Mining and Energy Union re Hunter Valley Operations Open Cut Mine - [2025] FWC 2402

[2025] FWC 2402

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.306E - Application for a regulated labour hire arrangement order

Mining and Energy Union re Hunter Valley Operations Open Cut Mine

(LH2024/12 & LH2024/13)

DEPUTY PRESIDENT ROBERTS

SYDNEY, 15 AUGUST 2025

Applications for regulated labour hire arrangement orders – whether it is not fair and reasonable to make the proposed orders – acquisition of property otherwise than on just terms – form of order – orders made.

Introduction

In these matters, the Mining and Energy Union (MEU) has applied for regulated labour hire arrangement orders (RLHA orders) under s.306E of the Fair Work Act 2009 (Cth) (Act). The proposed orders relate to work performed by employees of Skilled Workforce Solutions (NSW) Pty Ltd (Skilled) and WorkPac Mining Pty Ltd (WorkPac) (collectively, the Labour Hire Employers) at the Hunter Valley Operations open cut coal mine (Mine) near Singleton in New South Wales. The operator of the Mine is HVO Services Pty Ltd (HVO) and that company is identified as the ‘regulated host’ in the applications.

If granted, the applications would result in the Hunter Valley Operations Enterprise Agreement 2022 (HVO Agreement) being treated as the ‘host employment instrument’ and the Labour Hire Employers would be required to pay their employees no less than the ‘protected rate of pay’[1] which would be the full rate of pay payable to those employees if the HVO Agreement were to apply to the employees.

HVO and the Labour Hire Employers oppose the applications on the basis that the Fair Work Commission (Commission) can and should be satisfied that it would not be fair and reasonable in all the circumstances for orders to be made and that the Commission in that case is prevented from making orders because of the operation of s.306E(2) of the Act. Additionally, the Labour Hire Employers and HVO submitted that if orders were made, they should be more confined in their scope by limiting the way the regulated employees are specified in the terms of the orders. Skilled also submitted that the proposed orders could not be made because of the operation of s.39 of the Act. That section limits the application of the Act and instruments made under it to the extent that the Act or instrument would result in the acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) otherwise than on just terms.

Background

The Mine is an open cut coal mine that uses truck and excavator methods to produce high quality thermal coal, as well as semi-soft metallurgical coal, for export. HVO employs production and maintenance (engineering) employees to perform work at the Mine. The Mine’s operations are supported by employees supplied by the Labour Hire Employers. The Mine consists of two separate mining areas known as West Pit and South Pit and two coal handling and preparation plants. There are also two train loading points.

The parties to the HVO Agreement are HVO and its employees performing production and engineering work at Hunter Valley Operations.[2] The HVO Agreement contains a single classification being ‘Mine and Process Technician’. Appendix 1 to the HVO Agreement defines a ‘Mine and Process Technician’ as ‘an employee engaged in production and engineering tasks carried out in any part of the mine, maintenance, coal preparation and/or support services work areas.’ The rate of pay for Mine and Process Technicians (other than casuals) under the HVO Agreement is a single rate that varies only according to the roster worked by those employees.

Employees of Skilled are provided to HVO to work at the Mine pursuant to a contract between Programmed Skilled Workforce Ltd (Programmed) (a related entity of Skilled) and HVO, entered into in June 2023. The contract provides for the supply of employees at an agreed set of rates. An enterprise agreement called the Skilled Workforce Solutions (NSW) Pty Ltd Enterprise Agreement 2019 (Skilled Agreement) covers Skilled employees performing production and engineering work at black coal sites in the Northern Districts of NSW, including at the Mine.[3] It provides for four employee classification levels, two as ‘Mineworker Level 1 Trainee’, and a Mineworker Level 2 and a Mineworker Level 3 classification.

WorkPac is a party to a services contract with Glencore Coal Assets Australia Pty Ltd (Glencore) pursuant to which WorkPac provides employees to perform work at the Mine. Those employees are covered by the WorkPac Coal Mining Agreement 2019 (WorkPac Agreement). The WorkPac Agreement applies to employees employed in the black coal mining industry whose duties are directly connected with the day-to-day operation of a black coal mine site.[4] It provides for a six-level classification structure[5] and the engagement of trainees. The WorkPac Agreement also provides for additional payments to be paid to employees at the company’s discretion through a ‘flexible reward scheme’.[6]

Evidence

Evidence for the MEU was given by Mr. Hewitt, a production employee employed by HVO at the Mine, and Mr. Hanson, a District Vice-President of the MEU’s Northern Mining and NSW Energy District Branch.

Mr. Hewitt said that the workforce of the Mine includes persons employed by HVO and workers employed by labour hire providers, almost exclusively Skilled and WorkPac. Mr. Hewitt described the shift arrangements at the Mine. He said he worked a rotating 7-day day/night shift. He said virtually all production and engineering employees work the same four panel roster, including HVO, Skilled and WorkPac employees. He said the maintenance employees worked a few different rosters of 12 or 10 hours. Mr. Hewitt said HVO employees, and the employees of the Labour Hire Employers, work alongside each other and perform the same work. He said there was no distinction in the day-to-day duties or work assignments between production employee work groups and that they all operated the same machinery and equipment and performed identical production tasks provided they possessed the same skill and competencies. He said all of the equipment and machines used by the employees performing production work was owned or leased by HVO.

Mr. Hewitt said pre-shift meetings for all employees at the Mine, including those of the Labour Hire Employers, were conducted by HVO supervisors. Amongst other things, these meetings provide directions to employees about the tasks for the upcoming shift. He said that all workers at the Mine, including employees of the Labour Hire Employers, undergo the same mandatory site induction process before they commence work at the Mine. Mr. Hewitt said that the employees of the Labour Hire Employers undergo the same process for training and assessment of competency as HOV employees and that all are obliged to adhere to the relevant training packages and policies. The record of the training undertaken and the competencies possessed by all employees is kept and maintained by HVO. Mr. Hewitt said this ensured that when HVO supervisors assigned duties, all employees were given duties that were consistent with their competencies and within their authority to perform. Mr. Hewitt said the four production crews were composed of HVO employees and employees of the Labour Hire Employers and that on a day-to-day basis, all of those employees took their direction and instruction from HVO supervisors. All supervisory personnel at the Mine were employed by HVO. He said the Labour Hire Employers do not have supervisors or managers based on-site at the Mine and they do not supervise the work of those employed by them at the Mine.

Mr. Hewitt gave a similar account in relation to those engaged in the maintenance and infrastructure work at the Mine. He said that WorkPac employees in this team worked throughout the entire mining operations, used the same HVO equipment and performed the exact same work as performed by maintenance and infrastructure employees employed directly at the Mine. Mr. Hewitt gave evidence that employees of the Labour Hire Employers who worked the same rosters as direct employees of HVO earned less money in wages than HVO employees.

Mr. Hanson gave similar evidence. He described the rostering and payment arrangements for HVO employees under the HVO Agreement, including the single rate of pay and the amount of the annualised salary and the work pattern allowance for employees under this agreement. This was compared to the flat hourly rates payable to employees under the agreements of the Labour Hire Employers. In the case of both Skilled and WorkPac, Mr. Hanson’s evidence was that employees of those companies performing the same work under the same roster as directly employed employees of HVO would receive considerably less money in wages than those employed by HVO.

The General Manager of the Mine, Mr. Foster gave evidence for HVO. He described the workforce at the Mine as at December 2024 as consisting of approximately 1,650 persons of whom there were 624 production operators and 167 maintenance employees covered by the HVO Agreement. He described the recent history of the use of contracted personnel amongst the production workforce at the Mine. He said the proportion of contracted to permanent personnel had, in 2022, been in the order of 55:45 but that HVO had ‘been on a journey’ to reduce reliance on contracted labour and to change the ratio to 80% permanent HVO employees to 20% contract personnel, as opposed to the present ratio of 70:30.

Mr. Foster said the use of contracted personnel enabled HVO to cover short and long-term absences and provided a pathway for employees of contractors to become HVO employees. He said the use of such personnel was also assisting to increase labour supply in an effort to increase production in a context of a shortage in the supply of skilled operators. Mr. Foster said that in order to increase the ratio of directly engaged employees and to meet additional manning requirements, HVO had in the past two years, gone to the market to engage 108 production operators and a further 76 operators previously employed by the Labour Hire Employers. Mr. Foster said that HVO preferred engaging from the pool of employees offered by the Labour Hire Employers because HVO had an opportunity to observe and assess their performance on-site. In relation to maintenance employees, Mr Foster said contractors were used to provide skill and services not performed by HVO employees and to fill temporary vacancies left by HVO employees.

Mr. Foster said that HVO engaged with the Labour Hire Employers to primarily provide production operators and that those operators engaged by the Labour Hire Employers were predominately new to the mining industry and only competent to operate haul trucks. Mr. Foster described the training arrangements that the Labour Hire Employers have in place to provide traineeships to new entrants to the industry. The training includes on-site training delivered by HVO’s trainers. Mr. Foster said all candidates were required to have a minimum 12 month’s experience operating a haul truck solo to be eligible for employment with HVO. He said the production operators employed by HVO were multi-skilled and have significant experience working at the Mine. By contrast Mr. Foster said employees of the Labour Hire Employers were predominately only able to operate haul trucks and had limited experience at the Mine.

Mr. Foster said there were 188 pieces of mobile plant at the Mine of 11 different categories. There are different sizes and models within some of those categories, including 3 models of haul trucks. Haul trucks consist of just under half of the total number of pieces of mobile plant. Mr Foster described the process adopted by HVO to ensure it maintains a multi-skilled workforce to enhance the productivity of its directly employed workforce. He said the less experienced operators required a higher level of direction from supervisors and were generally less productive. He provided a summary of the competencies of the production operators employed by HVO and the Labour Hire Employers and the years of service at HVO (including its predecessor). In general terms, the summaries indicated that production operators employed by HVO were ‘passed out’ on 3 or more pieces of mobile plant and therefore had the skills to operate equipment across the HVO fleet. They also tended to have lengthy periods of service. By comparison Mr Foster’s evidence was that operators employed by the Labour Hire Employers had fewer competencies and less experience than HVO operators.

According to Mr Foster, the maintenance workforce is significantly smaller in number than the production workforce. The HVO maintenance workforce are permanent employees who are trade-qualified and 55% of them have between 3 and 20 years of service with HVO. He also described the maintenance employees supplied by WorkPac. They include trade qualified fitters, light vehicle mechanics and carpenters and a small number of trades assistants.

Skilled provide to HVO amongst others, bench hands who assist shotfirers with the preparation of the explosives for the removal of overburden. The bench hands are not licensed shotfirers.

In relation to the HVO Agreement, Mr Foster said the rate of pay is determined by market factors and the general economic outlook and that the rates payable to contractors was not a relevant consideration in arriving at rates in the HVO Agreement. He said that rate reflected an ‘overall agreement’ with employees that took into account the company’s requirements regarding employee performance, efficiency, flexibility, training and development. Ms. Hartmann, a former Human Resources Manager for HVO and a person involved in the negotiation of the HVO Agreement, gave evidence to similar effect.

Mr. Hockaday gave evidence for WorkPac. He said WorkPac owned a registered training organisation through which it facilitated traineeships and apprenticeships, including for new entrants to the mining industry. He said WorkPac also employed persons in ‘new to industry’ roles for clients in the mining industry which allowed for inexperienced workers to acquire on-the-job training and experience that would enable them to progress to higher classified and better paid jobs. Mr. Hockaday said that WorkPac’s clients preferred not to directly engage trainees or new to industry roles but rather engaged companies like WorkPac to take on the expense and risk of doing so on their behalf and in that respect, WorkPac filled an important gap in the market through the provision of new entrants to the mining industry. He described the arrangement as a ‘rent, try, buy approach’ that allowed clients to assess people before they offered them direct employment.[7]

Mr. Hockaday also gave evidence about the WorkPac Agreement. He said that although many of the company’s clients had flat or flatter classification structures than the WorkPac Agreement, WorkPac was unable to set rates at a singular classification basis or at the rates of mine operators as this would make WorkPac’s offering uncompetitive.

Mr. Hockaday’s evidence was that WorkPac supplied both permanent and casual employees to HVO at the Mine. Those supplied who would be covered by the RLHA Order were at the CMW Levels 2, 3 and 4. Some were paid at the flat hourly rate set out in the WorkPac Agreement. Others were paid a ‘flex-up’ hourly rate under the discretionary payment arrangements provided for in that agreement. Mr. Hockaday also provided evidence about the likely effect on WorkPac’s operations of the making of the RLHA Order. More will be said about that below.

The General Manager North - Energy and Resources for Programmed, Mr. Cribb, gave evidence for Skilled. He described the contractual arrangements between Programmed and HVO pursuant to which labour employed by Skilled was provided to perform production work at the Mine. At the time of Mr. Cribb’s statement Skilled supplied 279 employees to HVO to perform work at the Mine to whom the Skilled Agreement applies. Of these, 81 are indentured trainees and the remaining 198 are production workers employed in mineworker classifications in various capacities. Of the 198 production workers, 185 are employed in the classification of Mineworker Level 3 (ML3). The Skilled Agreement says a ML3 employee is ‘best described as an experienced Mineworker.’ Mr. Cribb accepted that these employees had been supplied as experienced workers and accepted by HVO as experienced.[8] Thirteen employees are employed as bench hands. Mr. Cribb also said that Skilled provided 8 employees to the Mine who were charged at a higher rate than the ML3 rate being persons described as Experienced Higher Duties 1 (employees competent and perform work using a grader or dozer) and 2 provided as Experienced Higher Duties 2 (employees competent and perform work using an excavator, shovel or dragline).

Mr. Cribb also gave evidence as to the experience and tenure of the Skilled production workers supplied to the Mine. He said 51 employees had previous coal mining experience before being employed by Skilled and that 143 had no coal mining or other directly relevant experience before being so employed. Mr. Cribb said 165 employees had completed their black coal mining traineeship with Programmed and all but 2 of those had done so at the Mine. The vast majority of those had concluded their traineeships in 2023 or 2024.

Statutory provisions

Part 2-7A of the Act deals with the making of RLHA orders. It provides for the Commission to make such orders and describes the obligations of employers and regulated hosts where such orders are made. The key provision in the Part is s.306E which sets out the circumstances in which the Commission must make RLHA orders. For present purposes, the relevant provisions are as follows:

306E FWC may make a regulated labour hire arrangement order

Regulated labour hire arrangement order

(1) The FWC must, on application by a person mentioned in subsection (7), make an order (a regulated labour hire arrangement order) if the FWC is satisfied that:

(a) an employer supplies or will supply, either directly or indirectly, one or more employees of the employer to perform work for a regulated host; and
(b) a covered employment instrument that applies to the regulated host would apply to the employees if the regulated host were to employ the employees to perform work of that kind; and
(c) the regulated host is not a small business employer.

Note: The FWC may make other decisions under this Part which relate to regulated labour hire arrangement orders: see Subdivisions C (short‑term arrangements) and D (alternative protected rate of pay orders) of this Division, and Division 3 (dealing with disputes).
…..
(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.

Regulated employee and host employment instrument
(5) An employee referred to in paragraph (1)(a) is a regulated employee.
(6) The covered employment instrument referred to in paragraph (1)(b) is a host employment instrument.

Who may apply for an order

(7) The following persons may apply for the order:
(a) a regulated employee;
(b) an employee of the regulated host;
(c) an employee organisation that is entitled to represent the industrial interests of an employee mentioned in paragraph (a) or (b);
(d) the regulated host.

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.

What an order must specify
(9) A regulated labour hire arrangement order must specify:
(a) the regulated host covered by the order; and
  (b) the employer covered by the order under this section; and
  (c) the regulated employees covered by the order under this section; and
  (d) the host employment instrument covered by the order; and
  (e) the day the order comes into force, which must be:
(i) if the order is made before 1 November 2024—that day or a later day; or
(ii) otherwise—the day the order is made or a later day.

Note: For paragraphs (b) and (c), additional employers and regulated employees of those employers may be covered by the order under section 306EA.

Section 306E has been considered by Full Benches of the Commission in Re Mining and Energy Union [2024] FWCFB 299 (Batchfire), Application by the Mining and Energy Union re Rix’s Creek [2025] FWCFB 12 (Rix’s Creek), Application by the Mining and Energy Union re Bengalla Mining Company [2025] FWCFB53 (Bengalla) and Application by the Mining and Energy Union & anor re Goonyella Riverside, Peak Downs and Saraji Mines[2025] FWCFB 134 (Goonyella). In Batchfire the Full Bench set out a number of principles in relation to the proper application of s.306E which I will adopt and apply without setting out in full here. The Bench in that matter noted that s.306E(1) requires the Commission to make a RLHA order if it is satisfied that the criteria in paragraphs (a), (b) and (c) of the subsection are met and neither of the prohibitions described in subsections 306E(1A) and 306E(2) apply. No party contended that s.306E(1A) applied to the present circumstances and I am satisfied that that subsection has no application here.

I am also satisfied that the MEU is an employee organisation that is entitled to represent the industrial interests of employees of the Labour Hire Employers who are regulated employees within the meaning of s.306E(5), and employees of the regulated host who work at the Mine, and is therefore entitled to apply for a RLHA order under s.306E(7)(c). Further, I am satisfied that the requirements of s.306E(1) of the Act have been met. In this respect I note that:

(i)The Labour Hire Employers supply employees to perform work for HVO. Employees of the Labour Hire Employers perform work for HVO because they perform work wholly or principally for the benefit of HVO[9] or the enterprise carried on by HVO, namely the work undertaken at the Mine.[10]

(ii)The host employment instrument[11] is the HVO Agreement. The HVO Agreement would apply to employees of the Labour Hire Employers if HVO were to employ the employees of the Labour Hire Employers performing work that they currently perform for HVO.

(iii)HVO is not a small business employer.

The primary objection taken to the present applications arise under s.306E(2), that is, that the Commission is prevented from making RLHA orders in these matters because the Commission should be satisfied that it is not fair and reasonable in all the circumstance to make orders having regard to the matters in s.306E(8) about which submissions have been made.

Submissions

The MEU submitted that the labour hire arrangements at the Mine amount to permanent outsourcing not short-term surge or specialist work and erode the wages and conditions of HVO employees provided for in the HVO Agreement. They said labour hire was a permanent feature of the Mine’s workforce being presently in the order of 30% and previously as high as 55% of the workforce. The MEU submitted that the evidence established that those employees supplied by Skilled (excluding trainees) were classified as Mineworker Level 3 or above, and in the case of WorkPac, were predominately CMW Level 3 or above. Further, it was said that contrary to the employer submissions, most of HVO’s labour was obtained from external sources rather than through employees of Labour Hire Employers already working at the Mine.

The MEU submitted that the proposed orders would not prevent new or trainee employees being engaged by HVO or prevent the Labour Hire Employers from supplying less experienced workers. The MEU said fairness considerations weighed in favour of making orders because to do so would substantially increase the pay of the employees of the Labour Hire Employers and that it could be inferred from the evidence that HVO employees also supported the making of the orders.

As to any alleged distinction between the experience of the HVO employees and those of the Labour Hire Employers, the MEU said the distinction was artificial as the major production unit was the haul truck and that it was the same competency and same equipment that was operated by both groups of employees. In any case, it was said that employees of the Labour Hire Employers operate more equipment than haul trucks and conversely, many employees of HVO only operate haul trucks.

The MEU submitted that the evidence established that the vast majority of employees supplied to the Mine by the Labour Hire Employers were experienced employees in the higher classifications of the respective agreements of those employers and that the contractual arrangements between the parties recognised experienced employees as those with at least one year of experience in performing the position described. The MEU said that the employees of the Labour Hire Employers were assessed for the same competencies, operate the same equipment and work in accordance with the same safety management and operations systems as those directly employed by HVO at the Mine. The MEU said that little regard should be had to any alleged ‘experience deficit’ amongst the employees of the Labour Hire Employers and that employees who were deemed competent to operate the same equipment should receive the same pay.

The MEU submitted that it was clear from the terms of the HVO Agreement that the Agreement covered the full range of employees covered by the Award including experienced and less experienced employees. They said the single classification level in the HVO Agreement was common in the industry and had been a feature of agreements applying at the Mine over an extended period pre-dating the current HVO Agreement. The MEU referred to and relied on the F17 Employer Declaration filed in support of the approval of the HVO Agreement and pointed out that the declaration matched the ‘mine and process technician’ in the HVO Agreement with the ‘mineworker’ classification in the Award rather than the advanced or specialised categories in the Award. They pointed out that the HVO Agreement draws no distinction between those operating haul trucks and other types of plant and equipment.

In relation to the Labour Hire Employers, the MEU submitted that the financial impact of making RLHA orders could be a relevant consideration but that it had not been demonstrated that the impact would be material and that such orders would not be unfair or involve ‘distortion’ of enterprise based arrangements given both Labour Hire Employers already currently paid their employees at the Mine higher amounts than those prescribed by their respective agreements. The MEU said that agreements deal with a range of entitlements beyond rates of pay and the capacity to bargain would remain in the event RLHA orders are made. Further, the MEU said higher leave and related costs were an inherent aspect of Part 2-7A and that the evidence was insufficient to conclude that such effects were material.

The MEU said that Skilled had not made any submissions on the matters listed in s.306E(8) and that the Commission was not required to consider those matters in relation to Skilled. The MEU said Skilled submissions was little more than a complaint that a RLHA order would raise costs. The MEU said that the claim of unfairness in applying the rates in the HVO Agreement to Skilled employees should be afforded little weight given the HVO rate covered all production and engineering work at the Mine and was determined having regard to the work performed, not some (undefined) level of experience possessed by employees.

HVO submitted that the Commission could and should be satisfied that it is not fair and reasonable in all the circumstance to make the proposed orders because HVO’s arrangements with the Labour Hire Employers allowed it to meet its increased need for the supply of labour and provided a pathway for inexperienced workers to gain experience in the industry, and frequently, direct employment by HVO at the Mine. It was put that this process was beneficial to HVO, the Labour Hire Employers and the employees of the Labour Hire Employers. Further, HVO said that the single rate of pay in the HVO Agreement reflects the particular value gained from the experience and competence of the company’s directly employed workforce and it has not applied to inexperienced mineworkers or non-trades qualified maintenance employees. HVO submitted that the use of the Labour Hire Employers was unrelated to the terms applicable to its own workforce and was not used to undercut or undermine bargained rates and conditions applying to that workforce.

HVO said that there was a material difference between the skills of its own workforce and that of the Labour Hire Employers in that the HVO employees were multi-skilled and could operate a wide range of plant and equipment whereas the employees of the Labour Hire Employers were generally less experienced and less multi-skilled and therefore contributed less to HVO’s operations. They cited the bench hands engaged by Skilled as an example of persons who were neither trade-qualified nor able to operate heavy machinery. HVO said the single rate of pay applies to its highly skilled production workforce and the 171 maintenance workers, all of whom were trade qualified and that applying this agreement to less skilled and less-qualified employees would destroy pay relativities between the two groups. HVO said that the evidence did not establish that the rates paid to employees of the Labour Hire Employers were used to undercut the rates bargained for in the HVO Agreement.

HVO argued that a simple ‘point in time’ comparison between the skillset of its own employees and those of the employees of the Labour Hire Employers which might show comparable skills, missed the point that the latter group was typically given the opportunity to gain skills and experience through the arrangements that were in place. Further, HVO contended the evidence demonstrated that even within the single cohort of haul truck drivers, the employees of HVO were more experienced and would typically be allocated to operate the larger type of haul truck which delivered greater productivity to HVO.

HVO submitted that while Skilled supplied a number of bench hands to the Mine and HVO also employed a small number of bench hands, the latter were also qualified to operate a range of production equipment. They submitted that the maintenance tradespersons and trades assistants supplied by WorkPac worked in different departments to the maintenance tradespersons directly engaged by HVO and did not have the qualifications to perform the range of highly skilled work on the plant and equipment that was carried out by HVO’s maintenance employees.

In relation to the pay arrangements that apply to employees of HVO and the regulated employees,[12] HVO said that the single classification and base rate of pay in the HVO Agreement was reflective of and commensurate with the higher level of skill and experience of HVO’s workforce and that by comparison, most of the employees of the Labour Hire Employers were primarily only able to operate haul trucks. It was said that the HVO Agreement pre-dated the ‘Same Job, Same Pay’ reforms which introduced Part 2-7A and did not cover inexperienced mineworkers or contemplate persons other than those typically employed by HVO. The Skilled and WorkPac Agreements on the other hand, contained different classification levels. It was submitted that the history of the industrial arrangements showed that HVO had a history of active engagement and bargaining with the MEU and that the rates that had been negotiated for that agreement had not been undermined by HVO’s use of the Labour Hire Employers. Those employers had their own history of bargaining and the agreements each reflected a key object of the Act, namely, the primacy of enterprise-level bargaining.[13]

It was submitted by HVO that the relationship between themselves and the Labour Hire Employers was a commercial arm’s length relationship that had been negotiated in good faith and did not have the effect of undermining pay rates for employees under the HVO Agreement. The arrangement included an ‘umbrella’ agreement and site-specific arrangements. It was put that the arrangement provided for a legitimate labour supply and training pathway which was neither designed to or had the effect of undermining bargained rates. In that case it was said that the present circumstances were not those the RLHA orders regime was designed to address.

Skilled accepted that Part 2-7A was directed towards setting a revised rate of pay for labour hire employees in circumstances where a regulated host sets a higher rate for its own employees for work of a like kind. Nonetheless, Skilled submitted that the effect of any perceived wage injustice was moderated by and accounted for by the bargaining processes contained in Part 2-4 of the Act. Further, Skilled submitted that fairness and reasonableness considerations as between their employees and those of HVO should be weighed having regard to the work, skills and productivity exchanges reflected in the respective agreements. They said a RLHA order would deprive them of the fruit of their contract which was for a fixed term and that profit earned to date would be absorbed into increased leave balances for their employees. Skilled said that there was no contractual provision through which those losses could be recovered. Skilled submitted that an order would overturn rates that were negotiated with their workforce at a time when Part 2-7A was not a prospect and substitute a different rate and productivity exchange as reflected in the HVO Agreement.

WorkPac submitted that the WorkPac Agreement contained a pay and classification structure that aligned with the Black Coal Mining Industry Award classification structure and was a tiered structure with progression linked to competencies. They submitted that the making of a RLHA order would involve the imposition of terms that were extraneous to the relationship between WorkPac and its employees and which were not warranted on the basis that the arrangement undermined the employment security and/or wages and conditions of HVO employees. WorkPac submitted that the ‘supplanting’ of the WorkPac Agreement was inconsistent with the emphasis the Act accords to enterprise level collective bargaining.

WorkPac submitted that the absence of restrictions on the use of contractors in the HVO Agreement meant that the parties to that agreement did not seek to regulate the rates paid to employees of contractors at the Mine and suggested the parties were content to leave those matters to be negotiated between the contractor and its employees.

WorkPac referred to the consequential effects of the making of RLHA orders including an increase in accrued leave liabilities, the cumulative effect of such orders on WorkPac’s profit and the flow-on consequences for the business if losses could not be ameliorated or defrayed. The company said that there was no basis to conclude that WorkPac would be able to take steps to defray increased labour costs that would follow from the making of an order. They submitted proper account should be taken of the fact that the contract with HVO would become a loss-making contract.

Consideration

General principles – s.306E(2) and (8) – ‘fair and reasonable’

The assessment as to whether it would not be fair and reasonable to make a RLHA order must be undertaken in the statutory context in which Part 2-7A appears.[14] That context includes the objects of the Act and the relationship between RLHA orders and the agreement-making processes in Part 2-4 of the Act.[15] The task involves the exercise of a broad value judgement and will involve a balancing of interests having regard to the matters in s.306E(8) about which submissions are made.[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 doing the same work. However, there is no statutory predisposition established by the Part favouring the making of orders where the requirements of s.306E(1) are met.[17]

The fact that labour is supplied to a regulated host and the arrangements by which that supply occurs are part of ‘all the circumstances’ that must be considered. The nature and history of the industrial arrangements applying to the labour hire employer will often be relevant to whether it is not fair and reasonable to make a RLHA order.[18] However the object in s.3(f) of the Act does not dictate a presumption against the making of such an order simply because an effect of an order would be to disrupt an enterprise agreement that applies to the regulated employees.[19] Determining whether it is not fair and reasonable to make orders involves a consideration of fairness to employees and between employees, to employers and between employers, and between employees and employers.[20]

Fair and reasonable – the present matter

The circumstances and arguments advanced in the present matter bear significant similarities to those considered recently by Deputy President Saunders in Re Bulga Open Cut Mine[21] (Bulga). In considering the argument that it would not be fair and reasonable to make an order that had the effect of putting the inexperienced and less skilled employees of the Labour Hire Employers on the same rates of pay as the multi-skilled employees of the regulated host, the Deputy President in that matter noted that almost all of the employees of the Labour Hire Employers who worked at the Mine commenced their work there as a trainee for their first 12 months of employment. Further, it was noted that the requirement to pay the protected rate of pay to an employee under a RLHA order did not apply if a training arrangement applies to the employee in respect of the work performed for the regulated host.[22] Consequently if RLHA orders were made they would not apply to the employees of the labour hire companies while they were working at the mine, usually for the first 12 months.

The evidence and submissions from the employers in this matter emphasised that the provision of trainees through the Labour Hire Employers was an important aspect of the arrangements that had been put in place. HVO said the arrangement between the employer parties was not a case of outsourcing but was a training arrangement that allowed employees to be trained and assessed by HVO as suitable for direct engagement on completion of the traineeship. Reference was made to the statistics which showed that 40% and 30% of the employees supplied by WorkPac and Skilled respectively were engaged under a formal traineeship.[23] The Skilled Agreement makes provision for two trainee classifications. The WorkPac Agreement also provides for the engagement of trainees[24] and includes rates of pay for trainee employees. The exclusion of traineeships from the requirement to pay the protected rate of pay has the effect here of removing any concern about those less skilled employees who are trainees receiving the higher rates that are payable to HVO employees in the event that a RLHA order is made. Further, as Deputy President Saunders concluded in Bulga, the making of the proposed orders would not have the effect of preventing the Mine from being a training ground for trainees who could continue to be engaged by the Labour Hire Employers and work for HVO in these less skilled roles.

As is referred to above, the HVO Agreement provides for a single rate of pay for the single classification of Mine and Process Technician which varies only by reference to the rosters worked by the employees. It does not differentiate based on the skills and experience possessed by the individual employee covered by the Agreement. As a general proposition, HVO production operators are multiskilled. For example, 92% of production operators are ‘passed out’ on 3 or more pieces of mobile equipment.[25] The evidence also shows that the skills and experience of the HVO workforce varies considerably.[26] The number of competencies held by the HVO production operators on South Pit A Crew varies from 21 to 3.[27] Haul truck competencies were commonly held amongst the HVO production cohort. Some of HVO’s employees only had competencies to operate haul trucks, although some of these were in the process of acquiring further skills.[28] Competencies for larger items of equipment such as excavators and shovels, were less commonly held.

The experience of this group also varied. Those with two years or less experience represented 26% of the total, whilst the remaining 74% had between two- and thirty-years’ experience.

By comparison, the employees of the Labour Hire Employers employees tended to be less multi-skilled. Most of Skilled’s production operators were only competent to operate haul trucks, though some 20 employees[29] had other competencies and the employees supplied were capable of operating 21 items of equipment.[30] All but one of WorkPac’s production operators were only competent to operate haul trucks. In terms of work experience at the Mine, 72% of Skilled’s production operators have less than 2 years’ experience (67% have more than 12 months experience) and the vast majority of those employed by WorkPac had less than one years’ experience at the Mine.

As to the maintenance workforce, HVO’s direct employees, all of whom were trade qualified, had different levels of experience at the Mine, with 32% having 3 years or less and the remainder having between 3 and 35 years of service. The trade qualifications of these employees included boiler makers, fitters and high voltage and auto electricians. The majority of the WorkPac employees supplied to HVO to perform maintenance work are also trade- qualified and there is in addition, a small number of trades assistants supplied to HVO.

HVO also employs 2 production operators that are assigned to the shot-firing crew and 2 employees who are production operators training to become licenced shot-firers who assist the licenced shot firers place and detonate explosives to remove overburden. Skilled supply HVO with 12 additional bench hands assisting the shot-firers. In re-examination Mr. Foster referred to the fact that the employees of the Labour Hire Employers are also directed to do miscellaneous general duties that were labouring-type duties but said that HVO permanent employees regularly performed those duties as well.[31]

In my view, the fact that there is a single rate of pay that applies under the HVO Agreement irrespective of the skills and experience of those directly employed by HVO favours a conclusion that it would not be unfair and unreasonable to extend those rates to a cohort who are, viewed as a group, less multi-skilled and less experienced than the HVO employees.

In Bulga Deputy President Saunders said:

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.

HVO argued that the single rate set out in the HVO Agreement does reflect the high levels of skills and experience of its directly employed because they have entered into the agreement having consciously adopted a model of ensuring that only employees with high levels of skills and experience are employed by them. However, the fact that the single rate arrangement exists and has applied at the Mine for some considerable period of time indicates that applying a single rate to employees at the Mine with varying levels of skills and experience is not an inherently problematic proposition. In Mining and Energy Union – Northern Mining and NSW Energy District Branch[32] Deputy President Slevin came to a similar view after an analysis of the differences between the skills and experience of the employees of the regulated host (and the labour hire employees) in circumstances where a single hourly base rate of pay applied under the host employment instrument:

The table showing the skills of the employees on the crew shows that labour hire employees do, as a general proposition, as there are some exceptions, have fewer qualifications and less experience than the Glencore employees. However, the number of skills held by the Glencore employees working on the crew also ranged widely -from 3 skills to 24 skills. The Glencore employee with 3 skills is paid the same base hourly rate under the Agreement as the employee with 24 skills. Similarly, the years’ experience also varied greatly with the longest serving Glencore employee having worked at the Mine for more than 12 years and the shortest less than a year. Again, the recently employed employee is paid the same base rate as the longest serving employee.
The table with the aggregate figures of skills held by employees of each employer showed a similar pattern. Most of the Glencore employees are multi-skilled, but not all are. The skill with the greatest prevalence was the truck operations skill. The next most prevalent skill is on water trucks, then dozers, and the least prevalent skill was the excavator skill. The summary suggests that not all Glencore employees had skills on all pieces of equipment. ……The single hourly base rate of pay applies to all of the Glencore employees regardless of how many of those skills they possess.
If there is unfairness or unreasonableness associated with applying the single base rate of pay to all regardless of skill or experience, then it applies equally between Glencore employees. The parties to the Glencore Agreement did not consider this to be unfair or unreasonable having entered into those arrangements. It would not be unfair to make an order that extended those arrangements, with this perceived shortcoming to the labour hire employees.[33]

The operation of haul trucks is undoubtedly a significant aspect of the operation of the Mine. There are 90 haul trucks out of the 188 pieces of mobile plant and equipment at the Mine.[34] That is the highest number for any category of the plant used at the Mine by a very wide margin. At any given point in time, it is therefore likely that a very significant proportion of the mobile plant operators at the Mine are driving haul trucks, irrespective of the number of competencies that they might possess or their years of experience. In cross-examination Mr. Foster accepted that 98 HVO employees would go to work and just operate haul trucks.[35] He explained this by reference to HVO’s need to ramp up production and increase staffing levels and the backlog in the training process. It should also be recalled that the HVO Agreement makes no distinction between the rates of pay payable to haul truck operators and those operating other items of plant.

It was accepted by the employers that insofar as the rates of pay paid to haul truck drivers employed by HVO and the Labour Hire Employers were concerned there was a disparity. However, HVO contended that there could be no relevant comparison between the work that was done by the two groups because of the greater proficiency of the HVO employees and the tendency for them to be allocated the more challenging haul truck work and their capacity to be allocated to other items of equipment because of their additional skills. It was put that this meant the value of their work differed from that of the employees of the Labour Hire Employers and it could not be said that the employees performed the same work. I do not accept that proposition.

There was some evidence that until haul truck operators reached a certain level of proficiency, they were typically assigned to the smaller model trucks and worked with the smaller excavator units. It was said that this meant that the output associated with their work was less than those (typically HVO) employees assigned to the larger trucks. However, the evidence did not go so far as to show that experienced and multi-skilled HVO haul truck operators did not also perform work on the smaller trucks as the employees of the Labour Hire Employers did, or that the latter were never required to work with the larger machinery. Mr. Foster’s evidence was that it could take between 12 and 24 months for haul truck operators to become familiar with all the seams in the pit and be proficient at ‘reading the play’. He also said that 38% of Skilled’s production operators had between 1 and 2 years’ experience at the Mine and that a further 29% had more than 2 years’ experience. On the basis of experience alone, there would be a significant cohort of Skilled employees capable of ‘reading the play’ on Mr. Foster’s assessment. Any differences which arise as a matter of practice between the HVO employees and those employed by the Labour Hire Employers operating haul trucks is not so significant that no meaningful comparison can be made.

The large number of haul trucks highlights the importance of that work to the Mine’s operation. The demand for those skills is high and this is consistent with the fact that most of the multi-skilled operators include haul truck competencies amongst the list of competencies they possess. As was the case in Bulga, the significance of multi-skilled employees to the successful operation of the Mine can be accepted but this does not reduce the importance of haul trucks at the Mine or the value of the work that the 90 haul trucks operated by both HVO employees and the employees of the Labour Hire Employers alike, undertake.[36]

It was put in submissions that the circumstances in Bulga were distinguishable because the new enterprise agreement that was introduced at that mine made provision for a new classification of ‘inexperienced employee’ (less than 12 months’ experience) at a rate of 80% of the rate paid to those with more than 12 months experience. This meant that there was a reduced likelihood of inexperienced employees being paid the same as experienced employees. In this case there was no such classification, and a previous classification of probationary employee had been removed from the HVO Agreement. I do not think that this point of distinction is so significant in the overall assessment that no meaningful comparison can be made with the circumstances in Bulga. The change introduced a single point of distinction not a multi-level skills and experience-based classification structure. Further, s.306G(1) operates to exclude from the requirement to pay the protected rate of pay regulated employees to whom a training arrangement applies in respect of work performed for the regulated host. The large percentages of employees of the Labour Hire Employers who are supplied to HVO under a formal traineeship arrangement reduces the concern described above.

The foregoing discussion deals with matters which must be considered in the determination of whether it would not be fair and reasonable to make the orders proposed, as required by ss.306E(2) and (8). I also make the following points in relation to the matters referred to in s.306E(8).

Pay arrangements that apply to employees of the regulated host and the regulated employees – 306E(8)(a)

As is described above, the HVO Agreement applies to Mine Process Technicians which includes production and maintenance employees at the Mine who range from very experienced employees with multiple competencies to less experienced employees with fewer competencies. The HVO Agreement applies to employees at a classification, job level or grade that would be applicable to employees of Skilled and WorkPac. If the orders are made, the rate of pay that would be payable to the regulated employees of the Labour Hire Employers would be the single classification rate in the HVO Agreement which applies to all Mine Process Technicians regardless of skill and experience. That rate would also apply to the employees of the Labour Hire Employers (other than trainees) regardless of their skills and experience.

History of industrial arrangements applying to the regulated host and employers– 306E(8)(c)

I have taken into account the history of the industrial arrangements including the agreements that have historically applied to the regulated host and the employers, and the parties involved in the bargaining for the agreements. There is a long history of a single classification rate of pay in agreements applying to the regulated host. The employers’ agreements have contained a multi-level classification structure.

Relationship between the regulated host and the employers– 306E(8)(d)

HVO is not a related body corporate of the Labour Hire Employers, nor are they involved in a joint venture or common enterprise. The relationship between HVO and the Labour Hire Employers is one of an ‘arm’s length’ commercial arrangement under which the latter businesses supply labour to HVO. No submissions were made in relation to s.306E(da).

Terms and nature of the arrangement under which the work will be performed – s.306E(8)(e)

The contractual arrangements by which the Labour Hire Employers supply labour to HVO at the Mine are well established and have operated over a number of years. Skilled submitted that under the terms of its contract with HVO there was only a limited capacity to vary the charges it applies to HVO and that any proposed variation would be at the discretion of HVO. They said that the proposed LHRA order would result in the amounts required to be paid by Skilled exceeding amounts that Skilled could recover for the provision of labour to the Mine. These are considerations which must be taken into account, although it must also be acknowledged that any commercial or contractual response to the making of a RLHA order is at this stage unknown.

The work being undertaken in accordance with those contracts is work in the black coal industry at the Mine. The employees provided by the Labour Hire Employers represent a minority of the overall workforce engaged at the Mine but are nonetheless a significant proportion of that workforce.

Any other matter – 306E(8)(f)

The rates of pay received by the employees of the Labour Hire Employers who work at the Mine are significantly less than the rate they would receive if HVO were to employ the employees to perform work of that kind. This is a factor which weighs against a conclusion that it would not be fair and reasonable to make the orders sought by these applications. I also note that the proportion of persons employed directly by HVO as opposed to the Labour Hire Employees, and therefore the number of persons receiving the lower rate, varies from time to time. In general terms, HVO determines what the proportion should be. HVO’s evidence was that the proportion of labour hire employees was previously much higher but at the present time, it was moving to reduce the proportion of employees employed by the Labour Hire Employers at the Mine.

It was not in dispute that the Labour Hire Employers would face increased accrued leave liabilities if the order were made. Leave liabilities for the Labour Hire Employers have been provisioned taking into account the rates payable under the terms of their respective agreements. The increases are not insignificant although WorkPac properly conceded that given the relative small number of employees it supplied to the Mine the consequential effect would not on its own have a material impact on its profit. Skilled said it had no mechanism to recover the increased liability under its present contractual arrangements with HVO.[37] Otherwise, Skilled did not bring detailed evidence as to the financial impact of the making of a RLHA order or its overall financial position. This constrains the extent to which I can take into account the financial impact of the making of an order on Skilled in the assessment of fairness and reasonableness.

WorkPac said its capacity to recover costs associated with the making of an RLHA order varied depending on the client[38] and if these additional costs could not be recovered it would have a significant effect on their operations, including potentially adverse consequences for WorkPac’s employees. There was evidence that WorkPac’s revenue stream from the Mine was significant in the scheme of its earnings and that a reduction would prompt a consideration of reducing staff numbers. WorkPac’s evidence was that it was safe to assume that for the overwhelming majority of its employees engaged at the Mine, the protected rate of pay that would have to be paid if an order is made would exceed the rates (and in some cases by a significant amount) that WorkPac currently pays to its employees at the Mine. In the case of CMW Level 3, that rate would exceed the rate agreed between WorkPac and HVO, making the ongoing supply of those employees unprofitable. I have taken each of these considerations into account.

As to fairness between the respective groups of employees I do not consider that unfairness would be visited upon HVO employees if the RLHA orders are made. As is apparent from the terms of the HVO Agreement, the HVO employees have accepted the proposition that amongst themselves, there should be no pay differential based on skills and/or experience. I do not consider that the extension of the HVO Agreement rates to co-workers at the mine would generate dissatisfaction at the Mine or result in objective unfairness as between the employees in circumstances where the HVO Agreement provides for a single rate for HVO employees across the Mine. Further, I do not think that the making of RLHA orders would be unfair to HVO employees who have bargained for their own agreement based on their particular circumstances. The bargain between HVO and its directly employed workforce remains undisturbed by the making of RLHA orders.

I accept that the bargained outcomes between the Labour Hire Employers and their employees will be affected by the making of RLHA orders. Both agreements have passed their nominal expiry date but continue to operate. The WorkPac Agreement provides for a discretionary payment system. WorkPac did not submit that none of its employees were paid at the discretionary rates specified in the Agreement or that all of its employees currently received a lower rate of pay than they would if a RLHA order were made. There were no particular features of the Labour Hire Employers’ Agreements that were drawn to my attention to suggest that, in combination with the proposed RLHA orders, the bargained outcome would manifest unfairness. I accept that even though changes to bargained rates as a result of the making of RLHA orders will necessarily follow from the introduction of part 2-7A, it is an impact that is nonetheless material for the Labour Hire Employers and should be taken into account.

On balance, and taking into account all of the evidence and submissions, I have come to the view that I am not satisfied that it is not fair and reasonable to make the orders sought and that I am therefore required to make orders under s.306E(1).

Acquisition of property

Skilled made the formal submission that the making of a RLHA order would result in an acquisition of Skilled’s property otherwise than on just terms and that by the operation of s.39 of the Act, the Act cannot apply to the application made in relation to Skilled and must therefore be dismissed. The argument was put and rejected by the Full Bench in Bengalla.[39] I adopt and apply the reasoning in that decision and reject the submission.

Form of order

The MEU’s amended proposed RLHA order in relation to Skilled is expressed to cover ‘employees of Skilled Workforce Solutions (NSW) Pty Ltd, who perform work at Hunter Valley Operations open cut coal mine 24 kilometres northwest of Singleton in the state of New South Wales who would, if employed by the Regulated Host, be covered by the host employment instrument (the Hunter Valley Operations Enterprise Agreement 2022).’ Skilled argued that the proposed order was too broad and did not meet the obligation to ‘specify’ the regulated employees in s.306E(9). It was said that the duty to specify means to describe with ‘unambiguous clarity’, to be ‘’unambiguously identified’ or be ‘made clear.’

In its original written submission Skilled submitted that the proposed order needed to be delimited in two respects. First, the RLHA order should only be subject to work of the kind that is (or would be) subject to the HVO Agreement if it were performed by an employee covered by that instrument. The point was directed to the form of order sought in the originating application. That issue was subsequently addressed by the applicant filing the amended form of draft orders that made reference to the host employment instrument.[40] Second, Skilled submitted that the RLHA order should not apply prospectively to any services (as opposed to labour) that Skilled might provide to HVO in the future, noting that the legislative scheme was against such an outcome. A similar argument was advanced and rejected by the Full Bench in Bengalla.[41] For the same reasons as given by the Full Bench, I reject that argument.

In closing submissions Skilled made a further submission in relation to the form of the proposed order. They said the proposed order should be limited to production work on the basis that the evidence established that the work of the employees that Skilled provides was production work only. Consequently, it was put that the statutory requirement set out in s.306E(9)(c) to specify the regulated employees in any RLHA order meant that the order could only specify employees that the evidence establishes Skilled supplies or will supply, rather than simply by reference to employees to whom the covered employment instrument of HVO would apply. WorkPac adopted those submissions as they related to the corresponding order proposed to be made in their case but made no further submissions on the matter.

HVO argued that the only fair and reasonable option available to the Commission was to reject the proposed orders in their entirety. It was further submitted that in the event orders were to be made, the Commission could and should limit the terms of the orders by reference to specific classifications of employees of the Labour Hire Employers. These were (and by reference to the respective Labour Hire Employer agreements), in the case of Skilled, the Mineworker Level 3 classification and in the case of WorkPac, Mineworker Level 3 (Experienced). Further, it was said that the evidence established that in practice, the HVO Agreement had never applied to certain classifications supplied by the Labour Hire Employers and that a construction of the provisions of s.306E that resulted in an ‘all or nothing’ approach to orders would create anomalous results.

In Bengalla the Full Bench made the following observations in relation to the form of order proposed in that matter:

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.[42]

If the Commission is satisfied of the matters set out in s.306E(1) (and ss.306E(1A) and (2) do not apply) then it must make a RLHA order. The matters that the Commission must be satisfied of are relevantly here, and in summary, that an employer ‘supplies or will supply’… ‘one or more employees of the employer’ … ‘to perform work for a regulated host’ (subsection (a)), and that a covered employment agreement 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’ (subsection (b)).

I have recorded above that I am satisfied that the requirements of s.306E(1) have been met and that neither ss.306E(1A) or (2) operate to prevent the making of an order. In reaching that state of satisfaction I note that s.306E(1)(a) is engaged where the Commission is satisfied that an employer ‘supplies or will supply’… ‘one or more employees to perform work.’ The first of those requirements references supply in the present tense. The second refers to future supply. Thus, the Commission could reach the requisite state of satisfaction even where there are no employees presently supplied. There was no issue here that the Labour Hire Employer currently supply labour. There are contractual arrangements in place to provide for future supply. The contractual arrangements as to the supply of labour are broad in terms of the labour that may be supplied. The supply contract between HVO and Programmed refers to the supply of supplementary labour which includes production operators and associated labour.[43] The categories of temporary personnel that may be requested is described inclusively and is not confined to production workers.[44] WorkPac’s contract with Glencore refers to the supply of suitably qualified, experienced and competent supplementary labour on an as required basis.[45]

Section 306E(1)(b) imposes a further requirement that in the case of the employees that the employer supplies or will supply, 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. Read in context, the reference to ‘work of that kind’ is a reference to the work referred to in s.306E(1)(a). The employees supplied or who will be supplied could perform a range of different work. What the Commission needs to be satisfied of is that the covered employment instrument of the host would apply to the employees supplied (or to be supplied) if they were employed by the host performing that work. The scope of the covered employment instrument and its forecast application is plainly relevant to the Commission’s state of satisfaction. It was not contended here that the covered employment instrument would not apply to the employees supplied but rather that the terms of the order should be confined having regard to the employees presently supplied. I do not propose to limit the proposed orders in those terms.

The specification of the regulated employees is a distinct exercise from the determination as to whether an order should be made at all and only arises if the Commission is satisfied that an order should be made. The application or non-application of the HVO Agreement, in practice, to certain classifications of employees supplied, is a relevant consideration in determining whether it is fair and reasonable to make an order at all[46] but it is not necessarily a proper basis on which to limit the scope of the proposed orders. The obligation imposed on the Commission by s.306E(9)(c) is to specify ‘the regulated employees’ covered by any order that is made. Subsection 306E(5) provides that an employee referred to in s.306E(1)(a) is a regulated employee. A regulated employee is therefore the one or more employees that an employer supplies or will supply, directly or indirectly, to perform work for a regulated host. The orders proposed by the MEU sufficiently identify the regulated employees for the purpose of s.306E(9)(c).

Various decisions of the Commission have resulted in the making of RLHA orders in similar terms to those sought by the MEU.[47] A number of proposed exclusions in the terms of the orders made have been rejected in some of those decisions. I propose to adopt a similar course.

Conclusion

I conclude that I am required to make orders under s.306E of the Act. The orders will be in the form sought by the MEU. I will publish the orders separately setting out the matters referred to in s.306E(9). The Labour Hire Employers made submissions as to the operative date of the orders. Having regard to those submissions, I propose to make the orders operative from 31 August 2025.

DEPUTY PRESIDENT

Appearances:

Mr Endacott for the Mining and Energy Union.
Mr McLean of counsel for WorkPac Mining Pty Ltd.
Mr Popple for Skilled Workforce Solutions (NSW) Pty Ltd and Programmed Skilled Workforce Limited.
Mr Murdoch SC and Mr Brotherson of counsel for Hunter Valley Operations Services Ptd Ltd.

Hearing details:

Final Submissions heard in-person at the Fair Work Commission, Sydney at 10am AEST on Tuesday, 24 June 2025.

[1] See s.306F(4).

[2] Clause 4.

[3] Clause 3.

[4] Clause 1.4.

[5] Appendix 1.

[6] Clause 13.

[7] PN1134.

[8] PN1294-1295.

[9] (s.306D(2)(a)).

[10] (s.306D(2)(b)).

[11] Section 306E(6).

[12] Section 306E(8)(a).

[13] Section 306E(8)(c).

[14] Bengalla op cit at [81].

[15] Ibid.

[16] Ibid.

[17] Ibid at [82] and [83].

[18] Section 306E(8)(c).

[19] Bengalla op cit at [91].

[20] Ibid at ]116].

[21] [2025] FWC 1273.

[22] Ibid at [80].

[23] PN 3212. See also HVO5 at [40].

[24] At 9.4

[25] HVO 5 at [55].

[26] See DF 1 and DF 2 to Exhibit HVO 5 and HVO 6.

[27] HVO 1.

[28] HVO 8.

[29] As at April 2025 – HVO 6.

[30] PN1386.

[31] PN2907.

[32] [2025] FWC 1932.

[33] At [65] to [67].

[34] HVO 5 at [42].

[35] PN 2457.

[36] Bulga op cit at [88].

[37] Programmed 1 at [23].

[38] WorkPac 1 at [58(i)].

[39] At [43] to [71].

[40] Draft orders filed 3 June 2025.

[41] Op cit at [137]. See also Application by Mining and Energy Union re Boggabri Coal Mine [2024] FWCFB 415 at [17] and following and Bulga op cit at [109] and following.

[42] Op cit at [138].

[43] Programmed 1 Annexure JC1, clause 1.

[44] Ibid clause 2.

[45] WorkPac 1 Annexure CH 1 Schedule 2 clause 1.

[46] Section 306E(8)(a)(ii).

[47] See Bengalla, Boggabri, Bulga and Wambo op cit. See also Applications by Mining and Energy Union re Maules Creek Pty Ltd [2025] FWC 1499 and Applications by Mining and Energy Union re Mangoola Open Cut Coal Mining Operation [2025] FWC 2190.

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