Union win in BHP fight

Two enterprise agreements, championed by Mike Henry to reduce labour contracting, have been dealt a blow by the Fair Work Commission.

BHP boss Mike Henry has championed the Operations Services model as a means to reduce the use of labour hire contracting on BHP’s mines. Aaron Francis/The Australian

A key employment model championed by BHP boss Mike Henry has suffered a setback in the Fair Work Commission, which on Friday overturned the approval of two enterprise agreements covering the company’s in-house labour hire arm.

The agreements, covering BHP’s Operations Services arm, were approved in December in the face of vocal opposition by mining unions, who argued the agreements contained pay and conditions far worse than existing union-negotiated agreements covering directly-employed BHP coal workers.

But the full bench of the Commission overturned that decision on Friday, saying it believed the earlier approval may have underestimated whether workers were better off overall under the new agreements compared to the relevant awards; were concerned key elements of the agreement were not explained to workers before they voted; and could breach elements of the national employment standards as they require employees to work a roster of more than 38 hours a week for a fixed salary.

The agreements, effective from Boxing Day, were originally voted on by 50 workers, a small fraction of the 2350 workers now employed under their terms, and an even smaller portion of the total number of people that work on its mines. They will cover thousands of workers across the country.

But unions did not win a total victory, with the full bench to reconsider arguments about the disputed elements of the registration later this year.

BHP boss Mike Henry has championed the Operations Services model as a means to reduce the use of labour hire contracting on BHP’s mines.

He argues Operations Services has improved safety standards and productivity, gives employment security and certainty to regional workers, and pays better than many of the labour hire companies BHP has used.

BHP says the model is not designed to replace workers covered by existing enterprise agreements, but to convert its contract and labour hire workforce to permanent employees, while retaining workforce flexibility.

But unions argue those workers should be brought under existing union-negotiated agreements, and BHP has only established the Operations Services arm to undercut existing agreements.

CFMEU National President Tony Maher said Friday’s decision was a “setback to BHP’s strategy of cutting wages by employing people on non-union agreements”.

“Operations Services has always been a strategy of BHP’s to drive down wages and conditions in the mining industry,” he said.

“These agreements are dodgy and the decision to approve them was dodgy and it is good to see that recognised by the Full Bench in [Friday’s] decision. BHP already has perfectly good enterprise agreements in place at its coal operations and their Operations Services employees deserve the same pay and conditions as those directly employed workers alongside them.”

A spokesman for BHP said the company will “continue to work through this ongoing process”.

“We would like to assure our 2350 Operations Services team members that their employment, terms and conditions will not be affected,” he said.

“Operations Services was established to give BHP more reliability and better productivity, and to provide an option for people seeking the security of permanent employment with our company.

“Operations Services employees are offered market competitive rates, which are well above the relevant awards and compare favourably to rates earned by labour hire workers. Our 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 company share program.”