Applications by the Mining and Energy Union re Bulga Open Cut Mine
[2025] FWC 1273
•12 MAY 2025
| [2025] FWC 1273 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.306E - Application for a regulated labour hire arrangement order
Applications by the Mining and Energy Union re Bulga Open Cut Mine
(LH2024/25 & LH2024/26)
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 12 MAY 2025 |
Application for a regulated labour hire arrangement order in respect of The Tesa Group Pty Ltd, WorkPac Pty Ltd and WorkPac Mining Pty Ltd in relation to work performed for Bulga Coal Management Pty Ltd at the Bulga Open Cut Mine – whether it is not fair and reasonable to make a regulated labour hire arrangement order – acquisition of property otherwise than on just terms – form of order – orders made.
Introduction
On 14 October 2024, the Mining and Energy Union filed two applications for regulated labour hire arrangement orders under s 306E of the Fair Work Act 2009 (Cth). The orders sought by the MEU would apply to labour hire workers employed by The TESA Group Pty Ltd (Skilled) or one of two entities in the WorkPac group of companies, WorkPac Mining Pty Ltd or WorkPac Pty Ltd, who perform work for Bulga Coal Management Pty Ltd at the Bulga Open Cut Mine near Singleton in New South Wales. The host employment instrument is the Bulga Open Cut Enterprise Agreement 2021.
Skilled opposes the orders sought by the MEU. Skilled advances three submissions. First, it contends that the application must be dismissed by virtue of s 39 of the Act on the basis that the orders sought would, if made, result in the acquisition of Skilled’s property otherwise than on just terms. Secondly, Skilled submits that the orders sought are not fair and reasonable in all the circumstances. Thirdly, Skilled makes a number of submissions about the terms of any orders to be made by the Fair Work Commission.
WorkPac submits that the Commission can and should be satisfied that it would not be fair and reasonable in all the circumstances to make the orders sought, with the result that no orders should be made.
Bulga submits that both applications should be dismissed on the basis that the Commission ought to be satisfied that it is not fair and reasonable to make the orders sought.
Evidence
The evidence before the Commission in relation to the applications comprised the following:
(a)Witness statements of Chad Hanson dated 24 January 2025 and 15 April 2025. Mr Hanson is a District Vice President of the Northern Mining and NSW Energy District Branch of the MEU.
(b)Witness statements of Brian Spicer dated 22 November 2024 and 28 January 2025. Mr Spicer is employed by Bulga to work as an Operator at the Mine.
(c)A witness statement of David Foster dated 18 December 2024. Mr Foster is employed by Glencore Coal Assets Australia Pty Limited in the position of General Manager of Hunter Valley Operations. Mr Foster was previously the Operations Manager at the Mine.
(d)A witness statement of Murray Gregson dated 18 December 2024. Mr Gregson is employed by Glencore Coal Assets in the position of Operations Manager at the Mine.
(e)Witness statements of Cameron Hockaday dated 17 December 2024 and 11 March 2025. Mr Hockaday is the Chief Commercial & Risk Officer of WorkPac Group Pty Ltd.
(f)A witness statement of Samantha Moore dated 2 April 2025. Ms Moore is employed by Programmed Skilled Workforce Ltd in the position of Operational Delivery Manager. Ms Moore adopted a witness statement of Joel Cribb dated 18 December 2024. Although Mr Cribb was not available to give evidence at the hearing, his witness statement was admitted into evidence because Ms Moore adopted it as her evidence in the proceedings.
(g)Various documents tendered by the parties.
(h)Oral evidence given by the witnesses who were cross examined.
The evidence indicates, and I find, as follows:
(a)The Mine is an open cut coal mine situated approximately 15 kilometres southwest of Singleton in New South Wales. Bulga operates the Mine. Bulga is a wholly owned subsidiary of Glencore Coal Assets and part of the global Glencore plc group.
(b)Thermal and metallurgical coal is produced at the Mine.
(c)Bulga employs employees to perform work at the Mine.
(d)The workforce at the Mine includes production workers, maintenance workers and ‘staff’.
(e)The production workers at the Mine operate machines such as dozers, drilling machines, an electric rope shovel, excavators, graders, loaders, rear dump trucks, and water carts. The production workers also operate the Bulga Coal Handling and Preparation Plant, where the coal is washed, processed and loaded onto trains for export from the Port of Newcastle.
(f)The maintenance workers at the Mine inspect, repair and maintain the machines and equipment at the Mine. The maintenance workforce includes both trade and non-trade qualified workers.
(g)The ‘staff’ at the Mine work in a variety of administrative, professional, supervisory and technical roles.
(h)The Bulga Enterprise Agreement covers Bulga and its employees who are employed at the Mine (including the Coal Handling Preparation Plant) and who perform work covered by the classifications contained in Schedule A of the Black Coal Mining Industry Award 2010.
(i)The Bulga employees who are covered by the Bulga Enterprise Agreement perform production and maintenance work.
(j)In addition to the directly employed workforce, Skilled and WorkPac supply employees to Bulga to perform production work at the Mine.
(k)The TESA Group Enterprise Agreement 2022 (Skilled Enterprise Agreement) covers and applies to employees of Skilled who work for Bulga at the Mine.
(l)The Workpac Coal Mining Agreement 2019 covers and applies to WorkPac and its employees who are employed in the black coal mining industry whose duties are directly connected with the day-to-day operation of a black coal mining site, including the Mine. The nominal expiry date of the WorkPac Agreement was 27 June 2023. Although the last pay increase provided for in the WorkPac Agreement took effect on 1 July 2023, WorkPac increased those rates in July 2024, partly because the pay rates for some employees covered by the WorkPac Agreement fell below the minimum rates of pay prescribed by the Black Coal Mining Industry Award 2020
(m)PSW is a party to a supply contract with Bulga to provide labour to perform production work at the Mine. PSW and Skilled are part of the Programmed group of companies. The supply contract between PSW and Bulga includes an Umbrella Agreement between PSW and Glencore Coal Assets Australia Pty Limited. Skilled has been providing employees to the Mine since about 2012. The charge out rates agreed between Bulga and PSW for the supply of labour to the Mine are arrived at by taking an hourly rate of pay from the Skilled Enterprise Agreement, applying various additional amounts on top (to account for loadings or penalties, leave accruals for permanent employees, a casual loading for casual employees, on-costs and other overheads and exigencies).[1] When applying the Skilled Enterprise Agreement, Skilled is currently adopting a base rate of $31.30 for a ML3, because this is the amount prescribed by the BCMI Award, which exceeds the base rate of pay in the Skilled Enterprise Agreement. A small profit margin is then added to the base rate plus other amounts described above. A higher duties allowance is also paid to some Skilled employees who work at the Mine on the basis that they have competencies beyond haul truck, fuel truck and water cart operation
(n)WorkPac Pty Ltd is party to a supply contract with Glencore Coal Assets, under which WorkPac provides supplementary labour to perform work at the Mine. The supply contract between WorkPac Pty Ltd and Yancoal obliges WorkPac Pty Ltd to supply Glencore Coal Assets with suitably qualified, experienced and competent supplementary labour on an as required basis. The supply contract between WorkPac Pty Ltd and Glencore Coal Assets contains a schedule of ‘flat pay rates’[2], onto which are added statutory on-costs, allowances, overhead recovery and a small profit margin.[3]
(o)As at 12 December 2024, there were 384 permanent production operators employed by Bulga at the Mine, 88 production operators employed by WorkPac at the Mine, and 64 production operators employed by Skilled at the Mine.
(p)Employees of Skilled and WorkPac who work at the Mine attend the same daily pre-start meetings as the Bulga employees and are allocated work and equipment for their shift by the Bulga Supervisors in the same way.
(q)Employees of Skilled and WorkPac who work at the Mine perform the same work and operate the same Bulga-owned machines and equipment as the Bulga employees.
(r)Employees of Skilled and WorkPac who work at the Mine do not wear Glencore or Bulga uniforms
(s)Employees of Skilled and WorkPac who work at the Mine are required to comply with the same instructions as the Bulga employees delivered by the Bulga Supervisors.
(t)Employees of Skilled and WorkPac who work at the Mine must undertake the same site induction conducted by Bulga before commencing work at the Mine.
(u)Employees of Skilled and WorkPac who work at the Mine operate pursuant to the Safety Management System established by Bulga at the Mine.
(v)Employees of Skilled and WorkPac who work at the Mine operate under the same Bulga procedures, policies and rules as the Bulga employees.
(w)Employees of Skilled and WorkPac who work at the Mine are rostered on the same shifts and allocated to the same crews as the Bulga employees.
(x)Employees of Skilled and WorkPac who work at the Mine take breaks at times determined by Bulga and share the same crib facilities as Bulga’s employees.
(y)Employees of Skilled and WorkPac who work at the Mine undertake the same training as Bulga’s employees.
(z)Employees of Skilled and WorkPac who work at the Mine are supplied with personal protective equipment and consumables by Bulga.
(aa)The rates of pay for employees of WorkPac and Skilled who work at the Mine are the subject of confidentiality orders, so I will not set them out in this decision. However, it is accepted by Bulga that, if an order is made, “their hourly rates would increase significantly to an effective hourly rate of $67.95 based on the current annualised salary under the Bulga EA” of $154,593.30.[4] Mr Hockaday gave evidence that the likely increase in the rates of pay to be paid to WorkPac employees covered by a regulated labour hire arrangement order would be significant and would vary depending on classifications, the rosters being worked and performance payments.[5] The evidence adduced by Skilled as to its increased leave liabilities supports Bulga’s assessment that the wages of its employees who work at the Mine will “increase significantly” if the orders sought by the MEU are made.[6]
(bb)On the morning of the final day of the hearing in these proceedings, 17 April 2025, Bulga’s employees at the Mine who are covered by the Bulga Enterprise Agreement voted in favour of making a new enterprise agreement. The new enterprise agreement has not, at this time, been approved by the Commission.
Statutory Provisions
Part 2-7A of the Act is entitled “Regulated labour hire arrangement orders”. It permits 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 the present case are as follows:
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 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…”
In Re Mining and Energy Union[7] (Batchfire), Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd,[8] and Application by the Mining and Energy Union re Rix’s Creek,[9] different Full Benches of the Commission have outlined a number of principles concerning the proper interpretation and application of s 306E. I will apply the principles stated in those decisions in deciding the present case.
Section 306E(1) and (1A)
Section 306E(1) of the Act 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 in ss 306E(1A) and 306E(2) apply.
I am satisfied on the evidence before the Commission that:
(a)Skilled and WorkPac supply, directly, their employees to perform work for Bulga (a regulated host) at the Mine;
(b)the Bulga Enterprise Agreement would apply to the employees of Skilled and WorkPac who work at the Mine if Bulga were to employ those employees to perform work of that kind;
(c)Bulga is not a small business employer; and
(d)the performance of work by employees of Skilled and WorkPac at the Mine 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) of the Act. In relation to the matters referred to in s 306E(7A), I make the following brief findings (noting that the issue is not in contest):
(i)There is no evidence that Skilled or WorkPac has any involvement in matters relating to the performance of work by their employees at the Mine.
(ii)The evidence indicates that Bulga arranges and oversees the work of Skilled and WorkPac employees who are supplied to perform work at the Mine, employees of Skilled and WorkPac are assigned work by Bulga, Supervisors employed by Bulga direct, instruct and monitor the work of employees of Skilled and WorkPac, and employees of Skilled and WorkPac are subject to the same procedures, policies, rules, and rosters as Bulga employees.
(iii)Bulga’s employees work alongside employees of Skilled and WorkPac. They also use the same plant and equipment supplied by Bulga and use the same crib facilities. The same policies and procedures are applied to all employees at the Mine.
(iv)There is no evidence that Skilled or WorkPac is or will be subject to industry or professional standards or responsibilities in relation to the work of employees of Skilled or WorkPac supplied to Bulga.
(v)The production work undertaken by Skilled and WorkPac employees at the Mine does not involve work of a specialist or professional nature.
Section 306E(2) and (8) – fair and reasonable
General principles
The prohibition on the making of a regulated labour hire arrangement order in s 306E(2) of the Act only operates if the Commission is positively satisfied that it is not fair and reasonable in all the circumstances to make the order.[10]
Fairness has a number of aspects. It includes fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers.[11]
The Commission is only required to have regard to a matter in s 306E(8) as a mandatory consideration if a submission is made about the matter. However, the Commission is otherwise entitled to have regard to those matters as part of “all the circumstances” even if no such submission is advanced.[12]
The task of assessing whether it would not be fair and reasonable in all the circumstances to make a regulated labour hire arrangement order must be undertaken in the statutory context in which Part 2-7A appears.[13] That includes the objects of the Act and the relationship between orders under Part 2-7A and collective bargaining and enterprise agreements made in accordance with Part 2-4 of the Act.[14]
The Commission is required to make a broad value judgment as to whether it is satisfied that it is not fair and reasonable to make an order.[15] This task will likely involve a balancing of various interests affected by an order having regard to the matters listed in s 306E(8), if submissions are made about them).[16]
The broad purpose of Part 2-7A 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 as the direct employees of the regulated host for doing the same work.[17] However, the Act does not establish 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.[18]
The fact of the supply of labour to a regulated host and the arrangements according to which the employees are supplied to perform work for the regulated host are part of “all the circumstances” which must be considered.[19]
If a submission is made about the matter, s 306E(8) requires consideration of the pay arrangements that apply to the regulated host and the regulated employees, the relationship between the regulated host and the employer, whether the work is performed for a joint venture, and the terms and nature of the arrangement under which the work is performed.[20] For example, whether the regulated employees are being paid substantially less than employees of the regulated host, or whether the rates of pay are comparable and the employees receive some other benefits from their employer, is capable of being relevant to whether it is not fair and reasonable to make an order.[21]
The nature and history of the industrial arrangements which apply to the labour hire employer will frequently be relevant to whether it is not fair and reasonable to make a regulated labour hire arrangement order. So much is clear from s 306E(8)(c) of the Act. For example, a labour hire employer might submit that it has a long history of orderly and appropriate enterprise bargaining which has produced fair and appropriate outcomes for employees and that it is not fair and reasonable for a regulated labour hire arrangement order to disrupt the outcome of those bargaining process.[22] Notwithstanding the potential relevance of the nature and history of the industrial arrangements which apply to the labour hire employer, the object in s 3(f) of the Act does not dictate a presumption that it is not fair and reasonable to make a regulated labour hire arrangement order simply because the effect of the order would be to disrupt, to some degree, and enterprise agreement that applies to the regulated employees.[23]
Bulga’s submissions
Bulga submits that the Commission should be satisfied on the evidence that it is not fair
and reasonable in all the circumstances to make the orders sought because:
(a)There is a material difference between the skills of the Bulga workforce and the workforces of WorkPac and Skilled;
(b)Employing multi-skilled production operators is critical to the day-to-day operation of the Mine because it allows Bulga the flexibility to allocate operators to different plant and equipment as required in response to changing operational needs;
(c)As a consequence, the work undertaken by employees of Workpac and Skilled contributes less to the operations, and is consequently of lesser value, as compared to the work undertaken by Bulga employees. The existing relativities in pay appropriately reflect the different value of the work performed;
(d)Preserving the relativities between the rates of pay of WorkPac and Skilled, as compared to the rates of pay for Bulga employees, does not undermine the rates in the Bulga Enterprise Agreement. On the contrary, it preserves the integrity of the rates in the Bulga Enterprise Agreement that were developed by reference to the rates of pay for experienced operators, and did not take into account rates paid to contractors;
(e)The single rate of pay, used to produce the annual salaries provided for in Appendix A of the Bulga Enterprise Agreement, reflects the experienced production operators, the vast majority of whom are multi-skilled. The Bulga Enterprise Agreement also applies to the 134 maintenance workers employed by Bulga, who are all qualified electricians or heavy diesel mechanics;
(f)The collapsing of pay relativities could create further tension in the workplace;
(g)Bulga provides an important training ground for employees of WorkPac and Skilled from which those inexperienced and less skilled operators obtain valuable experience and skills. The pathway provided regularly translates to an offer of permanent employment with Bulga when the operator demonstrates the skills and aptitudes of a Bulga employee and the higher rate of pay in the Bulga Enterprise Agreement. There is simply no basis to assert that Bulga uses the WorkPac and Skilled employees to undercut bargained rates; and
(h)Bulga engages with WorkPac and Skilled on an arm’s length basis. They are not related body corporates.
Bulga submits that its directly employed production operators have a range of competencies across the full fleet of mobile plant and equipment used at the Mine, including a shovel, excavators, loaders, drills, haul trucks, dozers, graders, water trucks and service trucks (s 306E(8) (a) and (f) of the Act). In contrast to Bulga’s workforce, it is submitted that the employees of WorkPac and Skilled are substantially less experienced production operators than Bulga employees who, other than in less than a handful of exceptional cases (18 as at 12 December 2024), are only able to operate haul trucks. Bulga submits that Mr Hanson and Mr Spicer both acknowledged during cross-examination that haul trucks are an entry level competency for production operators.
As of 12 December 2024, there were a total of 536 workers engaged as production operators at the Mine. Of these workers:
(a)384 are permanent production operators employed by Bulga;
(b)88 production operators employed by Workpac (11 of whom are completing aformal traineeship); and
(c)64 production operators employed by Skilled (7 of whom are completing a formal traineeship).
WorkPac and Programmed do not provide qualified tradespersons to Bulga (s 306E(8)(e) and (f) of the Act). It is submitted that employees of WorkPac and Skilled do not operate any shovel or excavator equipment, and only in very limited instances operate water trucks, dozers, drills, scraper, grader and service cart. Employees of WorkPac and Skilled do not perform shot firing (s 306E(8)(e) and (f) of the Act).
In terms of tenure at the Mine, it is submitted that the Skilled and WorkPac employees have other than in a very limited number of exceptions been at Bulga for less than three years.
Bulga submits that the MEU has sought to confine the attention of the Commission to the operation of haul trucks only. This is a distraction, so Bulga submits. The value is in the multi-skilled workforce and capacity to operate various pieces of equipment. Nonetheless, even within this confined portion of the workforce, Bulga submits that the evidence establishes that inexperienced operators are assigned to smaller haul trucks which operate under the smaller excavators, where spot times are more forgiving and have less of an impact on productivity.
The work of production operators is allocated according to their skills and competency of the individual operators. Accordingly, Bulga submits that its production operators are allocated to a wide range of equipment and to higher risk mining tasks because they are generally multi-skilled and they have experience operating in a variety of challenging conditions and environments. It is submitted that Mr Spicer acknowledged during cross examination that this multiskilling makes an employee more useful in terms of versatility and adaptability. Further, Bulga submits that the ability to swap operators in key items of equipment - such as dozers and loaders - is critical (s 306E(8)(f) of the Act).
Bulga submits that the Commission and its predecessors have long recognised the benefit to productivity and efficiency of multi-skilled workers, and that the resulting benefit can support higher wages (306E(8)(a), (c) and (f) of the Act). It is submitted that the MEU, in its evidence, also acknowledges this, with this exchange between Mr Murdoch KC and Mr Spicer apposite:[24]
“Q: And you know that if you're required to operate another piece of equipment for which you're qualified there's no question that you will be required to do it?
A: Correct.
Q: And you're ready, willing and able to do it, aren't you?
A: Yes, that's what we get paid for, yes.”
Bulga submits that it is not fair and reasonable that Bulga’s significantly more experienced and multiskilled operators should be paid the same as a new entrant to the industry, who may have recently completed a traineeship, and/or is only accredited to operate haul trucks. Bulga submits that exhibit B5 demonstrates that Skilled and WorkPac employees who work at the Mine are predominantly competent only in relation to the five categories of haul trucks/water trucks used at the Mine, whereas Bulga’s employees have, in many instances, more than 10 competencies. Bulga submits that employing multi-skilled operators at the Mine is critical to the day-to-day operation of the Mine.[25] Multi-skilling produces benefits to Bulga, which supports the higher wages paid to Bulga’s employees under the Bulga Enterprise Agreement.
Bulga submits that the effect of the granting of the orders would destroy the pay relativities of Bulga’s predominantly multi-skilled and experienced production operators and the comparatively less skilled and less experienced production operators employed by WorkPac and Skilled. Bulga submits that such relativities are preserved in the BCMI Award, which contains a tiered classification structure that ranges from Mineworker - Induction Level 1 to Mineworker - Specialised and, as an award of the Commission, is presumed to be fair. Each of the classifications have a corresponding rate of pay, which is reflective of the differing competencies and qualifications.
Bulga submits that destroying pay relativities can also contribute to disharmony with the potential for inexperienced operators to cause frustration with Bulga’s experienced workforce due to the consequent delays in production circuits and on occasion perceived risk to safety, as evidenced by the complaint made by Mr Spicer (s 306E(8)(e) and (f) of the Act).
Bulga submits that the Bulga Enterprise Agreement is relevant to s 306E(8)(a), (c) and (f) of the Act. The Bulga Enterprise Agreement:
(a)was negotiated with the MEU on behalf of Bulga’s multi-skilled employees;
(b)was developed to reflect Bulga’s workforce of experienced and multi-skilled production operators and qualified tradespersons, and the contribution made by them to the safe and efficient production of the Mine, together with consideration of market rates and inflation;
(c)reflects the minimum baseline of skills and competencies it requires of its directly employed workforce;
(d)had no regard for the rates payable to any contractors;
(e)does not restrict the use of contracted labour, and contemplates Bulga’s right to utilise it to the extent it is referred to in the Security of Employment provisions of the Bulga Enterprise Agreement;
(f)contains rates significantly above the BCMI Award and provides yearly increases to those rates; and
(g)gives effect to a key object of the Act, namely the primacy of enterprise level bargaining.
Bulga submits that the Bulga Enterprise Agreement has not been applied to employees of Bulga in a classification, job level or grade of an inexperienced mineworker, or non-trades qualified maintenance person (s 306E(8)(a), (c) of the Act). As Mr Foster described it in cross-examination, in the context of describing the practice at the Mine and his leading of the negotiations, “we had all our experienced people under our permanent arrangements under the enterprise agreement and then inexperienced under contractors”.
WorkPac and Skilled each have their own enterprise agreements, negotiated with the MEU, and aside from this application, Bulga submits that there is no suggestion that employees of Skilled or WorkPac have been underpaid for the purposes of the Act (s 306E(8)(c) and (f) of the Act).
Bulga submits that it does not use what is described in the Revised Explanatory Memorandum as the ‘labour-hire loophole’ to undercut bargained rates. Bulga submits that its use of the WorkPac and Skilled enables inexperienced workers to gain skills and experience in the mining industry, regularly leading to an opportunity to apply for and be offered direct employment with Bulga. As Bulga submits and Mr Hanson and Mr Spicer acknowledged, Bulga’s use of labour-hire provides an important pathway for inexperienced production operators to gain valuable skills and experience at the Mine and creates the opportunity to apply for permanent employment with Bulga. The evidence establishes, so Bulga submits, that the opportunity regularly arises. Turnover of Bulga-employed production operators is approximately 11% per annum. Whether an employee of WorkPac or Skilled receives an offer of employment depends on whether they meet the Bulga performance standards that are reflected in the terms of the Bulga Enterprise Agreement (for example, cll 7.2 and 7.3) (s 306E(8)(e) and (f) of the Act). It is submitted that Mr Spicer acknowledged that the recruitment process undertaken by Bulga enables it to hire Skilled and WorkPac employees that demonstrate they meet Bulga’s criteria in terms of safety, attendance, discipline and ability to get on with their coworkers, and that criteria is vital for employment with Bulga.
In the two years prior to December 2024, Bulga has directly employed 63 production operators from Skilled and WorkPac, being 24 from Skilled and 39 from WorkPac. Bulga submits that its established pattern of recruiting employees from Skilled and WorkPac evidences that Bulga’s use of WorkPac and Skilled has nothing to do with undercutting wages of its own employees, or in any other way (s 306E(8)(f) of the Act).
Bulga submits that it is not a related body corporate of WorkPac or Skilled. The terms of the supply contracts entered into between Bulga and the relevant WorkPac and Skilled entities for the supply of supplementary labour at the Mine have been negotiated in good faith and at arm’s length (s 306E(8)(d) of the Act).
Bulga submits that the mining industry is a critical component of the Australian economy. The promotion of traineeships and providing opportunities to new entrants to the mining industry/inexperienced mineworkers is in the public interest (s 306E(8)(f) of the Act).
Bulga submits that its use of Skilled and WorkPac is unrelated to the terms and conditions applicable to its workforce. Bulga has a history of active engagement with the MEU and enterprise bargaining, including in setting the single rate in the Bulga Enterprise Agreement.
Bulga submits that if any reliance is to be placed on the terms of the new enterprise agreement which has recently been made between Bulga and its employees at the Mine, then the outcome of these proceedings should wait until the Commission decides whether to approve the new enterprise agreement.
As to s 306E(8)(a)(i), Bulga submits that it is relevant because the particular class of employees covered by the Bulga Enterprise Agreement is a class of multi-skilled and experienced employees. The rate of pay prescribed by the Bulga Enterprise Agreement for this class of employees reflects the fact that the employees are multi-skilled and experienced. Bulga submits that the enterprise agreements which have historically applied at the Mine to its employees have included a wage rate that applies to a well-defined group and class of multi-skilled and experienced employees.
As to s 306E(8)(a)(ii), Bulga submits that the evidence demonstrates that the host employment instrument has always applied to multi-skilled and experienced mineworkers, and has not applied to persons at a lower level and grade of skill and experience, such as those supplied by Skilled and WorkPac to the Mine.
As to s 306E(8)(a)(iii), Bulga submits that the making of the orders sought by the MEU would result in the less skilled and less experienced employees of Skilled and WorkPac having their rate of pay lifted to the same rate as the multi-skilled and experienced employees of Bulga.
As to s 306E(8)(c), Bulga submits that the enterprise agreements that have historically applied to its employees at the Mine have included a rate of pay for a cohort of multi-skilled and experienced mineworkers, whereas the enterprise agreements that have historically applied to employees of Skilled and WorkPac have included a range of job classifications which cater for employees of varying degrees of experience and skill. What is sought to be done here, so Bulga contends, is to use s 306E of the Act to uplift employees of WorkPac and Skilled to an enterprise agreement with different industrial arrangements.
As to s 306E(8)(d), Bulga submits that it is not in a joint venture or common enterprise with WorkPac or Skilled, nor is WorkPac or Skilled a related body corporate of Bulga. The relationship between Bulga and each of WorkPac and Skilled is a commercial contract for the supply of labour.
As to s 306E(8)(da), Bulga submits that it is not in a joint venture or common enterprise with WorkPac or Skilled.
As to s 306E(8)(e)(i), Bulga submits that the contractual arrangements between Bulga and each of WorkPac and Skilled for the supply of labour to the Mine are long standing.
As to s 306E(8)(e)(ii), Bulga submits that the location of the work to be performed by employees of Bulga, WorkPac and Skilled is the Mine, where they work in proximity to each other, with the result that any inequities arising from different work value between employees being paid the same wages may impact harmony at the workplace.
As to s 306E(8)(e)(iii), Bulga submits that the industry is the black coal mining industry, which is relevant because Bulga is not the only employer in the black coal mining industry that pays its employees more than labour hire employees in recognition of the fact that its employees are more skilled and experienced than the labour hire employees.
As to s 306E(8)(e)(iv), Bulga submits employees of WorkPac and Skilled are in the minority compared to the total workforce at the Mine.
As to s 306E(8)(f), Bulga contends that its other submissions are other relevant matters. In particular, Bulga emphasises the factors which it says go to demonstrate that it would be highly inappropriate to make orders in this case because it would lift up the wage rates of less skilled and less experienced employees to the wage rates of multi-skilled and experienced employees. This brings into focus the relevance of work value, multi-skilling and comparative wage justice.
Skilled’s submissions
Skilled supports and adopts the submissions made by Bulga in relation to fairness and reasonableness. Skilled submits that work value equivalence has not been demonstrated on the evidence between the work performed by Bulga’s production operators and the work performed by WorkPac and Skilled’s production operators at the Mine. It follows, so Skilled submits, that making orders in the terms sought by the MEU would create wage injustice.
Skilled accepts that, having regard to the purpose of Part 2-7A to set a revised rate of pay for a labour hire employee in circumstances where a host sets a higher rate of pay for its own employees for work of a like kind, this counts favourably towards the making of a regulated labour hire arrangement order in this case. However, Skilled submits that the balance of the Act ameliorates this issue. Skilled submits that its employees are able to negotiate improved terms and conditions (in exchange for productivity improvements) under the bargaining processes under Part 2-4 of the Act, and are provided with a number of facilitative and coercive tools to extract improved terms and conditions. In other words, Skilled contends that the Act provides a process whereby any perceived wage injustice between labour hire provider and host can be bargained over, in exchange for productivity improvements. Unfairness on this score is already moderated and accounted for by the enterprise bargaining mechanisms contained in Part 2-4 of the Act.
Skilled submits that it is unfair and unreasonable to make a regulated labour hire arrangement order considering the position between employees. Skilled’s employees negotiated the Skilled Agreement, and its predecessor, against a backdrop of the work to be performed, the skills to be applied to that work, and the productivity benefits to be exchanged. The Bulga Enterprise Agreement was negotiated by Bulga and its employees against a different backdrop of work, skills and productivity exchanges. For example, Skilled submits that Bulga’s employees have agreed to there being no limit to the tasks, scope or range of work or training that may be required to be performed, no barrier preventing any employee from performing any task for which they are competent to perform, and (c) no barrier preventing any employee from being trained to perform any task.[26]
More significantly, Skilled submits that the employees it supplies to the Mine are predominantly new entrants into black coal mining work with limited to no experience (other than through a traineeship provided by a related entity of Skilled). By contrast, it is submitted that the Bulga Enterprise Agreement fixes a single, higher rate of pay for all (non-trainee) employees covered by it, which reflects the higher levels of experience of the workforce employed under it.
Skilled submits that it is clearly unfair and unreasonable to make the regulated labour hire arrangement order when Skilled’s position is considered. It contends that unfairness and unreasonableness arises on a number of fronts:
(a)the fruit of the labour hire contract is taken away. Profit that has been earned to date is absorbed by the increased leave balances. There is no capacity in the labour hire supply contract to recover this amount. The labour hire supply agreement cannot be varied unilaterally by PSW. The agreement provides for payment on the provision of an invoice and it can only be terminated by PSW on repudiation by Bulga, after the process prescribed by the agreement is followed;
(b)making regulated labour hire arrangement orders against Skilled and its related entities will impact the viability of the Programmed group of companies;
(c)in addition, the Act conferred an entitlement on Skilled to negotiate an enterprise agreement with its employees that became the Skilled Agreement, and Skilled negotiated that agreement at a point in time where the operation of Part 2-7A was not a prospect. The Act presently confers an entitlement to apply the Skilled Agreement to its workforce. Making a regulated labour hire arrangement order would overturn that negotiation and the productivity exchange underpinning it, and displace its most important terms (i.e. the rates of pay to apply); and
(d)in lieu, Skilled will be required to pay a rate of pay that is not informed by the productivity exchange that has been negotiated by Bulga and its employees. The product of that bargain reflects the circumstances of a different industrial relationship, and does not reflect Skilled’s bargain nor the make-up of its workforce. Skilled does not have the right to pass on higher labour costs arising from the making of a labour hire arrangement order to Bulga.
Skilled submits that it is unfair and unreasonable to make a regulated labour hire arrangement order when fairness and reasonableness is measured between employers, and between employers and employees. All other employers and employees enjoy the right to enter into enterprise agreements which set a rate of pay in exchange for the work to be performed, the skills to be applied to that work, and the productivity benefits to be exchanged. The same cannot be said when it comes to Skilled and its employees in the advent of a regulated labour hire arrangement order. Skilled readily accepts that this is a consequence of the legislative intent behind Part 2-7A, but that does not render the unfairness irrelevant. It is a factor to be considered in the same vein (and with the same weight) when it comes to considering the favourable aspects of the scheme to Skilled’s employees.
Skilled submits that, beyond the issues addressed above, the matters outlined in s 306E(8) of the Act do not materially influence what is fair and reasonable in all of the circumstances, in this particular proceeding. The criteria therein appear, so Skilled submits, directed to other situations: such as where regulated labour hire arrangement order has already been accounted for in negotiations for the labour supply, or where there are less sophisticated labour hire-host arrangements.
WorkPac’s submissions
WorkPac adopts the submissions advanced by both Bulga and Skilled in relation to the misalignment that would be caused between wages and skills if the labour hire arrangement orders sought by the MEU in these proceedings were made. WorkPac also supports Bulga’s submission that the outcome of these proceedings should wait until the Commission decides whether to approve the new enterprise agreement which has recently been made between Bulga and its employees at the Mine.
As to s 306E(8)(a) and (c) of the Act, WorkPac submits that it is an established, sophisticated and substantial employer. It provides recruitment services and labour hire to many clients in the mining, construction, healthcare and other industry sectors throughout Australia. In the past 12 months, WorkPac has found employment for over 16,000 employees, often including new and inexperienced workers, women, and indigenous workers. It provides support for indigenous workers, and training to new entrants to the coal mining industry.
WorkPac submits that it has a direct, meaningful and established arrangements with its employees, including the on-hire employees engaged by it and supplied to the Mine. WorkPac submits that includes:
(a)providing significant opportunities for trainees and apprentices, particularly but not limited to opportunities within the black coal mining industry;
(b)providing employees with designated contact persons for dealing with employment related matters during the course of their assignments with WorkPac's clients;
(c)where necessary, dealing with employee grievances and disputes directly with its workforce; and
(d)a long history of engaging in enterprise bargaining and successfully making workplace and enterprise agreements with its workforces, including in (but not limited to) the black coal mining sector.
In the black coal mining industry, WorkPac submits that the MEU (and its predecessors) has been an employee bargaining representative and an active participant in those negotiations. It is submitted that the WorkPac Agreement:
(a)has a pay and classification structure that closely aligns with the BMCI Award classification structure;
(b)was approved by a majority of the employees who participated in a vote on the proposed enterprise agreement, such that its terms and conditions contained in the applicable document was taken to have been 'agreed to' by WorkPac’s employees;
(c)provides terms and conditions which passed the 'better off overall' test as against the underlying BCMI Award under the Act to allow the Commission to approve the enterprise agreement; and
(d)provides certainty to WorkPac in its tenders for opportunities with its clients across the industry.
WorkPac submits that the classification structure and applicable pay rates under the WorkPac Agreement are different to those in the Bulga Enterprise Agreement:
(a)The WorkPac Agreement contains a tiered classification structure. Progress through the classifications is generally linked to minimum competencies. Pay rates for the WorkPac employees are linked to the classification for each employee.
(b)There are no classifications contained within the Bulga Enterprise Agreement; with no differentiation depending on skills or experience. All employees working the same rosters are paid the same.
WorkPac submits that the making of the regulated labour hire arrangement order sought in this proceeding, by imposing on WorkPac and its employees, terms that are extraneous to their relationship, would inevitably disturb and distort these arrangements. It is submitted that it is neither fair nor reasonable to do so, particularly in circumstances where there is no demonstrated need for any such imposition. In particular, WorkPac submits that there is no factual basis for the MEU's submission that the engagement of WorkPac has led to any undercutting of the security of employment of Bulga’s directly employed workforce, undermining of the collective strength of Bulga’s directly employed workforce, or undercutting of the wages bargained for by Bulga’s employees and the MEU in enterprise agreements.
WorkPac submits that the Bulga Enterprise Agreement contains no restrictions on the use of contractors by Bulga. The parties to the Bulga Enterprise Agreement did not themselves seek to regulate the rates of pay to be paid to employees of contractors being utilised at the Mine. Additionally, it is submitted that the Bulga Enterprise Agreement does not contemplate the engagement of casual employees by Bulga on its terms, and thus does not specifically deal with those arrangements. The complete absence of such regulation suggests that the parties were content for the pay rates for any contractors utilised at the Mine to be regulated as between the contractor and its employees.
As to s 306E(8)(d), (e) and (f), WorkPac submits that the consequential effects of the making of the regulated labour hire arrangement orders sought in these proceedings may include:
(a)Whilst the pay obligations on WorkPac may only be prospective from the date an order comes into effect, WorkPac submits that there is a material adverse impact upon the making of an order on WorkPac's accrued liabilities for employee entitlements for annual leave and personal leave. That is because, unsurprisingly, WorkPac has not made provision for those accrued entitlements on the basis that a regulated labour hire arrangement order would be in place when the entitlements fall due for payment. Those balances have been provisioned having regard to the applicable wage rates payable to the WorkPac employees under their terms and conditions of employment with WorkPac.
(b)For the Mine, WorkPac’s current aggregate leave balances for permanent employees are significant.
(c)If regulated labour hire arrangement orders are made, the applicable 'protected rate of pay' which would be payable to the WorkPac employees during their leave periods is likely to be higher than the rate under the WorkPac Agreement. The retrospective value of the aggregate leave balances for the WorkPac employees will therefore increase.
(d)WorkPac estimates that its current aggregate leave balances will increase by a significant amount if the orders sought by the MEU are made. The quantum of the increase has been disclosed by WorkPac, but it is confidential. WorkPac had a relatively modest net profit after tax for the most recent financial year. In those circumstances, the consequential effect on accrued leave liabilities for the WorkPac employees at the Mine represents a material impact on WorkPac’s profit.
(e)Additionally, WorkPac submits that a number of regulated labour hire arrangement orders have been made in respect of WorkPac and it is the subject of a number of applications for such orders. WorkPac estimates that for the regulated labour hire arrangement orders which have been made to date, the retrospective value of annual leave and sick/personal leave entitlements have increased by a significant additional amount. It is submitted that the cumulative effect of the making of regulated labour hire arrangement orders will represent a material impact on WorkPac's profit.
(f)WorkPac submits that the labour hire supply contract made between WorkPac Pty Ltd and Bulga was made against a commercial context that did not include the prospect of a regulated labour hire arrangement order.
(g)Unless WorkPac's commercial arrangements with its clients allow for the recovery of the increased cost associated with the necessary payments having to be made by WorkPac to its employees covered by a particular regulated labour hire arrangement order, WorkPac submits that the additional cost will have a significant impact on WorkPac's operations, including many arrangements potentially becoming wholly unviable and WorkPac needing to consider its options to respond to those challenges, which may include terminating commercially unsustainable arrangements. WorkPac submits that it has no right to pass on to Bulga the higher costs associated with paying employees a higher rate of pay pursuant to a regulated labour hire arrangement order.
(h)Even if WorkPac is able to obtain relief that defrayed or ameliorated the direct and immediate costs occasioned by the making of an regulated labour hire arrangement order, there remains a prospect, so WorkPac submits, that the making of a regulated labour hire arrangement order could cause WorkPac's clients to reduce their use of WorkPac employees (in part or in full) because it is not viable to continue their operations with an increased labour cost with no productivity improvement across the whole of their operation.
WorkPac submits that any deleterious impacts on its revenue as a result of a regulated labour hire arrangement order would inevitably have consequential flow-on impacts across the whole of WorkPac's business. To the extent this happens, WorkPac submits that the making of the regulated labour hire arrangement order would diminish the security of, and opportunities for, employment for all of WorkPac's current employees, including those that work in sectors other than black coal mining, and the capacity of WorkPac to continue to contribute to the Australian labour market in every sector in which it operates. That contribution includes providing pathways for female and indigenous employees, providing pathways for new and inexperienced entrants to the workforce (including for trainees and apprenticeships), and opportunities for its employees to transition to directly employed roles with WorkPac's clients, filling positions for WorkPac's clients quickly and efficiently, including for specialist and uncommon roles, and providing flexibility to WorkPac's employees to move between clients and sites.
WorkPac submits that the making of a regulated labour hire arrangement order would undermine the objects of the Act which include 'achieving productivity and fairness through an emphasis on enterprise-level collective bargaining…' because:
(a)the regulated labour hire arrangement order would, to the extent that it operates, set at nought the enterprise-level collective bargaining represented by the making of the WorkPac Agreement;
(b)bargaining for a new WorkPac black coal mining enterprise agreement to replace the WorkPac Agreement will, at best, be distorted, and may perhaps be frustrated altogether; and
(c)the approval of any replacement WorkPac black coal mining enterprise agreement would be susceptible to challenge on the basis that a significant cohort of employees who voted on a new agreement did not have a sufficient stake in the terms of the new agreement because they would not be being paid in accordance with its terms.
WorkPac submits, in the alternative, that the matters it raises in relation to s 306E(8)(a) to (e) may be relied on as other relevant matters under s 306E(8)(f) of the Act.
WorkPac also submits that there is no evidence as to what Bulga will do, or where it may source additional labour, if the orders sought in these proceedings are made. To the extent that there is evidence in these proceedings that WorkPac is continuing to recruit and supply workers to other sites where regulated labour hire orders are in place, there is no evidence as to the commercial terms that apply at those sites, including whether WorkPac can pass on additional labour costs to its clients at those other sites.
WorkPac adopts the submissions made by Skilled in relation to the specificity and form of any orders which may be made in these proceedings.
MEU’s submissions
The MEU submits that the engagement of labour hire at the Mine is a clear instance of the use of outsourced labour on a permanent basis in lieu of the direct engagement of employees of Bulga. The upshot of Bulga’s practice of engaging labour hire not for the purposes of surge work or specialist temporary work is, so the MEU submits, that wages and conditions of directly employed employees of Bulga set by enterprise agreements are necessarily undermined.
The MEU submits that reliance by Bulga on the method of using inexperienced labour hire workers and determining whether to engage them directly is a matter that is not capable of bearing on the fairness and reasonableness of the orders sought. It is submitted that there is no tenable basis for Bulga not to engage inexperienced or new employees, including under traineeships. Historically, this is what companies such as Bulga did before outsourcing this to lower paying labour hire employers. The MEU submits that it is unclear what, if anything, this point has to do with the fairness and reasonableness of a labour hire arrangement order, given that such an order will not preclude or otherwise impact Skilled or WorkPac employees who may be inexperienced continuing to perform work at the Mine. Further, it is submitted that there is no requirement, let alone any certainty, that a labour hire employee will be directly employed by Bulga after working for a labour hire company for a period of time.
As to fairness and reasonableness to employees of Skilled and WorkPac who work at the Mine, the MEU submits that this weighs heavily in favour of granting the orders sought by the MEU because those employees will receive a much higher rate of pay if the orders are made.
As to fairness and reasonableness between employees of Skilled and WorkPac, on the one hand, and employees of Bulga, on the other hand, the MEU relies on Bengalla at [121] and says there is no evidence from any employee of Bulga saying that an order should not be made. Conversely, Mr Spicer, who is both an employee of Bulga and a delegate at the Mine, supports the making of an order, from which it can be inferred, so the MEU submits, that Bulga’s employees support the orders sought by the MEU.
On the topic of the experience of Bulga’s employees compared to the experience of employees supplied by WorkPac and Skilled to work at the Mine, the MEU submits that:
(a)The vast majority of Skilled’s employees who work at the Mine are at the ML3 classification, which is an “Experienced Mineworker … (greater than 12 months Coal Mining Industry Experience) and determined competent to work under limited supervision”.[27]
(b)The vast majority of WorkPac’s employees who work at the Mine are at the L3 classification, which is an “experienced” mineworker.[28]
(c)Mr Gregson gave evidence that WorkPac and Skilled provide employees to the Mine who are either (i) unskilled employees, or employees with some skills outside the mining industry, undertaking a traineeship or (ii) skilled employees who have a minimum of 12 months open cut mining experience.[29]
(d)The Bulga Enterprise Agreement covers “employees of the Company employed at the Bulga Open Cut and Coal Handling Preparation Plant who perform work covered by the classifications contained in Schedule A of the Black Coal Mining Industry Award, 2010”.[30] This means that the Bulga Agreement covers all classifications of employees within Schedule A of the BCMI Award, from the inexperienced to the very experienced. This is apparent from both the text of clause 2.1 of the Bulga Enterprise Agreement and the declaration filed by Bulga in the Commission in support of its application for approval of the Bulga Enterprise Agreement.[31] Accordingly, the MEU submits that Bulga’s attempt to now say that the Bulga Enterprise Agreement is only intended to apply to experienced employees should not be accepted.
(e)Mr Foster accepted that it is a common feature of enterprise agreements in the black coal mining industry and within Glencore to have a single classification level.[32] Mr Foster accepted that this creates simplicity and can afford or confer operational efficiencies.[33]
(f)The new enterprise agreement, which has just been voted up by Bulga’s employees and will replace the Bulga Enterprise Agreement when it is approved by the Commission, has a new classification of ‘Inexperienced Employee’. This classification is defined as “an Employee (non-trade) with less than 12 months’ relevant experience in the black coal mining industry”. The new enterprise agreement provides for an ‘Inexperienced Employee’ to be paid 80% of the salary and entitlements paid to other employees covered by the agreement. It follows, so the MEU submits, that any concern about unfairness or unreasonableness arising from Bulga’s contention that the enterprise agreement applicable to its employees at the Mine was only intended to apply to experienced mineworkers can be put to one side. The MEU opposes any suggestion that the outcome of these proceedings should be delayed until the Commission decides whether or not to approve the new Bulga enterprise agreement.
(g)Bulga has put forward a simplistic analysis in relation to the competencies held by operators at the Mine. There is no evidence of the frequency with which operators use the competencies held by them. Further, the data provided by Bulga does not support a simplistic situation where Bulga’s employees are experienced and labour hire employees at the Mine are not. In some respects, labour hire employees at the Mine have more skills and experience in some machines, such as large haul trucks. There is no distinction under the Bulga Enterprise Agreement between employees who operate haul trucks and other machinery and equipment at the Mine. The key to the relevant classifications under the WorkPac Agreement (L3) and the Skilled Agreement (ML3) is whether the employee can operate the machinery with minimal supervision.
(h)There is no need to establish that particular work has the same work value to justify a labour hire arrangement order being made. The relevant test is set out in s 306E(1)(b) of the Act.
As to fairness and reasonableness to WorkPac and Skilled, the MEU accepts that the financial impact of the making of labour hire arrangement orders in relation to WorkPac and Skilled is a relevant consideration. But the MEU submits that neither Skilled nor WorkPac has adduced sufficient evidence to establish that making the orders sought by the MEU will have a substantial impact on them. The MEU submits that Skilled has failed to adduce evidence in relation to the size of its operation, its financial position, or any difficulties that may be caused by the making of the orders sought by the MEU. The MEU submits that Mr Hockaday agreed that WorkPac has not undertaken any financial analysis or modelling of the impact of making a regulated labour hire arrangement order other than that contained in his second witness statement.[34] The extent of that analysis is very limited. It does not extend beyond a calculation of increased leave liabilities and costs increasing. Nor has Skilled or WorkPac, so the MEU submits, adduced any evidence of communications with Bulga about whether Bulga will pay them higher rates if the regulated labour hire arrangement orders sought by the MEU are made. Further, the argument by Skilled and WorkPac that it would be unfair and unreasonable to require them to pay higher amounts to their employees who work at the Mine than the rates set out in their respective enterprise agreements should be given no weight because both Skilled and WorkPac pay their employees who work at the Mine amounts higher than the rates prescribed in their respective enterprise agreements.[35]
In response to WorkPac’s submissions, the MEU makes the following submissions:
(a)Section 306E(8)(a) focuses on pay arrangements that apply to employees of the regulated host and those which apply to regulated employees including whether the host instrument: (i) applies to only a particular class of employees; (ii) whether in practice the host employment instrument has ever applied to employees at classifications, job levels or grades applicable to the regulated employees; and (iii) the rate that would be payable to regulated employees if the order were made. None of the matters detailed at paragraphs 9 – 16 of WorkPac’s submissions relate to these matters, apart from the fact that the WorkPac Agreement contains rates of pay.
(b)Whether WorkPac considers itself to be a ‘sophisticated’ employer or one which has established ‘direct, meaningful and established arrangements’ with its employees, or whether it finds employment for new and inexperienced workers from a variety of backgrounds, are not matters which fall within s 306E(8)(a). The MEU submits that WorkPac’s self-aggrandising assertions are immaterial to both s 306E(8)(a) and s 306E(8)(c), with the latter focusing on the history of industrial arrangements applicable to the regulated host and employer.
(c)It is unclear how or why the fact that employees will be required to be paid higher rates equivalent to those prescribed by the host instrument is germane to either ss 308E(8)(a) or (c) or why this would ‘disturb or distort’ the relationship between WorkPac and its employees. WorkPac has not adduced evidence that the rates prescribed by the WorkPac Agreement are in fact paid by it to employees at the Mine. WorkPac employees are generally not paid the rates set out in the WorkPac Agreement, which is treated by WorkPac as a ‘minimum rates’ agreement, with WorkPac employees being paid a contractual rate of pay higher than that prescribed by the enterprise agreement which is set by WorkPac on a ‘mine by mine’ basis.
(d)The Commission should infer that WorkPac does not pay its employees at the mine the rates set out in the WorkPac Agreement, but at contractual rates akin to its practice at other mine sites. This reality undercuts the generally irrelevant assertion that an order will ‘disturb and distort’ arrangements effected by the WorkPac Agreement. The contention also ignores the fact that enterprise agreements deal with a raft of terms and conditions of employment beyond pay rates.
(e)That the enterprise agreement that covers and applies to a host employer may not fetter the use of contractors says nothing about the fairness or reasonableness of making of an order.
(f)The fact that WorkPac will be required to pay employees more and its accrued leave liabilities will increase in value is irrelevant to fairness and reasonableness. An employer cannot sensibly rely upon the intended and inevitable effect of Part 2-7A and the making of an order to contend that such an order will not be fair and reasonable. The object and purpose of Part 2-7A is to close the labour hire loophole by ensuring that labour hire providers like WorkPac are no longer permitted to pay their employees less for performing equivalent work to that specified in a host employer instrument.
(g)The fact WorkPac has consented to (or otherwise not opposed) a number of regulated labour hire arrangement orders points firmly against acceptance of its contention that the making of an order in these proceedings would not be fair and reasonable. Why it was fair and reasonable for those other orders to have been made but not the order sought here is unexplained and inexplicable.
(h)If the ultimate effect of an order is that host employers determine to employ a greater proportion of their workforce directly rather than engaging labour hire providers that employ workers to perform materially similar work at lower rates of pay, that will be congruent with the objects of Part 2-7A. The labour hire loophole has been systematically exploited by host employers to drive down wages and conditions and undercut the conditions in enterprise agreements which apply to the host and its employees. That the effect of an order may be to disincentivise a host from engaging labour hire to replace permanent workers is entirely consistent with the purpose and object of the legislative regime. Importantly for present purposes, this cannot be a matter capable of pointing to a conclusion that it is not fair and reasonable to make the orders sought in this proceeding. In this regard, the fact that a labour hire provider may earn a lower profit or that its profit margin will be eroded is irrelevant given that Part 2-7A is designed to close the loophole that opened the opportunity for the making of those profits in the first place.
The following terms of WorkPac’s ‘Umbrella Agreement – Labour Supply’ with Glencore Coal Assets should also be noted: a) cl 2.1 determines that Glencore engages WorkPac on an ad hoc basis, by issuing purchase orders, with Glencore not requesting work and WorkPac not being required to perform work unless and until a purchase order is issued and WorkPac then executes ‘Engagement Terms’ concerning the requested work; b) cl 5.1 determines that WorkPac offers to provide Glencore work and Glencore may, from time to time, engage WorkPac to perform work; and c) cl 12.4 confers a right on Glencore to terminate the contract for any reason by giving WorkPac 7 days written notice. WorkPac therefore does not have (and appears never to have had) a guarantee of a particular amount of work at the Mine or ongoing work. This is a factor which tells against any notion that the making of an order will not be fair and reasonable.
In response to Skilled’s submissions, the MEU submits as follows:
(a)Skilled makes no attempt to identify in relation to what matters in s 306E(8) its submission have been made.
(b)It is unclear how potential bargaining for a new enterprise agreement between employees of Skilled and Skilled directly or indirectly impacts on whether it is fair or reasonable to make an order.
(c)The clear statutory intent of Part 2-7A is to impose a protected rate of pay over and above rates provided in other instruments, including the employer’s enterprise agreement. Whether employees of a labour hire employer are able to bargain with their employer for an enterprise agreement is not relevant to the achievement of this objective.
(d)There is no textual basis for the contention that the Bulga Enterprise Agreement provides a rate of pay attached to employees with any particular level of experience. Even if the Bulga employees are more experienced, it does not follow that the pay rates in the Bulga Enterprise Agreement can objectively be said to be intended to apply to employees with some unspecified amount of experience.
Consideration re fair and reasonable
I have had regard to all the submissions advanced by the parties on the fair and reasonable question. This includes the written submissions filed by the parties,[36] the supplementary submissions of Bulga dated 17 April 2025,[37] and the closing oral submissions made by counsel for each party.
One of the major arguments advanced by Bulga, Skilled and WorkPac is that it would not be fair or reasonable to put the inexperienced and less skilled employees of Skilled and WorkPac who work at the Mine, predominantly driving haul trucks, on the same rates of pay as the multi-skilled, more experienced employees of Bulga who work at the Mine. The first point to make in response to this submission is that almost all employees of WorkPac and Skilled who work at the Mine commenced at the Mine in the role of a trainee for their first twelve months.[38] Importantly, the requirement to pay the protected rate of pay to an employee pursuant to a regulated labour hire arrangement order does not apply if a training arrangement applies to the employee in respect of the work performed for the regulated host (s 306G(1) of the Act). Accordingly, if regulated labour hire arrangement orders are made in the present case, they will not have any application to employees of Skilled and WorkPac while they are working at the Mine as trainees, usually for their first twelve months.
In his evidence, Mr Gregson differentiated between inexperienced production operators and experienced production operators, including in relation to the longer ‘spot times’[39] generally created by inexperienced production operators and the greater wear and tear placed by inexperienced production operators on haul trucks.[40] The point of distinction between these classes of employees, according to Mr Gregson, is that inexperienced production operators have less than 12 months experience.[41] During their first 12 months of experience at the Mine, production operators will be exposed to most if not all of the various environmental conditions, hazards and work areas at the Mine.[42] During those first 12 months a production operator will obtain the five competencies for operating all the haul trucks used at the Mine[43] and the inexperienced operators are assigned to smaller haul trucks which operate under the smaller excavators, where spot times are more forgiving and have less of an impact on productivity. Mr Gregson gave evidence that, in his experience, it takes at least 12 months, often longer, for a production operator to gain the knowledge, experience and proficiency required to interact smoothly with the other machinery on site and reduce spot times.[44] Mr Spicer disagreed with that assessment.[45] He gave evidence that such skills could be obtained in a much shorter timeframe and he would not pass a production operator as competent unless the operator could work proficiently in the same way as him.[46] In any event, the distinction made by Mr Gregson between inexperienced production operators, with less than 12 months’ experience, and experienced production operators, with at least 12 months’ experience, is consistent with (a) the definition of ‘Inexperienced Employee’ in the new enterprise agreement made between Bulga and its production employees at the Mine[47] and (b) the ML3 classification in the Skilled Agreement.[48] It follows from this analysis that the making of regulated labour hire arrangement orders in this case would not result in many inexperienced production operators (as described by Mr Gregson) at the Mine being paid the higher rates of pay prescribed by the Bulga Enterprise Agreement because almost all employees of WorkPac and Skilled who commence at the Mine do so in the role of a trainee for their first twelve months. As explained above, trainees do not receive the benefit of regulated labour hire arrangement orders. Bulga will continue to be able to provide a training ground for trainees by employing them directly or through WorkPac or Skilled, which is in the public interest. Bulga will also be able to continue recruiting employees from WorkPac and Skilled as the need arises in its business.
Secondly, the new enterprise agreement made between Bulga and its employees who work at the Mine and are covered by the Bulga Enterprise Agreement includes a new classification of ‘Inexperienced Employee’ (less than 12 months’ experience) and provides for employees in this classification to be paid 80% of the remuneration paid to a production operator with at least 12 months’ experience. This new enterprise agreement was voted up by 53% of employees covered by it. There is no reason to think that this new enterprise agreement will not be approved by the Commission. Accordingly, if the regulated labour hire arrangement orders sought by the MEU are made, the likelihood is that they will not result in any inexperienced employees at the Mine being paid the same as experienced employees.
Thirdly, the Bulga Enterprise Agreement covers all “employees of the Company employed at the Bulga Open Cut and Coal Handling and Preparation Plant who perform work covered by the classifications contained in Schedule A of the Black Coal Mining Industry Award, 2010”. The classifications contained in Schedule A of the BCMI Award include Mineworker Induction Level 1, Mineworker Induction Level 2, Mineworker – Training, Mineworker – Advanced, and Mineworker – Supervised. Progression between these classifications under the BCMI Award occurs when the employer assesses the employee as competent to perform the tasks required at the relevant classification level and the applicable level of supervision, or supervisory skill, is attained. It follows that production operators at each of these classification levels in the BCMI Award are covered by the Bulga Enterprise Agreement. This point is also reinforced by the declaration made by Mr Michael Critchley, Bulga’s Human Resources Superintendent, in support of the application for approval of the Bulga Enterprise Agreement.[49] Furthermore, the Bulga Enterprise Agreement does not provide for different rates of pay depending on the experience or skills of employees covered by it. The pay rates under the Bulga Enterprise Agreement for production operators only vary depending on the roster worked by the employee.[50] This is so notwithstanding that Bulga’s production operators to whom the Bulga Enterprise Agreement applies have the following different levels of experience and skills:[51]
(a)12/384 (3%) have been employed less than one year;
(b)84/384 (22%) have been employed between 1 and 2 years;
(c)110/384 (29%) have been employed between 2 and 5 years;
(d)60/384 (16%) have been employed between five and ten years;
(e)69/384 (18%) have been employed between 10 and 15 years;
(f)36/384 (9%) have been employed between 15 and 20 years;
(g)2/384 (0.5%) have been employed between 20 and 30 years;
(h)11/384 (3%) have been employed greater than 30 years; and
although 95% of production operators employed by Bulga to work at the Mine have five or more competencies and 54% of production operators employed by Bulga to work at the Mine have ten or more competencies,[52] there are about 134 of the 384 production operators employed by Bulga to work at the Mine who have seven or fewer competencies.[53]
The fact that the Bulga Enterprise Agreement requires Bulga to pay the same annualised salary to:
· 96/384 (25%) of its production operators with two years or less experience as it does to the 288/384 (75%) of its production operators with between two and 30 years, or more, experience; and
· 134/384 (35%) of its production operators with seven or fewer competencies as it does to the 250/384 (65%) who have between eight and 26 competencies
suggests that the annualised salaries prescribed by the Bulga Enterprise Agreement have not been set or determined by reference to, or on the basis of, the experience and/or skills of Bulga’s employees. Apart from the introduction of the new classification of ‘Inexperienced Employee’, the same analysis applies in relation to the new enterprise agreement made between Bulga and its employees at the Mine on 17 April 2025.
The evidence also shows that production operators employed by WorkPac and Skilled at the Mine have the following experience:[54]
(a)11/88 (13%) WorkPac employees have less than one year of experience at the Mine;
(b)37/88 (42%) WorkPac employees have between one and two years of experience at the Mine;
(c)37/88 (42%) WorkPac employees have between two and three years of experience at the Mine;
(d)3/88 (3%) WorkPac employees have between three and five years of experience at the Mine;
(e)8/64 (13%) Skilled employees have less than one year of experience at the Mine;
(f)21/64 (33%) Skilled employees have between one and two years of experience at the Mine;
(g)29/64 (45%) Skilled employees have between two and three years of experience at the Mine;
(h)4/64 (6%) Skilled employees have between three and five years of experience at the Mine; and
2/64 (3%) Skilled employees have greater than five years of experience at the Mine
It is accepted from these figures that production operators employed by WorkPac and Skilled to work at the Mine have, on average, less experience than Bulga’s production operators who work at the Mine, but there are 45% of WorkPac’s production operators and 54% of Skilled’s production operators who have more than two years’ experience at the Mine. This is consistent with the fact that:
(a)the vast majority of Skilled’s employees who work at the Mine are at the ML3 classification, which is an “Experienced Mineworker … (greater than 12 months Coal Mining Industry Experience) and determined competent to work under limited supervision”;[55] and
(b)the vast majority of WorkPac’s employees who work at the Mine are at the L3 classification, which is an “experienced” mineworker and includes a haul truck operator with more than two years’ experience.[56]
Putting to one side trainees, all the production operators employed by WorkPac and Skilled to work at the Mine have at least the five haul truck competencies, and only small numbers of production operators employed by WorkPac and Skilled to work at the Mine have other competencies.[57] It must be kept in mind, however, that the following mobile plant and equipment is operated by production operators at the Mine: haul trucks (74); fuel carts (3); drills (5); scrappers (2); watercarts (6); graders (6); wheel dozers (2); dozers (21); front end loaders (2); face shovels (1); and excavators (10).[58] Bulga therefore has a much greater requirement for production operators to operate haul trucks than it does any other type of mobile plant or equipment at the Mine. Of further relevance is the fact that there is no distinction under the Bulga Enterprise Agreement between employees who operate haul trucks and other plant and equipment at the Mine.
For the reasons given above, I do not accept the argument that it would be unfair or unreasonable to make the regulated labour hire arrangement orders sought because they would lift up the wage rates of less skilled and less experienced employees to the wage rates of Bulga’s multi-skilled and experienced employees. According to evidence adduced by Bulga and the terms of its new enterprise agreement, production operators are considered experienced employees when they attain 12 months experience at the Mine. The orders sought by the MEU will only apply to experienced production operators. Almost all production operators employed by WorkPac or Skilled to work at the Mine commence as trainees, with the result that their wages (as trainees) will not be lifted up at all during their first 12 months at the Mine by the making of orders. The significant number of haul trucks in operation at the Mine means that Bulga has a much greater demand for haul truck drivers than it does for operators of other mobile plant and equipment. This is reflected in the ranges of competencies held by different employees at the Mine. Although I accept that multi-skilling employees at the Mine is critical to Bulga’s operation of the Mine, it does not diminish the importance of haul truck driving at the Mine and the work value associated with the operation of 74 haul trucks at the Mine. Moreover, in circumstances where Bulga employs production operators at the Mine with a wide range of experience and competencies, the fact that the Bulga Enterprise Agreement (and the new enterprise agreement which has been negotiated to replace it) does not provide for the payment of different amounts of remuneration to employees depending on the number of competencies they have or the experience they have at the Mine,[59] is a powerful argument against the contention that it would create wage injustice, or be unfair and/or unreasonable, to make the orders sought. Bulga also has the option of training additional production operators, whether employed by Skilled, WorkPac or Bulga, in extra competencies. I consider that an element of the job of a production operator at the Mine (whether employed by Bulga, WorkPac or Skilled) would include a potential requirement to be trained in additional competencies to operate different items of plant or equipment at the Mine.
In relation to fairness to employees, the rates of pay received by Skilled and WorkPac employees who work at the Mine are significantly below the rates paid to Bulga’s employees under the Bulga Enterprise Agreement.[60] These pay differentials weigh heavily in favour of a conclusion that it would be fair and reasonable to make the orders sought.[61]
The evidence does not disclose what Bulga will do if regulated labour hire arrangement orders are made. The only certainty of making the orders sought is that employees of WorkPac and Skilled (other than trainees) who work at the Mine after the orders take effect will be paid significantly more than they were before the orders commenced operation. In those circumstances, I cannot give any significant weight to possibility that Bulga may take some action in response to the making of regulated labour hire arrangement orders which has a negative impact on employees of WorkPac or Skilled.
As to the argument that employees of Skilled and WorkPac could seek to bargain for improved terms and conditions of employment under Part 2-4, the mere existence of the ability for regulated employees to engage in collective bargaining with their direct employer is, in itself, not of significance in assessing whether it is not fair and reasonable to make an order in a particular case.[62] The statutory regime encompassed in Part 2-7 provides for a regulated labour hire arrangement order to supplement an enterprise agreement that applies to regulated employees. In addition, the bargaining outcomes between Skilled and its employees and between WorkPac and its employees have demonstrated that the opportunity to bargain does not always give rise to particularly advantageous outcomes for employees, particularly when compared to the bargaining outcome reached between Bulga and its employees who work at the Mine.
In relation to fairness to employers, the fact that making a regulated labour hire arrangement order would increase the liabilities of each of Skilled and WorkPac for accrued annual leave and personal leave (which must be paid out in some circumstances), weighs in favour of a conclusion that it would not be fair and reasonable to make the orders sought.
In the case of WorkPac, its leave liability for annual leave and personal leave will increase by a significant amount if the orders sought by the MEU are made.[63] WorkPac does not have a right to recover this increase in liabilities from Bulga.[64] This increase in liabilities is to be considered in a context in which the WorkPac group of companies made a relatively modest net profit after tax in the financial years ending 30 June 2023 and 30 June 2024[65] and a significant proportion of the revenue earned by WorkPac from Glencore mines comes from employees working at the Mine.[66] Further, for the four other sites where regulated labour hire arrangement orders have come into effect, WorkPac estimates that the retrospective value of annual leave and personal leave entitlements have increased by a significant amount.[67] Unless WorkPac's commercial arrangements allow the increased cost arising from the making of a regulated labour hire arrangement order to be recovered from its client (which varies depending on the arrangements in place with a particular client), the additional cost will have a significant impact on WorkPac’s operations. If the cost cannot be recovered, I accept that many arrangements could become wholly unviable for WorkPac’s business and it would need to consider its options to respond to those challenges, which may include terminating those arrangements which are commercially unsustainable. WorkPac’s employees may be immediately and adversely affected if those arrangements are terminated, and it may not be possible to offer those impacted employees continuing employment with WorkPac.[68] I have taken these matters into account.
In the case of Skilled, its leave liability for annual leave and personal leave will increase by a significant amount if the orders sought by the MEU are made.[69] Skilled has no right to recover this increase in liability from Bulga or anyone else. Because Skilled only earns a small profit margin on the labour hire employees it supplies to the Mine, the increased leave liability arising from the making of a regulated labour hire arrangement order would exceed the profit margin earned by PSW under its supply contract with Bulga over the life of that contract.[70] I have taken this into account. However, Skilled did not adduce evidence as to its financial position, the financial position of the Skilled group of companies, or the impact which the increase in leave liabilities would have on its financial position. In those circumstances, there are limits on the weight I can attach to the financial impact on Skilled in assessing whether it is not fair and reasonable to make an order.[71]
In addition to the unfairness associated with increased leave liabilities, Skilled and WorkPac face a situation where they do not have the right under the labour hire supply contracts entered into with Bulga to unilaterally increase the amount they will be paid by Bulga if regulated labour hire arrangement orders are made and they are required under those supply contracts to supply labour to the Mine. Skilled and WorkPac can request an amendment to the rates to be paid by Bulga on the basis that regulated labour hire arrangement orders have been made, but Bulga is not obliged under the terms of the supply contracts to agree to any such request. This could potentially lead to the termination of the supply contracts between Bulga and the relevant WorkPac and Skilled entities. This uncertainty, together with the possibility of being required to supply labour to the Mine at a price which is below the wages which must be paid by Skilled or WorkPac to the relevant employees, gives rise to some unfairness and unreasonableness to Skilled and WorkPac.
In relation to fairness between employees, I do not consider that unfairness would be caused to Bulga’s employees who work at the Mine if regulated labour hire arrangement orders were made. There is no evidence that any employees of Bulga hold that view. In any event, their subjective view would not be determinative. More significantly, these are not cases where employees of Skilled and WorkPac who work at the Mine receive benefits from their employer aside from their rate of pay which would warrant, or weigh materially in favour of, a conclusion that it is not fair and reasonable that they be entitled to the applicable rate of pay under the Bulga Enterprise Agreement. WorkPac points to a range of benefits to employees under the WorkPac Agreement, such as being able to be put forward for work opportunities at a range of workplaces, being given opportunities for training, being given opportunities for work as inexperienced employees, and being employed by a sophisticated employer which is not a ‘fly-by-nighter’. These are benefits to employees, but in my view they are not particularly significant, especially when regard is had to the significant pay differentials between pay rates under the Bulga Enterprise Agreement and the pay rates paid to employees of WorkPac and Skilled who work at the Mine.
I do not accept Skilled’s argument that making a regulated labour hire arrangement order pursuant to which its employees would be remunerated on the same basis as Bulga’s employees would be unfair to the employees of Bulga who negotiated remuneration on a different basis in exchange for different productivity gains they agreed to confer on Bulga in the course of enterprise bargaining. The bargain between Bulga and its employees, in the form of the Bulga Enterprise Agreement, will not be altered or disturbed by the making of regulated labour hire arrangement orders covering employees of Skilled and WorkPac. The Bulga Enterprise Agreement will continue to govern the terms and conditions of employment of Bulga’s employees who work at the Mine, until it is replaced by the new enterprise agreement. The evidence does not demonstrate that employees of Skilled or WorkPac will be better off in any material way, financially or otherwise, compared to employees of Bulga, if regulated labour hire arrangement orders are made.
In relation to fairness between employers and between employees and employers, the mere existence of the collective bargaining regime in Part 2-4 of the Act does not favour a conclusion that it is not fair and reasonable to make an order.[72] The evidence does not demonstrate particular aspects of the bargaining history concerning Skilled and its employees or WorkPac and its employees, or particular features of the enterprise agreements that have resulted from those bargaining processes, that weigh materially in support a conclusion that it is not fair and reasonable to make an order. Each of Skilled and WorkPac can bargain with their employees, although I acknowledge that the existence of regulated labour hire arrangement orders will likely have a substantial impact on the bargaining.[73] It is also relevant that the WorkPac Agreement passed its nominal expiry date on 27 June 2023 and the rates of pay in that agreement are no longer actually paid to many WorkPac employees who work at the Mine. WorkPac has had to increase those rates because of changes to the base rates of pay in the BCMI Award.[74] Similarly, the Skilled Agreement passed its nominal expiry date on 6 January 2025 and the rates of pay in that agreement are no longer actually paid to many Skilled employees who work at the Mine because increases in base rates of pay under the BCMI Award have had to be passed on to Skilled’s employees[75] and Skilled pays some production operators a slightly higher rate than that prescribed by the Skilled Agreement because those employees perform a “higher duty” and the supply agreement with Bulga requires payment at the higher rate.[76]
I accept the argument that there is some unfairness and unreasonableness to Skilled and WorkPac, when fairness and reasonableness is measured between employers, and between employers and employees, insofar as other employers and employees enjoy the right to enter into enterprise agreements which set a rate of pay in exchange for the work to be performed, the skills to be applied to that work, and the productivity benefits to be exchanged. But the same cannot be said when it comes to Skilled and its employees or WorkPac and its employees in the event of regulated labour hire arrangement orders being made. Although this is a consequence of the legislative intent behind Part 2-7A, it does not render the unfairness irrelevant. I will give this matter some weight.
In my analysis above of the question of fairness and reasonableness to employees, fairness and reasonableness between employees, fairness and reasonableness to employers, and fairness and reasonableness between employers above, I have taken into account many of the matters specified in s 306E(8)(a) to (f). I also make the following observations in relation to those provisions:
(a)As to s 306E(8)(a)(i), the Bulga Enterprise Agreement does not apply only to a class of multi-skilled and experienced employees. It applies to a class of employees which includes relatively inexperienced production operators (for example, between 12 months and two years’ experience) with few skills/competencies up to very experienced production operators with many skills/competencies. It is accepted that the Bulga Enterprise Agreement does not restrict the use of contracted labour and contemplates Bulga’s right to use it to the extent it is referred to in the Security of Employment provisions of the Bulga Enterprise Agreement.
(b)As to s 306E(8)(a)(ii), the Bulga Enterprise Agreement has always applied to all production operators employed by Bulga and working at the Mine, regardless of their experience and skill level. The Bulga Enterprise Agreement applies to employees at a classification, job level or grade that covers employees of WorkPac and Skilled who work at the Mine.
(c)As to s 306E(8)(a)(iii), if the orders sought by the MEU are made, the single-classification rate of pay in the Bulga Enterprise Agreement, which applies to all production operators employed by Bulga at the Mine, regardless of their experience and skills, will be payable to the employees of WorkPac and Skilled who work at the Mine (other than trainees), regardless of their experience and skills.
(d)As to s 306E(8)(c), the enterprise agreements that have historically applied to Bulga’s employees at the Mine have included a single-classification rate of pay that applies to all production operators employed by Bulga at the Mine, from the relatively inexperienced employees with limited skills/competencies to the very experienced employees with many skills/competencies.
(e)As to s 306E(8)(d), Bulga is not in a joint venture or common enterprise with WorkPac or Skilled, nor is WorkPac or Skilled a related body corporate of Bulga. I accept that the relationship between Bulga and each of WorkPac and Skilled is an ‘arm’s length’ commercial contract for the supply of labour.
(f)As to s 306E(8)(da), the performance of work will not be wholly or principally for the benefit of a joint venture or common enterprise engaged in by Bulga and WorkPac or Skilled.
(g)As to s 306E(8)(e)(i), the contractual arrangements between Bulga and each of WorkPac and Skilled for the supply of labour to the Mine are long standing.
(h)As to s 306E(8)(e)(ii), the location of the work to be performed by employees of Bulga, WorkPac and Skilled is the Mine, where the production operators employed by each of those employers will work together in crews, on the same rosters, and under the same conditions. The evidence does not disclose any significant disharmony between workers, or groups of workers, at the Mine. Any experienced employee may, on occasion, become concerned or frustrated about the extent to which less experienced employees are being trained on the job[77] or cause delays in production, but that can arise regardless of which employer actually employs the particular employee at the Mine. I am not satisfied on the evidence that making the regulated labour hire arrangement orders sought by the MEU at the Mine will give rise to an appreciable risk of disharmony between workers at the Mine.
As to s 306E(8)(e)(iii), the industry is the black coal mining industry, where it is quite common for mine operators to pay the same rate of pay to production operators, regardless of their experience or skills/competencies, and for production operators employed by labour hire companies working at the same mine to be paid significantly less than the direct employees.
(j)As to s 306E(8)(e)(iv), employees of WorkPac and Skilled at the Mine are clearly in the minority compared to the total workforce at the Mine. WorkPac and Skilled supply production operators to the Mine, but they do not supply qualified tradespersons, shot firers, or, for the most part, production operators who operate shovels, excavator equipment, water trucks, dozers, drills, scrapers, graders, and service carts.
(k)As to s 306E(8)(f), I have addressed the other matters I consider relevant in the balance of my reasons for decision.
My broad value judgment is that I am not satisfied that it is not fair and reasonable in all the circumstances to make regulated labour hire arrangement orders with respect to employees of Skilled and WorkPac who work at the Mine. I have reached this position after having regard to all the circumstances, including the evidence before the Commission and the submissions made by each of Skilled, WorkPac and the MEU. My assessment, after balancing the various interests affected by an order in each case, is that the unfairness created by labour hire production operators at the Mine doing the same job as direct employees of Bulga, yet being paid significantly less than the direct employees, outweighs those considerations which support a conclusion that it is not fair and reasonable in all the circumstances to make the orders sought.
Section 306E(7)
I am 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 Skilled and WorkPac who are supplied to perform work for Bulga at the Mine as well as employees of Bulga employed to perform work at the Mine. Accordingly, the MEU is entitled to apply for a regulated labour hire arrangement order under s 306E of the Act by operation of s 306E(7)(c) and, as such, for the purposes of s 306E(1).
Acquisition of property
Skilled submits that making a regulated labour hire arrangement order would result in the Act operating to acquire Skilled’s property otherwise than on just terms. As a result and by operation of s 39 of the Act, Skilled submits that the Act cannot apply to the MEU’s application, and the application must be dismissed.
Quite properly, Mr Howard submitted on behalf of Skilled that I am bound to apply the reasoning in paragraphs [43] to [71] of the Full Bench decision in Bengalla, with the result that I must conclude in this case that s 39 of the Act would not be engaged by the making of a regulated labour hire arrangement order that covers Skilled. I agree. It follows that s 39 does not affect the Commission’s jurisdiction in this matter or otherwise provide a reason not to make an order.
Mr Howard formally made submissions as to why Skilled says the Full Bench in Bengalla erred in relation to s 39 of the Act. I do not need to address those arguments in this decision.
Form of the regulated labour hire arrangement orders
The MEU’s proposed regulated labour hire arrangement order in relation to Skilled is one that covers Skilled and “employees of [Skilled] who perform work at the Bulga Open Cut Mine and Coal Handling and Preparation Plant located approximately 15 kms south-west of Singleton in the Hunter Valley, in the State of New South Wales who would, if employed by the Regulated Host, be covered by the host employment instrument identified in A.4.” Skilled submits that this proposed order is too broad and does not meet the obligation to “specify” in s 306E(9). It is submitted that the duty to “specify” means that the thing to be specified is to be described with “unambiguous clarity”, be “unambiguously identified”, or be “made clear”. WorkPac also adopts these submissions to the circumstances of its case.
Skilled submits that the proposed order needs to be delimited so that it should not apply prospectively to any services (as opposed to labour) that Skilled might supply to Bulga in the future. It is submitted that the MEU’s order would regulate any work of employees that might be the subject to future services that Skilled might seek to provide, in circumstances where the legislative scheme is against that outcome.
Skilled submits that there should be no doubt as to what a labour hire provider’s obligations are pursuant to a regulated labour hire arrangement order, and no doubt as to what a regulated labour hire arrangement order will not regulate. It is submitted that any ambiguity on this score runs the risk of resulting invalidity. Certainty as to what Skilled can, and cannot, do on the making of the regulated labour hire arrangement order is made all the more critical in light of the anti-avoidance provisions contained in ss 306S and 306SA of the Act.
In closing oral submissions, Mr Howard submitted on behalf of Skilled that I am bound to follow the Full Bench in Bengalla (at [134]-[138]) in relation to what I need to specify in the order. Mr Howard also formally put on the record submissions concerning alleged errors in the reasoning of the Full Bench in Bengalla in relation to what needs to be specified in the order. I do not need to address those submissions in this decision.
In Bengalla, the Full Bench reasoned as follows in relation to these arguments by Skilled:
“[135] 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. 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.
[136] 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.
[137] 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.
[138] 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.”
I will follow this approach in these proceedings.
The only outstanding matter I need to address in relation to Skilled’s submissions (echoed by WorkPac) concerning the framing of the order is the contention that the evidence before the Commission does not establish that Skilled supplies employees other than ML3 or haul truck drivers and drillers.[78]
The supply contract between PSW and Bulga concerns the provision of “supplementary labour by the [PSW] for use by the Client [Bulga] to operate various items of Client provided plant and/or equipment under the day-to-day supervision and instruction of the Client”.[79] It is clear from this provision that the supply contract is not limited to employees in the classification of ML3 or haul truck drivers and drillers. Further, Bulga has the right under the supply contract to “utilise any skills possessed by the Contractor’s Personnel and may be required to work in either the Client’s open cut mining area or CHPP”.[80] Evidence given by Mr Gregson demonstrates that some employees of Skilled working at the Mine have competencies beyond haul truck driving and drilling, including in the operation of water trucks, wheel loaders, graders and scrapers.[81] In light of this evidence, coupled with the requirement under the supply contract for Skilled to provide supplementary labour to “operate various items of Client provided plant and/or equipment”, I am satisfied that it is appropriate in the circumstances of this case to follow, as proposed by the MEU, the approach taken by a number of Full Benches of the Commission in framing the regulated labour hire arrangement order to apply to “employees of [Skilled] who perform work at the Bulga Open Cut Mine and Coal Handling and Preparation Plant located approximately 15 kms south-west of Singleton in the Hunter Valley, in the State of New South Wales who would, if employed by the Regulated Host, be covered by the host employment instrument identified in A.4.”
The same analysis applies in relation to WorkPac and the employees it has, and continues to, supply to the Mine.[82] Accordingly, I will adopt the same approach in terms of the framing of orders in relation to WorkPac.
Conclusion
For the reasons set out above, I am required by s 306E of the Act to a make regulated labour hire arrangement orders as sought by the MEU and which apply to employees supplied by Skilled and WorkPac to perform work at the Mine. I will publish the orders together with this decision, setting out the matters specified in s 306E(9). The operative date of each order will be Sunday, 18 May 2025. Both Skilled and WorkPac requested that any order commence operation on a Sunday because the payroll cycle for both labour hire companies begin on a Sunday. The date of 18 May 2025 has been selected because it will give both Skilled and WorkPac some time, albeit slightly less than the 14 days they requested, to make the necessary arrangements to prepare for the impact of the orders. No party submitted that the orders should specify when they will cease to be in force for the purposes of s 306E(10). Accordingly, the orders will also not contain such a specification.
DEPUTY PRESIDENT
Appearances:
Y. Bakri, counsel, for the MEU
J. Murdoch KC and K. Brotherson, counsel, for Bulga Coal Management Pty Ltd
J. McLean, counsel, for WorkPac Mining Pty Ltd and WorkPac Pty Ltd
L. Howard, counsel, for The TESA Group Pty Ltd and Programmed Skilled Workforce Pty Ltd
Hearing details:
24 & 25 March 2025 and 17 April 2025.
Sydney.
[1] Hearing Book at p 526
[2] Hearing Book at p 358
[3] Hearing Book at pp 362-365
[4] Supplementary submissions of Bulga dated 17 April 2025
[5] Hearing Book at p 466[28(a)]
[6] Hearing Book at p 504[22]
[7] [2024] FWCFB 299; (2024) 333 IR 249
[8] [2025] FWCFB 53
[9] [2025] FWCFB 12
[10] Batchfire at [16]
[11] Bengalla at [115], applying the reasoning of Kiefel CJ, Nettle and Gordon JJ in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495 at [14]
[12] Bengalla at [79]
[13] Bengalla at [81]
[14] Ibid
[15] Ibid
[16] Ibid
[17] Bengalla at [82]-[83]
[18] Bengalla at [83]
[19] Bengalla at [87]
[20] Bengalla at [88]
[21] Ibid
[22] Bengalla at [90]
[23] Bengalla at [91]
[24] PN462
[25] Hearing Book at p 136[48]
[26] Bulga Enterprise Agreement, clause 7.2
[27] Clause 11.1 of the Skilled Agreement
[28] Schedule 1 of the WorkPac Agreement
[29] PN991-992 & PN1002
[30] Clause 2.1 of the Bulga Agreement
[31] Ex A4 at p 5 (answer to Q9)
[32] PN871-872
[33] PN873-876
[34] PN792 & PN756-781
[35] PN726-746
[36] MEU’s written submissions dated 22 November 2024 and 24 January 2025, Bulga’s written submissions dated 18 December 2024, WorkPac written submissions dated 18 December 2024, and Skilled written submissions dated 27 November 2024.
[37] including the document entitled ‘Key evidence from cross-examination’ handed up by Mr Mudoch KC on 17 April 2025
[38] PN595-602; Hearing Book at pp 503[18] & 280-281[25]-[28]
[39] ‘spot time’ is the time an excavator is waiting for a truck to get into position to receive a load (Hearing Book at p134[33])
[40] Hearing Book at pp 134-135[32]-[37]
[41] Hearing Book at pp 133[24] & 136[42]
[42] Hearing Book at p 135[35]; PN549
[43] PN603-609; Hearing Book at p 134[27]
[44] Hearing Book at p 135[35]
[45] PN547-548
[46] PN541-545
[47] Ex A8 at [6]
[48] The WorkPac Agreement is similar, but a haul truck operator under that agreement who has more than two years’ experience as a haul truck operator will be classified as a L3 mineworker.
[49] Ex A4 at p 5 (answer to Q9)
[50] Appendix A of the Bulga Enterprise Agreement
[51] Hearing Book at p 139[71]
[52] Hearing Book at p 139[69]
[53] Ex B5
[54] Hearing Book at p 139[74] & [76]
[55] Clause 11.1 of the Skilled Agreement
[56] Schedule 1 of the WorkPac Agreement
[57] Hearing Book at pp 139-140[75] & [77]; Ex B5
[58] Hearing Book at p 132-133[18]
[59] greater than 12 months, in the case of the new enterprise agreement
[60] See paragraph [6(aa)] above
[61] Bengalla at [105]
[62] Bengalla at [118]
[63] Hearing Book at p 465[24]
[64] PN806-809
[65] Hearing Book at pp 459-460[6]
[66] Hearing Book at pp 460-462[10]-[14]
[67] Hearing Book at p 286[58(h)]
[68] Hearing Book at p 287[58(j)]
[69] Hearing Book at p 504[22]
[70] Hearing Book at p 505[29]
[71] Bengalla at [123]
[72] Bengalla at [124]
[73] Bengalla at [124]
[74] PN743
[75] Hearing Book at p 505[27]
[76] Hearing Book at p 502[16]
[77] See, for example, Hearing Book at p 146
[78] Hearing Book at pp 501-2
[79] Hearing Book at p 510, clause 2.1(a)
[80] Hearing Book at p 510, clause 2.1(c)
[81] Ex B5
[82] Hearing Book at pp 285, 294 & 349 (definition of ‘Work’), 354-357 (Contractor Employee Classifications); Ex B5
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