Fair Work Commission|2025-06-06

Applications by the Mining and Energy Union re Maules Creek Coal Pty Ltd [2025] FWC 1499 (6 June 2025)

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

Applications by the Mining and Energy Union re Maules Creek Coal Pty Ltd

Application for a regulated labour hire arrangement order in respect of WorkPac Mining Pty Ltd, SESLS Industrial Pty Ltd, and Skilled Workforce Solutions (NSW) Pty Ltd in relation to work performed for Maules Creek Coal Pty Limited at Maules Creek Open Cut Mine - whether it is not fair and reasonable to make a regulated labour hire arrangement order - form of order - orders made.

[1] On 11 October 2024, the Mining and Energy Union ("the MEU") filed three applications for regulated labour hire arrangement orders ("RLHA orders") under section 306E of the Fair Work Act 2009 (Cth) ("the Fair Work Act").

[2] If made the RLHA orders would apply to labour hire workers employed by WorkPac Mining Pty Ltd ("WorkPac"), SESLS Industrial Pty Ltd, and/or Skilled Workforce Solutions (NSW) Pty Ltd ("Skilled") who perform work for Maules Creek Coal Pty Limited ("Maules Creek Coal") at the Maules Creek Open Cut Mine ("the Mine") near Narrabri and Boggabri in New South Wales.

[3] The MEU has since discontinued the application against SESLS Industrial Pty Ltd. This decision determines the other two applications.

[4] The host employment instrument is the Maules Creek Mine Enterprise Agreement 2023 ("the Maules Creek Coal Enterprise Agreement").

[5] WorkPac and Skilled both oppose the application on the grounds that it would not be fair and reasonable to make an RLHA order in all the circumstances.

[6] In addition, Skilled opposes the application on the basis that the orders would, if made, result in the acquisition of Skilled's property otherwise than on just terms.

[7] WorkPac, Skilled, and the MEU have also made submissions about the terms of any orders.

[8] Maules Creek Coal entered an appearance at the hearing but did not lead any evidence or make any submissions.

[9] For the reasons that follow I have decided to grant the two remaining applications and make orders accordingly.

[10] Part 2-7A of the Act is entitled "Regulated labour hire arrangement orders". It provides for the Commission to make RLHA orders, and sets out the obligations of employers and regulated hosts covered by those orders. Section 306E, a provision in that Part, sets out when the Commission must make an RLHA order. Specifically, the Commission is required to make an order if certain requirements of subsection 306E(1) are met, subject to exclusions in subsections (1A) and (2). If either of those exclusions apply, the Commission must not make the order.

[11] The exclusion in subsection 306E(2) is in issue in these proceedings. That subsection provides that the Commission must not make the order if it 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. Subsection (8) provides:

306E FWC may make a regulated labour hire arrangement order

(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;

(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;

[12] There is no sub-paragraph (b) in subsection 306E(8).

[13] The MEU filed each of the initiating applications on 11 October 2024.

[14] I set out most of the procedural history of these applications in Application by Mining and Energy Union re Maules Creek.[1] A brief summary follows.

[15] The President of the Commission issued Directions on 25 October 2024, and further Directions on 30 January 2025. The latter provided for, inter alia, the matter to be listed before me in Sydney on 7 and 8 April 2025.

[16] On 26 February I decided an application, by Skilled, to adjourn the hearing to a later date. Skilled's application had been made on the basis of representative unavailability, a matter that had been before the President when he decided the listing dates. There being no additional grounds providing a basis for me to depart from an earlier decision of the President, I decided to dismiss the application for adjournment. I invited parties to seek written reasons if they wished to do so. No party did so.

[17] On 26 March 2025 Skilled applied for me to recuse myself from these proceedings. On 28 March 2025 I dismissed Skilled's recusal application.[2] I had made a consistent decision in another matter to which Skilled was a party.[3]

[18] On 31 March 2025, on the application of each of Skilled and WorkPac, I made confidentiality orders to protect certain commercial information.

[19] At the outset of the hearing on 7 April 2025, Skilled applied for an adjournment on the basis that it had applied to the Federal Court of Australia on 4 April 2025 for relief in relation to the issue of whether I ought to recuse myself. After providing the other parties an opportunity to be heard, I declined to grant the adjournment for the reasons given on transcript. Skilled indicated that it would participate in the hearing on the basis that it did not concede that it was a valid exercise of jurisdiction.

[20] The MEU tendered statements of Mr Shane Hayman, a Maules Creek Coal production employee, and Mr Jeremy McWilliams, District Vice President of the MEU's Northern Mining and New South Wales Energy District, both dated 21 November 2024. WorkPac tendered a statement of Mr Cameron Hockaday, Chief Commercial & Risk Officer of WorkPac Group Pty Ltd, dated 19 December 2024. Skilled tendered a statement of Mr Joel Cribb, General Manager North - Energy and Resources, Programmed Skilled Workforce Ltd ("PSW"), dated 15 January 2025. None of the witnesses were required for cross-examination, and their statements were admitted into evidence. Maules Creek Coal did not seek to adduce any evidence.

[21] Some of the evidence, going to commercial information, was covered by the confidentiality orders referred to above.

[22] I have considered all of the evidence, including the evidence covered by confidentiality orders.

[23] I make the following findings in relation to matters that were not in dispute.

[24] The Mine is an open cut coal mine situated approximately 20 kilometres northeast of Boggabri and 45 kilometres southeast of Narrabri in the Gunnedah Basin Coalfields of New South Wales. The Mine produces high-quality thermal and semi-soft coal for export.[4] Maules Creek Coal operates the Mine. Maules Creek Coal is a majority owned subsidiary of Whitehaven Coal Mining Ltd ("Whitehaven").[5]

[25] Maules Creek Coal employs employees to perform work at the Mine.[6] In addition to the directly employed workforce, Skilled and WorkPac supply employees to Maules Creek Coal to perform production & engineering work at the Mine.[7]

[26] The production workers at the Mine operate machines such as excavators, haul trucks, dozers, graders, dump trucks, water trucks, loaders, service carts, and scrapers.[8]

[27] The Maules Creek Coal Enterprise Agreement covers Maules Creek Coal and its employees who are employed at the Mine (including the Coal Handling Preparation Plant) and who perform work covered by the classifications contained in Schedule 1 of that Agreement.[9] It excludes and replaces the Black Coal Mining Industry Award 2010 ("the Award") in respect of those employees.[10] It covers production & engineering employees.[11]

[28] The WorkPac Coal Mining Agreement 2019 ("the WorkPac Enterprise Agreement") 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.[12]

[29] The nominal expiry date of the WorkPac Enterprise Agreement was 27 June 2023. The last pay increase provided for in the WorkPac Enterprise Agreement took effect on 1 July 2023.[13] However, WorkPac adjusted its flat rates in July 2024.[14]

[30] WorkPac Mining Pty Ltd is party to a supply contract with Whitehaven ("the WorkPac Supply Agreement"), under which WorkPac provides supplementary labour to perform work at the Mine.[15] Under that contract WorkPac provides suitably qualified personnel for deployment across Whitehaven's operations located at various locations.[16]

[31] The WorkPac Supply Agreement contains a schedule of 'flat pay rates', onto which are added statutory on-costs, allowances, overhead recovery and a small profit margin.[17]

[32] Mr Hockaday's evidence was that in most cases the rate of pay required to be paid by WorkPac to its employees would increase if the application was to be granted and the order made.[18]

[33] As at December 2024, WorkPac had a substantial number of workers at the Mine, including both permanent and casual employees, across four of the five main Mineworker classifications under the WorkPac Enterprise Agreement. The specific numbers are covered by a confidentiality order.

[34] The Skilled Workforce Solutions (NSW) Pty Ltd Enterprise Agreement 2019 ("the Skilled Enterprise Agreement") covers and applies to employees of Skilled who perform work for Maules Creek Coal at the Mine.[19] It applies to Skilled's employees who, but for the Skilled Enterprise Agreement, would be covered by the Award.[20] The nominal expiry date was 14 February 2023.

[35] PSW is party to a supply contract with Whitehaven ("the PSW Supply Agreement") to provide labour to perform work at the Mine.[21] PSW and Skilled are both part of the Programmed group of companies,[22] and Skilled employs the employees provided under the PSW Supply Agreement.[23] The PSW Supply Agreement commenced in 2017 and expires in December this year.[24]

[36] The charge out rates under the PSW Supply Agreement are arrived at by taking an hourly rate of pay from the Skilled Enterprise Agreement, 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 is then added to the base rate plus other amounts described above.[25]

[37] Mr Cribb's evidence was that if the order was made, Skilled's leave liabilities would increase,[26] implying that pay would increase.

[38] As at January 2025, Skilled provided workers to the Mine, including 184 workers to perform production work, predominantly operating haul trucks, of whom 101 were trainees. Seventy-two of the remaining eighty-three were permanent employees, with the remainder employed on a casual basis, all as Mineworker Level 3 under the Skilled Enterprise Agreement.[27]

[39] Employees of Skilled and WorkPac who work at the Mine attend the same daily pre-start meetings as the Maules Creek Coal employees.[28] They are allocated work and equipment for their shift in the same way.[29]

[40] Employees of Skilled and WorkPac who work at the Mine:

(a) perform the same work and operate the same Maules Creek Coal-owned machines and equipment as the Maules Creek Coal employees;[30]

(b) must undertake the same site induction conducted by Maules Creek Coal before commencing work at the Mine;[31]

(d) operate under the same Maules Creek Coal procedures, policies and rules as the Maules Creek Coal employees;[33]

(e) are rostered on the same shifts and allocated to the same crews as the Maules Creek Coal employees;[34]

(f) use the same crib facilities, bathhouses and noticeboards as Maules Creek Coal employees;[35]

(g) undertake the same training as Maules Creek Coal's employees.[36]

[41] All supervisory responsibilities at the Mine are managed solely by personnel employed directly by Maules Creek Coal.[37]

[42] Employees of Skilled and WorkPac who work at the Mine are initially supplied with the uniform, boots, and helmet by their respective employer. They are supplied with replacement personal protective equipment and consumables by Maules Creek Coal.[38]
[43] Maules Creek Coal, Skilled, and WorkPac employees are transported to work by the same buses.[39]

[44] I will now summarise the parties' submissions to the extent relevant to the matters that were in dispute between them.

[45] The MEU submitted that WorkPac employees can be paid an annual amount of up to $17,761 less per year than directly employed employees, and employees of Skilled are paid up to $29,692.99 less per year.[40] It submitted that it would be manifestly fair and reasonable for an RLHA order to be made given that it is contrary to the policy of Part 2-7A of the Fair Work Act, and manifestly unfair for WorkPac and Skilled employees to be performing the same production work as Maules Creek Coal employees and being paid lower rates of pay.

[46] WorkPac and Skilled both made submissions about the meaning of "fair and reasonable" for the purposes of subsection 306E(2). WorkPac made submissions directed to subparagraphs (a), (c), (d), (e), and (f) of subsection 306E(8). Skilled made submissions generally regarding fairness and reasonableness to employees, to Skilled, as between employers, and as between employers and employees. Skilled also made submissions as to the form and content of the orders if made.

[47] In reply, the MEU made submissions as to the construction of subsections 306E(2) and (8). It submitted that there is no discernible basis for the Commission to have regard to any matters not raised by the Respondents in relation to subsection (8). It submitted that the Commission's assessment of what is fair and reasonable in all the circumstances should be informed by the statutory text, statutory context and objective. It replied to the Respondents' submissions as to subsections (2) and (8). The MEU also replied to Skilled's submissions as to the form and content of the orders if made.

[48] The parties made oral closing submissions, at the hearing on 7 April 2025.

[49] Full Benches of this Commission have stated the principles for the proper application of section 306E in Application by MEU re Callide Mine[41] ("Batchfire"), Application by the Mining and Energy Union re Rix's Creek[42] ("Rix's Creek"), and Application by the Mining and Energy Union re Bengalla Mining Company Pty Ltd[43] ("Bengalla"). I will apply, but do not repeat, the principles stated in those decisions.

[50] I have also had the considerable benefit of reading first instance decisions in Applications by the Mining and Energy Union re Bulga Open Cut Mine,[44] Application by the Mining and Energy Union re Mount Thorley/Warkworth Mine,[45] and Mining and Energy Union.[46] These decisions are not binding, and each matter turns on its own facts.

[51] I am satisfied, for the purposes of subsection 306E(7) of the Fair Work Act, that the MEU is an employee organisation that is entitled to represent the industrial interests of the employees of WorkPac, or of Skilled, who are supplied to perform work for Maules Creek Coal at the Mine alongside employees of Maules Creek Coal employed to perform work at the Mine. Accordingly, the MEU is entitled to apply for a regulated labour hire arrangement order under section 306E of the Fair Work Act by operation of subsection 306E(7)(c).

[52] For the purposes of subsection 306E(1) of the Fair Work Act I am also satisfied, on the basis of the material filed, and noting these matters are not in dispute, that:

(a) WorkPac supplies employees employed by WorkPac to perform work for Maules Creek Coal at the Mine involving production work.

(b) Skilled, on behalf of PSW, supplies employees employed by Skilled to perform work for Maules Creek Coal at the Mine involving production work.

(c) The Maules Creek Coal Enterprise Agreement would apply to employees of WorkPac who are supplied to perform work for Maules Creek Coal if Maules Creek Coal were to employ those employees directly to undertake the same kind of work.

(d) The Maules Creek Enterprise Agreement would apply to employees of Skilled who are supplied to perform work for Maules Creek Coal if Maules Creek Coal were to employ those employees directly to undertake the same kind of work.

(e) Maules Creek Coal is not a small business employer.

[53] For the purposes of subsection 306E(1A) of the Fair Work Act, having regard to the matters set out in subsection (7A), I find the performance of work by the employees supplied by WorkPac or Skilled to Maules Creek Coal at the Mine is not and will not be for the provision of a service. I find and am satisfied that each of WorkPac and Skilled supplies labour to Maules Creek Coal.

Whether not fair and reasonable - introductory remarks

[54] Having made the above findings, I am required, pursuant to subsection 306E(2), to make an RLHA order unless I am satisfied that it would not be fair and reasonable in all the circumstances to do so, having regard to any matters in subsection 306E(8) in relation to which submissions have been made.

[55] The parties are in dispute as to whether it would not be fair and reasonable to make the order. As indicated above the MEU submits that it would be manifestly fair and reasonable to make the RLHA orders sought. Skilled and WorkPac submit it would not be fair and reasonable to make the orders.

[56] Unless the Commission is positively satisfied that it is not fair and reasonable to make an RLHA order, the prohibition does not arise.[47] The matters in subsection 306E(8) are mandatory considerations if a submission is made in that regard; otherwise, the Commission may take account of such matters as part of "all of the circumstances" even if no submission is advanced.[48]

[57] The assessment of whether it would not be fair and reasonable to make the orders must be undertaken having regard to the statutory context in which Part 2-7A of the Fair Work Act appears. That includes the objects of the Fair Work Act, and also the relationship between RLHA orders, collective bargaining, and enterprise agreements. A broad value judgement is required, balancing various interests affected by the order, and having regard to the matters in subsection (8) at least to the extent submissions are made about them.[49]

[58] There is no presumption that it is fair and reasonable to make an order.[50] The fact of the supply of labour, and the arrangements under which employees are supplied, can be considered as part of all of the circumstances. The fact that, and the degree to which, labour hire employees receive a lesser rate of pay compared with Maules Creek Coal's employees is relevant to the "fair and reasonable" assessment.[51]

[59] There is no assumption, by reference to section 3(f) of the Fair Work Act, that it is not fair and reasonable to make the RLHA order sought simply because doing so 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.[52]

Whether it is not fair and reasonable to make an order to apply to WorkPac

[60] WorkPac made helpful, logically-structured submissions as to the matters in subsection 306E(8). I will turn first to its submissions regarding paragraphs (a) and (c).

[61] In its Outline of Submissions filed 8 January 2025, WorkPac provided the following submissions about its operations, and its arrangements with its employees:[53]

WorkPac 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.

[62] The MEU argues that submission is not relevant to paragraphs (a) or (c) of subsection 306E(8),[54] which go to pay arrangements and industrial arrangements in relation to both the regulated host and the employer. They also argue that the other matters addressed in WorkPac's submission in respect of paragraphs (a) and (c) are not relevant. WorkPac's Outline goes on to state:[55]

WorkPac has a direct, meaningful and established arrangements with its employees, including the On-Hire Employees engaged by it under the [WorkPac Supply Agreement]. This 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.

(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.

In the black coal mining industry, the MEU (and its predecessors) has been an employee bargaining representative and an active participant in those negotiations.

(a) has a pay and classification structure that closely aligns with the Black Coal Mining Industry Award (BCMI 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 FW Act to allow the Commission to approve the enterprise agreements;

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

The classification structure and applicable pay rates under the WorkPac 2019 Agreement are different to those in the Maules Creek Agreement:

(a) The WorkPac 2019 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) The Classification Structure set out in Schedule 1 of the Maules Creek Agreement is much flatter than the WorkPac 2019 Agreement and is less prescriptive regarding competencies.

[63] WorkPac also submitted this was not a case where WorkPac had negotiated an employment that only covered the Mine, operating side-by-side with the Maules Creek Coal Agreement. It submitted that if that had been the case, that might be an example of the mischief that the Explanatory Memorandum for the relevant bill referred to, namely to undercut the wages and conditions of employees at that particular mine. In contrast, its enterprise agreement covered its coal mine workers from the northern tip of the Bowen Basin to the Southern Coalfields in New South Wales. It submitted there was no evidence of any undercutting or any adverse consequence for any employee of the regulated host. It said what is happening at the Mine should not be considered in isolation from the full breadth of what it provided. It observed there was no evidence that any of its employees at the Mine was dissatisfied with the circumstances of their employment, though it readily and properly conceded that as a matter of obvious inference employees would prefer to be paid more.

[64] These submissions substantially go to the pay arrangements that apply to the regulated employees, and to the history of the industrial arrangements applying to the employer and the regulated host. A regulated employee is an employee supplied by the employer to perform work for a regulated host: section 306E(1)(a) and (5).

[65] WorkPac submitted that making the RLHA order would inevitably disturb and distort the arrangements relating to it and its employees, and that there was no demonstrated need for any such imposition. It argued there was no factual basis for earlier submissions by the MEU that the labour hire arrangement gave rise to any undercutting of directly-employed workers' employment security, undermining of their collective strength, or undercutting of wages bargained for between the MEU and Maules Creek Coal in enterprise agreements.[56] It submitted that the Maules Creek Coal Enterprise Agreement did not restrict the use of contractors, or seek to regulate the rates of pay for contractors' employees at the Mine. They argued this suggested that Maules Creek Coal and the MEU were content for the pay rates for any contractors utilised at the Mine to be regulated as between the contractor and its employees.[57]

[66] The MEU submits that the fact that WorkPac has an enterprise agreement, negotiated with the MEU, does not weigh in favour of a conclusion that it would not be fair and reasonable to make the RLHA order. The history of industrial arrangements is a mandatory consideration if submissions are made in that regard. As WorkPac submitted, relying on Bengalla, the nature and history of the industrial arrangements that apply to the labour hire employer will frequently be relevant to whether it is not fair and reasonable to make an RLHA order.[58] WorkPac referred me particularly to paragraphs [90]-[92] of the decision in Bengalla.

[67] Disturbance of an employer's industrial arrangements may well be relevant to an assessment that it would not be fair and reasonable to make the order, as contemplated by the Full Bench in Bengalla at [90], but that must be tempered by the statutory context in which some degree of disturbance is inherent.

[68] As to the submission regarding distortion, the MEU submits that whether a RLHA order would distort existing pay arrangements under an enterprise agreement is of limited weight at best, given the statutory intent to impose a protected rate of pay over and above rates provided in other instruments. The MEU also submitted that though there was not synchronicity between the two classification structures they were nonetheless closely matched.

[69] It can readily be accepted that if the host employment instrument has a flatter classification structure than the employer's enterprise agreement, then imposing pay rates from the former will distort pay arrangements. Relativities between classifications in the employer's enterprise agreement would be replaced by the relativities between the classifications in the host employment instrument. It may be argued that there are benefits to relativities and less-flat structures, providing more opportunity for progression, and more incentive to develop skills or gaining competencies, which may yield productivity benefits. Contrary arguments may also be made. Such matters may be able to be considered in assessing fairness and reasonableness, in the context of subsection 306E(8)(c) or the general words of subsection 306E(2). However, I do not consider the differing classification structures, considered as part of the balancing exercise, give rise to a finding that it would not be fair and reasonable to make the RLHA order in these proceedings.

[70] A consideration of the coverage provisions of the Maules Creek Coal Enterprise Agreement and the WorkPac Enterprise Agreement shows that the former simply covers "all employees", with the word "employee" defined by reference to the classifications in that agreement. The WorkPac Enterprise Agreement covers all work directly connected with the day-to-day operation of a black coal mine, language reflecting that contained in the coverage provision of the Award.

[71] It is inherent in the statutory scheme that pay rates under a different instrument may be superimposed on pay rates in the employer's enterprise agreement. It is also a feature of bargaining that classification structures can differ between agreements in the same industry. There are no rigid requirements that classification structures in enterprise agreements align closely with the structures in the relevant Award; instead there is a global Better Off Overall Test.

[72] I accept that distortion can be considered under sub-paragraphs (a) and (c) of subsection 306E(8), I also accept that the potential distortion in this case does not weigh strongly in favour of a finding that would trigger the prohibition in subsection 306E(2).

[73] I do not consider that the MEU in some way acquiesced in labour hire arrangements on the basis of the absence of any anti-contracting-out provision of the Maules Creek Coal Enterprise Agreement.

[74] I have dealt with subsection 306E(8)(a)(i) above. As to sub-paragraph (ii), the question is 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. The MEU submits this should be read as referring to a "hypothetical employee". I do not need to decide whether that is correct given the evidence that actual employees of the regulated host undertake production work at the mine in classifications, job levels or grades that would be applicable to the regulated employees.[59] The use of "would be applicable" rather than "are applicable" suggests the provision is referring to the classifications, jobs levels or grades that would be applicable to regulated employees if they were employed under the host employment instrument.

[75] As to subsection 306E(8)(a)(iii), the MEU submitted and I accept that WorkPac did not cavil with the difference in pay it had identified in its earlier Outline.[60] I accept the MEU's submission that a substantial diﬀerence in pay between the regulated employee and an employee of the regulated host should weigh against a finding that would trigger the prohibition. The MEU makes this submission in reliance on the beneficial nature of the legislation and the statutory intent to ensuring that a regulated employee is not paid less than their counterparts directly employed by the regulated host. In respect of the latter, they refer to paragraphs [75] to [77] of the Revised Explanatory Memorandum to the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023.[61] I also consider the submission that a substantial pay differential weighs against a finding that it would not be fair and reasonable to make the order to be consistent with the Full Bench's decision in Bengalla.[62]

[76] WorkPac made the submissions I have referred to above as to the history of industrial arrangements applying to it. Mr Hockaday gave evidence that in the coal mining industry, WorkPac has been a party to the following workplace and enterprise agreements:[63]

(a) the WorkPac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007;

(b) the WorkPac Pty Ltd National Enterprise Workplace Agreement 2009;

(d) the agreement I have referred to in this decision as the WorkPac Enterprise Agreement.

[77] Mr Hockaday's evidence was that the MEU and its predecessors had been bargaining representatives for the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 and the current enterprise agreement, and had sought to be covered by those instruments. He gave evidence that the MEU had a significant influence through negotiations for and on behalf of its membership who were WorkPac employees covered by those agreements.[64] Maules Creek Coal did not put on evidence about the history of its industrial arrangements. Self-evidently it would previously have been covered by either the Award or earlier enterprise agreements compared with that same Award at the point of approval. The matters relevant to paragraph 306E(8)(c) in these proceedings do not weigh heavily against or for a finding that it would not be fair and reasonable to make the RLHA order.

[78] I now turn to WorkPac's submission regarding subsections 306E(8)(d), (e), and (f).

[79] As to paragraph 306E(8)(d), there is nothing before me to indicate that the regulated host and the employer are related bodies corporate or engaged in a joint venture or common enterprise. Having regard to the WorkPac Supply Agreement, the arrangement appears to be an ordinary commercial one. The matters relevant to paragraph 306E(8)(d) in these proceedings do not weigh heavily against or for a finding that it would not be fair and reasonable to make the RLHA order.

[80] The MEU submits that the reference to 'the terms and nature of the arrangement under which the work will be performed' in sub-paragraph 306E(8)(e) is in the present proceedings a reference to the arrangement between Maules Creek Coal and WorkPac.[65] That construction is consistent with the drafting in sub-paragraphs (ii) and (iv). As to paragraph (e):

(i) The WorkPac Supply Agreement was signed on 24 August 2021 and is presently set to expire on 31 December 2025.[66]

(ii) The location of the work to be performed under the arrangement is, relevantly, the Mine.

(iii) Both the regulated host and the employer operate in, relevantly, the Black Coal Mining Industry.

(iv) The number of employees performing the work is subject to the confidentiality order so I will not state it here. WorkPac supplies a not insubstantial number of employees to perform work for Maules Creek Coal at the Mine.

[81] The matters relevant to paragraph 306E(8)(e) in these proceedings tend to weigh against a finding that it would not be fair and reasonable to make the RLHA order.

[82] I will now turn to consider paragraph 306E(8)(f). I accept that the impacts on WorkPac, its employees who work at the Mine, and its other employees, may be relevant to the assessment of whether it would not be fair and reasonable to make the RLHA order.

[83] WorkPac made submissions about the effect of the RLHA order, if made, on its provisions for leave liabilities. In Bengalla, the Bench observed that 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.[67] Leave liabilities must be carried on Maules Creek Coal's balance sheet. This has consequences for the entity's equity position. I do not take the Full Bench in Bengalla as saying otherwise. In Bengalla, the Full Bench stated that 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.[68] I accept that if pay rates increase, that will have financial implications for the labour hire employers, in relation to both expenses and liabilities. This is true of every RLHA order that increases pay rates for labour hire employees. The fact and extent of financial implications will be a matter for evidence, will form part of the interests to be balanced in assessing whether it would not be fair and reasonable to make the RLHA order in all of the circumstances having regard to the matters in subsection 306E(8) of the Fair Work Act.

[84] In this case WorkPac properly conceded that it had a relatively small number of permanent employees at the Mine so this RLHA order, if made, would not have a material impact. It refers, though, to the cumulative effect of various applications for RLHA orders, in respect of various labour hire arrangements and sites. Thus I am asked to consider the cumulative impact of possible orders on WorkPac's leave liabilities. I accept this may be relevant, given the breadth of the term "all the circumstances," but I do not consider I should give significant weight to this consideration. Even if all of WorkPac's business was at the Mine, I do not consider the increase in leave liabilities would weigh heavily in favour of a finding that it is not fair and reasonable to make the order, given that the purpose of Part 2-7A is to increase rates of pay to a protected rate of pay, which will necessarily affect leave liabilities, at least where permanent employees are engaged.

[85] WorkPac also raised issues more generally about the commercial impact of an unanticipated increase to pay rates. It submitted:

The [WorkPac Supply Agreement] was made against a commercial context that did not include the prospect of an RLHA order.

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 RLHA order, the additional cost will have a significant impact on WorkPac's operations.

Many arrangements may become wholly unviable and WorkPac would need to consider its options to respond to those challenges, which may include terminating commercially unsustainable arrangements.

Even if WorkPac is able to obtain relief that defrayed or ameliorated the direct and immediate costs occasioned by the making of an RLHA order, there remains a prospect that the making of an RLHA 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.

[86] The MEU submitted that Mr Hockaday's evidence showed that WorkPac was profitable. They also suggested that paying higher rates may assist WorkPac in attracting new employees.[69]

[87] I accept that the commercial impacts on WorkPac can be considered, as they are relevant to the questions of fairness to WorkPac, and to WorkPac's employees who are supplied to perform work for Maules Creek Coal at the Mine.[70] I consider that the question of whether higher rates might assist with attraction and recruitment is a matter for WorkPac and does not influence my assessment of fairness and reasonableness. I otherwise have taken the impacts on WorkPac into account.

[88] Regardless of whether the costs were borne by WorkPac, passed through to Maules Creek Coal, or shared, I accept that if pay rates increase, it follows that unit labour costs will increase for at least one of them. Schedule 4 to the WorkPac Supply Agreement allows for pricing changes in the event of changes in Legislative Requirements, a term that is defined in that agreement to include, inter alia, orders and awards of the Commonwealth. WorkPac submitted there may be uncertainty as to the effect of the Agreement in that regard, including whether the definition of "Legislative Requirements" would cover an RLHA order.

[89] Whatever the proper construction of the pass through provisions, it is at least clear that the parties to the WorkPac Supply Agreement have turned their minds to the allocation of risk and costs, as between the two of them, in the event of change in legislative requirements.

[90] I accept that in the event an RLHA order is made, parties may seek to assert their legal rights, including the rights that exist in contract. I also accept that both entities will make commercial decisions in the event an RLHA order is made.

[91] WorkPac submitted that any deleterious impacts on its revenue, as a result of an RLHA order, would "inevitably have consequential flow-on impacts across the whole of WorkPac's business." It submitted the making of the RLHA 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. Relying on Mr Hockaday's evidence, it said that its contribution includes:

(a) Providing pathways for female and Indigenous employees;

(b) 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;

(d) Providing flexibility to WorkPac's employees to move between clients and sites.

[92] I accept that WorkPac (and its broader corporate group) provides a diverse range of services, and also that it provides employment and training opportunities for current and prospective employees beyond those who would be covered by the RLHA order if made. I also accept that its work likely benefits the labour market more broadly, across different sectors. I consider these matters to be relevant to the issues of fairness to and between employers, and fairness to and between employees. These are not the only relevant considerations.

[93] If the RLHA order is made, some people will benefit. Others would benefit more if the order was not made. The question is the fairness of the distribution of the benefits. As WorkPac's submissions imply, the employees of both the regulated host and WorkPac who are working at the Mine are not the only employees whose interests may be affected. This is an illustration of why the task in subsection 306E must be a broad one.

[94] There is also the question of fairness as between employers and employees. Again, this raises a distributional question, as to the extent to which employees should be expected to receive a pay rate lower than the "protected rate", to avoid any reduction to the employer's revenue or increase to the regulated host's costs.

[95] WorkPac also makes a submission as to the objects of the Fair Work Act, arguing that the making of the RLHA order would undermine the Act's objects which include '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.' This does not give rise to a presumption against making an RLHA order.[71] WorkPac submitted that Parliament could have, but did not, modify that provision or add an object specific to the labour hire arrangements scheme. They argued the starting point should be that fairness is to be achieved predominantly by or through collective bargaining, and the Commission should, in general, be protective of the bargains which employers and employees make between themselves.[72] In Bengalla the Full Bench said:[73]

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 regulated host] 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.

[96] Referring to Mondelez Australia Pty Ltd v AMWU,[74] WorkPac submitted that evaluating fairness must be done in a balanced way taking into account various persons' interests.[75]

[97] It said that the weight to be given to WorkPac employees' preference to receive a payrise depended on the likely consequences of an RLHA order being made. While noting there was no evidence from Whitehaven, WorkPac submitted that employment numbers may change, and that one could not predict that it is inevitable that, if an order was made, its employees would enjoy those higher wages into perpetuity. This can be accepted. As I indicated above, I accept that both the regulated host and WorkPac will make commercial decisions, including commercial decisions that respond to or take into account any changes in pay rates or labour-hire charge-out rates. I add that WorkPac's employees are not the only employees whose interests are to be considered.[76]

[98] WorkPac also referred to the submissions described above, in relation to the effects of any RLHA order on WorkPac, and added that it faced the real possibility that it would be held to the WorkPac Supply Agreement, which it said was negotiated at a time when these orders were not within contemplation. WorkPac said it would therefore be held to a loss-making arrangement at least until the expiry in December this year.[77] I have taken this into account.

[99] Having considered the matters in subsection 306E(8), the evidence, and the parties' submissions, I am not satisfied that it is not fair and reasonable in all the circumstances to make the RLHA order in relation to WorkPac.

Whether it is not fair and reasonable to make an order to apply to Skilled

[100] Skilled relied on a passage regarding fairness from a judgment of a majority of the High Court of Australia, Mondelez Australia Pty Ltd v AMWU.[78] It had made a corresponding submission in Bengalla, and I will adopt the Full Bench's approach in that regard.

[101] As to fairness to employees, Skilled accepts the RLHA order if made would mean its employees would have a higher rate of pay. It submits, though, that if employees perceive that the current rates of pay are unfair to them, that unfairness in this regard "is already moderated and accounted for by the enterprise bargaining mechanisms" contained in Part 2-4 of the Fair Work Act.

[102] Skilled submitted it would be unfair and unreasonable to make the RLHA order considering the position between employees. It submitted its employees had negotiated the Skilled Enterprise 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." It submitted that the Maules Creek Coal Enterprise Agreement had been negotiated by Maules Creek Coal and that entity's employees against a different backdrop of work, skills and productivity exchanges. It submitted it would be unfair to Maules Creek Coal employees for Skilled employees to be remunerated on the same basis as them.[79]

[103] Skilled made submissions as to why making the RLHA order would be unfair and unreasonable to Skilled. It submitted that if the RLHA order was made, the fruit of its labour hire contract is taken away, as profit that has been earned to date is absorbed by the increased leave balances. It submitted there is no capacity in the PSW Supply Agreement to recover this amount. It submitted that under the terms of the PSW Supply Agreement it had no rights to terminate and at the very least it was unclear whether they would have any rights to pass through any additional costs incurred because of the operation of an RLHA order.

[104] In addition, it submitted that the Fair Work Act had conferred an entitlement on Skilled to negotiate an enterprise agreement with its employees. It had done so, and the Skilled Enterprise Agreement had been made. Skilled had negotiated that enterprise agreement at a point in time where the operation of Part 2-7A was not a prospect. It submitted that the Fair Work Act presently confers an entitlement to apply the Skilled Enterprise Agreement to its workforce. It says the RLHA order if made would overturn the negotiation and the productivity exchange underpinning it, and would displace the enterprise agreement's most important terms, those relating to the rates of pay. It says the product of bargaining between Maules Creek Coal, and employees of Maules Creek Coal, reflects the circumstances of a different industrial relationship, and does not reflect Skilled's bargain nor the make-up of its workforce.

[105] As to fairness and reasonableness between employers, and between employers and employees, Skilled submits that 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 RLHA order. It goes on to readily accept that this is a consequence of the legislative intent behind Part 2-7A but submits that does not render the unfairness irrelevant.

[106] To the extent that its submissions did not deal with the matters set out in subsection 306E(8), Skilled submitted those matters do not materially influence what is fair and reasonable in all of the circumstances in this proceeding. This confirms they do not make submissions in respect of the matters in subsection (8) beyond those referred to above.

[107] The MEU, in reply, made the primary submission that Skilled failed to make submissions to any matters in subsection 306E(8) and that the Commission should not consider Skilled's submissions as to any unfairness and unreasonableness of the RLHA order. I have not accepted this, and instead have decided to consider Skilled's submissions. In the alternative, the MEU made submissions addressing Skilled's submissions.

[108] I apply the same reasoning to this application as I did to the application in relation to WorkPac, with necessary modifications.

[109] Skilled made submissions as to the effect of an RLHA order on its leave liabilities. It indicated it had 72 production workers employed at the Mine on a permanent basis, and that provision had been made for their annual and personal leave accruals. It made a formal submission that the decision in Bengalla was wrongly decided in relation to whether personal leave is not paid out on termination, in reference to the Skilled Enterprise Agreement. It accepted that I was bound by the decision in Bengalla. I need not repeat what I have said, above, in relation to this issue. I take the same general approach, consistent with the decision in Bengalla.

[110] As was the case in Bengalla, there was no evidence that any employee of Maules Creek Coal considered it would be unfair if Skilled employees were to become entitled to be remunerated on the same basis as them. I also do not accept it would be objectively unfair for the employees of the two entities to be paid the same given the uncontested facts as to the nature of the work, and the nature of its performance, that I have set out at the beginning of this decision. I adopt, but do not repeat, the approach of the Full Bench in Bengalla.[80]

[111] As to the question of whether any higher pay rates can be passed through to Maules Creek Coal or Whitehaven under the PSW Supply Agreement, the MEU made submissions as to the effect of clause 39 of that agreement, which goes to change in law. The PSW Supply Agreement reveals on its face that its parties have turned their minds to the allocation of costs and risks in the event of change in law (which self-evidently would include an unforeseen change in law). I again need not repeat what I have said above.

[112] As to the question of how Part 2-7A interacts with the collective bargaining and enterprise agreement provisions of the Fair Work Act, and the submissions as to unfairness being occasioned to Skilled if new rates are imposed on it in circumstances where it has an existing enterprise agreement, I again need not repeat what I said above.

[113] Having considered the matters in subsection 306E(8), the evidence, and the parties' submissions, I am not satisfied that it is not fair and reasonable in all the circumstances to make the RLHA order in relation to Skilled.

[114] In its written outline Skilled submitted that making a regulated labour hire arrangement order would result in the Act operating to acquire Skilled's property otherwise than on just terms. Skilled submitted that as a result and by operation of section 39 of the Fair Work Act, the MEU's application must be dismissed.[81] The MEU made submissions in reply, contradicting Skilled's submissions.[82]

[115] Skilled made the formal submission that the Full Bench in Bengalla erred in relation to section 39 of the Fair Work Act. Skilled also submitted, and I accept, that I am bound to apply the reasoning in paragraphs [43] to [71] of Bengalla. Accordingly, I find that section 39 of the Fair Work Act does not affect the Commission's jurisdiction in this matter, and does not otherwise provide a reason not to make an RLHA order.

[116] WorkPac submitted that the RLHA order, if made, could conceivably take effect after the expiry of the WorkPac Supply Agreement in December this year. WorkPac did not urge this course of action on the Commission. In circumstances where I have not found that it would not be fair and reasonable to make the RLHA order I do not consider the commencement of the order should be delayed to that extent.

[117] In its written outline Skilled submitted that:[83]

the RLHA order should relate only to work of the kind that is (or would be) subject to the Maules Creek Coal Enterprise Agreement if it were performed by a production employee covered by that instrument;

the RLHA order should bind only those employees who perform production work, consistent with the terms of the application and the evidence led by the MEU;

the RLHA order should not apply prospectively to any services (as opposed to labour) that Skilled might supply to Whitehaven in the future.

[118] The MEU made submissions as to the application of Application by Mining and Energy Union re Boggabri Mine[84] ("Boggabri"), submitting that adding words of limitation would confuse rather than clarify coverage, and introduce uncertainty. It submitted also that it would not be appropriate to frame the form of an RLHA order by reference to a 'speculative possibility,' and that any future uncertainty in relation to the coverage of the order can be dealt with by an application to the Commission to vary the order. It submitted the form of order it had proposed was compliant with subsection 306E(9) of the Fair Work Act.

[119] The MEU drew my attention to the decision in Mining and Energy Union,[85] in which Skilled had made similar submissions as to the terms of any orders, and in which the Commission had considered the effect of Boggabri. With respect I agree with Deputy President Slevin's reasoning in that decision.

[120] Skilled made formal submissions as to the decision and order in Bengalla, as to whether the order ought to have specified the workers covered by reference to the MEU's evidence, as well as in relation to the exclusions it had sought, but properly conceded that I am bound to follow that decision.

[121] Skilled submitted that the RLHA order should be limited to employees who perform haul truck driving work, because that was what the evidence disclosed. It submitted that if the Commission considered the evidence had disclosed production work, the exclusion should be the exclusion relating to production workers it had proposed in Bengalla, a copy of which was before me in Skilled's bundle of authorities.

[122] The MEU also submitted that Skilled's submission that any RLHA order should bind only those employees who perform production work was without merit, and that the outer limits of the proposed RLHA orders are set by the scope of the host employment instrument.[86] At hearing the MEU drew the Commission's attention to Schedule 2 to the PSW Supply Agreement which indicated that Skilled would supply, on an as-needed basis, the following types of labour hire:

Experienced Truck Operator (Maules Creek);
Experienced Truck Operator (Other Sites);
Experienced Plant Operator;
Digger Operator;
In-Experienced Operator;
Fitter;
Leading Hand Maintenance Fitter;
Admin (Group B)
Admin (Group C)
Bus Driver (Grade 3)
Cleaner (CSE1)

[123] The MEU pointed out that Mr Hayman's evidence had referred to five operational centres of the workforce, namely Production, Maintenance, Drill and blast, Coal Handling and Preparation, and Pit Services/Mine Services, and had referred to equipment used for work that went beyond production work.[87]

[124] At hearing Skilled pointed out that Mr Hayman's statement at paragraph [26], had referred specifically to production work, and that the initiating application identified the work the subject of the proceedings as production work.

[125] Skilled also pressed for a carveout, as they had proposed in Bengalla, in relation to any employees employed by Skilled in the event that such employees performed work in respect of Skilled's provision of services to the regulated host in the future (within the meaning of subsection 306E(1A) of the Fair Work Act.

[126] The MEU submitted that PSW presently does not have any commercial arrangement in place to supply services to Maules Creek Coal other than labour hire services, and nor does PSW suggest it currently has any concrete plans to provide services to Maules Creek Coal other than as a labour hire provider.

[127] After having regard to the evidence, the coverage of the respective instruments, and the requirements of section 306E, I will follow and adopt the approach taken in Boggabri, and, since then, in Bengalla, with the terms of the RLHA order made in Bengalla adapted to the present proceedings. I apply the same reasoning with necessary modifications.

[128] For the reasons set out above, pursuant to section 306E of the Fair Work Act I am required to make a regulated labour hire arrangement orders in respect of each of WorkPac and Skilled, in matter numbers LH2024/20 and 22 respectively.

[129] I will publish the orders together with this decision, setting out the matters specified in subsection 306E(9).

[130] WorkPac requested that any order commence operation on a Monday to accommodate its payroll cycle, and Skilled made a corresponding request for commencement on a Sunday. They both sought a period of two weeks before the orders took effect to prepare for implementation.

Applications by the Mining and Energy Union re Maules Creek Coal Pty Ltd [2025] FWC 1499 (6 June 2025)

At a glance

Court

Decision date

Source

Judgment (288 paragraphs)

Applications by the Mining and Energy Union re Maules Creek Coal Pty Ltd [2025] FWC 1499 (6 June 2025)

Legislation Cited (1)

Cases Cited (1)