Source:
Statement by Steve Knott AM, Chief Executive
Australian Resources & Energy Employer Association (AREEA)
The Fair Work Commission (FWC) has today granted “same job same pay” orders covering Operations Services (OS) employees working at three BHP Queensland coal mines, finding OS employees were supplied to BHP Coal for their labour rather than to provide services.
The decision is considered an important test case of the same job same pay laws, marking the first time an employer has sought to rely upon provisions that prevent the FWC from making orders where arrangements are for the provision of services rather than the supply of labour.
Known as the “service contractor exemption”, these provisions were negotiated into the same job same pay laws by AREEA when it became clear in late 2023 that the Albanese Government had enough support in the Senate to legislate their long-held policy.
To determine whether an arrangement is for the provision of a service or for the supply of labour, the FWC must consider several criteria including how involved the employer is in the performance of work, who supervises or controls employees, and which entity supplies the systems, equipment and structures of work.
Today’s decision reflects the FWC’s considerations of how work is performed at the relevant BHP sites and its view that the BHP-OS arrangements do not satisfy the service contractor exemption.
Having carefully reviewed the Full Bench’s conclusions, it’s clear the FWC is prevented from making orders covering genuine service contracting arrangements.
This exemption will apply to any service business – from specialist mining contractors to cleaning and catering companies – where they demonstrate they supervise their own employees, control their performance of work, supply them with equipment, and other factors.
As stated by the Full Bench:
Subsection (1) confers the power, and obligation, to make a regulated labour hire arrangement order. That section is rendered inoperative unless the Commission is positively satisfied that the performance of work is not or will not be for the provision of a service, rather than the supply of labour.
– Paragraph 23, [2025] FWCFB 134
AREEA intervened in this important FWC matter to reaffirm the commitments made by the Government at the time of our negotiations that it did not intend for the same job same pay laws to cover genuine service contracting arrangements.
We note it is open to the affected employers to appeal the FWC’s decision to the Federal Court should they believe jurisdictional or factual errors have been made.
With the Federal Government focused on national productivity, it’s also important to consider the wider commercial ramifications of such decisions.
Increasing labour costs at some of Australia’s most productive mining operations, in this case to the tune of some $1.3 billion, will fundamentally impact long-term investment and employment decisions.
This will be to the detriment of the mining sector workforce, regional communities, and all the small and medium businesses that service large project operators along the supply chain.
AREEA’s position is amendments are needed to ensure the ‘same job same pay’ is targeted at clear cases where there is evidence that labour hire is being used to undermine, undercut or avoid the payment of enterprise agreement wages.
Businesses that supply labour to clients via legitimate and lawful above-award arrangements provide an invaluable service to the economy, and they must be allowed to do so with certainty and confidence.