Union bid to shut $49,000 labour hire loophole

BHP accused of paying 2200 mineworkers up to $49,000 less a year than directly employed workers performing similar work.

ACTU secretary Sally McManus and labour hire workers in Brisbane. Picture: NewsWire / John Gass

BHP has been exploiting a labour hire loophole by paying 2200 mineworkers up to $49,000 less a year than directly employed workers performing similar work, unions allege, predicting workers stand to receive tens of thousands of dollars in extra pay annually if the Fair Work Commission approves the nation’s first contested same job, same pay application.

In its opening statement on the first day of the commission proceedings, the Mining and Energy Union said labour hire workers employed at Peak Downs, Saraji and Goonyella Riverside mines in Queensland’s Bowen Basin were paid between $10,000 and $49,000 a year less than workers performing the same work but engaged under enterprise agreements.

ACTU secretary Sally McManus hit back at allegations by the Minerals Council of Australia that, contrary to government assurances, service contractors would be captured by the same job, same pay laws. 

Workplace Relations Minister Murray Watt also rejected the employer “scaremongering”, maintaining the commission must not make a same job, same pay order unless it was satisfied the performance of the work was not or would not be for the provision of a service.

Accusing mining bosses of “making up whatever argument they can” to circumvent the legislation, Ms McManus said she believed the employer claims had “no legs”.

“Mining companies got away with this for far too long, got away with ripping off Australians,” she said outside the commission in Brisbane on Monday.

“They negotiated exemptions in the Act, which the Labor government agreed to, now they’re trying to use these exemptions to apply them where they don’t apply … the Minerals Council and BHP will continue to throw out a whole lot of other furphies, which are exactly that, simply designed to make it look as though they’ve got an argument … it is basically a fig leaf.”

The commission hearings are scheduled to run for two weeks, kicking off with union witnesses before BHP makes its opening statement on Thursday.

BHP and the MCA are opposing the same job, same pay applications from the Mining and Energy Union and the Australian Manufacturing Workers Union for employees of BHP Operations Services, WorkPac and Chandler McLeod.

Barrister Philip Boncardo, representing the MEU, rejected the service contractor arguments put forward by BHP.

“We say that the evidence will disclose that the notion that work performed by the OS employees at each of the mines in question is for the provision of the service rather than labour is untenable, and unsustainable, and contrary to the reality of what happens and what has happened at each of those mines on a day-to-day basis for many years,” he said.

Mr Boncardo said the OS entities were wholly owned subsidiaries of BHP.

“BHP proclaims on its website there’s no difference between OS and BHP,” he said. “OS only performs work at mines operated by BHP … we say that the OS entities are key entities that are vehicles for the provision of labour to BHP, and they are vehicles for the provision of labour at rates lower than those set by BHP’s enterprise agreements (for its) directly employed workforce.”

He said all the operations and maintenance work subject to the application were at some point historically performed by directly employed BHP employees.