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[23]
[2024] FWCFB 415
General information, not legal advice.
Fair Work Commission (Full Bench)
2024-11-01
Original judgment source is linked above.
s.306E - Application for a regulated labour hire arrangement order
Application by Mining and Energy Union re Boggabri Coal Mine
Application for a regulated labour hire arrangement order in respect of FES Coal Pty Ltd in relation to work performed for Boggabri Coal Operations Pty Ltd at the Boggabri Coal Mine - making of a regulated labour hire arrangement order not opposed by any party - dispute in relation to form of order - application determined on the papers - regulated labour hire arrangement order made.
[1] The Mining and Energy Union (MEU) has applied under s 306E of the Fair Work Act 2009 (Cth) (FW Act) for a regulated labour hire arrangement order applying to Boggabri Coal Operations Pty Ltd (Boggabri Coal) as the regulated host and FES Coal Pty Ltd (FES) as an employer. FES is part of the One Key Resources Group. The application was made on 21 June 2024.
[2] The proposed order would apply to employees of FES who perform work at the Boggabri Coal Mine (Mine), which is an open cut black coal mine owned by Idemitsu Australia Resources Pty Ltd, through its subsidiary Boggabri Coal Pty Ltd (which is 80% owned by Idemitsu, 10% owned by Chugoku Electric Power Australia Resources Pty Ltd and 10% owned by NS Boggabri Pty Limited).
[3] Neither Boggabri Coal nor FES oppose the application or seek to make submissions opposing a regulated labour hire arrangement order being made. However, FES opposes the form of the order sought by the MEU and submits that, if it is otherwise satisfied that the requirements for the making of an order are met, the Commission should make an order in a more limited form.
[4] On 12 August 2024, the MEU provided a draft order for consideration which included the following provision to describe the regulated employees who would be covered by the proposed order:
A.3 The regulated employees covered by the order are employees of the Employer who perform work at the Boggabri Coal Mine 17km north-east of Boggabri in the State of New South Wales who would, if employed by the Regulated Host, be covered by the host employment instrument identified in A.4.
[5] On 29 August 2024, FES provided a draft order proposing the following changes to the provision at A.3:
A.3 The regulated employees covered by the order are employees of the Employer who are supplied to the Regulated Host under Labour Hire Agreement BC- COM-619 (dated 10 April 2023 between One Key Resources Pty Ltd and the Regulated Host), or under any subsequent replacement labour hire contract, who perform work at the Boggabri Coal Mine 17km north-east of Boggabri in the State of New South Wales who would, if employed by the Regulated Host, be covered by the host employment instrument identified in A.4.
[6] FES seeks to restrict the operation of the order to employees supplied under a specific labour hire supply contract, referred to as 'Labour Hire Agreement BC-COM-619', and any subsequent replacement labour hire contract. The MEU does not consent to FES's proposed amendment to the draft order and submits than an order should be made in the form it proposes.
[7] The MEU filed submissions in support of the application. Boggabri Coal advised the Commission it neither opposes or supports the application and does not wish to file any material or make any submissions in relation to the application. In relation to the terms of the order sought, both the MEU and FES filed submissions. No other person has indicated an interest in the application.
[8] The evidence before the Commission comprised:
a witness statement of David Boxsell, an operations technician employed by Boggabri Coal and Secretary of the Boggabri Lodge of the MEU, dated 26 July 2024; and
a witness statement of Nathan Hall-Riley, a mining operator employed by FES at the Boggabri Mine, also dated 26 July 2024.
[9] The evidence indicates, and we find that:
The Mine is an open cut coal mine approximately 17 kilometres north-east of Boggabri in the Gunnedah basin coalfields of New South Wales. The Mine produces low ash, high volatile, low sulphur thermal/PCI/semi-soft coking coal and operates 24-hours a day, 7-days a week save for Christmas Day and Boxing Day.
Boggabri Coal employs production and maintenance employees to perform work at the Mine who are covered by an enterprise agreement known as the Boggabri Coal Operations Enterprise Agreement 2024 (Boggabri Agreement).
The Boggabri Agreement is expressed to cover Boggabri Coal and 'Employees of BCO engaged to perform work at the Boggabri CHPP and the Boggabri open cut mine, who would otherwise be covered by Schedule A of the Black Coal Mining Industry Award 2020'. The 'CHPP' is the Boggabri Coal's coal handling and preparation plant (CHPP). Clause 7 of the Boggabri Agreement sets out a series of classifications which are: Operations Technician in Training (Trainee); Operations Technician; and Maintenance Technician.
In addition to the directly employed workforce, FES supplies a substantial number of employees to Boggabri Coal to perform work at the Mine. There are presently approximately 80 to 100 FES employees who perform work at the Mine. The contracts of employment provided to FES employees, amongst other things, require that the employee:
perform duties at the Boggabri Coal site or elsewhere, as directed by Boggabri Coal;
are required to work the hours reasonably necessary to perform their role and reasonable additional hours as required by Boggabri Coal;
use their best endeavours to promote and protect FES and those of Boggabri Coal;
follow all reasonable and lawful directions from the client; and
comply with all requirements of the Work Health and Safety policies and procedures that apply to the workplace, including obligations arising under Boggabri Coal's health and safety management system.
An enterprise agreement known as the FES Coal Pty Ltd Greenfield Mining Agreement 2018 (FES Agreement) covers and applies to FES and its employees who perform work at the Mine.
Production work at the Mine involves engagement in processes relating to the extraction of coal and its transportation to a CHPP involving the use of plant and equipment by production workers employed by Boggabri Coal and FES. These items of plant and equipment include rear dump trucks, dozers, graders, water trucks, rubber tyred dozers, production excavators, ancillary excavators/loaders, production front end loaders, service carts and overburden/coal drill. Boggabri Coal owns the plant and equipment. FES provides no plant and equipment that is used at the Mine.
Both Boggabri Coal and FES employees perform production work at the Mine, operating the various types of plant and equipment. Boggabri Coal and FES employees work alongside one another and use the same plant and equipment and crib facilities.
Boggabri Coal determines which plant and equipment workers, including employees of FES, operate by reference to the worker having undertaken relevant training and assessment. The same training is required to be undertaken by both Boggabri Coal and FES employees and the training and assessment is conducted by Boggabri Coal.
Supervisors, who oversee and superintend work at the Mine, are all employed by Boggabri Coal and these supervisors arrange, oversee and monitor the work of all employees at the Mine, including FES employees. There are no FES managers or supervisors working at the Mine or overseeing and superintending the work of FES employees. One of the Boggabri Coal supervisors on each production crew holds the statutory function of open cut examiner (OCE) under the Work Health and Safety (Mines and Petroleum Sites) Regulation 2022 (NSW).
Boggabri Coal controls the sign in and sign out of workers to the Mine and all workers are issued swipe cards by Boggabri Coal recording their name and an identification number. FES employees are provided with the same swipe card and the sign in/sign off procedure followed by Boggabri Coal employees and all other workers is determined and enforced by Boggabri Coal. Boggabri Coal also monitors and enforces an alcohol and drug testing regime at the Mine that covers all workers including FES employees.
Both Boggabri Coal and FES employees attend pre-start meetings together when they commence at the same time and receive their duty assignments through the same computer screens and projectors provided by Boggabri Coal. A pre shift instruction (PSI) meeting is conducted at the beginning of each shift by the Boggabri Coal supervisors and attended by both Boggabri Coal and FES employees.
Policies and procedures in place at the Mine, which all workers including those employed by FES are required to adhere to, are established and enforced by Boggabri Coal. Training packages required to be undertaken by workers at the Mine are provided by Boggabri Coal and Boggabri Coal ensures that all workers at the Mine are trained in accordance with these packages. Boggabri Coal monitors and keeps track of the training undertaken by each worker.
Rostering arrangements for Boggabri Coal and FES employees are the same. With the exception of pit services and operations technicians that are engaged to provide 'crib' relief, Boggabri employees and FES employees on each of those production crews work a 5/4 rotating roster, which consist of 12-hour day and night shifts across the 7 days of the week. FES employees who wish to take personal/carer's leave are required to notify the relevant Boggabri Coal supervisor.
Personal Protective Equipment (PPE) for work at the Mine is provided to workers by Boggabri Coal, and all consumable products used and accessed by workers at the Mine are provided by Boggabri Coal. FES employees receive a uniform with their name and the Idemitsu Boggabri Coal logo, and PPE is supplied to FES employees by Boggabri Coal.
FES employees are paid an annual amount of approximately $15,618 less per year than is received by direct employees of Boggabri Coal. For Operations Technicians in Training (Trainee) equivalent, FES employees receive approximately $34,714.16 less than employees directly employed by Boggabri Coal at the Mine.
Is a regulated labour hire arrangement order required to be made?
[11] We are satisfied, for the purposes of s 306E(7) of the FW Act, that the MEU is an employee organisation that is entitled to represent the industrial interests of the employees of FES who are supplied to perform work for Boggabri Coal at the Mine as well as employees of Boggabri Coal employed to perform work at the Mine. Accordingly, the MEU is entitled to apply for a regulated labour hire arrangement order under s 306E of the FW Act by operation of s 306E(7)(c).
[12] We are further satisfied that the requirements of s 306E(1) of the FW Act, in relation to which we must be satisfied to trigger the obligation to make a regulated labour hire arrangement order, are met. Specifically, on the basis of the material before the Full Bench, we are satisfied that:
(a) FES supplies employees employed by FES to perform work for Boggabri Coal at the Mine involving production and maintenance work.
(b) The Boggabri Agreement would apply to employees of FES who are supplied to perform work for Boggabri Coal if Boggabri Coal were to employ those employees directly to undertake the same kind of work.
(c) Boggabri Coal is not a small business employer.
[13] For the purposes of s 306E(1A) of the FW Act, we are satisfied that the performance of work is not or will not be for the provision of a service, rather than the supply of labour. In forming this view, we have had regard to the matters set out in subsection (7A). In relation to the matters referred to in s 306E(7A), we make the following findings:
(a) There is no evidence that FES has any involvement in matters relating to the performance of work by employees of FES working at the Mine.
(b) The evidence indicates that Boggabri Coal arranges and oversees the work of FES employees who are supplied to perform work at the Mine, FES employees are assigned work by Boggabri Coal, supervisors employed by Boggabri Coal direct, instruct and monitor the work of FES employees and FES employees are subject to the same sign in/sign out and rostering procedures as Boggabri Coal employees.
(c) Boggabri Coal and FES employees work alongside one another and use the same plant and equipment supplied by Boggabri Coal and use the same crib facilities. FES employees are subject to operative procedures, health and safety systems and other policies and procedures established and enforced by Boggabri Coal.
(d) There is no evidence that FES is or will be subject to industry or professional standards or responsibilities in relation to the work of employees of the FES entities supplied to Boggabri Coal.
(e) The work undertaken by FES employees at the Mine involves the operation of plant and equipment and employees are provided with appropriate training but it does not involve work of a specialist or professional nature.
[14] Having regard to the considerations referred to in s 306E(7A), it is clear that the performance of work by the employees supplied by FES to Boggabri Coal at the Mine is not and will not be for the provision of a service. We are satisfied that FES supplies labour to Boggabri Coal.
[15] In relation to s 306E(2) of the FW Act, we are not satisfied that it is not fair and reasonable in all the circumstances to make the order the MEU seeks. Section 306E(2) indicates that the Commission is required to have regard to the matters listed in subsection (8) in relation to which submissions have been made. No submissions were made to the Full Bench in relation to any of the matters in subsection (8). Accordingly, we are not required to have regard to those matters.
[16] In those circumstances, we are required by s 306E to make a regulated labour hire arrangement order. However, in this matter there remains a dispute in relation to the terms of the order that should be made.
The terms of the regulated labour hire arrangement order
[17] In relation to the form of the order, FES submits the regulated employees covered by the orders should be limited to those who are supplied under a particular contract referred to as 'Labour Hire Agreement BC- COM-619' dated 10 April 2023 between One Key Resources Pty Ltd and Boggabri Coal or under any subsequent replacement labour hire contract.
[18] FES submits that the form of order it proposes would provide certainty in relation to the scope of the order and avoid 'any potential ambiguity which could lead to future scope related disputes'. FES accepts that it presently does not have any commercial arrangements in place to supply services to Boggabri Coal other than labour hire services. However, it says that, in response to the impact of Part 2-7A of the FW Act introduced by the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth), it must consider all potential diversification opportunities, including options outside of labour hire, to ensure the continued success of the business.
[19] FES's concern is said to be that, in the absence of the additional wording it proposes, it would be open to argue that the order not only captures current labour hire employees supplied by FES, but also all future FES employees based at the Boggabri Mine. If FES was to commence to supply services to Boggabri, it submits that such an arrangement should not automatically fall within the scope of the order made in this matter without consideration being given to whether the Commission is satisfied that the performance of work is not or will not be the provision of a service for the purposes of s 306E(1A) (having regard to the matters listed in s 306E(7A)).
[21] We propose to make a regulated labour hire arrangement order in the form proposed by the MEU, without the additional wording sought by FES, for the following reasons. First, in our opinion, the additional wording of limitation proposed by FES is likely to confuse rather than clarify the coverage of the order. We infer from FES's submissions that the FES employees supplied to Boggabri Coal are supplied under a contract known as 'Labour Hire Agreement BC- COM-619' dated 10 April 2023. However, there is no evidence before the Full Bench in relation to the terms or operation of that contract. We do not have before us evidence which would permit the Full Bench to be satisfied that a reference to the particular contract in the order would capture all FES employees currently performing work at the Boggabri Mine in relation to the supply of labour.
[22] Furthermore, the order should apply to future labour hire arrangements for FES to supply labour to Boggabri Coal. FES accepts that this should be the case by suggesting that the order extend to employees supplied under 'any future replacement labour hire contract'. The introduction of the language 'any future replacement labour hire contract', however, would itself introduce uncertainty in relation to the application of the order. If FES and Boggabri Coal enter a further contract, employees and the MEU may not even be aware this has occurred, and the terms of the contract are unlikely to be known, or accessible, to FES employees or to the MEU. Whether any further contract could be properly described as a 'replacement labour hire contract' may be difficult or impossible to ascertain or subject of dispute. This would, in our view, be undesirable. It is also possible that FES could enter into an arrangement for the supply of labour other than pursuant to a contract of the kind described in the words of limitation FES seeks to have included in A.3 of the proposed order - for example, by use of purchase orders.
[23] Second, as the MEU points out, FES does not suggest it currently has any concrete plan to provide services to Boggabri Coal other than as a labour hire provider. FES says no more than that it must consider potential diversification opportunities having regard to the legislative changes that have taken place. There is, at present, no more than the most speculative possibility that FES will ever provide services to Boggabri Coal beyond the provision of labour. In our opinion, it is not appropriate to frame the form of the regulated labour hire arrangement order by reference to what is no more than a speculative possibility.
[24] If FES were to change its business and, in the future, provide services at the Boggabri Mine rather than supplying labour, a number of issues may arise. If, as part of those services, employees of FES perform work at the Mine, those workers may or may not be 'regulated employees' for the purposes of s 306E(1)(a) and (5) depending on whether it could be said that the employees were supplied to perform work for Boggabri Coal. The relevant covered employment instrument may or may not apply to the employee if the employee were directly employed by the regulated host. The answer to those questions is likely to depend on the nature of the services provided and the arrangements under which the services are performed. It is not possible to consider that question in the hypothetical.
[27] The form of the order proposed by the MEU complies with the requirements as to the content of a regulated labour hire arrangement order in s 306E(9) of the FW Act. An order should be made in the form proposed by the MEU.
[28] For the reasons set out above, we are required by s 306E of the FW Act to make a regulated labour hire arrangement order. We will publish the order together with this decision, setting out the matters specified in s 306E(9) of the FW Act and in the form proposed by the MEU. The operative date of the order will be 4 November 2024, consistent with s 306E(9)(e)(ii).
C Moran-Simpson for FES Coal Pty Ltd trading as One Key.
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