s.306E - Application for a regulated labour hire arrangement order

Application by the Mining and Energy Union re Mount Thorley/Warkworth Mine

Application for a regulated labour hire arrangement order in respect of WorkPac Mining Pty Ltd and Skilled Workforce Solutions (NSW) Pty Ltd in relation to work performed for Coal & Allied Mining Services Pty Ltd at the Mount Thorley/Warkworth Mine - whether it is not fair and reasonable to make a regulated labour hire arrangement order - acquisition of property otherwise than on just terms - form of order - orders made.

• [1] On 8 October 2024, the Mining and Energy Union filed two applications for regulated labour hire arrangement orders under s 306E of the Fair Work Act 2009 (Cth). The orders sought by the MEU would apply to labour hire workers employed by WorkPac Mining Pty Ltd or Skilled Workforce Solutions (NSW) Pty Ltd who perform work for Coal & Allied Mining Services Pty Ltd at the Mount Thorley/Warkworth Mine near Singleton in New South Wales. The host employment instrument is the Mount Thorley/Warkworth Operations Enterprise Agreement 2022.

• [2] Skilled opposes the orders sought by the MEU. Skilled advances three submissions. First, it contends that the application must be dismissed by virtue of s 39 of the Act on the basis that the orders sought would, if made, result in the acquisition of Skilled's property otherwise than on just terms. Secondly, Skilled submits that the orders sought are not fair and reasonable in all the circumstances. Thirdly, Skilled makes a number of submissions about the terms of any orders to be made by the Fair Work Commission.

• [3] WorkPac submits that the Commission can and should be satisfied that it would not be fair and reasonable in all the circumstances to make the orders sought, with the result that no orders should be made.

• [4] Coal & Allied did not make any submissions and did not adduce any evidence in relation to the applications by the MEU against Skilled and WorkPac.

• [5] The evidence before the Commission in relation to the applications comprised the following:

(a) A witness statement of Chad Hanson dated 20 November 2024. Mr Hanson is a District Vice President of the Northern Mining and NSW Energy District Branch of the MEU.

(b) A witness statement of Matthew Dodd dated 20 November 2024. Mr Dodd is employed by Coal & Allied as a Production Employee to work at the Mine.

(c) A witness statement of Cameron Hockaday dated 19 December 2024. Mr Hockaday is the Chief Commercial & Risk Officer of WorkPac Group Pty Ltd (which is the parent company of the corporate group which includes WorkPac).

(d) A witness statement of Joel Cribb dated 15 January 2025. Mr Cribb is employed by Programmed Skilled Workforce Ltd in the position of General Manager North - Energy and Resources. Skilled is part of the Programmed group of companies that includes PSW.

• [6] Each of those witness statements was admitted into evidence in the proceedings and none of the witnesses were required for cross-examination, save for Mr Hockaday. The evidence indicates, and I find, as follows:

(a) The Mine is an open cut coal mine situated approximately 15 kilometres southwest of Singleton in New South Wales. Coal & Allied operates the Mine. Coal & Allied is a subsidiary of Yancoal Australia Ltd.

(b) Coal & Allied employs employees to perform work at the Mine, which is comprised of two adjacent mines that operate as a single mining operation: Mount Thorley and Warkworth.

(c) Thermal and semi-soft coking coal is produced at the Mine. Infrastructure at the Mine includes two coal handling preparation plants, rail loading facilities, and a rail line that is used to transport coal to the Port Waratah Coal Terminal in Newcastle for export.

(d) The Mount Thorley Enterprise Agreement covers and applies to Coal & Allied's full-time, part-time and casual employees who perform production and engineering work at the Mine. The Mount Thorley Enterprise Agreement does not contain any classifications of employees. It provides for employees to be paid different levels of remuneration, depending on the work pattern worked by the employee.

(e) In addition to the directly employed workforce, Skilled and WorkPac supply employees to Coal & Allied to perform work at the Mine.

(f) Programmed Skilled Workforce is a party to a supply contract with Yancoal, under which Coal & Allied issues purchase orders for the provision of labour to perform work at the Mine. The supply contract between PSW and Yancoal obliges PSW to provide, subject to a supply request, competent open cut temporary workers including but not limited to Trainee Operators, Experienced Operators, Electrical Trades, Mechanical Trades, Administrative and Professional roles, and any other role agreed between the parties in writing. The supply contract between PSW and Yancoal contains a schedule of rates which sets out the rates chargeable for each hour of work performed by a Skilled production worker. The schedule of rates can be varied but only with the consent of Yancoal. The rates in the schedule of rates are arrived at by taking an hourly rate of pay for a production employee and then applying various additional amounts on top (to account for loadings or penalties, leave accruals for permanent employees, a casual loading for casual employees, on-costs and other overheads and exigencies). A small profit margin per hour is then added to the base rate plus additional amounts.

(g) WorkPac Pty Ltd is party to a supply contract with Yancoal, under which WorkPac provides supplementary labour to perform work at the Mine. The supply contract between WorkPac Pty Ltd and Yancoal obliges WorkPac Pty Ltd to provide, subject to a supply request, competent temporary workers including but not limited to Trainee Operators, Experienced Operators, Electrical Trades, Mechanical Trades, Administrative and Professional roles, and any other role agreed between the parties in writing. The supply contract between WorkPac Pty Ltd and Yancoal contains a schedule of rates which sets out the rates chargeable for each hour of work performed by a WorkPac employee. The schedule of rates can be varied but only with the written consent of Yancoal. The rates in the schedule of rates are determined based on the Wage and Charge Rate Calculator in Attachment 1 to Schedule 5 of the supply contract. The Wage and Charge Calculator uses the following formula: base rate of pay + overtime penalties and/or shift loading for the specific roster worked + annual leave allowance if fixed term + charge rate build-up including statutory on-costs, overheads and a small profit margin = Charge Rate.

(h) The Skilled Workforce Solutions (NSW) Pty Ltd Enterprise Agreement 2019 covers and applies to Skilled and its employees employed and performing production and engineering work under the scope and classifications of the Skilled Agreement at Skilled's black coal mining client sites in the Northern Districts Coal Fields of NSW, including the Mine. The nominal expiry date of the Skilled Agreement was 14 February 2023.

(i) The Workpac Coal Mining Agreement 2019 covers and applies to WorkPac and its employees who are employed in the black coal mining industry whose duties are directly connected with the day-to-day operation of a black coal mining site, including the Mine. The nominal expiry date of the WorkPac Agreement was 27 June 2023. Although the last pay increase provided for in the WorkPac Agreement took effect on 1 July 2023, WorkPac increased those rates in July 2024, partly because the pay rates for some employees covered by the WorkPac Agreement fell below the minimum rates of pay prescribed by the Black Coal Mining Industry Award 2020. Further, WorkPac pays its employees at the CMW Level 4 classification, as well as some other classifications, under the WorkPac Agreement a "flex-up rate" because market forces require the payment of higher wages to attract the employees to work for WorkPac. These "flex-up rates" become the base rate of pay for the purpose of calculating the Charge Rate under the Wage and Charge Calculator.

(j) On 15 January 2025, Skilled was supplying 96 workers to perform production work at the Mine, including 45 trainees, 33 permanent employees in the classification of Mineworker Level 3 (ML3) performing production work working according to a 7 day rotating roster of 12.5 hour shifts, which is the same roster pattern worked by employees of Coal & Allied at the Mine, 15 casual employees in the ML3 classification, with seven of these employees working the 7 day, 12.5 hour rotating roster and eight of these employees working on a floating basis (meaning they do not work set shifts, but instead fill ad-hoc vacancies on 12.5 hour shifts as required), and three casual employees in the ML2 classification working according to the 7 day, 12.5 hour rotating roster. Employees at the ML2 classification have less than 12 months experience in the coal mining industry and have not completed a traineeship.

(k) On 5 December 2024, WorkPac was supplying fewer than 10 permanent employees and a slightly larger number of casual employees to work at the Mine. These employees were mainly trade qualified, trades assistants, warehouse or administrative employees.

(l) The production workforce at the Mine includes employees of Coal & Allied, Skilled employees and WorkPac employees.

(m) The contracts of employment provided to WorkPac's employees who work at the Mine require that they act in accordance with Coal & Allied's directions including with respect to working arrangements, safety regulations and the manner and proficiency with which they are to carry out their work, are subjected to the days of work, hours and length of the assignment as determined by Coal & Allied, obey lawful written and verbal directions issued by WorkPac or Coal & Allied including instructions about return to work allocation, safety, and compliance with site specific policies, comply with all site-specific policies and procedures of the Mine, and adhere to standard operating procedures and safe systems of work laid down by Coal & Allied.

(n) The Assignment Sheet and contract of employment for Skilled's employees who work at the Mine require that they adopt a flexible approach to hours of work to meet the requirements of the position and the needs of the client, work reasonable overtime required by the client, work a roster which is determined by Skilled's operational requirements and the needs of the client, and comply with all site-specific policies and procedures.

(o) Coal & Allied provides the plant and equipment that is used at the Mine by Coal & Allied's employees, Skilled's employees and WorkPac's employees. Employees of Coal & Allied, Skilled and WorkPac work alongside one another at the Mine. They all use the same crib facilities at the Mine.

(p) Coal & Allied determines which plant and equipment workers, including employees of Skilled and WorPac, operate at the Mine, based on relevant training and competency assessments. The same training packages, developed and maintained by Coal & Allied, are undertaken by both Coal & Allied and Skilled employees. All training assessments are conducted by Coal & Allied.

(q) Coal and Allied determines the maintenance and infrastructure work to be undertaken by the workers at the Mine, including employees of WorkPac.

(r) Supervisors and management employed at the Mine are all engaged by Coal & Allied. No supervisors or managers employed by WorkPac or Skilled are based on-site at the Mine, nor do they perform any supervisory duties. All supervisory responsibilities, including task allocation and performance monitoring, are managed by personnel employed directly by Coal & Allied.

(s) Employees of WorkPac and Skilled attend pre-start meetings appropriate to their roles. Those pre-start meetings are led by Coal & Allied's supervisors, and are also attended by employees of Coal & Allied.

(t) Policies and procedures in place at the Mine, including the Health and Safety Management System, are developed and enforced by Coal & Allied. All workers at the Mine, including those employed by WorkPac and Skilled, are required to adhere to these policies.

(u) Personal protective equipment used at the Mine is provided to workers as needed by Coal & Allied. In addition, consumable products used by workers at the Mine are provided by Coal & Allied as needed.

(v) Coal & Allied controls the sign in and out of workers to the Mine and all workers, including employees of WorkPac and Skilled, are issued with a fob key. Coal & Allied monitors and enforces an alcohol and drug testing regime at the Mine that applies to all workers, including employees of WorkPac and Skilled.

(w) Employees of WorkPac and Skilled work the same rosters at the Mine as employees of Coal & Allied.

(x) Employees of WorkPac or Skilled who perform the same work at the Mine as employees of Coal & Allied are paid substantially less than Coal & Allied's employees. For example:

• a WorkPac employee being paid a flat hourly rate of $44.56 who performs the same work at the Mine as a Coal & Allied production operator would earn approximately $34,751.20 less per annum. This calculation is based on the comparison of an annual salary of $92,684.80 for a WorkPac employee under the WorkPac Agreement and $127,456 for a similar position under the Mount Thorley Enterprise Agreement; and

• A Skilled Employee being paid a flat hourly rate of $51.8655 performing the same work at the Mine as a technician employed by Coal & Allied would earn approximately $42,044.99 less per annum. This calculation is based on the comparison of an annual salary of $117,994.01 for a Skilled employee and $160,039 for a similar position under the Mount Thorley Enterprise Agreement.

• [7] Part 2-7A of the Act is entitled "Regulated labour hire arrangement orders". It permits the Commission to make such orders and sets out the obligations of employers and regulated hosts covered by those orders. The key provision in Part 2-7A is s 306E, which sets out when the Commission "must" make a regulated labour hire arrangement order. The most relevant parts of s 306E for the present case are as follows:

FWC may make a regulated labour hire arrangement order

(1) The FWC must, on application by a person mentioned in subsection (7), make an order (a regulated labour hire arrangement order) if the FWC is satisfied that:

(a) an employer supplies or will supply, either directly or indirectly, one or more employees of the employer to perform work for a regulated host; and

(b) a covered employment instrument that applies to the regulated host would apply to the employees if the regulated host were to employ the employees to perform work of that kind; and

(c) the regulated host is not a small business employer.

Note: The FWC may make other decisions under this Part which relate to regulated labour hire arrangement orders: see Subdivisions C (short - term arrangements) and D (alternative protected rate of pay orders) of this Division, and Division 3 (dealing with disputes).

(1A) Despite subsection (1), the FWC must not make the order unless it is satisfied that the performance of the work is not or will not be for the provision of a service, rather than the supply of labour, having regard to the matters in subsection (7A).

(2) Despite subsection (1), the FWC must not make the order if the FWC is satisfied that it is not fair and reasonable in all the circumstances to do so, having regard to any matters in subsection (8) in relation to which submissions have been made.

(4) For the purposes of paragraph (1)(b), in determining whether a covered employment instrument would apply to the employees, it does not matter on what basis the employees are or would be employed.

(8) For the purposes of subsection (2), the matters are as follows:

(a) the pay arrangements that apply to employees of the regulated host (or related bodies corporate of the regulated host) and the regulated employees, including in relation to:

(i) whether the host employment instrument applies only to a particular class or group of employees; and

(ii) whether, in practice, the host employment instrument has ever applied to an employee at a classification, job level or grade that would be applicable to the regulated employees; and

(iii) the rate of pay that would be payable to the regulated employees if the order were made;

(c) the history of industrial arrangements applying to the regulated host and the employer;

(d) the relationship between the regulated host and the employer, including whether they are related bodies corporate or engaged in a joint venture or common enterprise;

(da) if the performance of the work is or will be wholly or principally for the benefit of a joint venture or common enterprise engaged in by the regulated host and one or more other persons:

(i) the nature of the regulated host's interests in the joint venture or common enterprise; and

(ii) the pay arrangements that apply to employees of any of the other persons engaged in the joint venture or common enterprise (or related bodies corporate of those other persons);

(e) the terms and nature of the arrangement under which the work will be performed, including:

(i) the period for which the arrangement operates or will operate; and

(ii) the location of the work being performed or to be performed under the arrangement; and

(iii) the industry in which the regulated host and the employer operate; and

(iv) the number of employees of the employer performing work, or who are to perform work, for the regulated host under the arrangement;

(f) any other matter the FWC considers relevant..."

• [8] In Re Mining and Energy Union[1] (Batchfire), Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd,[2] and Application by the Mining and Energy Union re Rix's Creek,[3] different Full Benches of the Commission have outlined a number of principles concerning the proper interpretation and application of s 306E. I will apply the principles stated in those decisions in deciding the present case.

Section 306E(1) and (1A)

• [9] Section 306E(1) of the Act requires the Commission to make a regulated labour hire arrangement order if it is satisfied that the criteria specified in paragraphs (a), (b) and (c) of the subsection are met and neither of the prohibitions upon the making of such an order in ss 306E(1A) and 306E(2) apply.

• [10] I am satisfied on the evidence before the Commission that:

(a) Skilled and WorkPac supply, directly, their employees to perform work for Coal & Allied (a regulated host) at the Mine;

(b) the Mount Thorley Enterprise Agreement would apply to the employees of Skilled and WorkPac who work at the Mine if Coal & Allied were to employ those employees to perform work of that kind;

(c) Coal & Allied is not a small business employer; and

(d) the performance of work by employees of Skilled and WorkPac at the Mine 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) of the Act. In relation to the matters referred to in s 306E(7A), I make the following brief findings (noting that the issue is not in contest):

(i) There is no evidence that Skilled or WorkPac has any involvement in matters relating to the performance of work by their employees at the Mine.

(ii) The evidence indicates that Coal & Allied arranges and oversees the work of Skilled and WorkPac employees who are supplied to perform work at the Mine, employees of Skilled and WorkPac are assigned work by Coal & Allied, supervisors employed by Coal & Allied direct, instruct and monitor the work of employees of Skilled and WorkPac, and employees of Skilled and WorkPac are subject to the same sign in/sign out procedures and rosters as Coal & Allied employees.

(iii) Coal & Allied's employees work alongside employees of Skilled and WorkPac. They also use the same plant and equipment supplied by Coal & Allied and use the same crib facilities. The same policies and procedures are applied to all employees at the Mine.

(iv) There is no evidence that Skilled or WorkPac is or will be subject to industry or professional standards or responsibilities in relation to the work of employees of Skilled or WorkPac supplied to Coal & Allied.

(v) The work undertaken by Skilled and WorkPac employees at the Mine involves the maintenance and operation of plant and equipment and employees are provided with appropriate training, but it does not involve work of a specialist or professional nature.

Section 306E(2) and (8) - fair and reasonable

• [11] The prohibition on the making of a regulated labour hire arrangement order in s 306E(2) of the Act only operates if the Commission is positively satisfied that it is not fair and reasonable in all the circumstances to make the order.[4]

• [12] Fairness has a number of aspects. It includes fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers.[5]

• [13] The Commission is only required to have regard to a matter in s 306E(8) as a mandatory consideration if a submission is made about the matter. However, the Commission is otherwise entitled to have regard to those matters as part of "all the circumstances" even if no such submission is advanced.[6]

• [14] The task of assessing whether it would not be fair and reasonable in all the circumstances to make a regulated labour hire arrangement order must be undertaken in the statutory context in which Part 2-7A appears.[7] That includes the objects of the Act and the relationship between orders under Part 2-7A and collective bargaining and enterprise agreements made in accordance with Part 2-4 of the Act.[8]

• [15] The Commission is required to make a broad value judgment as to whether it is satisfied that it is not fair and reasonable to make an order.[9] This task will likely involve a balancing of various interests affected by an order having regard to the matters listed in s 306E(8), if submissions are made about them.[10]

• [16] The broad purpose of Part 2-7A 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 as the direct employees of the regulated host for doing the same work.[11] However, the Act does not establish 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.[12]

• [17] The fact of the supply of labour to a regulated host and the arrangements according to which the employees are supplied to perform work for the regulated host are part of "all the circumstances" which must be considered.[13]

• [18] If a submission is made about the matter, s 306E(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.[14] For example, whether the regulated employees are being paid substantially less than employees of the regulated host, or whether the rates of pay 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.[15]

• [19] 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. So much is clear from s 306E(8)(c) of the Act. For example, a labour hire employer might submit 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.[16] Notwithstanding the potential relevance of the nature and history of the industrial arrangements which apply to the labour hire employer, the object in s 3(f) of the Act does not dictate 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.[17]

• [20] Skilled accepts that, having regard to the purpose of Part 2-7A to set a revised rate of pay for a labour hire employee in circumstances where a host sets a higher rate of pay for its own employees for work of a like kind, this counts favourably towards the making of a regulated labour hire arrangement order in this case. However, Skilled submits that the balance of the Act ameliorates this issue. Skilled submits that its employees are able to negotiate improved terms and conditions (in exchange for productivity improvements) under the bargaining processes under Part 2-4 of the Act, and are provided with a number of facilitative and coercive tools to extract improved terms and conditions. In other words, Skilled contends that the Act provides a process whereby any perceived wage injustice between labour hire provider and host can be bargained over, in exchange for productivity improvements. Unfairness on this score is already moderated and accounted for by the enterprise bargaining mechanisms contained in Part 2-4 of the Act.

• [21] Skilled submits that it is unfair and unreasonable to make a regulated labour hire arrangement order considering the position between employees. Skilled's employees negotiated the Skilled Agreement, and its predecessor, against a backdrop of the work to be performed, the skills to be applied to that work, and the productivity benefits to be exchanged. The Mount Thorley Enterprise Agreement was negotiated by Coal & Allied and its employees against a different backdrop of work, skills and productivity exchanges. Skilled submits that making a regulated labour hire arrangement order would mean that its employees would be remunerated on the same basis as Coal & Allied's employees, which would be unfair to the employees of Coal & Allied who negotiated remuneration on a different basis in exchange for different productivity gains they agreed to confer on Coal & Allied in the course of enterprise bargaining.

• [22] Skilled submits that it is clearly unfair and unreasonable to make the regulated labour hire arrangement order when Skilled's position is considered. It contends that unfairness and unreasonableness arises on a number of fronts:

(a) the fruit of the labour hire contract is taken away. Profit that has been earned to date is absorbed by the increased leave balances. There is no capacity in the labour hire supply contract to recover this amount;

(b) in addition, the Act conferred an entitlement on Skilled to negotiate an enterprise agreement with its employees that became the Skilled Agreement, and Skilled negotiated that agreement at a point in time where the operation of Part 2-7A was not a prospect. The Act presently confers an entitlement to apply the Skilled Agreement to its workforce. Making a regulated labour hire arrangement order would overturn that negotiation and the productivity exchange underpinning it, and displace its most important terms (i.e. the rates of pay to apply); and

(c) in lieu, Skilled will be required to pay a rate of pay that is not informed by the productivity exchange that has been negotiated by Coal & Allied and its employees. The product of that bargain reflects the circumstances of a different industrial relationship, and does not reflect Skilled's bargain nor the make-up of its workforce.

• [23] Skilled submits that it is unfair and unreasonable to make a regulated labour hire arrangement order when fairness and reasonableness is measured between employers, and between employers and employees. All other employers and employees enjoy the right to enter into enterprise agreements which set a rate of pay in exchange for the work to be performed, the skills to be applied to that work, and the productivity benefits to be exchanged. The same cannot be said when it comes to Skilled and its employees in the advent of a regulated labour hire arrangement order. Skilled readily accepts that this is a consequence of the legislative intent behind Part 2-7A, but that does not render the unfairness irrelevant. It is a factor to be considered in the same vein (and with the same weight) when it comes to considering the favourable aspects of the scheme to Skilled's employees.

• [24] Skilled submits that, beyond the issues addressed above, the matters outlined in s 306E(8) of the Act do not materially influence what is fair and reasonable in all of the circumstances, in this particular proceeding. The criteria therein appear, so Skilled submits, directed to other situations: such as where a regulated labour hire arrangement order has already been accounted for in negotiations for the labour supply, or where there are less sophisticated labour hire-host arrangements.

• [25] As to s 306E(8)(a) and (c) of the Act, WorkPac submits that it is an established, sophisticated and substantial employer. It provides recruitment services and labour hire to many clients in the mining, construction, healthcare and other industry sectors throughout Australia. In the past 12 months, WorkPac has found employment for over 16,000 employees, often including new and inexperienced workers, women, and indigenous workers. It provides support for indigenous workers, and training to new entrants to the coal mining industry.

• [26] WorkPac submits that it has direct, meaningful and established arrangements with its employees, including the on-hire employees engaged by it and supplied to the Mine. WorkPac submits that includes:

(a) providing significant opportunities for trainees and apprentices, particularly but not limited to opportunities within the black coal mining industry;

(b) providing employees with designated contact persons for dealing with employment related matters during the course of their assignments with WorkPac's clients;

(c) where necessary, dealing with employee grievances and disputes directly with its workforce; and

(d) a long history of engaging in enterprise bargaining and successfully making workplace and enterprise agreements with its workforces, including in (but not limited to) the black coal mining sector.

• [27] In the black coal mining industry, WorkPac submits that the MEU (and its predecessors) has been an employee bargaining representative and an active participant in those negotiations. It is submitted that the WorkPac Agreement:

(a) has a pay and classification structure that closely aligns with the BMCI Award classification structure;

(b) was approved by a majority of the employees who participated in a vote on the proposed enterprise agreement, such that its terms and conditions contained in the applicable document was taken to have been 'agreed to' by WorkPac's employees;

(c) provides terms and conditions which passed the 'better off overall' test as against the underlying BCMI Award under the Act to allow the Commission to approve the enterprise agreement; and

(d) provides certainty to WorkPac in its tenders for opportunities with its clients across the industry.

• [28] WorkPac submits that the classification structure and applicable pay rates under the WorkPac Agreement are different to those in the Mount Thorley Enterprise Agreement:

(a) The WorkPac Agreement contains a tiered classification structure. Progress through the classifications is generally linked to minimum competencies. Pay rates for the WorkPac employees are linked to the classification for each employee.

(b) There are no classifications contained within the Mount Thorley Enterprise Agreement; with no differentiation depending on skills or experience. All employees working the same rosters are paid the same.

• [29] WorkPac submits that the making of the regulated labour hire arrangement order sought in this proceeding, by imposing on WorkPac and its employees, terms that are extraneous to their relationship, would inevitably disturb and distort these arrangements. It is submitted that it is neither fair nor reasonable to do so, particularly in circumstances where there is no demonstrated need for any such imposition. In particular, WorkPac submits that there is no factual basis for the MEU's submission that the engagement of WorkPac has led to any undercutting of the security of employment of Coal & Allied's directly employed workforce, undermining of the collective strength of Coal & Allied's directly employed workforce, or undercutting of the wages bargained for by Coal & Allied's employees and the MEU in enterprise agreements.

• [30] WorkPac submits that the Mount Thorley Enterprise Agreement contains no restrictions on the use of contractors by Coal & Allied. The parties to the Mount Thorley Enterprise Agreement did not themselves seek to regulate the rates of pay to be paid to employees of contractors being utilised at the Mine. The complete absence of such regulation suggests that the parties were content for the pay rates for any contractors utilised at the Mine to be regulated as between the contractor and its employees.

• [31] As to s 306E(8)(d), (e) and (f), WorkPac submits that the consequential effects of the making of the regulated labour hire arrangement orders sought in these proceedings may include:

(a) Whilst the pay obligations on WorkPac may only be prospective from the date an order comes into effect, WorkPac submits that there is a material adverse impact upon the making of an order on WorkPac's accrued liabilities for employee entitlements for annual leave and personal leave. That is because, unsurprisingly, WorkPac has not made provision for those accrued entitlements on the basis that a regulated labour hire arrangement order would be in place when the entitlements fall due for payment. Those balances have been provisioned having regard to the applicable wage rates payable to the WorkPac employees under their terms and conditions of employment with WorkPac.

(b) If one or more regulated labour hire arrangement orders are made, the applicable 'protected rate of pay' which would be payable to the WorkPac employees during their leave periods is likely to be higher than the rate under the WorkPac Agreement. The retrospective value of the aggregate leave balances for the WorkPac employees will therefore increase.

(c) WorkPac acknowledges that given the relatively small number of current permanent employees at the Mine, the consequential effect on accrued liabilities for the WorkPac employees at the Mine will not, on their own, represent a material impact on WorkPac's profit.

(d) However, WorkPac submits that a number of regulated labour hire arrangement orders have been made in respect of WorkPac and it is the subject of a number of applications for such orders. WorkPac estimates that for the regulated labour hire arrangement orders which have been made to date, the retrospective value of annual leave and sick/personal leave entitlements have increased by a significant additional amount, in excess of $1,000,000. It is submitted that the cumulative effect of the making of regulated labour hire arrangement orders will represent a material impact on WorkPac's profit.

(e) WorkPac submits that the labour hire supply contract made between WorkPac Pty Ltd and Yancoal was made against a commercial context that did not include the prospect of a regulated labour hire arrangement order.

(f) Unless WorkPac's commercial arrangements with its clients allow for the recovery of the increased cost associated with the necessary payments having to be made by WorkPac to its employees covered by a particular regulated labour hire arrangement order, WorkPac submits that the additional cost will have a significant impact on WorkPac's operations, including many arrangements potentially becoming wholly unviable and WorkPac needing to consider its options to respond to those challenges, which may include terminating commercially unsustainable arrangements.

(g) Even if WorkPac is able to obtain relief that defrayed or ameliorated the direct and immediate costs occasioned by the making of an regulated labour hire arrangement order, there remains a prospect, so WorkPac submits, that the making of a regulated labour hire arrangement order could cause WorkPac's clients to reduce their use of WorkPac employees (in part or in full) because it is not viable to continue their operations with an increased labour cost with no productivity improvement across the whole of their operation.

• [32] WorkPac submits that any deleterious impacts on its revenue as a result of a regulated labour hire arrangement order would inevitably have consequential flow-on impacts across the whole of WorkPac's business. To the extent this happens, WorkPac submits that the making of the regulated labour hire arrangement order would diminish the security of, and opportunities for, employment for all of WorkPac's current employees, including those that work in sectors other than black coal mining, and the capacity of WorkPac to continue to contribute to the Australian labour market in every sector in which it operates. That contribution includes providing pathways for female and indigenous employees, providing pathways for new and inexperienced entrants to the workforce (including for trainees and apprenticeships), and opportunities for its employees to transition to directly employed roles with WorkPac's clients, filling positions for WorkPac's clients quickly and efficiently, including for specialist and uncommon roles, and providing flexibility to WorkPac's employees to move between clients and sites.

• [33] Finally, WorkPac submits that the making of a regulated labour hire arrangement order would undermine the objects of the Act which include 'achieving productivity and fairness through an emphasis on enterprise-level collective bargaining...' because:

(a) the regulated labour hire arrangement order would, to the extent that it operates, set at nought the enterprise-level collective bargaining represented by the making of the WorkPac Agreement;

(b) bargaining for a new WorkPac black coal mining enterprise agreement to replace the WorkPac Agreement will, at best, be distorted, and may perhaps be frustrated altogether; and

(c) the approval of any replacement WorkPac black coal mining enterprise agreement would be susceptible to challenge on the basis that a significant cohort of employees who voted on a new agreement did not have a sufficient stake in the terms of the new agreement because they would not be being paid in accordance with its terms.

• [34] The MEU submits that it is manifestly fair and reasonable for a regulated labour hire arrangement order to be made given that it is contrary to the policy of Part 2-7A of the Act and manifestly unfair for employees of WorkPac and Skilled to be performing the same production work as employees of Coal & Allied and being paid substantially lower rates of pay. This situation, so the MEU contends:

(a) undermines the security of employment of Coal & Allied's employees at the Mine;

(b) undercuts the Mount Thorley Enterprise Agreement;

(c) encourages and reinforces insecure work for a labour hire company rather than secure, full-time employment with a host employer; and

(d) undercuts other employers who employ their workforces directly and otherwise encourages a race to the bottom in wages.

• [35] In response to WorkPac's submissions, the MEU makes the following submissions:

(a) The mere fact that WorkPac has an enterprise agreement is of limited relevance and does not favour a conclusion that it would not be fair and reasonable to make the order.

(b) The clear statutory intent of Part 2-7A is to impose a protected rate of pay over and above rates provided in other instruments, including the labour hire employer's enterprise agreement. The express words of s 306F(10) make it clear that a protected rate of pay under a regulated labour hire arrangement order, once it is in force, takes precedence over any lesser rate of pay in a fair work instrument, covered employment instrument or contract of employment. Thus, whether a regulated labour hire arrangement order would distort existing pay arrangements under an enterprise agreement is of limited weight at best, given this statutory intent. The focus of s 306E(8)(a)(ii) is on whether the host employment instrument would have applied 'in practice' to a hypothetical employee in the position of the regulated employee. It does not require a theoretical exercise of comparing the structure of the host employment instrument with the employer's instrument to determine whether there are any paths of progression that are similar.

(c) The submission that imposing a protected rate of pay for each WorkPac employee who performs work at the Mine above and beyond rates provided in the WorkPac Agreement would lead to disturbances and distortions is clearly an overreach. In any case, it is not a submission under cover of sub-para (8)(a) and (c).

(d) Insofar as the regulated labour hire arrangement order may lead to higher contingent liabilities for WorkPac, such as the payout of accrued annual and personal leave, this must be weighed in the context of Part 2-7A and the legislative intent. The legislation is intended to function in a manner that imposes a protected rate of pay over and above the existing rate of pay of the labour hire employees. It is an immediate consequence of that intended purpose that the order will result in higher labour costs to the labour hire employer. The specific provision in s 306NA for the rate at which accrued leave and other entitlements are to be paid on termination supports this. WorkPac makes no more than a basic submission that the order sought will result in higher costs to it. Limited if any weight can be placed on these submissions.

(e) The impact of increased contingent liability on labour hire employers is always a matter of degree. The evidence relied on by WorkPac on this point is very limited. WorkPac appropriately concedes that the effect of the order on accrued entitlements for its employees at the Mine will not, on their own, represent a material impact on its profit. WorkPac has not provided cogent evidence about the purported increased contingent liabilities and its effect on its profits. The evidentiary gap in WorkPac's case renders the submissions to be without substance, conjectural and irrelevant.

(f) WorkPac's self-assessment of being an 'established, sophisticated and substantial employer' also weighs against an argument that it would not be fair and reasonable to make the order.

(g) There is no necessary and logic link between the making of a regulated labour hire arrangement order and undermining the enterprise level bargaining. The matters asserted by WorkPac are speculative, unsupported by evidence and irrelevant.

• [36] In response to Skilled's submissions, the MEU submits as follows:

(a) The primary position of the MEU is that Skilled has failed to make submissions to any matters in s 306E (8) and that the Commission should not consider Skilled's submissions as to any unfairness and unreasonableness of the order.

(b) Skilled makes no attempt to identify in relation to what matters in s 306E(8) its submissions have been made. The submissions do not identify any of the matters in s 306E(8) by subject matter, let alone by the relevant paragraph number. Therefore, Skilled has failed to make any submission about these matters, with the consequence that it is not mandatory for the Commission to have regards to these matters, but rather discretionary. For reasons of fairness, the Commission should exercise its discretion against having regard to the submissions made by Skilled.

(c) The mere fact that Skilled has an enterprise agreement is of limited relevance and does not favour a conclusion that it would not be fair and reasonable to make the order sought. The uncontested evidence and submissions that there is a significant difference between the remuneration of Skilled's employees performing the same work compared to Coal & Allied's employees stands in stark contrast with Skilled's submission as to the effectiveness of the enterprise bargaining mechanisms and any 'coercive tools to extract improved terms and conditions'. The clear statutory intent of Part 2-7A is to impose a protected rate of pay over and above rates provided in other instruments, including the employer's enterprise agreement. Overall, these submissions raise no relevant issues.

(d) Skilled's submission ignores the legislative decision to protect bargained rates at the regulated host from being undercut by the use of labour hire.

(e) Skilled's submission concerning the impact of a regulated labour hire arrangement order on its profitability and the bargain it has made with its employees have no relevance and weight considering the statutory context and intent, specifically that the legislation is intended to function in a manner that imposes a protected rated of pay over and above the existing rate of pay of the labour hire employees. It is a consequence of that intended purpose that the regulated labour hire arrangement order will result in higher labour costs to employers such as Skilled. In essence, Skilled makes a bare submission that the order sought will result in higher costs and it should not be accorded weight.

• [37] In relation to fairness to employees, the rates of pay received by Skilled and WorkPac employees who work at the Mine are very considerably below the rates payable to Coal & Allied's employees under the Mount Thorley Enterprise Agreement. There has been no challenge to the evidence given by Mr Hanson, which I accept, that a Skilled employee engaged as an experienced operator classification level 3 is paid $42,044.99 less under the Skilled Agreement compared to the Mount Thorley Agreement and a WorkPac employee engaged as a mineworker level 4 is paid $34,751.20 less under the WorkPac Agreement compared to the Mount Thorley Agreement. Even when regard is had to the fact that some classifications of WorkPac employees who work at the Mine are paid a 'flex-up rate' (above the rates in the WorkPac Agreement),[18] they are still paid a substantial amount less than they would be paid if they were directly employed by Coal & Allied and paid in accordance with the Mount Thorley Enterprise Agreement. These pay differentials weigh heavily in favour of a conclusion that it would be fair and reasonable to make the orders sought.[19]

• [38] Oral submissions were made on behalf of WorkPac that making a regulated labour hire arrangement order may not be beneficial to employees of WorkPac who work at the Mine because Coal & Allied may choose to cease engaging so many employees to work at the Mine or cease engaging employees through WorkPac. In circumstances where Coal & Allied has been involved in these proceedings but elected not to adduce any evidence and not to make any submissions, predicting what Coal & Allied may do at the Mine if regulated labour hire arrangement orders are made is a matter of speculation. The evidence reveals that questions have been asked of Coal & Allied as to what it will do if regulated labour hire arrangement orders are made, but no response has been provided. The only certainty of making the orders sought is that employees of WorkPac and Skilled who work at the Mine after the orders take effect will be paid significantly more than they were before the orders commenced operation. In those circumstances, I cannot give any significant weight to possibility that Coal & Allied may take some action in response to the making of regulated labour hire arrangement orders which has a negative impact on employees of WorkPac or Skilled.

• [39] As to the argument that employees of Skilled and WorkPac could seek to bargain for improved terms and conditions of employment under Part 2-4, the mere existence of the ability for regulated employees to engage in collective bargaining with their direct employer is, in itself, not of significance in assessing whether it is not fair and reasonable to make an order in a particular case.[20] The statutory regime encompassed in Part 2-7 provides for a regulated labour hire arrangement order to supplement an enterprise agreement that applies to regulated employees. In addition, the bargaining outcomes between Skilled and its employees and between WorkPac and its employees have demonstrated that the opportunity to bargain does not always give rise to particularly advantageous outcomes for employees, particularly when compared to the bargaining outcome reached between Coal & Allied and its employees who work at the Mine.

• [40] In relation to fairness to employers, the fact that making a regulated labour hire arrangement order would increase the liabilities of each of Skilled and WorkPac for accrued annual leave and personal leave (which must be paid out in some circumstances), weighs in favour of a conclusion that it would not be fair and reasonable to make the orders sought. In the case of WorkPac, the weight to be attributed to this factor is not as significant as in other cases because WorkPac only supplies a relatively small number of permanent employees to the Mine. Mr Hockaday accepted in his evidence that WorkPac would be able to meet the cost of increased liabilities for annual leave and personal leave for permanent WorkPac employees who work at the Mine, although he made the point by reference to WorkPac's consolidated financial accounts that the cumulative effect of regulated labour hire arrangement orders being made at various workplaces (including black coal mines) where WorkPac supplies labour around Australia may have a significant financial impact on WorkPac's business and financial viability. I have taken this into account. In the case of Skilled, the weight to be accorded to this matter is more significant as a result of the larger number of permanent employees it supplies to the Mine. Mr Cribb gave unchallenged evidence, which I accept, that making a regulated labour hire arrangement order would increase Skilled's leave liabilities by approximately $172,617.63 for its employees who work at the Mine. Skilled has no right to recover this increased liability from Coal & Allied or anyone else. Because Skilled only earns a small profit margin on the labour hire employees it supplies to the Mine, the increased leave liability arising from the making of a regulated labour hire arrangement order would exceed the profit margin earned by PSW under its supply contract with Yancoal over the life of that contract.[21] I have taken this into account. However, Skilled did not adduce evidence as to its financial position, the financial position of the Skilled group of companies, or the impact which the increase in leave liabilities would have on its financial position. In those circumstances, there are limits on the weight I can attach to the financial impact on Skilled in assessing whether it is not fair and reasonable to make an order.[22]

• [41] In addition to the unfairness associated with increased leave liabilities, Skilled and WorkPac face a situation where they do not have the right under the labour hire supply contracts entered into with Yancoal to unilaterally increase the amount they will be paid by Coal & Allied if regulated labour hire arrangement orders are made and they are required under those supply contracts to supply labour to the Mine. Skilled and WorkPac can request an amendment to the rates to be paid by Yancoal on the basis that regulated labour hire arrangement orders have been made, but Yancoal is not obliged under the terms of the supply contracts to agree to any such request. This could potentially lead to the termination of the supply contracts between WorkPac Pty Ltd and Yancoal and between PSW and Yancoal. This uncertainty, together with the possibility of being required to supply labour to the Mine at a price which is below the wages which must be paid by Skilled or WorkPac to the relevant employees, gives rise to some unfairness and unreasonableness to Skilled and WorkPac.

• [42] The tiered classification structure in the WorkPac Agreement enables employees to progress through the classifications, generally if the employee achieves minimum competencies. In contrast, there are no classifications in the Mount Thorley Enterprise Agreement, with no differentiation depending on skills or experience. All employees working the same roster are paid the same rates. Although making a regulated labour hire arrangement order would disrupt these arrangements, I do not consider that it would be materially unfair or unreasonable to WorkPac or its employees to do so. Coal & Allied has the right to require employees of WorkPac or Skilled who work at the Mine to follow lawful and reasonable instructions and to follow policies and procedures at the Mine, which would include undertaking training and obtaining competencies to operate particular pieces of plant and equipment which are used at the Mine in the production of coal. That situation would not change if regulated labour hire arrangement orders were made. Although the making of such orders would result in employees of WorkPac and Skilled being paid at the higher (Mount Thorley Enterprise Agreement) rate regardless of whether they had particular competencies, there could be an operational need at any point in time for such an employee to obtain a competency, in which case the applicable training and competence assessment would be provided. Moreover, Coal & Allied has struck a bargain with its employees at the Mine that they will be paid the same as other employees who work the same rosters, notwithstanding a potential difference in the competencies held by different employees. I do not consider that it would be unfair or unreasonable to WorkPac, Skilled, Coal & Allied or any employees working at the Mine for this arrangement to apply to all workers at the Mine doing the same job.

• [43] In relation to fairness between employees, I do not consider that unfairness would be caused to Coal & Allied's employees who work at the Mine if regulated labour hire arrangement orders were made. There is no evidence that any employees of Coal & Allied hold that view. In any event, their subjective view would not be determinative. More significantly, these are not cases where employees of Skilled and WorkPac who work at the Mine receive benefits from their employer aside from their rate of pay which would warrant, or weigh materially in favour of, a conclusion that it is not fair and reasonable that they be entitled to the applicable rate of pay under the Mount Thorley Enterprise Agreement. WorkPac points to a range of benefits to employees under the WorkPac Agreement, such as being able to be put forward for work opportunities at a range of workplaces, being given opportunities for training, being given opportunities for work as inexperienced employees, and being employed by a sophisticated employer which is not a 'fly-by-nighter'. These are benefits to employees, but in my view they are not particularly significant, especially when regard is had to the substantial pay differentials between pay rates under the Mount Thorley Enterprise Agreement and the pay rates paid to employees of WorkPac and Skilled who work at the Mine.

• [44] I do not accept Skilled's argument that making a regulated labour hire arrangement order pursuant to which its employees would be remunerated on the same basis as Coal & Allied's employees would be unfair to the employees of Coal & Allied who negotiated remuneration on a different basis in exchange for different productivity gains they agreed to confer on Coal & Allied in the course of enterprise bargaining. The bargain between Coal & Allied and its employees, in the form of the Mount Thorley Enterprise Agreement, will not be altered or disturbed by the making of regulated labour hire arrangement orders covering employees of Skilled and WorkPac. The Mount Thorley Enterprise Agreement will continue to govern the terms and conditions of employment of Coal & Allied's employees who work at the Mine. The evidence does not demonstrate that employees of Skilled or WorkPac will be better off in any material way, financially or otherwise, compared to employees of Coal & Allied, if regulated labour hire arrangement orders are made.

• [45] In relation to fairness between employers and between employees and employers, the mere existence of the collective bargaining regime in Part 2-4 of the Act does not favour a conclusion that it is not fair and reasonable to make an order.[23] The evidence does not demonstrate particular aspects of the bargaining history concerning Skilled and its employees or WorkPac and its employees, or particular features of the enterprise agreements that have resulted from those bargaining processes, that weigh materially in support a conclusion that it is not fair and reasonable to make an order. Each of Skilled and WorkPac can bargain with their employees, although I acknowledge that the existence of regulated labour hire arrangement orders will likely have a substantial impact on the bargaining.[24] It is also relevant that the WorkPac Agreement passed its nominal expiry date on 27 June 2023 and the rates of pay in that agreement no longer set the rates actually paid to many WorkPac employees who work at the Mine.

• [46] I accept the argument that there is some unfairness and unreasonableness to Skilled and WorkPac, when fairness and reasonableness is measured between employers, and between employers and employees, insofar as other employers and employees enjoy the right to enter into enterprise agreements which set a rate of pay in exchange for the work to be performed, the skills to be applied to that work, and the productivity benefits to be exchanged. But the same cannot be said when it comes to Skilled and its employees or WorkPac and its employees in the event of regulated labour hire arrangement orders being made. Although this is a consequence of the legislative intent behind Part 2-7A, it does not render the unfairness irrelevant. I will give this matter some weight.

• [47] In my consideration of fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers, I have had regard to, and taken into account, the submissions made by WorkPac in relation to s 306E(8)(a), (c), (d), (e) and (f) of the Act.

• [48] Having regard to all the circumstances, including the submissions made by each of Skilled, WorkPac and the MEU, my broad value judgment is that I am not satisfied that it is not fair and reasonable in all the circumstances to make regulated labour hire arrangement orders with respect to employees of Skilled and WorkPac who undertake work at the Mine. In the circumstances of each of these applications brought by the MEU, my assessment, after balancing the various interests affected by an order in each case, is that the unfairness created by labour hire employees at the Mine doing the same job as direct employees of Coal & Allied, yet being paid substantially less than the direct employees, outweighs the matters which weigh in favour of a conclusion that it is not fair and reasonable in all the circumstances to make the orders sought.

• [49] I am 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 Skilled and WorkPac who are supplied to perform work for Coal & Allied at the Mine as well as employees of Coal & Allied 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 Act by operation of s 306E(7)(c) and, as such, for the purposes of s 306E(1).

• [50] Skilled submits that making a regulated labour hire arrangement order would result in the Act operating to acquire Skilled's property otherwise than on just terms. As a result and by operation of s 39 of the Act, Skilled submits that the Act cannot apply to the MEU's application, and the application must be dismissed.

• [51] Quite properly, Mr Howard submitted on behalf of Skilled that I am bound to apply the reasoning in paragraphs [43] to [71] of the Full Bench decision in Bengalla, with the result that I must conclude in this case that s 39 of the Act would not be engaged by the making of a regulated labour hire arrangement order that covers Skilled. I agree. It follows that s 39 does not affect the Commission's jurisdiction in this matter or otherwise provide a reason not to make an order.

• [52] Mr Howard formally made submissions as to why Skilled says the Full Bench in Bengalla erred in relation to s 39 of the Act. I do not need to address those arguments in this decision.

Form of the regulated labour hire arrangement orders

• [53] The MEU's proposed regulated labour hire arrangement order in relation to Skilled is one that covers Skilled and "employees of [Skilled], who perform work at the Mount Thorley/Warkworth Mine 15 kms south west of Singleton in the State of New South Wales." Skilled submits that this proposed order is too broad and does not meet the obligation to "specify" in s 306E(9). It is submitted that the duty to "specify" means that the thing to be specified is to be described with "unambiguous clarity", be "unambiguously identified", or be "made clear".

• [54] Skilled submits that the proposed order needs to be delimited in two respects:

(a) First, the order should only be subject to work of the kind that is (or would be) subject to the Mount Thorley Enterprise Agreement if it were performed by a production employee covered by that instrument. Skilled submits that the MEU's framing would result in any work performed being subject to the regulated labour hire arrangement order, regardless of whether it is work of a kind that triggers the jurisdiction to make the order in the first place. This submission was further refined in closing oral submissions by Mr Howard, who submitted that the order should be limited to haul truck drivers and water cart drivers because the evidence before the Commission does not establish that Skilled supplies any other types of employees to the Mine.

(b) Second, the order should not apply prospectively to any services (as opposed to labour) that Skilled might supply to Yancoal in the future. It is submitted that the MEU's order would regulate any work of employees that might be the subject to future services that Skilled might seek to provide, in circumstances where the legislative scheme is against that outcome.

• [55] Skilled submits that there should be no doubt as to what a labour hire provider's obligations are pursuant to a regulated labour hire arrangement order, and no doubt as to what a regulated labour hire arrangement order will not regulate. It is submitted that any ambiguity on this score runs the risk of resulting invalidity. Certainty as to what Skilled can, and cannot, do on the making of the regulated labour hire arrangement order is made all the more critical in light of the anti-avoidance provisions contained in ss 306S and 306SA of the Act.

• [56] In closing oral submissions, Mr Howard submitted on behalf of Skilled that I am bound to follow the Full Bench in Bengalla (at [134]-[138]) in relation to what I need to specify in the order. Mr Howard also formally put on the record submissions concerning alleged errors in the reasoning of the Full Bench in Bengalla in relation to what needs to be specified in the order. I do not need to address those submissions in this decision.

• [57] In Bengalla, the Full Bench reasoned as follows in relation to these arguments by Skilled:

"[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. 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."

• [58] I will follow this approach in the present matter.

• [59] The only outstanding matter I need to address in relation to Skilled's submissions concerning the framing of the order is the contention that the evidence before the Commission does not establish that Skilled supplies employees other than haul truck drivers and water cart drivers to the Mine. I do not accept this submission.

• [60] Mr Cribb gave evidence in his witness statement that Skilled currently provides 96 workers to perform 'production work' at the Mine. This includes 45 trainees, 33 permanent employees in the classification of ML3 performing production work (predominantly operating a haul truck or water cart), 15 casual employees in the ML3 classification, and three casual employees in the ML2 classification. Apart from the 33 permanent employees who predominantly operate a haul truck or water cart, Mr Cribb does not give evidence as to the nature of work undertaken by the other 63 Skilled employees at the Mine, other than that they perform 'production work'. As to the 33 permanent employees, Mr Cribb's evidence that they predominantly operate a haul truck or water cart gives rise to an implication that those employees, or at least some of them, sometimes do work other than operating a haul truck or water cart.

• [61] Skilled also relies on the following business records:

• (a) a payslip for a Skilled employee which states that the employee's position is 'Dump Truck Driver'; [25]

• (b) the schedule to a contract of employment for a Skilled employee which describes the position of the employee as 'Experienced Operator'.[26] Skilled submits that this position is equivalent to the classification of Experienced Mineworker under the BCMI Award, which means the employee has more than 12 months' experience; and

(c) an Assignment Sheet for a Skilled employee which describes the classification of the employee as ML3.

• [62] Mr Dodd gave the following relevant evidence in his witness statement:[27]

"14. The Mine's operational centres of the workforce can be divided into three (3) broad groups:

a) Production:-

• Coal Partings (remove partings and split coal seams);
• Pre-Strip (remove the over or inner burden);
• Mining Services (incorporating drag line, drill & blast and pump crew);

b) Maintenance; and

c) Coal Handling & Preparation.

1. The workforce at the Mine includes workers employed by MTW and workers employed by labour hire providers, principally exclusively Programmed and some WorkPac employees.

1. At the Mine "production" refers to coal extraction and its transport to the CHPPs. The production process generally follows these steps:

a) This Stripping of Topsoil: The top layer of soil was removed using dozers, moxy trucks, and excavators. The excavators load the topsoil onto the trucks which are transported to a stockpile for future site rehabilitation. A dozer prepares the area includes debris. Topsoil removal is normally done by an external contracting company.

b) Drill and Blast: A grader levels the designated mining area (the drill pattern). A blast hole drill creates holes in this area, which are then loaded, primed, and detonated to break up the overburden. In areas with multiple coal seams, the layers between seams are called interburden or partings.

c) Overburden: An excavator, loader, or shovel loads fragmented overburden onto haul trucks, transporting it to designated dumps. At the dump, haul trucks discharge overburden at the tip-head, and levels the dumped material, including forming a windrow along the edge. Graders are also used on roads to level them. A dragline is also used. The dragline's role is to cart overburden so the coal seam can be exposed to permit extraction of coal.

d) Coal mining: Excavators or loaders dig and load coal onto haul trucks, which transport it to a Run-of-Mine (ROM) area. There are multiple ROMs due to the two (2) CHPPs. Coal may be directly tipped into a stockpile or a ROM hopper. If initially placed in a stockpile, it is later moved into the ROM hopper via front end loaders. From the ROM hopper, coal is conveyed to the CHPP by conveyor belts. There is also a ROM hopper where the coal can bypass the CHPP washeries in circumstances where the coal doesn't need to be washed.

1. This the production work described above is undertaken by MTW employees working under the MTW Agreement at both the Mount Thorley and Warkworth [mines], and almost exclusively by employees of Programmed that contract with MTW to provide labour to the Mine.

1. All of the plant, equipment and vehicles at the Mine requires maintenance and servicing. This maintenance and servicing is undertaken by direct employees of the Mine and labour hire and contract companies. WorkPac is a labour hire company that provides employees to undertake maintenance work at the Mine.

1. At the CHPPs, the coal undergoes crushing, washing, and additional treatment. Once processed, it is either loaded directly onto rail cars for transport to the Port of Newcastle or temporarily stored on a stockpile for future loading.

1. On each shift, MTW assigns a fleet of haul trucks and other equipment to undertake planned mining activities. This equipment is operated by production workers, MTW employees and Programmed employees, and includes:

a) Rear dump trucks: Haul trucks loaded with overburden or coal and driven around the Mining to designated dumping areas.

b) Dozers: Used primarily to clean up or move dirt, overburden, or coal. They are also used to rip the coal seam to make it easier to load out.

c) Graders: Used to maintain haul roads and level off the drill pattern.

d) Water trucks: Used to spray water over the haul roads for dust suppression. The water trucks also act as the fire tenders.

e) Rubber-tyred dozer: Quieter machines used for cleaning up or moving dirt, overburden, or coal.

f) Production excavators: Primarily used to dig and then load the haul trucks with overburden and coal.

g) Shovels: Used to dig and then load the haul trucks with over burden and inner burden.

h) Dragline: Used to cast overburden on spoil dumps to gain access to the coal seams.

1. Production loaders: Primarily used to dig and then load the haul trucks with coal and partings. They can also go down into the pit and be used to dig and load overburden, but this does not often occur. A loader will also be tasked with loading coal from the stockpile adjacent to the CHPPs into trucks to be put into the ROM hoppers.

j) Service carts (trucks): Used to lube, service and provide fuel to the mining fleet.

k) Scraper: Primarily used to maintain the roads by putting down gravel.

1. Small front-end loaders and excavators: The small front-end loaders are used for windrows, assisting to install intersections throughout the haul areas of the mine and clean ups. The small excavators are used for windrow construction and to clean out the hoppers at the CHPPs.

m) Light vehicles: Used to transport workers and supervisors around the mining operations. This

1. During each shift, haul trucks work with an excavator, loader, or shovel to remove overburden or coal in a continuous cycle of loading and unloading.

1. Production workers receive their duty allocations for the shift at the pre-start meeting. These pre-start meetings are held in the master areas. There is the North Master Area (Warkworth) and the South Master Area (Mount Thorley). Each Master area room contains approximately six (6) screens. On the screens are each production workers assignment and name. This informs the production employees of their location, the equipment they're allocated to and their work area.

1. The production workforce includes MTW employees and Programmed employees. They all operate plants [sic] and perform other production work. The Programmed employees principally operate haul trucks and water carts. MTW employees and Programmed employees work alongside each other."

• [63] When Mr Dodd's evidence that Skilled's employees 'principally operate haul trucks and water carts' is considered in context with the other relevant parts of his witness statement which I have set out above, I am satisfied, on the balance of probabilities, that the work undertaken by Skilled's employees at the Mine is not limited to operating haul trucks and water carts. Mr Dodd's evidence establishes to my satisfaction that Skilled's employees at the Mine also, on occasion, operate different pieces of plant and equipment (from the list set out in paragraph [20] of Mr Dodd's witness statement) as part of their production work at the Mine.

• [64] I am satisfied that it is appropriate in the circumstances of this case to follow, as proposed by the MEU, the approach taken by a number of Full Benches of the Commission in framing the regulated labour hire arrangement order to apply to employees of Skilled "who perform work at the Mount Thorley/Warkworth Mine 15km south west of Singleton in the State of New South Wales who would, if employed by the Regulated Host, be covered by the host employment instrument". Coverage of the Mount Thorley Enterprise Agreement is limited to employees of Coal & Allied "located at Mount Thorley/Warkworth performing production and engineering work".

• [65] For the reasons set out above, I am required by s 306E of the Act to a make regulated labour hire arrangement orders as sought by the MEU and which apply to employees supplied by Skilled and WorkPac to perform work at the Mine. I will publish the orders together with this decision, setting out the matters specified in s 306E(9). The operative date of each order will be Sunday, 20 April 2025. Both Skilled and WorkPac requested that any order commence operation on a Sunday because the payroll cycle for both labour hire companies begin on a Sunday. The date of 20 April 2025 has been selected because it will give both Skilled and WorkPac some time, albeit slightly less than the 14 days they requested, to make the necessary arrangements to prepare for the impact of the orders. No party submitted that the orders should specify when they will cease to be in force for the purposes of s 306E(10). Accordingly, the orders will also not contain such a specification.

D. Williams, solicitor, for WorkPac Mining Pty Ltd

L. Howard, counsel, for Skilled Workforce Solutions (NSW) Pty Ltd

M. Moffat, solicitor, for Coal & Allied Mining Services Pty Ltd

[1] [2024] FWCFB 299; (2024) 333 IR 249

[2] [2025] FWCFB 53

[3] [2025] FWCFB 12

[5] Bengalla at [115], applying the reasoning of Kiefel CJ, Nettle and Gordon JJ in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495 at [14]

[27] Ex A2 at [14]-[26]; Hearing Book at pp 194-198

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