Fair Work derails Roy Hill train deal

Tribunal finds labour hire group supplying drivers to Gina Rinehart’s Roy Hill Mine engaged in “corporate manipulation”.

The Fair Work Commission has scrapped a controversial agreement covering train drivers delivering iron ore from billionaire Gina Rinehart’s Roy Hill Mine after finding that a labour hire group had engaged in “corporate manipulation”.

Railtrain Group had a contract to supply about 50 train crew to Roy Hill through a subsidiary, TRRC. After Roy Hill indicated it would offer Railtrain a new four-year contract provided there was an enterprise agreement in place for the life of the contract, Railtrain created an entity, Karijini, and employed two staff to make a new enterprise agreement.

The duo, who were on probation and still in training, voted up the new agreement, the TRRC workers were transferred to Karijini, and a new contract was reached with Roy Hill.

A FWC full bench found Railtrain’s strategy was designed to avoid having to negotiate a new agreement with the TRRC workforce and their likely bargaining representative, the CFMEU.

Railtrain director Graham Butler told the commission that the two employees asked him a “lot of questions about the effect of the proposed enterprise agreement on the current train drivers working for TRRC and whether they would be disadvantaged”.

He said the questions showed they were fully aware they would be negotiating an enterprise agreement that would cover the transferring TRRC workforce as well as themselves.

But while it was not in dispute the two workers were covered by the mining award, the full bench said Karijini told them they were covered by the rail industry award, meaning they did not have a correct understanding of the award entitlements displaced by the agreement.

Karijini did not state that the agreement contained “inferior entitlements” concerning types of employment, meal breaks and the taking of annual leave when compared to the mining award.

It said the TRRC employees would be offered employment with Karijini on their existing pay inclusive of CPI adjustments, with additional monetary benefits, recognition of prior service and transfer of their accrued entitlements. But it was never explained to the two employees that the purpose of the agreement was to reclassify the permanent TRRC employees as maximum-term or fixed-term employees.

The change meant they would not have any entitlement to redundancy pay if the contract was not renewed. “The ultimate upshot was that, unbeknownst to them, the two employees’ concern to protect the TRRC employees from disadvantage was not met when they voted to approve the agreement,” the full bench said.

The commission found Railtrain had “engaged in an exercise of corporate manipulation”. “We find that there are reasonable grounds for believing that the agreement of those two employees did not constitute properly informed consent, and lacked the moral authority required for genuine agreement,” it said.

Greg Busson, the secretary of the CFMEU’s West Australian mining and energy division, said the union would seek to negotiate a fair deal for the drivers who “work at the operations of the richest woman in Australia in the midst of an iron ore price boom”.

“This has been a disgraceful attempt to avoid bargaining with workers and avoid paying industry rates and conditions in order to win a contract from Gina Rinehart,” he said.