Australia’s Fair Work Commission issues first ‘same job, same pay’ decision

The Fair Work Commission (FWC) issued its first order under the SJSP laws which were introduced by the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth). The order means 324 labour hire workers employed by labour hire provider WorkPac will receive annual pay increases of up to AU$20,000 (US$13,272) in November.

The case sheds some light on amendments to the Fair Work Act which came into effect in December and empower the FWC to issue regulated labour hire arrangement orders (RLHAOs). The main effect of such an order is to ensure labour hire employees are paid the same as employees doing the same work for the host employer under an enterprise agreement. Exceptions apply, including small business host employers and training agreements, ‘genuine’ service contractors as opposed to labour hire providers, and labour hire workers engaged for less than three months. RLHAOs may come into effect on and from 1 November.

The FWC decided the case ‘on the papers’ without a hearing and relying only on the union’s submission and witness statements from on-hire and direct employees working at the host’s open-cut thermal coal mine in Queensland.

WorkPac and the host employer Batchfire declined to file any submissions and did not oppose the Mining and Energy Union’s (MEU) application or its draft SJSP orders. As a result, the legal significance of the FWC’s decision is limited, but it does provide some insight into the FWC’s approach to the new laws.

Background to the case

The MEU applied to the FWC for a RLHAO for labour hire workers engaged in production and maintenance work at Batchfire’s Callide mine in Queensland. Of about 561 workers at the mine, almost 60% were labour hire workers employed by WorkPac. The FWC identified several identical working arrangements between Batchfire and WorkPac employees at the mine. The arrangements included:

• attending the same pre-start meeting each day and being allocated work and equipment for their shift by Batchfire in the same way;
• performing the same production work and operating the same Batchfire-owned or leased machines and equipment;
• wearing the same Batchfire uniforms;
• being equally required to comply with Batchfire’s instructions, usually communicated by Batchfire’s supervisors;
• undertaking the same site induction, conducted by Batchfire, before commencing work at the mine;
• operating subject to the safety and health management system established by Batchfire for the safe operation of the mine consistent with its obligations under the Coal Mining Safety and Health Act 1999 (Qld);
• operating under the same Batchfire standard operating procedures and other policies and procedures;
• being rostered on the same rosters and allocated into the same production crews by Batchfire;
• taking annual leave only when determined by Batchfire, and being required to notify Batchfire of any personal or carer’s leave taken;
• taking breaks at times determined by Batchfire and shared the same crib facilities;
• undertaking the same training provided by Batchfire; and
• using personal protective equipment and consumables provided by Batchfire.

The FWC ordered Batchfire to implement a RLHAO and set a ‘protected rate of pay’ for labour hire production workers at the mine in line with the Callide Mine Union Enterprise Agreement. This meant that the pay for those WorkPac labour hire production employees would be lifted to match the rates of Batchfire’s directly-engaged production employees from 1 November.

As the first order issued under the new SJSP laws, the FWC allowed interested parties two weeks to comment on its terms before its decision was made final.

Practical implications for employers

While the decision will no doubt increase costs for the mine operator and is noteworthy as being the first order of its kind under the SJSP laws, its legal significance is limited given the lack of opposition to the MEU’s application from Batchfire and WorkPac.

In these circumstances, the FWC’s decision could be based only on the material presented by the MEU. The FWC was not called on to consider opposing or competing evidence and submissions about the operation of the new laws. The FWC’s decision therefore did not consider contrasting arguments about matters such as the scope, interpretation and application of the new laws. As a result, its views about such matters are necessarily lacking.

While the decision provides some insights into how the FWC sees the new laws working in practice, we will need to wait for other decisions involving contested applications before a clearer picture of the new laws emerges.

The MEU has also filed a series of applications for SJSP orders covering roughly 1,700 labour hire workers across three BHP coal mines in Queensland. BHP’s labour hire subsidiaries in that case have reportedly indicated they will oppose the orders sought by the MEU because they are service contractors, not labour suppliers. That matter has been listed for further directions in October.

It seems likely the BHP case will be more of a test case on the scope and operation of the new (SJSP) laws. A decision in that case is expected to be handed down early next year.

Co-written by Suren Missaghi and Ebony O’Connor of Pinsent Masons.