BHP enterprise agreements quashed
BHP will be forced to go back to the drawing board on a key labour model championed by CEO Mike Henry.
BHP is considering whether to put controversial pay agreements championed by chief executive Mike Henry directly to its workforce, after the full bench of the Fair Work Commission quashed earlier enterprise agreements covering the company’s internal labour hire arm.
In a decision delivered late on Thursday, the full bench of the Commission rejected BHP’s latest attempts to address concerns its Operations Services agreements had not been genuinely agreed by workers, with a majority of the Commission expressing renewed concerns that undertakings given by the mining giant still did not meet requirements that workers had to be better off overall compared to the relevant awards.
Mr Henry has championed the Operations Services model as an alternative to the use of labour hire contracting on BHP’s mines, arguing it offers more certainty and better conditions for workers, while improving productivity and making it easier for BHP to move employees between its mines in Queensland, WA and NSW.
But the enterprise agreements underpinning the model were quashed by the Fair Work Commission on Thursday, largely over concerns key clauses were not explained to the bulk of the workers affected by them.
The two agreements were originally voted on by 50 workers, a small fraction of the 3400 people now employed by BHP’s internal labour hire arm, and an even smaller portion of the total number that work on its mines. They would have eventually covered thousands more of workers across the country, with BHP saying they had now had more than 84,000 applications for positions within its Operations Services arm since the program was launched in April 2018.
Although the mining giant could appeal the decision to the Federal Court, it could only do so on technical legal grounds. Its successive failures in the FWC, and the fact Thursday’s decision focuses on the approval process — not the content of the agreements — make it more likely BHP will move quickly to put the agreements to its entire Operations Services workforce directly, with minor changes.
Such a move would put BHP on a collision course with mining unions, who have mounted a vocal campaign against the model, arguing it undermines pay and conditions negotiated at BHP’s mine sites. Unions want BHP to go back and begin from scratch to negotiate an entirely new agreement.
BHP said on Friday the decision would not affect the pay and conditions offered to Operational Services workers currently working on its mines, with vice president Operations Services Mark Swinnerton saying existing employment contracts remain in effect.
“Operations Services offers market competitive rates, which are well above the relevant awards and compare favourably to others in the industry. Operators and maintainers earn more than $100,000, and have the added benefits of stability, paid parental leave, annual leave and sick leave, performance bonuses and access to the BHP Employee SharePlus share program,” Mr Swinnerton said.
With key enterprise agreements covering BHP’s coal mines in Queensland coming up for negotiation, CFMEU Mining and Energy President Tony Maher said BHP should apologise to its workforce, saying the Operations Services agreements undercut workers directly employed by BHP by as much as $50,000 a year.
“We’ve long said these tricky, toxic agreements belong in the bin and that’s exactly where the Commission has finally put them with this decision,” he said.
“BHP wanted to impose conditions from a different industry on coal miners in Queensland and NSW – and at the same time undercut its permanent workforce.
“The pay and conditions of the Operation Services agreements were far below the pay and conditions that exist for permanent coal miners on BHP’s sites that have been negotiated over decades.”
Mr Swinnerton said BHP was considering the implications of the Fair Work decision.