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In an extraordinary concession, the Fair Work Commission has acknowledged labour hire firms may face millions of dollars in retrospective liabilities under Labor’s “same job same pay” laws – even leading to workers losing their jobs.
In its decision of 7 May 2025 (published Monday 12 May) relating to Glencore’s Bulga coal mine in New South Wales, the FWC considered arguments from labour hire firms Skilled and WorkPac that they would be impacted by increases in the retrospective value of annual leave and sick/personal leave entitlements of their employees, should the same job same pay order be made.
Despite ultimately making the order, the FWC found:
“… the fact that making a regulated labour hire arrangement order would increase the liabilities of each of Skilled and WorkPac for accrued annual leave and personal leave (which must be paid out in some circumstances), weighs in favour of a conclusion that it would not be fair and reasonable to make the orders sought.”
Further, in the case of WorkPac:
“… 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, in the case of Skilled:
“Skilled has no right to recover this increase in liability from Bulga or anyone else. Because Skilled only earns a small profit margin on the labour hire employees it supplies to the mine, the increased leave liability arising from the making of a regulated labour hire arrangement order would exceed the profit margin earned by (Skilled) under its supply contract with Bulga over the life of that contract.”
AREEA Chief Executive Steve Knott AM said the decision confirmed long-held concerns that “same job same pay” could mean “hundreds of millions of dollars in retrospective leave liabilities”.
“In late 2023, AREEA raised concerns with the Albanese Government that its proposed same job same pay laws could unleash retrospective leave liability costs on the mining industry, potentially ranging in the hundreds of millions,” he said.
“The government paid lip service in response – implementing a partial fix that would apply only in very limited circumstances. This issue needs to be urgently revisited.
“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.
“Evidence was accepted that labour hire firms have limited ability to recover unplanned increases in both prospective costs and retrospective leave liabilities, and their ability to commercially service contracts may be put at real risk.
“Yet, remarkably, such impacts apparently do not weigh heavily enough in the favour of a same job same pay order being “not fair and reasonable” when balanced against labour hire employees and direct hired employees having a pay differential.
“Retrospective cost increases driven by government policy is a killer for investor certainty and business confidence. How could any firm confidently invest and do business in Australia when such concerns can be cavalierly brushed aside?
“The Albanese Government said the laws would not impact on firms retrospectively. It should act to ensure this commitment is upheld and protect the sanctity of commercial arrangements lawfully and compliantly entered into under the laws of the land at the time.
“At stake are thousands of jobs, billions of dollars in investment capital and many billions more in government revenues to fund national programs and infrastructure.”
Another challenging outcome of the Bulga mine same job same pay decision is that relatively inexperienced labour hire employees will soon be paid at the same rates as their vastly more experienced direct-hired counterparts.
This outcome was accepted, but also didn’t weigh heavily enough against the making of the order.
“As a result, labour hire trade assistants with as little as 12 months’ experience will receive pay rises of up to $40,000 per annum, bringing them into parity with experienced heavy machinery operators who have been employed at the mine for more than 10 years,” Mr Knott said.
“Given the Albanese Government said the laws would not result in unfair pay parity between inexperienced and highly experienced employees, these types of outcomes may play out adversely in the marketplace.”