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Labour hire rip-off is costing mining communities.



Over the past five to ten years, the mining industry has embraced the model of outsourcing permanent jobs and replacing them with casual labour hire workers.


Over the past five to ten years, the mining industry has embraced the model of outsourcing permanent jobs and replacing them with casual labour hire workers.

In NSW’s coalfields almost four in 10 coal miners are now employed as casuals through labour hire contractors.

Far from being a supplementary workforce to manage peaks and troughs in production, casualisation is a deliberate strategy of mining companies to drive down wages and conditions.

It is not just bad for the affected mineworkers, it also has a flow-on economic cost to those communities and regions that depend on mining wages – including the Hunter Valley, Illawarra and Central West in NSW.

Casual jobs in mining are not ‘casual’ in the sense most people understand the term. Most people would regard casual employment as a mode of engagement where there is no ongoing expectation of work. Work that is intermittent, unpredictable, irregular, you know – the opposite of permanent.

Yet casual labour hire mineworkers usually do exactly the same work on the same 12-month rosters as permanent employees - but with much lower wages than the people working alongside them and with no paid leave or job security.

Directly employed, permanent mineworkers on CFMEU-negotiated agreements typically earn in the range of $140,000 to $160,000 and with their unfriendly rosters, tough work environments and the big profits they generate for mine owners they are worth every cent.

Instead of earning more to make up for the lack of entitlements, casuals usually earn about 30-40% less than permanents. They are able to do so, because labour hire companies – at the direction of mine owners – set the rates at just above the Award minimum, whilst the rates under enterprise agreements that apply to permanent employees are often reflective of four or five generations of collective bargaining.

It is a state of affairs that has caused enormous division and disgruntlement among mineworkers. It is very rare for any new permanent jobs to be created in a coal mine. Labour hire jobs are usually the only way into the industry, with some mine owners dangling the prospect of a permanent job for a lucky few as a ‘reward’ for good behaviour – like not speaking up about safety concerns, for example.

Our Union has been fighting this business model in the courts for several years. In 2018, we had an important Federal Court win in the matter of our member Paul Skene, a Fly in Fly Out haul truck operator employed as a casual by labour hire company WorkPac in two Central Queensland coal mines over two and a half years.


When Paul Skene finished up with WorkPac he made a legal claim supported by our Union that sought a finding that he was not a casual but was in fact a permanent employee. The court agreed, finding that Paul could not properly be considered a casual under the Fair Work Act due to the regular and continuous nature of his work on a fixed roster. He was therefore entitled to receive accrued annual pay on termination of his employment.

The decision sent employer groups into a frenzy, with claims it would lead to an epidemic of ‘double-dipping’ by greedy casual workers across the workforce, claiming backpaid entitlements when they had already received a ‘casual loading’.

This is just plain wrong. In the Skene case the court found that there was no identifiable ‘casual loading’. But equally, from a real-world perspective, Paul Skene was paid far less than the permanent employees he worked side by side with, even taking into account his flat-rate of pay. In which universe is that double-dipping?

Rather than do anything to address dodgy work practices and the widespread exploitation of casuals, the Morrison Government has backed employers trying to overturn this decision in court.

Industrial Relations Minister Christian Porter recently flagged that if the Skene decision could not be beaten in court, he would introduce new legislation to prevent casuals from claiming entitlements.

We will keep fighting this business model in the courts – but we also need fairer workplace laws. It is a weakness in our current system that mining companies can use outsourcing strategies to bypass union-negotiated enterprise agreements with good pay and conditions won over many years and this must be addressed. We also need a proper definition of casual work in line with community expectations and we need ‘same job same pay’ laws to stop labour hire workers getting ripped off.

Communities that host mines have the right to expect well-paid jobs and shared economic benefits. Our Union is committed to fighting and beating the ‘permanent casual’ rort that has taken hold in the coal mining industry and is effectively taking money out of family pay packets and regional economies and funnelling it back into company profits.


Grahame Kelly is the General Secretary of the CFMEU Mining and Energy Division



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