The Fair Work Commission has delivered a landmark ruling in favour of regulated labour hire arrangements at three major BHP Group Ltd (LSE:BHP, ASX:BHP)-operated coal mines in Queensland, paving the way for pay increases of up to $30,000 per year for more than 2,000 contract workers.
In a significant ruling applying new labour hire provisions introduced by the Closing Loopholes Act 2023, the Commission’s Full Bench found that workers employed by labour hire firms WorkPac, Chandler Macleod, and BHP’s internal labour unit, Operations Services, are performing work equivalent to directly employed staff at the Goonyella Riverside, Peak Downs, and Saraji coal mines — and should be paid the same.
The decision was made under section 306E of the Fair Work Act 2009 (Cth), which empowers the Commission to issue regulated labour hire arrangement orders where workers are supplied to a host employer but are not performing a distinct service.
Union hails $66 million annual pay win
The Mining and Energy Union (MEU), which brought the applications alongside the Australian Manufacturing Workers’ Union, described the outcome as the biggest win yet under the Same Job Same Pay reforms.
“BHP has fought our Same Job Same Pay applications tooth and nail, trying to protect the wage-cutting employment model it pioneered,” said MEU Queensland president Mitch Hughes. “This decision reaffirms that BHP’s approach of using labour hire to undercut bargained wages is no longer lawful and it’s time to pay up.”
The MEU said the ruling represents its sixth successful application in Queensland and seventeenth nationwide, delivering more than $100 million in total annual pay increases to date.
Industry body warns of broader consequences
The Minerals Council of Australia (MCA), however, said the ruling sets a dangerous precedent by capturing service contractors beyond the intended scope of the legislation.
“This is an incredibly disappointing decision that will directly threaten thousands of specialised contractors who play a vital role in mining operations across the country,” said MCA CEO Tania Constable.
“These businesses exist to provide a specialised service, not just workers, and should never have been covered by these laws,” she added. “It is now incumbent on the government to find a legislative fix to address the ‘unintended consequence’ of all service contractors being captured.”
The Commission has yet to formally issue the regulated labour hire orders, but its decision clarifies how section 306E will be applied in future cases — potentially reshaping employment practices across the mining sector.
BHP Group shares were trading down by about 1.13% on Tuesday afternoon following the Commission’s ruling.