Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd [2025] FWCFB 53 | Case summary

[2]Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd [2025] FWCFB 53 | Case summary | Zoe

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[1] On 21 June 2024, the Mining and Energy Union (the MEU) filed two applications for regulated labour hire arrangement orders under s 306E of the Fair Work Act 2009 (Cth) (the Act). The orders sought by the MEU would apply to labour hire workers employed by CoreStaff NSW Pty Ltd (CoreStaff) and Skilled Workforce Solutions (NSW) Pty Ltd (Skilled), respectively, who perform work for Bengalla Mining Company Pty Ltd (Bengalla) at the Bengalla Mining Operations (the Bengalla Mine or the Mine). The host employment instrument is the Bengalla Enterprise Agreement 2022 (AE517092) (the Bengalla Agreement).

[2] The Bengalla Mine is an open cut coal mine located approximately four kilometres southwest of Muswellbrook in New South Wales. Bengalla employs approximately 560 employees as technicians performing production and engineering work at the Bengalla Mine. In addition, labour hire employees are supplied to perform work for Bengalla by CoreStaff and Skilled. At the time the evidence was prepared, Skilled indicated that it provided 156 workers to perform work at the Mine and CoreStaff indicated that it employed 35 workers who were assigned to work at the Mine.

[3] The making of regulated labour hire arrangement orders as sought by the MEU is opposed by Bengalla, Skilled and CoreStaff. We will set out the relevant provisions of the Act below. It is appropriate to indicate at the outset that all parties accepted that the Commission should be satisfied that the requirements which trigger the obligation to make a regulated labour hire arrangement order in s 306E(1) are met and that the Commission should be satisfied that the performance of work at the mine by employees of CoreStaff and Skilled is not for the provision of a service, rather than the supply of labour, for the purposes of s 306E(1A).

[4] The making of the orders sought is opposed on three grounds:

(a) First, Skilled submits that a regulated labour hire arrangements order would give rise to an acquisition of its property otherwise than on just terms for the purposes of s 51(xxxi) of the Commonwealth Constitution and the Commission, as a result, has no jurisdiction to make the order sought by operation of s 39 of the Act. Bengalla and CoreStaff did not join in making that submission.

(b) Second, Bengalla, CoreStaff and Skilled each contend, albeit for somewhat different reasons, that the Commission is prohibited from making a regulated labour hire arrangement order in either case because it should be satisfied that it is not fair and reasonable in all the circumstances to do so for the purposes of s 306E(2).

(c) Third, Skilled contends that the form of order sought by the MEU is deficient and not sufficiently specific and that, if an order is made, it should exclude certain groups of workers, including employees who perform work involving "car washing", trainees performing work as part of a training arrangement and future employees if they perform work for the provision of a service, rather than the supply of labour, within the meaning of s 306E(1A).

[5] For the reasons that follow, we are satisfied that the requirements in s 306E(1) and (1A) are met. Section 39 of the Act would not be engaged by a regulated labour hire arrangement order that covers Skilled's employees and does not deprive the Commission of jurisdiction to make an order which would apply to Skilled. We are also not satisfied it is not fair and reasonable in all the circumstances to make orders with respect to CoreStaff and Skilled employees who perform work at the Bengalla Mine for the purposes of s 306E(2). As a result, the Commission is required by s 306E(1) to make regulated labour hire arrangement orders covering CoreStaff and Skilled employees performing work for Bengalla.

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[6] The following summary represents uncontroversial facts derived from the evidence and sets out the findings of the Full Bench based on that evidence. The Bengalla Mine is a single pit open cut mine which uses a dragline, truck and excavator mining method and operates 24 hours a day, seven days a week. The production process at the mine involves coal extraction and its transport to the Coal Handling and Preparation Plant. In broad overview, the production process involves stripping the top layer of dirt and soil using excavators and haul trucks, drill and blast operations to break up the overburden, the removal of the overburden using a dragline and dozers and the use of excavators and haul trucks to dig and load the coal and transport it to a hopper or designated coal stockpile area. The coal then undergoes crushing, washing and treatment at the Coal Handling and Preparation Plant and is loaded onto rail cars for transportation.

[7] The operational workforce at the Bengalla Mine is divided into four groups being production, maintenance, coal handling and preparation and blast crew. The various steps involved in the extraction of coal involve the use of plant and equipment by production workers employed by Bengalla, CoreStaff and Skilled, including dump trucks, dozers, graders, water trucks, rubber tyred dozers, dragline, production excavators, ancillary excavators/loaders, production front end loaders, service carts and overburden drills. Bengalla owns and operates all the plant and equipment.

[8] Bengalla, CoreStaﬀ and Skilled employees work alongside one another in the same crews, use the same plant and equipment and the same crib facilities. Bengalla is responsible for determining which plant and equipment workers use, including employees of CoreStaﬀ and Skilled and ensuring that employees have undertaken relevant training and assessment. The same training is required to be undertaken by the Bengalla, CoreStaff and Skilled employees and is conducted by Bengalla.

[9] Supervisors and managers at the mine are all employed by Bengalla and all supervisory responsibilities, including task allocation and performance monitoring, are managed by personnel employed directly by Bengalla. The Bengalla supervisors report to Bengalla's production superintendent who, in turn, reports to its mine manager who, in turn, reports to the general manager of Bengalla. Bengalla supervisors supervise the crews and the production work, one of whom is an open cut examiner and is required to be appointed consistent with the obligations imposed by the Work Health and Safety (Mines and Petroleum Sites) Act 2013 (NSW).

[10] Bengalla controls the sign in and sign out procedures for all workers to the mine and all workers are issued swipe cards recording their name and an identification number by Bengalla. CoreStaff and Skilled employees participate in the same sign in/sign off procedure as other workers. Bengalla, CoreStaff and Skilled employees all attend pre-start meetings together when they commence at the same time and those meetings are conducted by a Bengalla supervisor. All the employees receive their duty assignments in the same manner from Bengalla.

[11] Policies and procedures at the mine are required to be adhered to by all workers, including those employed by CoreStaff and Skilled, and are developed and enforced by Bengalla. Training packages required to be undertaken by workers at the mine are Bengalla's, and Bengalla ensures that all workers at the Mine are trained in accordance with the training packages. Bengalla monitors and keeps track of the training undertaken by each worker. Bengalla has also implemented a drug and alcohol policy and testing regime at the mine which applies to all workers including CoreStaff and Skilled employees.

[12] CoreStaff and Skilled, respectively, have some involvement in the work of their employees assigned to work at the mine. CoreStaff representatives communicate with Bengalla in relation to absences and disciplinary or performance issues concerning its employees. CoreStaff provides an online induction process prior to an employee undertaking on-site work in addition to the on-site induction provided by Bengalla and provides some online training modules to its employees. It also provides uniforms and personal protective equipment to its employees although they are the same as those used by Bengalla employees.

[13] The terms and conditions of employment of Bengalla employees performing work at the mine are governed by the Bengalla Agreement. Clauses 1.2 and 1.3 of the Agreement set out the coverage of the Bengalla Agreement in the following terms:

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[20] Clause C8 of Schedule C also provides for additional payments to be made to employees for extra shifts required to be worked in addition to rostered hours and hours included in the base salary and work pattern allowance.

[21] CoreStaff indicated that, as of November 2024, it assigned 35 production employees to work at the Bengalla Mine. Renee Kearney, who made a witness statement for CoreStaff, gave evidence that, of those employees, 14 are permanent employees of which 13 are full-time permanent members of the production crew and one is a permanent part-time "crib relief employee". There are also 21 casual employees, including 10 production crew members, 9 crib relief employees and two who are referred to as "floaters". The crib relief employees provide coverage for production crew staff while they are on their crib break to ensure that the machines run continuously. The floaters are engaged to work to cover shifts across all production crews and crib relief employees where an employee is unavailable to work their rostered shift. CoreStaff employees assigned to work at the Bengalla Mine are covered by the CoreStaff NSW Black Coal Enterprise Agreement 2018 (the CoreStaff Agreement). All except one of the CoreStaff emloyees are classified as Mineworker Production Level 2A in the CoreStaff Agreement.

[22] As of November 2024, Skilled supplied 156 employees to perform work at the Bengalla Mine. Joel Cribb, who made a witness statement for Skilled, indicated that 73 of those employees are trainees performing work as part of a training arrangement under the Apprenticeship and Traineeship Act 2001 (NSW). Of the remaining 83 employees, 69 are employed in the classification of Mineworker Level 3 of which 53 are permanent full-time employees, 7 are permanent part-time employees performing crib relief work, 8 employed as casual employees working on a "floating" basis and one employed as a casual employee working a 12.5 hour, 7 day rotating roster. In addition, there are two employees performing "bench hand work" assisting the drill and blast operators employed by Bengalla, four are employed in the classification of Mineworker Level 2 on a permanent full-time basis and eight are employed on a casual basis as "Wash Technicians" working an 8 hour, 7 day rotating roster. The employees supplied by Skilled are covered by the Skilled Workforce Solutions (NSW) Pty Ltd Enterprise Agreement 2019 (the Skilled Agreement).

[23] The MEU advanced evidence in relation to the differences between the rates of pay under the Bengalla Agreement, on the one hand, and the CoreStaff Agreement and the Skilled Agreement on the other. Clint Smith, who prepared a witness statement for the MEU, indicated that a full-time employee engaged by CoreStaff would receive between $46,406.00 and $52,730.50 more per annum if employed by Bengalla and covered by the Bengalla Agreement depending on classification. Mr Smith indicated that a full-time Skilled employee would earn between $31,550.99 and $42,798.99 more per annum if employed by Bengalla and covered by the Bengalla Agreement depending on classification. The same calculations were made by Matthew Howard who also prepared a witness statement for the MEU. These calculations were not agreed, although Bengalla, CoreStaff and Skilled did not provide alternative calculations or identify any specific error in the calculations.

[24] There is no evidence before the Commission as to the contractual arrangements between Bengalla and CoreStaff under which labour is supplied to Bengalla. However, Skilled relied on the nature of its contractual arrangements with Bengalla. Mr Cribb annexed to his witness statement a "Contract for the Supply of Services (and Associated Goods)" between Bengalla and Programmed Skilled Workforce Limited under which the latter agreed to provide "supplementary mining labour" to the former (the Supply Contract). One feature of the contractual arrangements is that the contract under which labour is supplied was not made with the respondent to the present proceedings, Skilled Workforce Solutions (NSW) Pty Ltd, but with a related entity, Programmed Skilled Workforce Limited. The evidence suggested that Skilled is part of the Programmed group of companies. By reason of the operation of s 306D(3) of the Act, it does not matter for present purposes whether there is a contract between the supplier of labour and the regulated host. Although Skilled is not actually party to the Supply Contract, it is convenient to refer to the obligations of the contract as applying to Skilled.

[25] The Supply Contract contains a "Key Terms" section and a series of schedules setting out various terms and conditions. The Key Terms include that the contract has a commencement date of 1 January 2022 and a term of five years concluding on 31 December 2026. Schedule A describes the services to be provided by Skilled. Clause 1 provides:

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[26] Clause 6.1 provides that Skilled "must follow and attend to the directions, instructions or demands of the [Bengalla] Representative ... without delay, protest or additional cost".

[27] Schedule C sets out the prices under the Supply Contract. Schedule C contains a schedule of hourly rates payable for the supply of employees falling within particular categories to Bengalla. The schedule is commercially sensitive, and it is not appropriate to set out the rates in this decision. It is sufficient to note that the schedule of rates sets out how the final hourly rates payable to Skilled have been calculated, including components for "employee pay rates", superannuation, payroll tax, worker compensation and overheads as well as an identified profit margin to be derived by Skilled.

[28] Clause 1.3 of Schedule C indicates that the rates in the schedule will be increased where changes occur in statutory on-costs or governmental taxes for any category of personnel to be provided by Skilled. In its oral submissions, Skilled emphasised that, aside from changes to statutory on-costs and government taxes, there was no provision permitting it to pass through increases in the costs of supplying employees in accordance with the Supply Contract, including if there were increases in the rates of pay Skilled itself was required to pay the relevant employees.

[29] In that regard, Schedule I to the Supply Contract contains "General Conditions for the Supply of Services". Clause 6.1 of Schedule I provides Bengalla with the capacity to give notice to vary the Supply Contract but not to Skilled. Clause 34 provides that Bengalla can terminate the Supply Contract by giving 30 days' notice of its intention to do so without fault on the part of Skilled. A right to terminate the Supply Contract is only conferred on Skilled by clause 36 of Schedule I in the event of default by Bengalla. The MEU also drew attention to clause 31 of Schedule I which contains a force majeure clause.

[30] There are three further observations to be made about the price provisions of the Supply Contract. The first is that, although the schedule of rates set out in Schedule C to the Supply Contract identifies nominal cost components used to construct the rate payable to Skilled, Skilled accepted in oral submissions that the Supply Contract does not require that it pay employees supplied to perform work for Bengalla amounts which equate with the "employee pay rates" in Schedule C. Mr Cribb indicated in his witness statement that Skilled is currently paying its employees at a higher rate of pay than is contained in the Skilled Agreement, has not passed those costs through to Bengalla, and is performing the Supply Contract at a loss.

[31] The second observation is that, although there does not appear to be a right under the Supply Contract for Skilled to require Bengalla to renegotiate the rates, Mr Cribb indicated that Skilled seeks to renegotiate the rates payable by Bengalla from time to time. Mr Cribb annexed to his witness statement the most recent schedule of rates which he says was effective from 28 March 2023. No evidence was given by Skilled or Bengalla in relation to the circumstances in which the rates were renegotiated or what prompted that to occur. The Supply Contract does not expressly provide a mechanism for renegotiating the rates.

[32] The third observation is that Skilled says that, unless the rates are renegotiated, if a regulated labour hire arrangement order is made, the increased costs resulting from the requirement to pay Skilled employees no less that would be payable under the Bengalla Agreement would far exceed the value of the profit margin for which provision is made in the Supply Contract. No evidence was given by Skilled that it had approached Bengalla to discuss whether Bengalla would be open to renegotiating the rates under the Supply Contract if a regulated labour hire arrangement order was made. No evidence was given by any representative of Bengalla as to what its attitude would or might be in that event.

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[45] It is appropriate to make two initial observations in relation to the operation of s 39 of the Act. The first observation is that Skilled's submissions assume that s 39 of the Act is "jurisdictional" in character and that, if the section would be engaged by an order made under s 306E, the Commission has no jurisdiction and must dismiss the MEU's application. As we understand the submission, Skilled suggests that the Act does not apply to the extent that its operation would result in the acquisition of property otherwise than on just terms within the meaning of s 51(xxxi) of the Commonwealth Constitution and that, if making the order sought in the MEU's application would have such an effect, the provisions of Part 2-7A have no application and the Commission cannot make the order.

[46] On one view, s 39 of the Act does not operate on the Commission's jurisdiction. It could not be contended that Part 2-7A itself directly results in an acquisition of property. Part 2-7A simply authorises the Commission to make a regulated labour hire arrangements order. It is only if such an order is made, and is in force, that Part 2-7A imposes obligations on an employer covered by the order.[2] If the Commission makes an order which would result in the acquisition of property other than on just terms, s 39 means the Act does not apply to the extent it would have that effect. It is not clear that s 39 deprives the Commission of jurisdiction to make an order at all even if there is some possibility that the order might result in an acquisition of property other than on just terms.

[47] However, we understand Skilled to submit that, in this case at least, no order could be made that would not result in the acquisition of property other than on just terms such that the Commission cannot make any order at all and any order it did make would be outside jurisdiction. The Commission is able to determine its own jurisdiction and to decline to act upon an application on the basis that it fails for want of jurisdiction.[3] The Commission is also likely to conclude that it is not fair and reasonable to make a regulated labour hire arrangement order for the purpose of s 306E(2) if the order would result in the acquisition of property otherwise than on just terms contrary to s 51(xxxi) of the Constitution. It is appropriate to consider Skilled's argument.

[48] The second initial observation to be made is that s 39 of the Act is intended to reflect the operation of s 51(xxxi) of the Constitution. That is, s 39 operates only to the extent that the Act, or an instrument made under the Act, results or would result in an acquisition of property that would fall outside the legislative capacity of the Commonwealth by reason of s 51(xxxi). That is apparent from the language used in the section, particularly the fact that the section operates only with respect to an acquisition of property "within the meaning of paragraph (xxxi) of the Constitution". If there were any ambiguity in the section, it is instructive that the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) indicated:[4]

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[52] The taking or extinguishment of, or the interference with, the property rights of a person does not, in itself, give rise to an acquisition. There must be some identifiable benefit or gain obtained by the Commonwealth or another person and the benefit or gain must be proprietary in nature in that it represents an interest in property.[10] The acquisition may be by the Commonwealth or a third person.[11] The proprietary interest obtained by the Commonwealth or a third person does not necessarily need to correspond precisely with what was taken.[12]

[53] Skilled relied on two forms of property that, it said, would be the subject of an acquisition if a regulated labour hire arrangement order is made. In its written submissions, Skilled described the two forms of property it said would be acquired as follows:

(a) The first item of property is the bundle of rights that are conferred on Skilled by the labour hire contract. Of particular concern is Skilled's ability to derive a profit margin that has been computed over the life of the five year term.

(b) The second item of property is the sum of money Skilled has provisioned for leave accruals with respect to the work that has been performed pursuant to the labour hire contract.

[54] The first item of property referred to by Skilled is described as the "bundle of rights" conferred by the Supply Contract it has with Bengalla. The Supply Contract entitles Skilled to be paid at specified hourly rates for providing "Service Provider Personnel" to Bengalla. The making of a regulated labour hire arrangement order would not alter the rights of Skilled under the contract or deprive Skilled of those rights. Skilled will continue to have the right to receive the contractually agreed price for the supply of labour. At most, a regulated labour hire arrangements order may increase the costs incurred by Skilled in performing its obligations under the Supply Contract and reduce the profit it is able to derive from supplying labour. It may do so in a substantial way. We do not consider that means there has been an acquisition of Skilled's rights under the Supply Contract. If that were so, any action of the Commonwealth which had the effect of reducing the profits able to be earned by a business under a contract would involve an acquisition of property for the purposes of s 51(xxxi) of the Constitution.

[55] Skilled's submissions assume that the Supply Contract confers a contractual entitlement on Skilled to derive a profit from its supply of labour to Bengalla. The schedule of rates initially within Schedule C of the Supply Contract, and as subsequently varied, breaks down the components of the total price Skilled is entitled to charge Bengalla with respect to the supply of labour, including identifying a nominal "profit margin". However, as Skilled conceded in oral submissions, the Supply Contract does not require that it pay employees the nominal rates used to calculate the price it charges Bengalla or, with the exception of changes to statutory on-costs and certain taxes, permit it to pass on increases in the costs it incurs in providing the employees to Bengalla. It is not correct to describe the Supply Contract as conferring a contractual right on Skilled to receive a profit. Skilled is currently paying higher rates of pay to its employees than those used to calculate the price it charges under the Supply Contract and performing the Supply Contract at a loss. Self-evidently, Skilled itself does not regard the Supply Contract as conferring it with a contractual right to derive a profit from the supply of labour. It does not.

[56] As to the second item of property relied upon by Skilled, it may be accepted that any money that Skilled has set aside on account of potential leave liabilities with respect to its employees represents a form of property. Skilled submits that, if a regulated labour hire arrangement order is made, Skilled's current provision "is taken from them". We do not understand the submission. On no view would any money set aside by Skilled with respect to the accrued leave entitlements of its employees be subject to acquisition if a regulated labour hire arrangements order is made. If Skilled has $100,000 in the bank today which it has set aside on account of the leave entitlements of its employees, it will have the same $100,000 in the bank the day after an order is made. Skilled will retain that money.

[57] The consequence of a regulated labour hire arrangement order would be to potentially increase the contingent future liability with respect to the leave entitlements of Skilled employees. If Skilled continued to deploy its employees to perform work for Bengalla and, in the future, those employees access a paid leave entitlement when performing work for Bengalla, the employees might be entitled to be paid at the protected rate of pay calculated in accordance with s 306F. Any provision Skilled has now made with respect to the accrued leave entitlements of its employees it will retain. Skilled might have an increased future contingent liability, but there would be no acquisition of any property of Skilled.

[58] We would add that there was, in any event, no evidence before the Commission as to what, if any, provision has been made by Skilled with respect to the accrued leave entitlements of its employees. The witness statement of Mr Cribb contains calculations as to the theoretical value of the current accrued leave entitlements of Skilled employees performing work at the Bengalla Mine. He does not say what provision has been made with respect to those entitlements. The extent to which the theoretical liability materialises will depend on future events. For example, personal leave is only payable if an employee is unfit to perform work or caring for a member of their immediate family or household and is not generally paid out on termination.[13] The value of accrued annual leave is paid on termination of employment, but the rate at which the payment is calculated will depend on the circumstances of the employee at that time.[14]

[59] Although it is not determinative in relation to Skilled's submission in this regard, we note that provision is made with respect to the calculation of payments required to be made in relation to the termination of employment of an employee in circumstances in which a regulated labour hire arrangements order applies to the employee. Section 306NA, in short, provides that where an employee has only performed work for one regulated host during their employment, termination payments will be calculated with reference to the protected rate of pay, but that where an employee has performed work for more than one regulated host, termination payments will be calculated with reference to the terms of the employer's enterprise agreement or other applicable employment instrument.[15] Any increase in the future liability of Skilled to make payments in relation to the termination of employment of any of its employees may be reduced by the operation of this section.

[60] For those reasons, we do not believe that there would be any acquisition of property of Skilled if a regulated labour hire arrangement order is made. That means it is strictly not necessary to consider whether any benefit or gain of a proprietary nature will be acquired by Bengalla or Skilled's employees. So far as Bengalla is concerned, it will acquire no property. Its contractual position will remain unchanged. We accept that Skilled's employees deployed at the Bengalla Mine will acquire a benefit of a proprietary nature if an order were made. Skilled would be required to pay employees supplied to Bengalla at least at the protected rate of pay by s 306F(2). That is a civil remedy provision and an employee affected by a contravention of the provision is able to bring proceedings to seek compliance with the obligation.[16] However, as there has been no deprivation of any existing property of Skilled, there would be no acquisition of property by reason of the rights that would be obtained by Skilled employees as a result of an order being made.

[61] In case we are wrong about whether there would be an acquisition of property as a result of the making of a regulated labour hire arrangements order, it is appropriate to consider the second question. The second question is whether the acquisition would be an acquisition which comes within s 51(xxxi) in the present circumstances. Every acquisition of property by or facilitated by the Commonwealth is not caught by s 51(xxxi). In Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297, Mason CJ, Deane and Gaudron JJ explained:[17]

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[64] We have no doubt that Part 2-7A of the Act is properly characterised as a law concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity as described in Georgiadis, Nintendo Co and Mutual Pools. Any acquisition of property that might result from a regulated labour hire arrangement order would be subservient and incidental to the principal purpose and function of Part 2-7A. It is not a law with respect to the acquisition of property.

[65] Part 2-7A falls within Chapter 2 of the Act which sets the "main terms and conditions of employment of an employee that are provided under this Act" in the National Employment Standards, modern awards, enterprise agreements and workplace determinations.[20] Part 2-4 provides mechanisms for enterprise bargaining, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits.[21] Notably, the object of the Act as a whole includes, in s 3(f), providing "a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by" ... "achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action".

[66] The function of Part 2-7A in that context is not, in our opinion, difficult to discern. Subject to the requirements set out in the Part, particular in s 306E, the Commission is conferred with the capacity to make an order the effect of which is to ensure that labour hire workers supplied to perform work for a host employer receive the same rate of pay as employees directly engaged by that employer. The order, if made, protects the bargaining process which has occurred within the enterprise of the regulated host. If confirmation is needed, the Revised Explanatory Memorandum to the Fair Work Amendment (Closing Loopholes) Bill 2023 (Cth) indicated that (footnotes omitted):[22]

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[67] Seen in this context, the power conferred on the Commission is part of the system enacted by Parliament to govern the relationships between employers and employees in the interests of national economic prosperity and social inclusion. A central feature of that system is the facility to set terms and conditions of employment through collective bargaining, primarily at an enterprise level. In appropriate circumstances, Part 2-7A permits the Commission to make a regulated labour hire arrangement order so as to prevent the engagement of labour hire workers undermining a collective bargain made within a particular enterprise. It cannot be characterised as a law with respect to the acquisition of property.[23]

[68] Finally, it is appropriate to record that the ramifications of Skilled's submission, if it were correct, are difficult to overstate. The effect of a regulated labour hire arrangements order is to set a minimum rate of pay that must be paid to a regulated employee in connection with work performed for the regulated host. If that provision results in an acquisition of property other than on just terms because it might reduce the profit able to be derived by an employer under a contract or increase the value of accrued leave liabilities, it is difficult to see why the same conclusion would not follow for any provision which sets, or provides a mechanism for setting, minimum rates of pay. That would presumably include a national minimum wage order, modern award minimum wages or a workplace determination setting rates of pay. Key features of the Act, and the safety net of terms and conditions of employment for which it provides, would be rendered practically inoperative at least for employers who supply labour under contract.

[69] It would mean that it has gone unnoticed for generations that the regulation of minimum wages and conditions of employment might involve the acquisition of property in a manner that triggers the operation of s 51(xxxi). That would be particularly remarkable given that major constitutional disputes arose in the United States during the twentieth century as a result of the Supreme Court of the United States invalidating minimum wage laws and other employment regulations on grounds that the laws contravened the due process clause of the 5th or 14th amendments to the United States Constitution by interfering with freedom of contract.[24] Those decisions, along with others, played a part in prompting Franklin Roosevelt's threat to pack the Supreme Court during the 1930s.[25] The United States Supreme Court ultimately changed course and upheld the constitutionality of minimum wage laws.[26]

[70] Skilled contends that its submissions would not have that consequence. With respect, we find that contention unpersuasive. Skilled suggests that the provisions of Part 2-7A are distinguishable from earlier industrial legislation because it is, primarily at least, based on the corporations power in s 51(xx) rather than the conciliation and arbitration power in s 51(xxxv). How that distinction affects the application of s 51(xxxi) was not explained. It does not. Skilled also submits that the Supply Contract contemplated increases in the national minimum wage. Whilst the Supply Contract provides for annual increases in the rates payable to Skilled, it is not clear how the increases were set. Even if it was related to contemplated increases in the national minimum wage, it does not alter the effect of Skilled's argument. On its submissions, if the national minimum wage or a modern award wage was increased above the provision made for the rates of pay for Skilled employees in the Supply Contract, an acquisition of property would occur. The same consequence, in terms of the operation of s 39 of the Act, would arise as Skilled contends arises from a regulated labour hire arrangement order. That consequence points strongly against Skilled's submission being correct.

[71] In our opinion, s 39 of the Act would not be engaged by the making of a regulated labour hire arrangement order that covers Skilled. The section does not affect the Commission's jurisdiction in this matter or otherwise provide a reason not to make an order.

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[72] As we have observed, no party disputed that the requirements in s 306E(1) and (1A) of the Act are met with respect to the employees supplied by CoreStaff and Skilled to perform work for Bengalla. Having considered the evidence filed by the parties, we are satisfied that each of the requirements in s 306E(1) are met and that the prohibitions on making an order in s 306E(1A) do not apply with respect to either application.

[73] The Full Bench is satisfied, for the purposes of s 306E(7), that the MEU is an employee organisation that is entitled to represent the industrial interests of the employees of CoreStaff and Skilled who are supplied to perform work for Bengalla at the Bengalla Mine as well as employees of Bengalla employed to perform work at the Mine. Accordingly, the MEU is entitled to apply for regulated labour hire arrangement orders under s 306E of the Act by operation of s 306E(7)(c) and, as such, for the purposes of s 306E(1).

[74] The Full Bench is further satisfied that the requirements of s 306E(1) of the Act are met. Specifically, on the basis of the material before the Full Bench, we are satisfied that:

(a) CoreStaff and Skilled supply employees they employ to perform work for Bengalla at the Bengalla Mine involving engagement in production work associated with the mining and extraction of coal and its transport to the Coal Handling and Preparation Plant.

(b) The Bengalla Agreement applies to all technicians performing production and engineering work in the classifications in Schedule A to the Black Coal Mining Industry Award 2020. Leaving aside one issue in relation to wash technicians which is addressed later in this decision, no party disputed that the Bengalla Agreement would apply to employees of CoreStaff and Skilled supplied to perform work at the Bengalla Mine if those employees were directly employed by Bengalla to undertake the same kind of work and we find that it would.

(c) Bengalla is not a small business employer.

[75] For the purposes of s 306E(1A) of the Act, the Full Bench is satisfied that the performance of work by CoreStaff or Skilled employees is not and will not be for the provision of a service, rather than the supply of labour, having regard to the matters in s 306E(7A). In relation to the matters set out in s 306(7A) to be considered in being satisfied of the requirement in s 306E(1A), we make the following findings:

(a) There is no evidence before the Full Bench that CoreStaff and Skilled have substantial involvement in matters relating to the performance of work by their employees working at the Bengalla Mine.

(b) The evidence indicates that Bengalla directs, supervises and controls the work of CoreStaff and Skilled employees who are supplied to perform work at the Bengalla Mine. Bengalla takes primary responsibility for the administration of training and assessment of CoreStaff and Skilled employees in relation to their work at the Mine.

(c) CoreStaff and Skilled employees assigned to perform work at the Bengalla Mine work alongside Bengalla employees in the same crews, operate the same plant and equipment and use the same crib facilities as Bengalla employees and are subject to the same safety policies, inductions, sign-on/sign-out and site policies and procedures as Bengalla employees.

(d) There is no evidence before the Full Bench that CoreStaff and Skilled are or will be subject to industry or professional standards or responsibilities in relation to the work of its employees supplied to Bengalla.

(e) The work undertaken by CoreStaff and Skilled employees at the Bengalla Mine involves the operation of plant and equipment but does not involve work of a specialist or professional nature.

[76] Having regard to the considerations referred to in s 306E(7A), it is clear that the performance of work by CoreStaff and Skilled employees is not for the provision of a service but is for the supply of labour for the purposes of s 306E(1A).

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[81] The nature of the task of assessing whether it would not be fair and reasonable to make a regulated labour hire arrangement order in a particular case must be undertaken in the statutory context in which Part 2-7A appears.[30] That includes the object of the Act and the relationship orders under Part 2-7A have to collective bargaining and enterprise agreements made in accordance with Part 2-4. In our view, it is sufficient to observe that the Commission is required to make a broad value judgement as to whether it is satisfied that it is not fair and reasonable to make an order which is likely to involve a balancing of various interests affected by an order having regard to the matters listed in s 306E(8) (at least to the extent submissions are made about them).[31]

[82] Secondly, some of the submissions made by the MEU tended to suggest that the statutory context and statutory purpose of Part 2-7A establishes a predisposition in favour of the Commission making a regulated labour hire arrangement order if the circumstances in s 306E(1) and (1A) are met. That is, it says that the purpose of the Part is to protect bargained rates of pay by enabling the Commission to make an order that employees supplied by a labour hire employer to perform work for a regulated host are to be paid the same rate of pay and that this statutory context creates something approaching a presumption in favour of an order being made where that circumstance exists. Bengalla, CoreStaff and Skilled each submit that it would be an error to approach the fair and reasonable question with any predisposition favouring an order being made.

[83] We do not believe it is correct to approach the question of whether the Commission is satisfied it is not fair and reasonable to make an order for the purposes of s 306E(2) by adopting a predisposition in favour of an order being made. Section 306E(2) imposes no threshold to be reached for the Commission not to make an order other than that it must be satisfied it is not fair and reasonable to do so. The MEU accurately describes the broad purpose of Part 2-7A. However, Parliament has not chosen to pursue that purpose by providing that the rates of pay payable to employees of the regulated host will automatically apply to employees of a labour hire employer. Leaving other considerations to one side, an order cannot be made if the Commission is satisfied that it is not fair and reasonable to do so. In those circumstances, it would be wrong to approach s 306E(2) on the basis that there is a presumption that it is fair and reasonable to make an order.

[84] Thirdly, that does not mean that the fact employees are being supplied to perform work for the regulated host in circumstances which satisfy the requirements of s 306E(1) and (1A), and the nature of the arrangements under which that work is performed, are irrelevant to the fair and reasonable assessment. Bengalla makes a submission to that effect. It submits that the word "despite" in s 306E(2) has the same meaning as the word "notwithstanding" and indicates that one clause is dominant over the other. It refers to the decision of the NSW Court of Appeal in RIG Consulting Pty Ltd v Queanbeyan-Palerang Regional Council [2021] NSWCA 130 in which Leeming JA said:[32]

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[85] Bengalla submits that, as a result, s 306E(2) is the dominant clause. It says that the objective existence of the facts satisfying the requirements in s 306E(1) or (1A) does not inform or affect the assessment the Commission is required to made by s 306E(2) and is irrelevant to the assessment of whether it is not fair and reasonable to make the order. We do not accept the submission in the manner it is put by Bengalla.

[86] Obviously enough, s 306E(2) is dominant over s 306E(1) in the sense that, even if the requirements in subsection (1) are met, the Commission must not make a regulated labour hire arrangement order if satisfied it is not fair and reasonable to do so in all the circumstances. The word "despite" has the effect that the obligation to make an order which would otherwise arise under subsection (1) falls away if subsection (2) applies. Like s 306E(1A), it represents an exception to the obligation to make an order under subsection (1). Subsection (2) prevails in that sense.

[87] However, we do not accept that the fact that employees are being supplied to perform work for the regulated host in circumstances in which, if they were directly employed by the host, the covered employment instrument would apply to the employees, is irrelevant to whether it is not fair and reasonable to make an order. Section 306E(2) requires the Commission to consider whether it is not fair and reasonable to make an order "in all the circumstances". The circumstances which must be considered do not exclude the fact of the supply of labour to the regulated host or the arrangements according to which the employees are supplied to perform work for the regulated host. The plain text of s 306E(2) indicates that it is "all" the circumstances that must be considered.

[88] Aspects of the arrangements according to which labour is supplied to the regulated host are capable of being relevant to whether it is not fair and reasonable to make an order and might fall within the matters expressly identified in s 306E(8). If a submission is made about the matter, subsection (8) requires consideration of the pay arrangements that apply to the regulated host and the regulated employees, the relationship between the regulated host and the employer, whether the work is performed for a joint venture and the terms and nature of the arrangement under which the work is performed.[33] To provide an example, whether the regulated employees are being paid substantially less than employees of the regulated host, or whether the rates are comparable and the employees receive some other benefits from their employer, is capable of being relevant to whether it is not fair and reasonable to make an order (of course balanced with other relevant considerations). We understood CoreStaff and Skilled to accept the fact and the degree to which their employees receive a lesser rate of pay compared to Bengalla employees was relevant to the fair and reasonable assessment.

[89] Fourthly, Bengalla refers to the object of the Act in s 3(f) of providing "a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by" ... "achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action". It submits that the object of the Act is significant in the assessment required to be undertaken for the purposes of s 306E(2).[34] It says that the consequence of the "emphasis on enterprise-level collective bargaining" is that some priority must be attached to the maintenance of the enterprise agreements made by CoreStaff and Skilled and which apply to their employees. There must, so the submission goes, be some consideration that makes it fair and reasonable to displace the emphasis or priority on the bargaining that has occurred within CoreStaff and Skilled.

[90] The nature and history of the industrial arrangements which apply to the labour hire employer will frequently be relevant to whether it is not fair and reasonable to make a regulated labour hire arrangement order. Section 306E(8)(c) expressly refers to the history of industrial arrangements applying to the regulated host and the employer. A labour hire employer might submit, for example, that it has a long history of orderly and appropriate enterprise bargaining which has produced fair and appropriate outcomes for employees and that it is not fair and reasonable for a regulated labour hire arrangement order to disrupt the outcome of those bargaining processes. That might well be a relevant matter the Commission must consider in assessing whether it is satisfied it is not fair and reasonable to make an order.

[91] However, we do not believe the object in s 3(f) dictates a presumption that it is not fair and reasonable to make a regulated labour hire arrangement order simply because the effect of the order would be to disrupt, to some degree, an enterprise agreement that applies to the regulated employees. Section 3(f) signals an "emphasis on enterprise-level collective bargaining", not that enterprise-level bargaining constitutes the only mechanism by which terms and conditions of employment are set. The Act contains an array of limitations on the process and outcome of enterprise bargaining. Among other things, enterprise agreements cannot exclude the National Employment Standards.[35] An enterprise agreement can only be approved if employees will be better off overall than if a relevant modern award applied to the employees.[36] An "emphasis" on enterprise-level collective bargaining does not suggest that the outcome of bargaining at the enterprise level is to be prioritised without constraint or that other mechanisms for determining conditions of employment are necessarily inconsistent with the object of the Act.[37]

[92] Furthermore, Bengalla's submissions adopt a limited understanding of how the Act seeks to achieve its object through an "emphasis on enterprise-level collective bargaining". An "enterprise" is defined as a "business, activity, project or undertaking".[38] Arguably, the enterprise in which CoreStaff and Skilled employees supplied to the Bengalla Mine are working is the enterprise of Bengalla. Where an enterprise agreement has been made that covers a particular type of work undertaken by employees of the regulated host, an order under Part 2-7A has the effect of protecting the outcome of that enterprise-level bargaining process by preventing the Bengalla obtaining workers to perform the same kind of work at lower rates of pay through a labour hire employer. Where that is the effect of a regulated labour hire arrangement order, the order protects rather than undermines enterprise-level collective bargaining.

[93] For those reasons, we acknowledge that the nature and history of the industrial arrangements which apply to the labour hire employer may be relevant to whether it is not fair and reasonable to make an order for the purposes of s 306E(2). However, the object in s 3(f) does not suggest that the Commission should commence with the assumption that it is not fair and reasonable to make an order simply because it might affect the operation of an enterprise agreement that applies to the labour hire employer. The significance of the industrial arrangements that apply to the labour hire employer will depend on the circumstances.

[94] With that introduction, we turn to address whether we are satisfied it is not fair and reasonable to make orders is the present case. It is necessary to bear in mind that two regulated labour hire arrangement orders are sought to apply, respectively, to CoreStaff and Skilled employees supplied to perform work for Bengalla. Although some of the considerations raised overlap, the Full Bench must consider separately whether it is not fair and reasonable to make an order in each case. The submissions advanced by Bengalla are relevant to both orders whereas the submissions advanced by CoreStaff and Skilled should be considered in relation to the orders sought to apply to those employers separately.

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[95] There is significant commonality between the submissions advanced by Bengalla and CoreStaff as to why they say it is not fair and reasonable to make an order applying to CoreStaff employees in all the circumstances. CoreStaff's submissions identified four reasons why it is not fair and reasonable to make an order as follows:

(a) CoreStaff employees are working shift patterns which are not contemplated by the Bengalla Agreement impacting the rate of pay that would be payable to the CoreStaff employees if the order was made;

(b) CoreStaff employees are engaged in modes of employment which are not contemplated by the Bengalla Agreement, again impacting the rate of pay that would be payable to the CoreStaff employees if the order was made;

(c) The Bengalla Agreement entitles employees to a performance-based wage increase and a performance payment (paid as an annual lump sum amount) if certain metrics are achieved by Bengalla; and

(d) CoreStaff would be burdened with a significant increase in leave liabilities if an order was made

[96] CoreStaff submits that the first, second and third points it raises must be taken into account because they represent submission in relation to the pay arrangements of Bengalla or CoreStaff employees for the purposes of s 306E(8)(a). Bengalla, similarly, relies upon the pay arrangements that apply to its employees for the purposes of s 306E(8)(a) (and, particularly, the rate of pay that would be payable to the regulated employees if an order is made for the purposes of s 306E(8)(a)(iii)) and the history of industrial arrangements applying to Bengalla for the purposes of s 306E(8)(c). The matters raised by Bengalla make essentially the same points as those raised by CoreStaff.

[97] The central submission advanced by CoreStaff and Bengalla is that the Bengalla Agreement only provides for full-time employment and sets out the remuneration required to be paid to full-time employees by way of an annualised salary. CoreStaff points out that the Bengalla Agreement does not contemplate the working patterns undertaken by its employees providing crib relief or working as "floaters" and does not provide for a rate of pay for part-time or casual employees. The annualised salaries payable to full-time Bengalla employees compensate those employees for between 42 and 48 hours work per week, depending on their work pattern, and incorporate compensation for overtime.[39] Bengalla employees may also be entitled to work pattern allowance payments depending on their roster pattern.

[98] The consequence of the pay arrangements in the Bengalla Agreement is said to be twofold. The first consequence is that difficulties are going to be encountered calculating the protected rate of pay for CoreStaff employees because the Bengalla Agreement only provides for an annualised salary and does not contain hourly rates of pay. Unless a different order is made by the Commission, the protected rate of pay is determined in accordance with s 306F(4) by reference to "the full time rate of pay that would be payable to the employee if the host employment instrument were to apply to the employee". Bengalla and CoreStaff submit that, in circumstances in which the Bengalla Agreement does not provide for an hourly rate of pay or contemplate part-time or casual employment, it is unclear how the protected rate of pay is to be calculated.

[99] We accept that any difficulties which may be encountered in calculating the protected rate of pay are relevant in deciding whether the Commission is satisfied it is not fair and reasonable to make the order, and we have taken that matter into account. However, we are unable to give great weight to that consideration in the circumstances of the present case. In oral submissions, Bengalla and CoreStaff accepted that it would be possible to calculate an hourly rate of pay from the annualised salaries in the Bengalla Agreement for the purpose of determining the protected rate of pay by using the method of proportionate deduction from the annualised salary of a full-time employee contemplated by clause 7.3 of the Agreement. At most, Bengalla suggested there was uncertainty as to the divisor to apply to calculate the hourly rate. So far as casual employees are concerned, s 306F(5) provides a mechanism by which the rate of pay for a regulated employee who is a casual employee is to be determined.

[100] In the event some difficulty is encountered in that respect, it is also relevant that ss 306P and 306Q contain a dispute resolution mechanism by which any dispute at least as to what the protected rate of pay is for a regulated employee can be dealt with by the Commission. If the dispute cannot be resolved, the Commission is able to deal with the dispute by arbitration by making an order determining how the protected rate of pay is to be worked out.[40] The dispute resolution mechanism in ss 306P and 306Q does not mean the difficulties referred to by Bengalla and CoreStaff need not be considered. However, in our opinion, the capacity of the Commission to resolve disputes in relation to the protected rate of pay is relevant to an overall assessment of whether it is not fair and reasonable to make the order where reliance is placed on the alleged difficulties in determining the protected rate of pay.

[101] The second consequence Bengalla and CoreStaff submit flows from the pay arrangements under the Bengalla Agreement has more substance. It is that the protected rate of pay determined in accordance with s 306F would result in a rate that is not fair and reasonable. Bengalla and CoreStaff point to the fact that the annualised salary includes compensation for working additional hours and overtime. Clause 4.1(1) of the Bengalla Agreement records that the annual base component of a technician's remuneration package "encompasses all entitlements to payments, industry allowances and overtime payments that may arise under any Award or Agreement. Clause 4.2 provides as follows:

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[102] As such, the annualised salary for Bengalla employees compensates for the impost of shift or weekend work associated with some work patterns and working additional and overtime hours. If the annualised salary is used to deduce an hourly rate of pay to be paid to part-time or casual employees supplied by CoreStaff, it is submitted that the rate would not be fair and reasonable because it compensates for working arrangements those employees do not undertake.

[103] This submission has some force. For some CoreStaff employees, the protected rate of pay calculated in the manner contemplated by the parties may involve a degree of overcompensation. At least for part-time and casual employees, and employees otherwise undertaking crib relief or floater work, the protected rate of pay calculated in the manner prescribed by s 306E(4) or (5) is likely to result in CoreStaff employees being paid a rate which takes into account overtime and additional or unsociable hours which the employee does not perform. That is a consequence that might support a conclusion that it is not fair and reasonable to make an order, and it is a matter we have taken into account and given considerable weight. However, that matter must be considered along with all other relevant circumstances.

[104] A number of considerations reduce the force of the submission. First, at the time of the preparation of evidence only 12 CoreStaff employees performed crib relief and floater work. A further 10 employees were casual but undertake work as part of a production crew and, as we understand the evidence, in accordance with the same work patterns as Bengalla employees. Whether is it not fair and reasonable to make an order on account of this consideration must be considered in light of the fact that it appears only 12 employees are affected. CoreStaff employees performing full-time work according to work patterns applying to Bengalla employees would be affected by the failure to make an order at all.

[105] Second, part of the circumstances we must consider is that the rates of pay received by CoreStaff employees are very considerably below the rates payable under the Bengalla Agreement. The unchallenged evidence put forward by the MEU is that full-time employees of CoreStaff would receive between $46,406.00 and $52,730.50 more per annum if employed directly by Bengalla. That differential will continue to exist if no order is made and that is a matter which should be considered as part of an assessment of whether it is not fair and reasonable to make the order. Any overcompensation which might arise for casual or part-time employees of CoreStaff as a result of inclusion of payment for overtime or additional hours in the protected rate of pay must be seen in that context.

[106] Third, ss 306P and 306Q permit the Commission to deal with a dispute as to how the protected pay is to be worked out. There is some uncertainty as to the type of dispute which can be dealt with under Division 3 of Part 2-7A. Section 306P(1) indicates that the Division applies to a "dispute about the operation of this Part". We do not see why that could not include a dispute that the protected rate of pay prescribed by s 306F does not set an appropriate rate because it results in overcompensation for some employees by including a component for overtime or other hours not worked by the regulated employee. If that dispute cannot be resolved, the Commission could make an order determining how the rate of pay is to be worked out under s 306Q(1). Again, the existence of the dispute mechanism does not mean the submission made by Bengalla and CoreStaff does not need to be considered, and we have considered it. The dispute process is, however, relevant to the weight to be attached to the submission in an overall assessment of whether it is not fair and reasonable to make the order.

[107] Reference is also made by Bengalla and CoreStaff to other elements of the remuneration payable under the Bengalla Agreement. In particular, the Bengalla Agreement provides for work pattern payments, for different annualised salaries depending on the personal leave scheme that applies to an employee and for performance pay. Each of those payments is said to result in difficulties in calculating the protected rate of pay or unfair and unreasonableness in the outcome of the calculation.

[108] We do not believe these additional payments create the same problems. The work pattern allowances are only payable to technicians under the Bengalla Agreement who work a particular work pattern.[41] The work patterns attracting an allowance apply only to a full-time employee.[42] If a CoreStaff employee performs work in accordance with a work pattern for which an allowance is payable, there is nothing unfair or unreasonable in the protected rate of pay including an element for that payment. No overcompensation is involved, and no complexity introduced when determining the protected rate of pay.

[109] The different annualised salaries payable to Bengalla employees who have access to different personal leave arrangements also do not complicate determination of the protected rate of pay. The Bengalla Agreement provides for a lower annualised salary for employees who continue to be entitled to the benefits under the more generous and now superseded Accrued Leave Scheme.[43] The CoreStaff employees supplied to perform work for Bengalla are not covered by the Accrued Leave Scheme and the rate for those employees would not be relevant in determining the protected rate of pay for the CoreStaff employees.

[110] The provision for performance pay in the Bengalla Agreement is the third contention raised by CoreStaff and is also relied upon by Bengalla as causing the protected rate of pay to be unfair and unreasonable. The "full rate of pay" referred to in s 306F(4), and as defined in s 18, includes "incentive-based payments and bonuses". Part 2-7A contemplates that the rate of pay that must be paid to regulated employees if an order is made will incorporate any incentive payments or bonuses. CoreStaff submits that it would not be fair and reasonable to make an order which required it to pay regulated employees an amount incorporating elements for performance pay because it is not entitled to a share of Bengalla's profits. Renee Kearney indicated in her witness statement that she understands that Bengalla pays CoreStaff a fixed price. There is otherwise no evidence before the Full Bench as to the nature of the payment arrangements and CoreStaff has not otherwise made submissions that the effect of a regulated labour hire arrangement order on it should contribute to a finding that it is not fair and reasonable to make the order. We have considered this matter, but are not satisfied that the possible inclusion of an element for performance pay in the protected rate of pay means that it is not fair and reasonable to make an order in this case.

[111] Bengalla separately submits that the performance pay provisions of the Bengalla Agreement give rise to additional uncertainty in relation to the calculation of the protected rate of pay. Two types of performance pay are provided for in the Bengalla Agreement: a lump sum payment of up to 5 percent of a technicians annual base salary paid annually and a "performance increase" of up to 0.45 percent.[44] If technicians receive an additional pay increase on performance grounds there is no difficulty in then determining the protected rate of pay. It is not clear whether an annual lump sum payment would be part of the "full rate of pay" of a technician under the Bengalla Agreement or, indeed, their "rate" of pay at all. However, we have not received submissions in relation to that question and it is not appropriate to express a view. Assuming the lump sum payment is part of the protected rate of pay, the only consequence would be that, when the lump sum becomes payable to Bengalla employees, any CoreStaff employees who, if the Bengalla Agreement applied to them, would be entitled to the payment must be paid that sum. We do not consider that outcome contributes any further difficulty in calculating the protected rate of pay.

[112] The final submission made by CoreStaff is that it will be burdened with a significant increase in leave liabilities if an order is made and it would be unfair and unreasonable to make an order taking into account the financial burden this will place on CoreStaff. Ms Kearney's witness statement indicates that the value of the accrued leave liabilities is $63,014.90. It submits that the liability could increase by approximately 30% if an order is made. Whilst the extent of the increase in leave liabilities might, in some cases, be relevant to whether it is not fair and reasonable to make an order, we cannot attach significant weight to that matter in this case. CoreStaff put forward no evidence in relation to the size of its operations, its financial position or that any increase in leave liabilities will cause it financial difficulties. We have no basis to conclude the financial burden on CoreStaff will be substantial. Further, as noted above with respect to Skilled, the liability is contingent and may or may not materialise depending on whether the occasion for employees to take leave arises and the circumstances of the employees at termination.[45]

[113] Having considered each of the matters in relation to which submissions have been made by CoreStaff and Bengalla and other matters we consider relevant, the Full Bench is not satisfied that it is not fair and reasonable to make a regulated labour hire arrangement order with respect to CoreStaff employees supplied to perform work for Bengalla.

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[116] It is appropriate to consider the submissions made with respect to each aspect of the fairness referred to by the members of the High Court, namely, fairness to employees, between employees, to employers, between employers and between employees and employers.

[117] In relation to fairness to employees, Skilled accepts that the benefit that would be conferred on Skilled employees if an order was made in that a higher rate of pay would become payable to those employees weighs in favour of an order being made. We consider this to be an appropriate concession. Skilled says, however, that the Act ameliorates that issue by the fact that Skilled's employees could seek to bargain for improved terms and conditions of employment under Part 2-4.

[118] We do not consider the mere existence of the facility for regulated employees to engage in collective bargaining with their direct employer is, in itself, of significance in assessing whether it is not fair and reasonable to make an order in a particular case. Part 2-7A acknowledges that the existence of the bargaining regime available to regulated employees is not an answer to an application for a regulated labour hire arrangement order. Such an order is intended to supplement an enterprise agreement that applies to regulated employees. In particular, s 306F(10)(a) provides that an order applies despite a fair work instrument that applies to a regulated employee.

[119] As we have said, the industrial arrangements that apply to a particular labour hire employer might be relevant to a fair and reasonable assessment as is contemplated by s 306E(8)(c). However, Skilled has pointed to no particular aspects of the industrial arrangements which apply to its employees, or of the history of bargaining in which it has engaged with its employees, which should lead the Commission to be satisfied that it is not fair and reasonable to make the order in its case. It expressly disclaimed any submission that there is any matter falling within s 306E(8)(c) relevant to its case.

[120] In relation to fairness between employees, Skilled submits that it would be unfair to Bengalla employees to make a regulated labour hire arrangement order. That is said to be because the Bengalla Agreement is the result of a negotiation in which the wage outcomes involved an exchange of productivity benefits such as provision for flexibility in the performance of work functions, that employees are paid for their role rather than time at work and that employees may be required to work additional hours on an as needs basis.[47] It is said it would be unfair to Bengalla employees to make an order because the Skilled employees would have the benefit of the rate of pay without the productivity compromises contained in the Bengalla Agreement.

[121] We do not accept that unfairness is caused to Bengalla employees if a regulated labour hire arrangement order is made. There is no evidence any Bengalla employees hold that view, and we would be surprised if they did. It is possible that, in some cases, it might be contended that it is not fair and reasonable to make an order because of the balance of terms and conditions which apply to the regulated employees and employees of the regulated host. For example, it may be said that, once that comparison is undertaken, the regulated employees receive benefits aside from their rate of pay which means is it not fair and reasonable that they be entitled to the rate of pay under the host employment instrument. Skilled did not attempt any such comparison. It simply identified three aspects of the Bengalla Agreement and asserted that those conditions explained the higher rates of pay under that Agreement. We can see no basis for that assertion or for a conclusion that is not fair and reasonable to make the order because of the balance of conditions between Bengalla and Skilled employees.

[122] In relation to fairness to Skilled, it submits that, if an order is made, it will have the fruit of the Supply Contract with Bengalla taken away and it will be required to perform its obligations for the remainder of the Supply Contract at a loss. Skilled further submits that it will be denied the entitlement to negotiate an enterprise agreement with its employees unconstrained by Part 2-7A and required to pay its employees a rate of pay "not informed by the productivity exchange that has been negotiated in the Bengalla Agreement".

[123] The financial impact of a regulated labour hire arrangement on a labour hire employer is relevant in assessing whether it is fair and reasonable to make the order, and we have had regard to the fact that there will be a financial impact on Skilled if an order is made. However, there is no evidence before the Full Bench in relation to the total costs that will be incurred by Skilled if an order is made, the size of Skilled's operations, its financial position, or that the making of an order would cause it financial difficulties. We have no basis to conclude the financial burden on Skilled's overall operations will be substantial. In those circumstances, there are limits on the weight we can attach to the financial impact on Skilled in assessing whether it is not fair and reasonable to make an order.

[124] In relation to fairness between employers and between employees and employers, Skilled submits that it would not be fair and reasonable to make an order because other employees and employers enjoy the right to enter into enterprise agreements that reflect the relevant skills, productivity benefits and work involved. That is said to be denied to Skilled if a regulated labour hire arrangement order is made. As we have said, we do not regard the mere existence of the collective bargaining regime in Part 2-4 as favouring a conclusion that it is not fair and reasonable to make an order. This is not a case in which Skilled has pointed to particular aspects of the bargaining history concerning its employees, or particular features of the enterprise agreements that have resulted from those bargaining processes, that support a conclusion that it is not fair and reasonable to make an order. It is also not correct to say that Skilled cannot bargain with its employees, although we acknowledge that the existence of a regulated labour hire arrangement order will likely have a substantial impact on the bargaining.

[125] Finally, in relation to the application for an order to apply to Skilled employees, we have also had regard to the submissions made by Bengalla. We have addressed those submissions in addressing the application concerning CoreStaff above and have also taken those matters into account in assessing whether it is not fair and reasonable to make an order to apply to Skilled. In relation to the pay rates for part-time and casual employees, we note that the evidence of Mr Cribb is that there are only a small number of those employees supplied by Skilled. Mr Cribb's evidence is that there are seven part-time employees performing crib relief work and eight casuals undertaking ad hoc floater work out of a total of 156 employees. There are a number of other casual employees, but they perform at least full-time hours. In relation to the increase in leave liabilities, Mr Cribb gave evidence of the quantum of the potential increase in Skilled's liabilities. We take that matter into account. However, as is the case the CoreStaff, there is no evidence before the Commission in relation to the size of Skilled's operations, its financial position or that any increase in leave liabilities will cause it financial difficulties.

[126] Having considered each of the matters in relation to which submissions have been made by Skilled and Bengalla and other matters we consider relevant, the Full Bench is not satisfied that it is not fair and reasonable to make a regulated labour hire arrangement order with respect to Skilled employees supplied to perform work for Bengalla.

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[131] It is apparent that the wash technicians are designated as technicians and would be covered by the Bengalla Agreement so long as they can be described as performing production and engineering work within the classifications in Schedule A of the Black Coal Award.

[132] The parties did not make detailed submissions in relation to the Black Coal Award. The Black Coal Award covers employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined or who are employed by an employer in the black coal industry, and are "directly connected with the day to day operation of a black coal mine" and employed in a classification or class of work in Schedule A or Schedule B.[49] There is no reason to doubt that the work of the wash technicians is directly connected with the day to day operation of a black coal mine and no submission was made to the contrary. Work on vehicles used at a mine has a sufficient connection.[50]

[133] Schedule A to the Black Coal Award contains a single stream structure, which does not contain any demarcations relating to the performance of work. The definitions for each of the classification levels are "necessarily general" as they are intended to cover the various types of work actually performed under the Award.[51] As a result, to fall within any of the classifications in Schedule A, it is not necessary that an employee performs any particular types of work or any particular range of duties. Although the wash technicians may perform only a limited type of work, that does not appear to remove them from being mineworkers for the purposes of Schedule A to the Black Coal Award. We are satisfied that the wash technicians would be covered by the Bengalla Agreement if employed by Bengalla.

[134] Skilled submits that other exclusions should be made from the order which applies to it. It refers to the requirement, in s 306E(9)(c), that an order "specify" the regulated employees covered by the order. Skilled says the requirement to "specify" imports a requirement of clarity and precision, particularly in the context of an instrument the contravention of which can result in the imposition of a pecuniary penalty.[52] Where a person may be subject to a penalty in the event of the contravention of an instrument, the subject of an order should not be left in any doubt as to what their obligations are pursuant to that order.[53]

[135] There is no lack of clarity in the order sought by the MEU. It proposes that the order will cover employees of Skilled or CoreStaff who perform work at the Bengalla Mine who would, if employed by Bengalla, be covered by the Bengalla Agreement. The coverage of the Bengalla Agreement is set out in clause 2. The Agreement is itself an instrument contravention of which can result in the imposition of a pecuniary penalty.[54] The draft order proposed by Skilled would introduce rather than avoid uncertainty. It seeks to insert reference to "production employees". It is unclear whether and, if so, what limitation is sought to be introduced by those words. The term "production employee" is not used in terms in the Bengalla Agreement and its use would not clarify the application of the order.

[136] Finally, Skilled submits that two further exclusions be made to the regulated employees covered by the order. Bengalla opposes any additional exclusions. Skilled suggests that any trainees who are performing work as part of a training arrangement should be excluded because s 306G(1) provides that the protected rate of pay in s 306F does not apply if a training arrangement applies to a regulated employee in respect of work for the regulated host. In our view, s 306G(1) operates by force of the Act and there is no need to exclude employees to whom a training arrangement applies from the terms of the order.

[137] Skilled then submits that any employees of Skilled must be excluded if the employees perform work in respect of Skilled's provision of services to Bengalla in the future within the meaning of s 306E(1A). It is not suggested that Skilled's employees performing work for Bengalla do perform work for the provision of a service, or that there is any proposal or likelihood of Skilled providing a service in the future. There is no evidence Skilled provides services, as opposed to supplying labour, as part of its business at all. We do not think it is necessary, or appropriate, to make this provision in circumstances in which there is no identified prospect of the eventuality ever occurring. The proposed exclusion would introduce uncertainty and a lack of clarity in the order which Skilled says must be avoided.

[138] The submissions made by Skilled assume that it is possible for the Commission to make a regulated labour hire arrangement order under s 306E which applies to some, but not all, employees supplied to perform work for the regulated host. It is not clear to us that the assumption is correct. Section 306E(1) requires the Commission to make an order if the circumstances in that subsection are met. The prohibitions in s 306E(1A) and (2) then set out circumstances in which the Commission must not make "the order". The language suggests that either the Commission must make an order applying to the regulated employees or it must not. However, it is not appropriate for the Full Bench to express a view about that question given the conclusions we have reached.

Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd [2025] FWCFB 53 (13 March 2025)

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Judgment (212 paragraphs)

Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd [2025] FWCFB 53 (13 March 2025)

Legislation Cited (3)

Cases Cited (27)