employed as casual employees working on a “floating” basis and one employed as a casual employee working a 12.5 hour, 7 day rotating roster. In addition, there are two employees performing “bench hand work” assisting the drill and blast operators employed by Bengalla, four are employed in the classification of Mineworker Level 2 on a permanent full-time basis and eight are employed on a casual basis as “Wash Technicians” working an 8 hour, 7 day rotating roster. The employees supplied by Skilled are covered by the Skilled Workforce Solutions (NSW) Pty Ltd Enterprise Agreement 2019 (the Skilled Agreement).
The MEU advanced evidence in relation to the differences between the rates of pay under the Bengalla Agreement, on the one hand, and the CoreStaff Agreement and the Skilled Agreement on the other. Clint Smith, who prepared a witness statement for the MEU, indicated that a full-time employee engaged by CoreStaff would receive between $46,406.00 and $52,730.50 more per annum if employed by Bengalla and covered by the Bengalla Agreement depending on classification. Mr Smith indicated that a full-time Skilled employee would earn between $31,550.99 and $42,798.99 more per annum if employed by Bengalla and covered by the Bengalla Agreement depending on classification. The same calculations were made by Matthew Howard who also prepared a witness statement for the MEU. These calculations were not agreed, although Bengalla, CoreStaff and Skilled did not provide alternative calculations or identify any specific error in the calculations.
There is no evidence before the Commission as to the contractual arrangements between Bengalla and CoreStaff under which labour is supplied to Bengalla. However, Skilled relied on the nature of its contractual arrangements with Bengalla. Mr Cribb annexed to his witness statement a “Contract for the Supply of Services (and Associated Goods)” between Bengalla and Programmed Skilled Workforce Limited under which the latter agreed to provide “supplementary mining labour” to the former (the Supply Contract). One feature of the contractual arrangements is that the contract under which labour is supplied was not made with the respondent to the present proceedings, Skilled Workforce Solutions (NSW) Pty Ltd, but with a related entity, Programmed Skilled Workforce Limited. The evidence suggested that Skilled is part of the Programmed group of companies. By reason of the operation of s 306D(3) of the Act, it does not matter for present purposes whether there is a contract between the supplier of labour and the regulated host. Although Skilled is not actually party to the Supply Contract, it is convenient to refer to the obligations of the contract as applying to Skilled.
The Supply Contract contains a “Key Terms” section and a series of schedules setting out various terms and conditions. The Key Terms include that the contract has a commencement date of 1 January 2022 and a term of five years concluding on 31 December 2026. Schedule A describes the services to be provided by Skilled. Clause 1 provides:
1. GENERAL
1.1 The Company requires the Service Provider to supply, and the Service Provider agrees to supply, supplementary mining labour as follows:
(a)Normal shifts: The Company’s current requirement is a minimum of 40 Service Provider Personnel per shift over the four (4) shift roster. The Company may, by notice to the Service Provider, increase or decrease this requirement in its absolute discretion.
(b)To cover short notice absences and absenteeism with reasonable notice as agreed by the Service Provider and the Company Representative.
1.2 The Service Provider is required to provide “Crib Relief” operators to the Company, on a 6 person per shift, 4 shift roster. The requirement for day shift and night shift for crib relief operators will be as follows:
Day shift – 10am-5pm; and
Night shift – 11pm-6am
Clause 6.1 provides that Skilled “must follow and attend to the directions, instructions or demands of the [Bengalla] Representative … without delay, protest or additional cost”.
Schedule C sets out the prices under the Supply Contract. Schedule C contains a schedule of hourly rates payable for the supply of employees falling within particular categories to Bengalla. The schedule is commercially sensitive, and it is not appropriate to set out the rates in this decision. It is sufficient to note that the schedule of rates sets out how the final hourly rates payable to Skilled have been calculated, including components for “employee pay rates”, superannuation, payroll tax, worker compensation and overheads as well as an identified profit margin to be derived by Skilled.
Clause 1.3 of Schedule C indicates that the rates in the schedule will be increased where changes occur in statutory on-costs or governmental taxes for any category of personnel to be provided by Skilled. In its oral submissions, Skilled emphasised that, aside from changes to statutory on-costs and government taxes, there was no provision permitting it to pass through increases in the costs of supplying employees in accordance with the Supply Contract, including if there were increases in the rates of pay Skilled itself was required to pay the relevant employees.
In that regard, Schedule I to the Supply Contract contains “General Conditions for the Supply of Services”. Clause 6.1 of Schedule I provides Bengalla with the capacity to give notice to vary the Supply Contract but not to Skilled. Clause 34 provides that Bengalla can terminate the Supply Contract by giving 30 days’ notice of its intention to do so without fault on the part of Skilled. A right to terminate the Supply Contract is only conferred on Skilled by clause 36 of Schedule I in the event of default by Bengalla. The MEU also drew attention to clause 31 of Schedule I which contains a force majeure clause.
There are three further observations to be made about the price provisions of the Supply Contract. The first is that, although the schedule of rates set out in Schedule C to the Supply Contract identifies nominal cost components used to construct the rate payable to Skilled, Skilled accepted in oral submissions that the Supply Contract does not require that it pay employees supplied to perform work for Bengalla amounts which equate with the “employee pay rates” in Schedule C. Mr Cribb indicated in his witness statement that Skilled is currently paying its employees at a higher rate of pay than is contained in the Skilled Agreement, has not passed those costs through to Bengalla, and is performing the Supply Contract at a loss.
The second observation is that, although there does not appear to be a right under the Supply Contract for Skilled to require Bengalla to renegotiate the rates, Mr Cribb indicated that Skilled seeks to renegotiate the rates payable by Bengalla from time to time. Mr Cribb annexed to his witness statement the most recent schedule of rates which he says was effective from 28 March 2023. No evidence was given by Skilled or Bengalla in relation to the circumstances in which the rates were renegotiated or what prompted that to occur. The Supply Contract does not expressly provide a mechanism for renegotiating the rates.
The third observation is that Skilled says that, unless the rates are renegotiated, if a regulated labour hire arrangement order is made, the increased costs resulting from the requirement to pay Skilled employees no less that would be payable under the Bengalla Agreement would far exceed the value of the profit margin for which provision is made in the Supply Contract. No evidence was given by Skilled that it had approached Bengalla to discuss whether Bengalla would be open to renegotiating the rates under the Supply Contract if a regulated labour hire arrangement order was made. No evidence was given by any representative of Bengalla as to what its attitude would or might be in that event.
Statutory Provisions
Part 2-7A of the Act is entitled “Regulated labour hire arrangement orders” and provides, among other things, for the Commission to make such orders and sets out the obligations of employers and regulated hosts covered by those orders. The key provision in Part 2-7A is s 306E which sets out when the Commission must make a regulated labour hire arrangement order. The most relevant parts of s 306E for present purposes are as follows:
306E FWC may make a regulated labour hire arrangement order
Regulated labour hire arrangement order
(1) The FWC must, on application by a person mentioned in subsection (7), make an order (a regulated labour hire arrangement order) if the FWC is satisfied that:
(a) an employer supplies or will supply, either directly or indirectly, one or more employees of the employer to perform work for a regulated host; and
(b) a covered employment instrument that applies to the regulated host would apply to the employees if the regulated host were to employ the employees to perform work of that kind; and(c) the regulated host is not a small business employer.
Note: The FWC may make other decisions under this Part which relate to regulated labour hire arrangement orders: see Subdivisions C (short - term arrangements) and D (alternative protected rate of pay orders) of this Division, and Division 3 (dealing with disputes).
(1A) Despite subsection (1), the FWC must not make the order unless it is satisfied that the performance of the work is not or will not be for the provision of a service, rather than the supply of labour, having regard to the matters in subsection (7A).
(2) Despite subsection (1), the FWC must not make the order if the FWC is satisfied that it is not fair and reasonable in all the circumstances to do so, having regard to any matters in subsection (8) in relation to which submissions have been made.
…
(4) For the purposes of paragraph (1)(b), in determining whether a covered employment instrument would apply to the employees, it does not matter on what basis the employees are or would be employed.
…
Matters that must be considered in relation to whether work is for the provision of a service
(7A) For the purposes of subsection (1A), the matters are as follows:
(a) the involvement of the employer in matters relating to the performance of the work;
(b) the extent to which, in practice, the employer or a person acting on behalf of the employer directs, supervises or controls (or will direct, supervise or control) the regulated employees when they perform the work, including by managing rosters, assigning tasks or reviewing the quality of the work;
(c) the extent to which the regulated employees use or will use systems, plant or structures of the employer to perform the work;
(d) the extent to which either the employer or another person is or will be subject to industry or professional standards or responsibilities in relation to the regulated employees;(e) the extent to which the work is of a specialist or expert nature.
Matters to be considered if submissions are made
(8) For the purposes of subsection (2), the matters are as follows:
(a) the pay arrangements that apply to employees of the regulated host (or related bodies corporate of the regulated host) and the regulated employees, including in relation to:
(i) whether the host employment instrument applies only to a particular class or group of employees; and
(ii) whether, in practice, the host employment instrument has ever applied to an employee at a classification, job level or grade that would be applicable to the regulated employees; and
(iii) the rate of pay that would be payable to the regulated employees if the order were made;
(c) the history of industrial arrangements applying to the regulated host and the employer;
(d) the relationship between the regulated host and the employer, including whether they are related bodies corporate or engaged in a joint venture or common enterprise;
(da) if the performance of the work is or will be wholly or principally for the benefit of a joint venture or common enterprise engaged in by the regulated host and one or more other persons:(i) the nature of the regulated host’s interests in the joint venture or common enterprise; and
(ii) the pay arrangements that apply to employees of any of the other persons engaged in the joint venture or common enterprise (or related bodies corporate of those other persons);
(e) the terms and nature of the arrangement under which the work will be performed, including:
(i) the period for which the arrangement operates or will operate; and
(ii) the location of the work being performed or to be performed under the arrangement; and
(iii) the industry in which the regulated host and the employer operate; and
(iv) the number of employees of the employer performing work, or who are to perform work, for the regulated host under the arrangement;
(f) any other matter the FWC considers relevant.
…
Section 306E has been considered by the Full Bench in Re Mining and Energy Union [2024] FWCFB 299; (2024) 333 IR 249 (Batchfire) and Application by the Mining and Energy Union re Rix’s Creek [2025] FWCFB 12 (Rix’s Creek). In Batchfire, the Full Bench outlined a number of principles concerning the proper interpretation and application of s 306E.[1] As observed by the Full Bench in Batchfire, s 306E(1) requires the Commission to make a regulated labour hire arrangement order if it is satisfied that the criteria specified in paragraphs (a), (b) and (c) of the subsection are met and neither of the prohibitions upon the making of such an order (“must not”) in ss 306E(1A) and 306E(2) apply.
In light of the submissions that have been advanced in this matter, it is appropriate to refer to some other features of Part 2-7A. A regulated labour hire arrangement order does not itself impose direct obligations on the employer or regulated host it covers. Rather, the order triggers obligations imposed by the Act. Of primary significance is s 306F. The most relevant parts of s 306F for present purposes are as follows:
306F Protected rate of pay payable to employees if a regulated labour hire arrangement order is in force
Application of section
(1) This section applies if a regulated labour hire arrangement order is in force that covers a regulated host, an employer and a regulated employee of the employer.
Employer must not pay less than protected rate of pay
(2) The employer must pay the regulated employee at no less than the protected rate of pay for the employee in connection with the work performed by the employee for the regulated host.
Note: This subsection is a civil remedy provision (see Part 4‑1).
…
Meaning of protected rate of pay
(4) Unless subsection (5) applies, the protected rate of pay for the regulated employee is the full rate of pay that would be payable to the employee if the host employment instrument covered by the regulated labour hire arrangement order were to apply to the employee.
(5) If the regulated employee is a casual employee, and there is no covered employment instrument that applies to the regulated host that provides for work of that kind to be performed by casual employees, the protected rate of pay for the regulated employee is the full rate of pay that would be payable to the employee if:
(a) the employee were an employee other than a casual employee and the host employment instrument covered by the regulated labour hire arrangement order were to apply to the employee; and
(b) the base rate of pay that would be payable to the employee, in the circumstances referred to in paragraph (a), were increased by 25%.
…
Requirement to pay no less than protected rate of pay applies despite other fair work instruments etc.
(10) Subsection (2) applies despite any provision of:
(a) a fair work instrument (other than an instrument made by the FWC under this Part) that applies to the regulated employee; or
(b) a covered employment instrument (other than a fair work instrument) that applies to the regulated employee; or
(c) the regulated employee’s contract of employment;
that provides for a rate of pay for the regulated employee that is less than the protected rate of pay for the regulated employee.
Note: See also section 306N (effect of alternative protected rate of pay order) and subsection 306Q(6) (effect of arbitrated protected rate of pay order).
The basic position dictated by s 306F(2) is that an employer covered by a regulated labour hire arrangement order must pay a regulated employee at no less than the protected rate of pay for the employee in connection with the work performed by the employee for the regulated host. The “protected rate of pay” is to be calculated in accordance with s 306F(4) by reference to the full rate of pay that would be payable to the employee if the host employment instrument were to apply to the employee. In this case, the default position is that, if an order is made, CoreStaff or Skilled employees supplied to perform work at the Bengalla Mine would be required to be paid the full rate that would be payable if those employees were covered by the Bengalla Agreement.
The concept of the “full rate of pay” of an employee is dealt with in s 18 as follows:
18 Meaning of full rate of pay
General meaning
(1) The full rate of pay of a national system employee is the rate of pay payable to the employee, including all the following:
(a) incentive‑based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.
The Act provides some mechanisms for determining a different protected rate of pay. Sections 306M and 306N provide for the Commission to make an order specifying a protected rate of pay by reference to a different covered employment instrument. Division 3 of Part 2-7A provides a mechanism for the Commission to deal with disputes about the operation of Part 2-7A, including in relation to the protected rate of pay. Section 306P provides:
306P Disputes about the operation of this Part
When this Division applies to a dispute
(1) This Division applies to a dispute about the operation of this Part if:
(a) a regulated labour hire arrangement order is in force that covers a regulated host, an employer and a regulated employee of the employer performing work for the regulated host; or
(b) a regulated labour hire arrangement order has been made but is not yet in force that covers a regulated host, an employer and a regulated employee of the employer performing work for the regulated host.
(2) Without limiting subsection (1), this Division applies to a dispute about:
(a) what the protected rate of pay for a regulated employee is; or
(b) whether a regulated employee has been, or is being, paid less than the protected rate of pay for the employee.
Parties must attempt to resolve dispute at workplace level
(3) In the first instance, the parties to the dispute must attempt to resolve the dispute at the workplace level by discussions between the parties.
(4) If discussions at the workplace level do not resolve the dispute, a party to the dispute may apply to the FWC to resolve the dispute.
How the FWC deals with dispute
(5) If a party to the dispute makes an application under subsection (4):
(a) the FWC must first deal with the dispute by means other than arbitration, unless there are exceptional circumstances; and
(b) the FWC may deal with the dispute by arbitration in accordance with section 306Q.
Note: For the purposes of paragraph (a), the FWC may deal with the dispute as it considers appropriate, including by mediation, conciliation, making a recommendation or expressing an opinion (see subsection 595(2)).
Representatives
(6) The employer, employee or regulated host may appoint a person or organisation that is entitled to represent the industrial interests of the employer, employee or regulated host to provide the employer, employee or regulated host (as the case may be) with support or representation for the purposes of:
(a) resolving the dispute; or
(b) the FWC dealing with the dispute.
Note: A person may be represented by a lawyer or paid agent in a matter before the FWC only with the permission of the FWC (see section 596).
Joinder of other employees to disputes
(7) Without limiting section 609, the procedural rules may provide for the joinder, as parties to a dispute in relation to which an employee has made an application under subsection (4), of any other employees who have a dispute about the operation of this Part with the same regulated host or employer.
Section 306P(1) provides that the Division applies to “a dispute about the operation of this Part”. Without limiting subsection (1), s 306P(2) indicates that the Division applies to a dispute about what the protected rate of pay for an employee is or whether a regulated employee is being or has been paid less than the protected rate of pay.
Section 306Q sets out the powers of the Commission to arbitrate a dispute referred to in s 306P in the event that the dispute cannot be resolved. Relevant parts of s 306Q are as follows:
306Q Dealing with disputes by arbitration
(1) The FWC may deal with the dispute by arbitration, including by making an order (an arbitrated protected rate of pay order) determining:
(a) how the rate of pay at which the employer must pay the employee in connection with the work is to be worked out; and
(b) that the employer must pay the rate of pay worked out in that way to the employee in connection with the work.
(2) If the employer is a national system employer only because of section 30D or 30N, the rate of pay for the purposes of paragraph (1)(a) of this section must not include any amount that relates to an excluded subject matter within the meaning of subsection 30A(1) or 30K(1).
Note: Sections 30D and 30N extend the meaning of national system employer.
(3) The FWC must not make an arbitrated protected rate of pay order unless the FWC considers that it would be fair and reasonable to make the order.
…
Effect of arbitrated protected rate of pay order
(6) If the FWC makes an arbitrated protected rate of pay order in relation to the dispute, the order has effect, in relation to so much of the work as is performed during the period to which the order applies, despite the following:
(a) section 306F (protected rate of pay payable to employees if a regulated labour hire arrangement order is in force);
(b) any provision of the following that provides for a lower rate of pay than that worked out in accordance with the order:(i) a fair work instrument that applies to the employee;
(ii) a covered employment instrument (other than a fair work instrument) that applies to the employee;
(iii) the employee’s contract of employment.
(7) A person must not contravene a term of an arbitrated protected rate of pay order.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(8) In making an order under this section, the FWC must ensure that, if an exception in section 306G would apply to the requirement to pay the regulated employee at no less than the protected rate of pay, the exception also applies in relation to the requirement to pay the employee at the rate worked out under the arbitrated protected rate of pay order.
Section 306Q(1) enables the Commission to arbitrate such a dispute including by determining “how the rate of pay at which the employer must pay the employee in connection with the work is to be worked out”. If the Commission makes an arbitrated protected rate of pay, the order has effect despite s 306F. In effect, if the Commission arbitrates the dispute, the arbitrated protected rate of pay applies in place of the protected rate of pay determined in accordance with s 306F.
In light of those statutory provisions, it is convenient to address the submissions made by Skilled in relation to s 39 of the Act, the requirements in s 306E(1) and (1A) that are not in dispute, the contentions advanced as to whether the Commission should be satisfied that it would not be fair and reasonable to make an order for the purposes of s 306E(2), and then the submissions made in relation to the form of the orders that should be made.
Section 39 of the Fair Work Act 2009 (Cth)
Skilled contends that the Act would operate to acquire property otherwise than on just terms if a regulated labour hire arrangement order is made which covers it and the employees it supplies to perform work for Bengalla. It submits that, by operation of s 39 of the Act, the Act cannot apply to the MEU’s application and any order made by the Commission could have no application to it and, as a result, the application must be dismissed.
Section 39 of the Act provides as follows:
39 Acquisition of property
This Act, or any instrument made under this Act, does not apply to the extent that the operation of this Act or the instrument would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph).
It is appropriate to make two initial observations in relation to the operation of s 39 of the Act. The first observation is that Skilled’s submissions assume that s 39 of the Act is “jurisdictional” in character and that, if the section would be engaged by an order made under s 306E, the Commission has no jurisdiction and must dismiss the MEU’s application. As we understand the submission, Skilled suggests that the Act does not apply to the extent that its operation would result in the acquisition of property otherwise than on just terms within the meaning of s 51(xxxi) of the Commonwealth Constitution and that, if making the order sought in the MEU’s application would have such an effect, the provisions of Part 2-7A have no application and the Commission cannot make the order.
On one view, s 39 of the Act does not operate on the Commission’s jurisdiction. It could not be contended that Part 2-7A itself directly results in an acquisition of property. Part 2-7A simply authorises the Commission to make a regulated labour hire arrangements order. It is only if such an order is made, and is in force, that Part 2-7A imposes obligations on an employer covered by the order.[2] If the Commission makes an order which would result in the acquisition of property other than on just terms, s 39 means the Act does not apply to the extent it would have that effect. It is not clear that s 39 deprives the Commission of jurisdiction to make an order at all even if there is some possibility that the order might result in an acquisition of property other than on just terms.
However, we understand Skilled to submit that, in this case at least, no order could be made that would not result in the acquisition of property other than on just terms such that the Commission cannot make any order at all and any order it did make would be outside jurisdiction. The Commission is able to determine its own jurisdiction and to decline to act upon an application on the basis that it fails for want of jurisdiction.[3] The Commission is also likely to conclude that it is not fair and reasonable to make a regulated labour hire arrangement order for the purpose of s 306E(2) if the order would result in the acquisition of property otherwise than on just terms contrary to s 51(xxxi) of the Constitution. It is appropriate to consider Skilled’s argument.
The second initial observation to be made is that s 39 of the Act is intended to reflect the operation of s 51(xxxi) of the Constitution. That is, s 39 operates only to the extent that the Act, or an instrument made under the Act, results or would result in an acquisition of property that would fall outside the legislative capacity of the Commonwealth by reason of s 51(xxxi). That is apparent from the language used in the section, particularly the fact that the section operates only with respect to an acquisition of property “within the meaning of paragraph (xxxi) of the Constitution”. If there were any ambiguity in the section, it is instructive that the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) indicated:[4]
It is not anticipated that the Bill (or instruments made under it) effects any acquisition of property other than on just terms contrary to paragraph 51(xxxi) of the Constitution. Clause 39 is included out of an abundance of caution to ensure that an acquisition contrary to paragraph 51(xxxi) cannot take place. In any circumstance where an acquisition contrary to paragraph 51(xxxi) is effected, the relevant law or instrument does not apply.
The consequence is that s 39 of the Act poses two questions: whether the order sought by the MEU would result in the acquisition of property at all and, if it would, whether the order would result in an acquisition of property within the meaning of s 51(xxxi) of the Constitution in the sense that the law authorising the acquisition would be contrary to that section.[5] No question of just terms being provided arises in this matter.
The first question is whether the making of a labour hire arrangements order covering Skilled would result in an acquisition of its property. The concept of “property” for the purposes of s 51(xxxi) has been construed broadly. It extends to every “species of valuable right and interest including real and personal property, incorporeal hereditaments such as rents and services, rights of way, rights of profit or use in land of another, and choses in action”.[6] It is not controversial that “property” includes contractual rights.[7]
The question of when an “acquisition” of property has occurred presents greater complexity. An “acquisition” within section 51(xxxi) does not occur merely because property rights might be adversely affected by a Commonwealth law. Section 51(xxxi) is not directed to the possession or enjoyment of proprietary rights by a State or by a person but to the acquisition of those rights from the State or person in whom they are vested.[8] In Commonwealth v Tasmania (1983) 158 CLR 1, Mason J explained:[9]
To bring the constitutional provision [s 51(xxxi)] into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be.
The taking or extinguishment of, or the interference with, the property rights of a person does not, in itself, give rise to an acquisition. There must be some identifiable benefit or gain obtained by the Commonwealth or another person and the benefit or gain must be proprietary in nature in that it represents an interest in property.[10] The acquisition may be by the Commonwealth or a third person.[11] The proprietary interest obtained by the Commonwealth or a third person does not necessarily need to correspond precisely with what was taken.[12]
Skilled relied on two forms of property that, it said, would be the subject of an acquisition if a regulated labour hire arrangement order is made. In its written submissions, Skilled described the two forms of property it said would be acquired as follows:
(a)The first item of property is the bundle of rights that are conferred on Skilled by the labour hire contract. Of particular concern is Skilled’s ability to derive a profit margin that has been computed over the life of the five year term.
(b)The second item of property is the sum of money Skilled has provisioned for leave accruals with respect to the work that has been performed pursuant to the labour hire contract.
The first item of property referred to by Skilled is described as the “bundle of rights” conferred by the Supply Contract it has with Bengalla. The Supply Contract entitles Skilled to be paid at specified hourly rates for providing “Service Provider Personnel” to Bengalla. The making of a regulated labour hire arrangement order would not alter the rights of Skilled under the contract or deprive Skilled of those rights. Skilled will continue to have the right to receive the contractually agreed price for the supply of labour. At most, a regulated labour hire arrangements order may increase the costs incurred by Skilled in performing its obligations under the Supply Contract and reduce the profit it is able to derive from supplying labour. It may do so in a substantial way. We do not consider that means there has been an acquisition of Skilled’s rights under the Supply Contract. If that were so, any action of the Commonwealth which had the effect of reducing the profits able to be earned by a business under a contract would involve an acquisition of property for the purposes of s 51(xxxi) of the Constitution.
Skilled’s submissions assume that the Supply Contract confers a contractual entitlement on Skilled to derive a profit from its supply of labour to Bengalla. The schedule of rates initially within Schedule C of the Supply Contract, and as subsequently varied, breaks down the components of the total price Skilled is entitled to charge Bengalla with respect to the supply of labour, including identifying a nominal “profit margin”. However, as Skilled conceded in oral submissions, the Supply Contract does not require that it pay employees the nominal rates used to calculate the price it charges Bengalla or, with the exception of changes to statutory on-costs and certain taxes, permit it to pass on increases in the costs it incurs in providing the employees to Bengalla. It is not correct to describe the Supply Contract as conferring a contractual right on Skilled to receive a profit. Skilled is currently paying higher rates of pay to its employees than those used to calculate the price it charges under the Supply Contract and performing the Supply Contract at a loss. Self-evidently, Skilled itself does not regard the Supply Contract as conferring it with a contractual right to derive a profit from the supply of labour. It does not.
As to the second item of property relied upon by Skilled, it may be accepted that any money that Skilled has set aside on account of potential leave liabilities with respect to its employees represents a form of property. Skilled submits that, if a regulated labour hire arrangement order is made, Skilled’s current provision “is taken from them”. We do not understand the submission. On no view would any money set aside by Skilled with respect to the accrued leave entitlements of its employees be subject to acquisition if a regulated labour hire arrangements order is made. If Skilled has $100,000 in the bank today which it has set aside on account of the leave entitlements of its employees, it will have the same $100,000 in the bank the day after an order is made. Skilled will retain that money.
The consequence of a regulated labour hire arrangement order would be to potentially increase the contingent future liability with respect to the leave entitlements of Skilled employees. If Skilled continued to deploy its employees to perform work for Bengalla and, in the future, those employees access a paid leave entitlement when performing work for Bengalla, the employees might be entitled to be paid at the protected rate of pay calculated in accordance with s 306F. Any provision Skilled has now made with respect to the accrued leave entitlements of its employees it will retain. Skilled might have an increased future contingent liability, but there would be no acquisition of any property of Skilled.
We would add that there was, in any event, no evidence before the Commission as to what, if any, provision has been made by Skilled with respect to the accrued leave entitlements of its employees. The witness statement of Mr Cribb contains calculations as to the theoretical value of the current accrued leave entitlements of Skilled employees performing work at the Bengalla Mine. He does not say what provision has been made with respect to those entitlements. The extent to which the theoretical liability materialises will depend on future events. For example, personal leave is only payable if an employee is unfit to perform work or caring for a member of their immediate family or household and is not generally paid out on termination.[13] The value of accrued annual leave is paid on termination of employment, but the rate at which the payment is calculated will depend on the circumstances of the employee at that time.[14]
Although it is not determinative in relation to Skilled’s submission in this regard, we note that provision is made with respect to the calculation of payments required to be made in relation to the termination of employment of an employee in circumstances in which a regulated labour hire arrangements order applies to the employee. Section 306NA, in short, provides that where an employee has only performed work for one regulated host during their employment, termination payments will be calculated with reference to the protected rate of pay, but that where an employee has performed work for more than one regulated host, termination payments will be calculated with reference to the terms of the employer’s enterprise agreement or other applicable employment instrument.[15] Any increase in the future liability of Skilled to make payments in relation to the termination of employment of any of its employees may be reduced by the operation of this section.
For those reasons, we do not believe that there would be any acquisition of property of Skilled if a regulated labour hire arrangement order is made. That means it is strictly not necessary to consider whether any benefit or gain of a proprietary nature will be acquired by Bengalla or Skilled’s employees. So far as Bengalla is concerned, it will acquire no property. Its contractual position will remain unchanged. We accept that Skilled’s employees deployed at the Bengalla Mine will acquire a benefit of a proprietary nature if an order were made. Skilled would be required to pay employees supplied to Bengalla at least at the protected rate of pay by s 306F(2). That is a civil remedy provision and an employee affected by a contravention of the provision is able to bring proceedings to seek compliance with the obligation.[16] However, as there has been no deprivation of any existing property of Skilled, there would be no acquisition of property by reason of the rights that would be obtained by Skilled employees as a result of an order being made.
In case we are wrong about whether there would be an acquisition of property as a result of the making of a regulated labour hire arrangements order, it is appropriate to consider the second question. The second question is whether the acquisition would be an acquisition which comes within s 51(xxxi) in the present circumstances. Every acquisition of property by or facilitated by the Commonwealth is not caught by s 51(xxxi). In Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297, Mason CJ, Deane and Gaudron JJ explained:[17]
Not every Commonwealth law with respect to the acquisition of property falls within s. 51(xxxi) of the Constitution. It may be outside that paragraph because, although it effects an acquisition of property, it is a law of a kind that is clearly within some other head of legislative power (28). That is the case with a law imposing taxation or a law providing for the sequestration of the estate of a bankrupt. Or it may be outside s. 51(xxxi) because it effects an acquisition of a kind that does not permit of just terms, as in the case of a law imposing a penalty by way of forfeiture (29). And, it may fall outside s. 51(xxxi) because it cannot fairly be characterized as a law for the acquisition of property for a purpose in respect of which the Parliament has power to make laws. That will generally be the case with laws directed to resolving competing claims or providing for “the creation, modification, extinguishment or transfer of rights and liabilities as an incident of, or a means for enforcing, some general regulation of the conduct, rights and obligations of citizens in relationships or areas which need to be regulated in the common interest”.
In Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134, for example, the Court emphasised that the cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible to legitimate characterisation as a law with respect to the acquisition of property for the purposes of s 51 of the Constitution.[18]
The application of the “just terms” constraint imposed by s 51(xxxi) of the Constitution depends on a question of characterisation, that is, whether the law can be characterised as a law with respect to the acquisition of property. In some cases, another head of power within s 51 is inherently antithetical to just terms compensation. For example, that is the case with the taxation power in s 51(ii). More generally, a law which is authorised by another head of power, but which effects an acquisition of property in a manner that is subservient and incidental to the principal purpose and effect of the legislation, will generally not be capable of being characterised as a law with respect to the acquisition of property. In Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155, Mason CJ explained:[19]
The examples given above of instances in which a law dealing with property or a chose in action necessarily stands apart from s. 51(xxxi) demonstrate that the words "for any purpose for which the Parliament has power to make laws" do not support the proposition that s. 51(xxxi) applies to any law providing for acquisition of property enacted by the Parliament. Instead, the Court has decided that acquisitions of various kinds, even though they might perhaps fall prima facie within the general power, are to be regarded as authorized by the exercise of specific powers otherwise than on the basis of just terms. Of these instances, it may be said that they are all cases in which the transfer or vesting of title to property or the creation of a chose in action was subservient and incidental to or consequential upon the principal purpose and effect sought to be achieved by the law so that the provision respecting property had no recognizable independent character. Indeed, the taxation cases apart, they were all cases in which the relevant statute provided a means of resolving or adjusting competing claims, obligations or property rights of individuals as an incident of the regulation of their relationship, e.g., the relationship between a bankrupt and the creditors in the bankruptcy, between the Crown and the person who brings in prohibited imports, and between the Crown and an enemy alien with respect to enemy property. In a context in which the law resolves or adjusts competing claims, obligations or property rights, it is not possible to regard the law as a law for the acquisition of property within the meaning of s. 51(xxxi).
We have no doubt that Part 2-7A of the Act is properly characterised as a law concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity as described in Georgiadis, Nintendo Co and Mutual Pools. Any acquisition of property that might result from a regulated labour hire arrangement order would be subservient and incidental to the principal purpose and function of Part 2-7A. It is not a law with respect to the acquisition of property.
Part 2-7A falls within Chapter 2 of the Act which sets the “main terms and conditions of employment of an employee that are provided under this Act” in the National Employment Standards, modern awards, enterprise agreements and workplace determinations.[20] Part 2-4 provides mechanisms for enterprise bargaining, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits.[21] Notably, the object of the Act as a whole includes, in s 3(f), providing “a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by” … “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”.
The function of Part 2-7A in that context is not, in our opinion, difficult to discern. Subject to the requirements set out in the Part, particular in s 306E, the Commission is conferred with the capacity to make an order the effect of which is to ensure that labour hire workers supplied to perform work for a host employer receive the same rate of pay as employees directly engaged by that employer. The order, if made, protects the bargaining process which has occurred within the enterprise of the regulated host. If confirmation is needed, the Revised Explanatory Memorandum to the Fair Work Amendment (Closing Loopholes) Bill 2023 (Cth) indicated that (footnotes omitted):[22]
Part 6 of Schedule 1 would positively engage the right to the enjoyment of just and favourable working conditions by protecting bargained rates in enterprise agreements, or other covered employment instruments (see item 72 of the Bill), from being undercut by the use of labour hire. While many employers negotiate enterprise agreements with their employees that set minimum rates, the FW Act currently allows employers to engage workers through a labour hire company, who are often paid less than those agreed rates.
Several inquiries have shown that labour hire is used in a range of industries with the result of undercutting bargained rates. For example, a Senate inquiry into labour hire considered these labour hire issues in the mining, agriculture, and transport and distribution sectors. The Victorian Inquiry into the Labour Hire Industry also found that because host enterprise agreements do not generally apply to labour hire workers, this results in lower pay for some workers who work alongside directly engaged employees.
To close this loophole, the Bill would enable employees and organisations entitled to represent their industrial interests, as well as host businesses, to apply to the FWC for an order that would require labour hire employees to be paid no less than what they would receive if they were directly employed by the host business and paid in accordance with the host’s enterprise agreement or other employment instrument. These provisions would therefore enable labour hire employees to be paid at least the same as their directly employed counterparts who are performing the same work and paid under the host’s enterprise agreement. Labour hire workers who are paid higher rates than directly employed workers would not be affected.
Seen in this context, the power conferred on the Commission is part of the system enacted by Parliament to govern the relationships between employers and employees in the interests of national economic prosperity and social inclusion. A central feature of that system is the facility to set terms and conditions of employment through collective bargaining, primarily at an enterprise level. In appropriate circumstances, Part 2-7A permits the Commission to make a regulated labour hire arrangement order so as to prevent the engagement of labour hire workers undermining a collective bargain made within a particular enterprise. It cannot be characterised as a law with respect to the acquisition of property.[23]
Finally, it is appropriate to record that the ramifications of Skilled’s submission, if it were correct, are difficult to overstate. The effect of a regulated labour hire arrangements order is to set a minimum rate of pay that must be paid to a regulated employee in connection with work performed for the regulated host. If that provision results in an acquisition of property other than on just terms because it might reduce the profit able to be derived by an employer under a contract or increase the value of accrued leave liabilities, it is difficult to see why the same conclusion would not follow for any provision which sets, or provides a mechanism for setting, minimum rates of pay. That would presumably include a national minimum wage order, modern award minimum wages or a workplace determination setting rates of pay. Key features of the Act, and the safety net of terms and conditions of employment for which it provides, would be rendered practically inoperative at least for employers who supply labour under contract.
It would mean that it has gone unnoticed for generations that the regulation of minimum wages and conditions of employment might involve the acquisition of property in a manner that triggers the operation of s 51(xxxi). That would be particularly remarkable given that major constitutional disputes arose in the United States during the twentieth century as a result of the Supreme Court of the United States invalidating minimum wage laws and other employment regulations on grounds that the laws contravened the due process clause of the 5th or 14th amendments to the United States Constitution by interfering with freedom of contract.[24] Those decisions, along with others, played a part in prompting Franklin Roosevelt’s threat to pack the Supreme Court during the 1930s.[25] The United States Supreme Court ultimately changed course and upheld the constitutionality of minimum wage laws.[26]
Skilled contends that its submissions would not have that consequence. With respect, we find that contention unpersuasive. Skilled suggests that the provisions of Part 2-7A are distinguishable from earlier industrial legislation because it is, primarily at least, based on the corporations power in s 51(xx) rather than the conciliation and arbitration power in s 51(xxxv). How that distinction affects the application of s 51(xxxi) was not explained. It does not. Skilled also submits that the Supply Contract contemplated increases in the national minimum wage. Whilst the Supply Contract provides for annual increases in the rates payable to Skilled, it is not clear how the increases were set. Even if it was related to contemplated increases in the national minimum wage, it does not alter the effect of Skilled’s argument. On its submissions, if the national minimum wage or a modern award wage was increased above the provision made for the rates of pay for Skilled employees in the Supply Contract, an acquisition of property would occur. The same consequence, in terms of the operation of s 39 of the Act, would arise as Skilled contends arises from a regulated labour hire arrangement order. That consequence points strongly against Skilled’s submission being correct.
In our opinion, s 39 of the Act would not be engaged by the making of a regulated labour hire arrangement order that covers Skilled. The section does not affect the Commission’s jurisdiction in this matter or otherwise provide a reason not to make an order.
Whether regulated labour hire arrangement orders must be made (s 306E(1) and (1A))?
As we have observed, no party disputed that the requirements in s 306E(1) and (1A) of the Act are met with respect to the employees supplied by CoreStaff and Skilled to perform work for Bengalla. Having considered the evidence filed by the parties, we are satisfied that each of the requirements in s 306E(1) are met and that the prohibitions on making an order in s 306E(1A) do not apply with respect to either application.
The Full Bench is satisfied, for the purposes of s 306E(7), that the MEU is an employee organisation that is entitled to represent the industrial interests of the employees of CoreStaff and Skilled who are supplied to perform work for Bengalla at the Bengalla Mine as well as employees of Bengalla employed to perform work at the Mine. Accordingly, the MEU is entitled to apply for regulated labour hire arrangement orders under s 306E of the Act by operation of s 306E(7)(c) and, as such, for the purposes of s 306E(1).
The Full Bench is further satisfied that the requirements of s 306E(1) of the Act are met. Specifically, on the basis of the material before the Full Bench, we are satisfied that:
(a)CoreStaff and Skilled supply employees they employ to perform work for Bengalla at the Bengalla Mine involving engagement in production work associated with the mining and extraction of coal and its transport to the Coal Handling and Preparation Plant.
(b)The Bengalla Agreement applies to all technicians performing production and engineering work in the classifications in Schedule A to the Black Coal Mining Industry Award 2020. Leaving aside one issue in relation to wash technicians which is addressed later in this decision, no party disputed that the Bengalla Agreement would apply to employees of CoreStaff and Skilled supplied to perform work at the Bengalla Mine if those employees were directly employed by Bengalla to undertake the same kind of work and we find that it would.
(c)Bengalla is not a small business employer.
For the purposes of s 306E(1A) of the Act, the Full Bench is satisfied that the performance of work by CoreStaff or Skilled employees is not and will not be for the provision of a service, rather than the supply of labour, having regard to the matters in s 306E(7A). In relation to the matters set out in s 306(7A) to be considered in being satisfied of the requirement in s 306E(1A), we make the following findings:
(a)There is no evidence before the Full Bench that CoreStaff and Skilled have substantial involvement in matters relating to the performance of work by their employees working at the Bengalla Mine.
(b)The evidence indicates that Bengalla directs, supervises and controls the work of CoreStaff and Skilled employees who are supplied to perform work at the Bengalla Mine. Bengalla takes primary responsibility for the administration of training and assessment of CoreStaff and Skilled employees in relation to their work at the Mine.
(c)CoreStaff and Skilled employees assigned to perform work at the Bengalla Mine work alongside Bengalla employees in the same crews, operate the same plant and equipment and use the same crib facilities as Bengalla employees and are subject to the same safety policies, inductions, sign-on/sign-out and site policies and procedures as Bengalla employees.
(d)There is no evidence before the Full Bench that CoreStaff and Skilled are or will be subject to industry or professional standards or responsibilities in relation to the work of its employees supplied to Bengalla.
(e)The work undertaken by CoreStaff and Skilled employees at the Bengalla Mine involves the operation of plant and equipment but does not involve work of a specialist or professional nature.
Having regard to the considerations referred to in s 306E(7A), it is clear that the performance of work by CoreStaff and Skilled employees is not for the provision of a service but is for the supply of labour for the purposes of s 306E(1A).
Whether it is not fair and reasonable to make an order (s 306E(2))?
Fair and reasonable assessment
Each of Bengalla, CoreStaff and Skilled submit that the Commission is prohibited from making regulated labour hire arrangement orders with respect to each application because it should be satisfied that it is not fair and reasonable to do so for the purposes of s 306E(2).
Section 306E(2) operates to impose a prohibition (“must not”) on the Commission making a regulated labour hire arrangement order. It does so if the Commission is satisfied it is not fair and reasonable in all the circumstances to make the order. That is, unless the Commission is positively satisfied that it is not fair and reasonable to make the order, the prohibition does not arise. In Batchfire, the Full Bench explained:[27]
… the prohibition on the making of a regulated labour hire arrangement order in s 306E(2) only operates if the Commission is positively satisfied that it is not fair and reasonable in all the circumstances to do so. The provision thus operates in an inverse way to s 306E(1A). The requirement to have regard to the matters in s 306E(8) is conditioned upon submissions having been made about them. That is, in the absence of any such submissions, regard need not be had to those matters. The statutory intention in this respect is confirmed in [646] of the REM: “The FWC is only required to consider matters listed in new subsection (8) where the parties have made submissions on these matters”.
The matters referred in to s 306E(8) are required to be considered if a submission is made in relation to the matter. Although there is some lack of clarity in the section, the better view is that the Commission is only required to have regard to a matter in s 306E(8) as a mandatory consideration if a submission is made in relation to the matter. The Commission is otherwise entitled to have regard to those matters as part of “all of the circumstances” even if no such submission is advanced.[28]
The parties made a number of submissions in relation to the operation of s 306E(2) of the Act. It is useful to refer to four issues. Firstly, the Full Bench was not greatly assisted by submissions as to the meaning of the word “fair” and “reasonable” in the abstract. Bengalla, for example, referred to the decision of Nicholson J in Pope v Lawler (1996) 41 ALD 127 where his Honour extracted dictionary definitions of those words as follows:[29]
The meaning of the words “fair and reasonable” is a question of fact. “Fair” is relevantly defined in The New Shorter Oxford English Dictionary 4th ed (1993) at 907 as “just, unbiased, equitable, impartial”. “Reasonable” is defined in the same dictionary at 2496 relevantly as “within the limits of reason; not greatly less or more than might be thought likely or appropriate.”
The nature of the task of assessing whether it would not be fair and reasonable to make a regulated labour hire arrangement order in a particular case must be undertaken in the statutory context in which Part 2-7A appears.[30] That includes the object of the Act and the relationship orders under Part 2-7A have to collective bargaining and enterprise agreements made in accordance with Part 2-4. In our view, it is sufficient to observe that the Commission is required to make a broad value judgement as to whether it is satisfied that it is not fair and reasonable to make an order which is likely to involve a balancing of various interests affected by an order having regard to the matters listed in s 306E(8) (at least to the extent submissions are made about them).[31]
Secondly, some of the submissions made by the MEU tended to suggest that the statutory context and statutory purpose of Part 2-7A establishes a predisposition in favour of the Commission making a regulated labour hire arrangement order if the circumstances in s 306E(1) and (1A) are met. That is, it says that the purpose of the Part is to protect bargained rates of pay by enabling the Commission to make an order that employees supplied by a labour hire employer to perform work for a regulated host are to be paid the same rate of pay and that this statutory context creates something approaching a presumption in favour of an order being made where that circumstance exists. Bengalla, CoreStaff and Skilled each submit that it would be an error to approach the fair and reasonable question with any predisposition favouring an order being made.
We do not believe it is correct to approach the question of whether the Commission is satisfied it is not fair and reasonable to make an order for the purposes of s 306E(2) by adopting a predisposition in favour of an order being made. Section 306E(2) imposes no threshold to be reached for the Commission not to make an order other than that it must be satisfied it is not fair and reasonable to do so. The MEU accurately describes the broad purpose of Part 2-7A. However, Parliament has not chosen to pursue that purpose by providing that the rates of pay payable to employees of the regulated host will automatically apply to employees of a labour hire employer. Leaving other considerations to one side, an order cannot be made if the Commission is satisfied that it is not fair and reasonable to do so. In those circumstances, it would be wrong to approach s 306E(2) on the basis that there is a presumption that it is fair and reasonable to make an order.
Thirdly, that does not mean that the fact employees are being supplied to perform work for the regulated host in circumstances which satisfy the requirements of s 306E(1) and (1A), and the nature of the arrangements under which that work is performed, are irrelevant to the fair and reasonable assessment. Bengalla makes a submission to that effect. It submits that the word “despite” in s 306E(2) has the same meaning as the word “notwithstanding” and indicates that one clause is dominant over the other. It refers to the decision of the NSW Court of Appeal in RIG Consulting Pty Ltd v Queanbeyan-Palerang Regional Council [2021] NSWCA 130 in which Leeming JA said:[32]
“Despite” is a word used in more modern legislation where once “notwithstanding” might have been used: Attorney-General (Cth) v Oates (1999) 198 CLR 162; [1999] HCA 35 at [33]; Environment Protection Authority v Condon as liquidator for Orchard Holdings (NSW) Pty Ltd (in liq) (2014) 86 NSWLR 499; [2014] NSWCA 149 at [28]. Its purpose is to ensure that the operation of one clause is unaffected by some other clause. The presence of the words “despite clause 4.1” does not imply that there is any conflict between two clauses which requires resolution. The words merely make it clear which clause prevails and which clause is subordinate in the event that there be a conflict. As Preston CJ of LEC points out, that is the orthodox approach to hierarchical words such as “despite” or “notwithstanding”; see for example Piper v Corrective Services Commission of New South Wales (1986) 6 NSWLR 352 at 358-359; Price v JF Thompson (Qld) Pty Ltd [1990] 1 Qd 278 at 281, 283, 287 and DPP v Leys & Leys (2012) 44 VR 1; [2012] VSCA 304 at [157], all three appellate courts citing In re Bland Bros and the Council of the Borough of Inglewood (No 2) [1920] VLR 522 at 533. As Cussen J there demonstrated, by reference to Sir Thomas Cecil’s Case (1597) 7 Rep 18b; 77 ER 440, this mode of drafting is ancient.
Bengalla submits that, as a result, s 306E(2) is the dominant clause. It says that the objective existence of the facts satisfying the requirements in s 306E(1) or (1A) does not inform or affect the assessment the Commission is required to made by s 306E(2) and is irrelevant to the assessment of whether it is not fair and reasonable to make the order. We do not accept the submission in the manner it is put by Bengalla.
Obviously enough, s 306E(2) is dominant over s 306E(1) in the sense that, even if the requirements in subsection (1) are met, the Commission must not make a regulated labour hire arrangement order if satisfied it is not fair and reasonable to do so in all the circumstances. The word “despite” has the effect that the obligation to make an order which would otherwise arise under subsection (1) falls away if subsection (2) applies. Like s 306E(1A), it represents an exception to the obligation to make an order under subsection (1). Subsection (2) prevails in that sense.
However, we do not accept that the fact that employees are being supplied to perform work for the regulated host in circumstances in which, if they were directly employed by the host, the covered employment instrument would apply to the employees, is irrelevant to whether it is not fair and reasonable to make an order. Section 306E(2) requires the Commission to consider whether it is not fair and reasonable to make an order “in all the circumstances”. The circumstances which must be considered do not exclude the fact of the supply of labour to the regulated host or the arrangements according to which the employees are supplied to perform work for the regulated host. The plain text of s 306E(2) indicates that it is “all” the circumstances that must be considered.
Bengalla separately submits that the performance pay provisions of the Bengalla Agreement give rise to additional uncertainty in relation to the calculation of the protected rate of pay. Two types of performance pay are provided for in the Bengalla Agreement: a lump sum payment of up to 5 percent of a technicians annual base salary paid annually and a “performance increase” of up to 0.45 percent.[44] If technicians receive an additional pay increase on performance grounds there is no difficulty in then determining the protected rate of pay. It is not clear whether an annual lump sum payment would be part of the “full rate of pay” of a technician under the Bengalla Agreement or, indeed, their “rate” of pay at all. However, we have not received submissions in relation to that question and it is not appropriate to express a view. Assuming the lump sum payment is part of the protected rate of pay, the only consequence would be that, when the lump sum becomes payable to Bengalla employees, any CoreStaff employees who, if the Bengalla Agreement applied to them, would be entitled to the payment must be paid that sum. We do not consider that outcome contributes any further difficulty in calculating the protected rate of pay.
The final submission made by CoreStaff is that it will be burdened with a significant increase in leave liabilities if an order is made and it would be unfair and unreasonable to make an order taking into account the financial burden this will place on CoreStaff. Ms Kearney’s witness statement indicates that the value of the accrued leave liabilities is $63,014.90. It submits that the liability could increase by approximately 30% if an order is made. Whilst the extent of the increase in leave liabilities might, in some cases, be relevant to whether it is not fair and reasonable to make an order, we cannot attach significant weight to that matter in this case. CoreStaff put forward no evidence in relation to the size of its operations, its financial position or that any increase in leave liabilities will cause it financial difficulties. We have no basis to conclude the financial burden on CoreStaff will be substantial. Further, as noted above with respect to Skilled, the liability is contingent and may or may not materialise depending on whether the occasion for employees to take leave arises and the circumstances of the employees at termination.[45]
Having considered each of the matters in relation to which submissions have been made by CoreStaff and Bengalla and other matters we consider relevant, the Full Bench is not satisfied that it is not fair and reasonable to make a regulated labour hire arrangement order with respect to CoreStaff employees supplied to perform work for Bengalla.
Whether it is not fair and reasonable to make an order to apply to Skilled?
The submissions of Skilled as to why it would not be fair and reasonable to make an order to apply to Skilled’s employees assert that none of the matters expressly listed in s 306E(8) are relevant in the present case. Skilled suggests that the express considerations set out in s 306E(8) are “useless” and appear directed at other situations, for example, “where there are less sophisticated labour hire-host arrangements”. It is sufficient to record that Skilled makes no submission in relation to any matter is s 306E(8)(a)-(e). Skilled says its submissions are all directed at whether it is fair and reasonable in all the circumstances to make the order.
Skilled’s submissions in relation to the fair and reasonable question are framed by reference to the following observation made in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495 by reference to the object of the Act in s 3:[46]
The stated objects show that the Act is intended to provide fairness, flexibility, certainty and stability for employers and their employees. “Fairness” necessarily has a number of aspects: fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers.
It is appropriate to consider the submissions made with respect to each aspect of the fairness referred to by the members of the High Court, namely, fairness to employees, between employees, to employers, between employers and between employees and employers.
In relation to fairness to employees, Skilled accepts that the benefit that would be conferred on Skilled employees if an order was made in that a higher rate of pay would become payable to those employees weighs in favour of an order being made. We consider this to be an appropriate concession. Skilled says, however, that the Act ameliorates that issue by the fact that Skilled’s employees could seek to bargain for improved terms and conditions of employment under Part 2-4.
We do not consider the mere existence of the facility for regulated employees to engage in collective bargaining with their direct employer is, in itself, of significance in assessing whether it is not fair and reasonable to make an order in a particular case. Part 2-7A acknowledges that the existence of the bargaining regime available to regulated employees is not an answer to an application for a regulated labour hire arrangement order. Such an order is intended to supplement an enterprise agreement that applies to regulated employees. In particular, s 306F(10)(a) provides that an order applies despite a fair work instrument that applies to a regulated employee.
As we have said, the industrial arrangements that apply to a particular labour hire employer might be relevant to a fair and reasonable assessment as is contemplated by s 306E(8)(c). However, Skilled has pointed to no particular aspects of the industrial arrangements which apply to its employees, or of the history of bargaining in which it has engaged with its employees, which should lead the Commission to be satisfied that it is not fair and reasonable to make the order in its case. It expressly disclaimed any submission that there is any matter falling within s 306E(8)(c) relevant to its case.
In relation to fairness between employees, Skilled submits that it would be unfair to Bengalla employees to make a regulated labour hire arrangement order. That is said to be because the Bengalla Agreement is the result of a negotiation in which the wage outcomes involved an exchange of productivity benefits such as provision for flexibility in the performance of work functions, that employees are paid for their role rather than time at work and that employees may be required to work additional hours on an as needs basis.[47] It is said it would be unfair to Bengalla employees to make an order because the Skilled employees would have the benefit of the rate of pay without the productivity compromises contained in the Bengalla Agreement.
We do not accept that unfairness is caused to Bengalla employees if a regulated labour hire arrangement order is made. There is no evidence any Bengalla employees hold that view, and we would be surprised if they did. It is possible that, in some cases, it might be contended that it is not fair and reasonable to make an order because of the balance of terms and conditions which apply to the regulated employees and employees of the regulated host. For example, it may be said that, once that comparison is undertaken, the regulated employees receive benefits aside from their rate of pay which means is it not fair and reasonable that they be entitled to the rate of pay under the host employment instrument. Skilled did not attempt any such comparison. It simply identified three aspects of the Bengalla Agreement and asserted that those conditions explained the higher rates of pay under that Agreement. We can see no basis for that assertion or for a conclusion that is not fair and reasonable to make the order because of the balance of conditions between Bengalla and Skilled employees.
In relation to fairness to Skilled, it submits that, if an order is made, it will have the fruit of the Supply Contract with Bengalla taken away and it will be required to perform its obligations for the remainder of the Supply Contract at a loss. Skilled further submits that it will be denied the entitlement to negotiate an enterprise agreement with its employees unconstrained by Part 2-7A and required to pay its employees a rate of pay “not informed by the productivity exchange that has been negotiated in the Bengalla Agreement”.
The financial impact of a regulated labour hire arrangement on a labour hire employer is relevant in assessing whether it is fair and reasonable to make the order, and we have had regard to the fact that there will be a financial impact on Skilled if an order is made. However, there is no evidence before the Full Bench in relation to the total costs that will be incurred by Skilled if an order is made, the size of Skilled’s operations, its financial position, or that the making of an order would cause it financial difficulties. We have no basis to conclude the financial burden on Skilled’s overall operations will be substantial. In those circumstances, there are limits on the weight we can attach to the financial impact on Skilled in assessing whether it is not fair and reasonable to make an order.
In relation to fairness between employers and between employees and employers, Skilled submits that it would not be fair and reasonable to make an order because other employees and employers enjoy the right to enter into enterprise agreements that reflect the relevant skills, productivity benefits and work involved. That is said to be denied to Skilled if a regulated labour hire arrangement order is made. As we have said, we do not regard the mere existence of the collective bargaining regime in Part 2-4 as favouring a conclusion that it is not fair and reasonable to make an order. This is not a case in which Skilled has pointed to particular aspects of the bargaining history concerning its employees, or particular features of the enterprise agreements that have resulted from those bargaining processes, that support a conclusion that it is not fair and reasonable to make an order. It is also not correct to say that Skilled cannot bargain with its employees, although we acknowledge that the existence of a regulated labour hire arrangement order will likely have a substantial impact on the bargaining.
Finally, in relation to the application for an order to apply to Skilled employees, we have also had regard to the submissions made by Bengalla. We have addressed those submissions in addressing the application concerning CoreStaff above and have also taken those matters into account in assessing whether it is not fair and reasonable to make an order to apply to Skilled. In relation to the pay rates for part-time and casual employees, we note that the evidence of Mr Cribb is that there are only a small number of those employees supplied by Skilled. Mr Cribb’s evidence is that there are seven part-time employees performing crib relief work and eight casuals undertaking ad hoc floater work out of a total of 156 employees. There are a number of other casual employees, but they perform at least full-time hours. In relation to the increase in leave liabilities, Mr Cribb gave evidence of the quantum of the potential increase in Skilled’s liabilities. We take that matter into account. However, as is the case the CoreStaff, there is no evidence before the Commission in relation to the size of Skilled’s operations, its financial position or that any increase in leave liabilities will cause it financial difficulties.
Having considered each of the matters in relation to which submissions have been made by Skilled and Bengalla and other matters we consider relevant, the Full Bench is not satisfied that it is not fair and reasonable to make a regulated labour hire arrangement order with respect to Skilled employees supplied to perform work for Bengalla.
Form of the orders
As the Full Bench has concluded that regulated labour hire arrangement orders must be made with respect to CoreStaff and Skilled employees supplied to perform work for Bengalla, it is necessary to consider the form of the orders to be made.
The parties accepted that all employees supplied by CoreStaff and Skilled to perform work for Bengalla would be covered by the Bengalla Agreement if employed by Bengalla with one exception. Skilled submits that wash technicians (or car washers as they were also referred to) it employs would not be covered by the Bengalla Agreement. It submits that the work of wash technicians is not contemplated by the Bengalla Agreement and they perform very different work to production and engineering employees covered by the Agreement. Bengalla does not support the wash technicians being carved out of an order applying to Skilled and neither does the MEU. It is, in those circumstances, necessary to assess whether those employees would be covered by the Bengalla Agreement.
The question posed by s 306E(1)(b) is whether the Bengalla Agreement would apply to the wash technicians if Bengalla were to employ the employees to perform work of the same kind. An enterprise agreement applies to an employee if it is in operation and covers the employee and, in turn, covers an employee if it is “expressed to cover (however described)” the employee.[48] The coverage of the Bengalla Agreement is set out above. In short, it covers all technicians. A technician is defined to include “persons designated by Bengalla as technicians and performing production and engineering work within the classifications in Schedule A of the Black Coal Mining Industry Award 2020”.
The work performed by wash technicians is only described in the witness statement of Mr Cribb who said:
19. The Wash Technicians have recently transitioned to an 8-hour day roster. Previously, their working hours have been sporadic and ad-hoc, according to operational needs. This has meant that Wash Technicians have been engaged for short and unpredictable periods, sometimes of 3 or 4 hours.
20. It is to compensate for the sporadic and short duration working arrangements that have previously applied that SWS has classified all Wash Technicians as ML3s. This work is otherwise essentially unskilled and requires no experience, training or qualifications (other than a working from heights licence), and involves working in the wash bay performing cleaning such as removing dirt and mud from vehicles and equipment. Unlike all other technicians directly employed by Bengalla, or other SWS mineworkers, Wash Technicians do not (and are not capable of) operating mining equipment, or going out into the mine site.
It is apparent that the wash technicians are designated as technicians and would be covered by the Bengalla Agreement so long as they can be described as performing production and engineering work within the classifications in Schedule A of the Black Coal Award.
The parties did not make detailed submissions in relation to the Black Coal Award. The Black Coal Award covers employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined or who are employed by an employer in the black coal industry, and are “directly connected with the day to day operation of a black coal mine” and employed in a classification or class of work in Schedule A or Schedule B.[49] There is no reason to doubt that the work of the wash technicians is directly connected with the day to day operation of a black coal mine and no submission was made to the contrary. Work on vehicles used at a mine has a sufficient connection.[50]
Schedule A to the Black Coal Award contains a single stream structure, which does not contain any demarcations relating to the performance of work. The definitions for each of the classification levels are “necessarily general” as they are intended to cover the various types of work actually performed under the Award.[51] As a result, to fall within any of the classifications in Schedule A, it is not necessary that an employee performs any particular types of work or any particular range of duties. Although the wash technicians may perform only a limited type of work, that does not appear to remove them from being mineworkers for the purposes of Schedule A to the Black Coal Award. We are satisfied that the wash technicians would be covered by the Bengalla Agreement if employed by Bengalla.
Skilled submits that other exclusions should be made from the order which applies to it. It refers to the requirement, in s 306E(9)(c), that an order “specify” the regulated employees covered by the order. Skilled says the requirement to “specify” imports a requirement of clarity and precision, particularly in the context of an instrument the contravention of which can result in the imposition of a pecuniary penalty.[52] Where a person may be subject to a penalty in the event of the contravention of an instrument, the subject of an order should not be left in any doubt as to what their obligations are pursuant to that order.[53]
There is no lack of clarity in the order sought by the MEU. It proposes that the order will cover employees of Skilled or CoreStaff who perform work at the Bengalla Mine who would, if employed by Bengalla, be covered by the Bengalla Agreement. The coverage of the Bengalla Agreement is set out in clause 2. The Agreement is itself an instrument contravention of which can result in the imposition of a pecuniary penalty.[54] The draft order proposed by Skilled would introduce rather than avoid uncertainty. It seeks to insert reference to “production employees”. It is unclear whether and, if so, what limitation is sought to be introduced by those words. The term “production employee” is not used in terms in the Bengalla Agreement and its use would not clarify the application of the order.
Finally, Skilled submits that two further exclusions be made to the regulated employees covered by the order. Bengalla opposes any additional exclusions. Skilled suggests that any trainees who are performing work as part of a training arrangement should be excluded because s 306G(1) provides that the protected rate of pay in s 306F does not apply if a training arrangement applies to a regulated employee in respect of work for the regulated host. In our view, s 306G(1) operates by force of the Act and there is no need to exclude employees to whom a training arrangement applies from the terms of the order.
Skilled then submits that any employees of Skilled must be excluded if the employees perform work in respect of Skilled’s provision of services to Bengalla in the future within the meaning of s 306E(1A). It is not suggested that Skilled’s employees performing work for Bengalla do perform work for the provision of a service, or that there is any proposal or likelihood of Skilled providing a service in the future. There is no evidence Skilled provides services, as opposed to supplying labour, as part of its business at all. We do not think it is necessary, or appropriate, to make this provision in circumstances in which there is no identified prospect of the eventuality ever occurring. The proposed exclusion would introduce uncertainty and a lack of clarity in the order which Skilled says must be avoided.
The submissions made by Skilled assume that it is possible for the Commission to make a regulated labour hire arrangement order under s 306E which applies to some, but not all, employees supplied to perform work for the regulated host. It is not clear to us that the assumption is correct. Section 306E(1) requires the Commission to make an order if the circumstances in that subsection are met. The prohibitions in s 306E(1A) and (2) then set out circumstances in which the Commission must not make “the order”. The language suggests that either the Commission must make an order applying to the regulated employees or it must not. However, it is not appropriate for the Full Bench to express a view about that question given the conclusions we have reached.
Conclusion and disposition
For the reasons set out above, the Full Bench is required by s 306E of the Act to make a regulated labour hire arrangement order which applies to all employees supplied by CoreStaff and Skilled to perform work at the Bengalla Mine. The Full Bench will publish the order together with this decision, setting out the matters specified in s 306E(9) of the Act.
Section 306E(9)(e)(ii) provides that the day an order will come into force which must be the day the order is made or a later day. In light of the issues raised by Bengalla and CoreStaff in relation to the calculation of the protected rate of pay for the regulated employees, we believe it is appropriate to delay the commencement of the orders for a period to permit any dispute in relation to the determination of the protected rate of pay to be dealt with between the parties and, if necessary, the Commission. We note that s 306P(1)(b) permits a dispute to be dealt with under that section and s 306Q when a regulated labour hire arrangement order has been made but is not yet in force. CoreStaff and Skilled each requested that, if orders are made, that they commence operation on a Sunday to coincide with the commencement of their pay periods. The orders will come into force on 13 April 2025.
No party submitted that the order should specify when it will cease to be in force for the purposes of s 306E(10). Accordingly, the order will also not contain such a specification.
VICE PRESIDENT
Appearances:
R Reitano, of counsel, with K Endacott for the Mining and Energy Union.
R Sweet KC and J McLean, of counsel, instructed by Herbert Smith Freehills for Bengalla Mining Company Pty Ltd.
L Howard, of counsel, instructed by Kingston Reid for Skilled Workforce Solutions (NSW) Pty Ltd.
C Pase, of counsel, instructed by KHQ Lawyers for CoreStaff NSW Pty Ltd.
Hearing details:
25 February 2025.
Sydney (in person).
[1] Re Mining and Energy Union [2024] FWCFB 299; (2024) 333 IR 249 at [8]-[17].
[2] See, particularly, Fair Work Act 2009 (Cth), s 306F.
[3] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152; (2020) 279 FCR 591 at [69].
[4] Explanatory Memorandum to the Fair Work Bill 2008 (Cth) at [175].
[5] See the approach adopted in Tran v Commonwealth [2010] FCAFC 80; (2010) 187 FCR 54 at [229]-[237] (Besanko J) and Re OneSteel Manufacturing Pty Ltd [2017] NSWSC 21; (2017) 93 NSWLR 611 at [45]-[56] (Brereton J) when dealing with provisions using similar wording to s 39 of the Act.
[6] Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 290 (Starke J); ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; (2009) 240 CLR 140 at [131] (Hayne, Kiefel and Bell JJ).
[7] Smith v ANL Ltd [2000] HCA 58; (2000) 204 CLR 493 at [20] (Gaudron and Gummow JJ).
[8] Commonwealth v Tasmania (1983) 158 CLR 1 at 247 (Brennan J).
[9] Ibid at 145 (Mason J). See also ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; (2009) 240 CLR 140 at [132] (Hayne, Kiefel and Bell JJ) and JT International SA v Commonwealth [2012] HCA 43; (2012) 250 CLR 1 at [42] (French CJ) and [169] (Hayne and Bell JJ).
[10] Commonwealth v Tasmania (1983) 158 CLR 1 at 145-146 (Mason J) and 248 (Brennan J); JT International SA v Commonwealth [2012] HCA 43; (2012) 250 CLR 1 at [42] (French CJ) and [170] (Hayne and Bell JJ).
[11] Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 452 (Aickin J); ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51; (2009) 240 CLR 140 at [42] (French CJ) and [133] (Hayne, Kiefel and Bell JJ).
[12] Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297 at 325 (Mason CJ, Deane and Gaudron JJ); JT International SA v Commonwealth [2012] HCA 43; (2012) 250 CLR 1 at [367] (Kiefel J).
[13] Fair Work Act 2009 (Cth), s 97.
[14] Fair Work Act 2009 (Cth), s 90(2).
[15] Fair Work Act 2009 (Cth), s 306NA(2) and (3).
[16] Fair Work Act 2009 (Cth), ss 539(2)(Item 9A) and 540(1).
[17] Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297 at 306-307 (Mason CJ, Deane and Gaudron JJ) referring to Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 189-190 (Deane and Gaudron JJ).
[18] Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 161 (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ).
[19] Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 171 (Mason CJ).
[20] Fair Work Act 2009 (Cth), s 43(1).
[21] Fair Work Act 2009 (Cth), s 171(a).
[22] Explanatory Memorandum to the Fair Work Amendment (Closing Loopholes) Bill 2023 (Cth) at [75]-[77].
[23] See approach in John Holland Group Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2011] VSCA 396; (2011) 214 IR 343 at [94]-[96] (Neave J, Nettle J and Judd AJA agreeing) with respect to transitional provisions for the current Act.
[24] See, most famously, Lochner v New York, 198 US 45 (1905) (dealing with hours of work laws), Adkin v Children’s Hospital, 261 US 525 (1923) (dealing with minimum wages for women) and Morehead v New York ex rel Tipaldo, 298 US 587 (1936) (also dealing with minimum wages). Notably, those decisions did not appear to suggest that minimum wage laws violated the “takings” clause of the 5th Amendment to the United States Constitution.
[25] Jeff Shesol, Franklin Roosevelt vs The Supreme Court (2010).
[26] West Coast Hotel Co v Parrish, 300 US 379 (1937).
[27] Re Mining and Energy Union [2024] FWCFB 299; (2024) 333 IR 249 at [16]. See also Application by the Mining and Energy Union re Rix’s Creek [2025] FWCFB 12 at [49]-[50].
[28] Application by the Mining and Energy Union re Rix’s Creek [2025] FWCFB 12 at [51]-[52].
[29] Pope v Lawler (1996) 41 ALD 127 at 135 (Nicholson J) .
[30] Alcoa of Australia Retirement Plan Pty Ltd v Thompson [2002] FCA 256; (2002) 116 FCR 139 at [48] (RD Nicholson J).
[31] See the approach adopted in other contexts: Toms v Harbour City Ferries Pty Limited [2015] FCAFC 35; (2015) 229 FCR 537 at [36] (Buchanan J); Secretary of the Ministry of Health v New South Wales Nurses and Midwives’ Association [2022] NSWSC 1178; (2022) 320 IR 249 at [12] (Walton J).
[32] RIG Consulting Pty Ltd v Queanbeyan-Palerang Regional Council [2021] NSWCA 130 at [22] (Leeming JA).
[33] Fair Work Act 2009 (Cth), s 306E(8)(a), (c), (da) and (e).
[34] Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2020] FCAFC 192; (2020) 282 FCR 1 at [25]-[29] (Allsop CJ) and [67]-[68] (Flick J); Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495 at [13]-[14] (Kiefel CJ, Nettle and Gordon JJ).
[35] Fair Work Act 2009 (Cth), s 55-56 and 186(2)(c).
[36] Fair Work Act 2009 (Cth), s 186(2)(d) and 193.
[37] See, in a different context, Australian Municipal, Administrative, Clerical and Services Union v Central Goldfields Shire Council[2024] FWCFB 444; (2024) 335 IR 110 at [76].
[38] Fair Work Act 2009 (Cth), s 12.
[39] Bengalla Enterprise Agreement 2022, clause 4.1 and 4.2.
[40] Fair Work Act 2009 (Cth), s 306Q(1).
[41] Bengalla Enterprise Agreement 2022, clause 2.1 of Schedule A.
[42] Bengalla Enterprise Agreement 2022, Schedule A – Table 1.
[43] Bengalla Enterprise Agreement 2022, Schedule A – Table 2.
[44] Bengalla Enterprise Agreement 2022, clause 4.1(3) and clause 1.2 of Schedule A.
[45] Fair Work Act 2009 (Cth), ss 90(2), 97 and 306NA.
[46] Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495 at [14] (Kiefel CJ, Nettle and Gordon JJ).
[47] By reference to the Bengalla Enterprise Agreement 2022, clause 3.1-3.3 and 4.2.
[48] Fair Work Act 2009 (Cth), ss 52(1) and 53(1).
[49] Black Coal Mining Industry Award 2020, clause 4.1(b)(i) and (ii).
[50] Groves v Kal Tire[2020] FWC 3689 at [135].
[51] Black Coal Mining Industry Award 2020, Schedule A clause A.1.2 and A.1.3. See also Bis Industries Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 1374 at [312] (White J).
[52] Vanstone v Clark [2005] FCAFC 189; (2005) 147 FCR 299 at [13] (Black CJ and Weinberg J); Beame v Commissioner of Police (NSW) [2023] NSWSC 347; (2023) 297 A Crim R 131 at [75] (Yehia J).
[53] Metal Trades Industry Association of Australia v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (1997) 77 IR 87 at 92 (Marshall J); Esso Australia Pty Ltd v Australian Workers’ Union [2015] FCA 758; (2015) 253 IR 304 at [97]-[99] (Jessup J).
[54] Fair Work Act 2009 (Cth), s 50.
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