Bosses fear same job, same pay bill

WorkPac could be forced to cut jobs if unable to offset the impact of same job, same pay orders.

Labour hire workers at Bulga Open Cut mine have won $35,000 pay rises. Picture: Peter Lorimer

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Prominent labour hire firm WorkPac could be forced to cut jobs if unable to offset the financial impact of same job, same pay orders, Fair Work has found, as employers claimed Labor’s laws could expose them to millions of dollars in retrospective liabilities.

Granting same job same pay orders delivering $35,000 pay rises to 150 labour hire workers at Glencore’s Bulga coal mine in NSW, Fair Work deputy president Tony Saunders accepted WorkPac’s claim that many of its commercial arrangements could become “wholly unviable” if it could not recover the extra labour costs from its clients.

“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 ... the additional cost will have a significant impact on WorkPac’s operations,” Mr Saunders said.

“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.”

Mr Saunders said making the same job same pay order would increase the annual leave and personal leave liabilities of WorkPac and a second labour hire firm, Skilled.

While he accepted there was some unfairness and unreasonableness to the two firms, Mr Saunders said this was outweighed by the unfairness created by labour hire production workers at the mine doing the same job as direct employees but being paid significantly less.

Calling again for the laws to be reviewed, Australian Resources and Energy Employer Association chief executive Steve Knott said the decision confirmed long-held employer concerns that employers could eventually face hundreds of millions of dollars in retrospective leave liability costs.

“The FWC has finally been forced to acknowledge the unfair, unreasonable and unsustainable impacts of same job same pay orders on labour hire firms in the mining industry, going so far as to admit contracts may be terminated and employees may lose their jobs,” he said.

Employment and Workplace Relations Minister Amanda Rishworth said Labor’s same job same pay laws were a “meaningful step to ensure workers who are employed through labour hire are paid the same as direct employees who they work alongside”.

She said the laws continued to deliver significant wage rises to thousands of Australian workers in aviation, mining, meat processing and warehousing.

“We have built in a review of these laws to make sure they continue to be fit for purpose and the right settings are in place and I will continue to monitor them as minister,” she said.

Minerals Council of Australia chief executive Tania Constable said Mr Saunders had made it clear that people would lose their jobs. “It’s right there in black and white – same job same pay is a job killer,” she said.

Mining and Energy Union Northern Mining and NSW Energy District president Robin Williams said the orders, the first for Glencore, were a great result, and he did not expect they would affect overall job numbers at Bulga.

“As same job same pay laws roll out, we are seeing a welcome shift back towards direct permanent employment in the industry,” he said.

“But labour hire companies including WorkPac are still operating at sites with same job same pay orders in place and adapting to new requirements.”