The Federal Court has rejected BHP Group Ltd (LSE:BHP, ASX:BHP)’s attempt to stay a landmark Fair Work Commission (FWC) decision, paving the way for 2,200 mineworkers to receive average pay rises of A$30,000.
In a short hearing on Wednesday afternoon, Justice Michael Wheelahan announced his decision at 2.15pm, confirming he would publish detailed reasons shortly.
The case was viewed as a key test of new industrial relations laws that allow the FWC to direct companies to pay labour-hire workers the same rates as directly employed staff if they perform identical work.
The Mining and Energy Union (MEU) welcomed the ruling, calling it a “nail in the coffin for BHP’s sham labour hire model”. The union said the decision would substantially increase the wages of labour-hire workers at the Peak Downs, Saraji and Goonyella Riverside mines in Queensland’s Bowen Basin.
BHP had sought to argue that its inhouse labour-hire companies should be exempt under the legislation by classifying them as service contractors. However, the FWC full bench ruled the evidence did not demonstrate that OS Production and OS Maintenance workers provided a distinct service to the BHP Mitsubishi Alliance joint venture.
According to the MEU, affected workers were previously earning between A$10,000 and A$49,000 less each year than colleagues covered by enterprise agreements despite performing the same roles.