First Regulated Labour-Hire Arrangement - Fair Work Commission Decision

September 10, 2024

In a recent decision handed down on 1 July 2024 [2024] FWCFB 299, the Fair Work Commission issued its first regulated labour hire arrangement order (RLHAO) under section 306E of the Fair Work Act 2009. The labour-hire workers, employed by WorkPac P/L and WorkPac Mining P/L (collectively, WorkPac) are working at the black coal open cut mine - Callide Mine, operated by the host employer, Batchfire Callide Management P/L.

Facts considered:

WorkPac provides approximately 324 production workers as labour hire contractors to Batchfire Callide Management.
Both the host’s and WorkPac’s production workers are eligible to be members of the applicant union (the Mining and Energy Union ‘MEU’), with a significant number already being members.
The Full Bench considered that employees from both the host and WorkPac share common factors, such as attending the same meetings, receiving allocation, management, and training from the host, performing identical work, and wearing the same host uniform.

Section 306E Requirements:

The Full Bench considered the eight requirements of section 306E and found that:

The applicant union (MEU) was entitled to represent the employees of both the host and WorkPac, giving it standing to make the application.
WorkPac supplies employees to perform production work for the host, and if these workers were directly employed by the host, the relevant enterprise agreement would apply to them.
The host is not a small business employer.

The Full Bench also considered that the work performed by WorkPac employees for the host constitutes the supply of labour rather than the provision of a service. This conclusion was based on several factors:

WorkPac employees are involved exclusively in production work.
No WorkPac representative directs, supervises, or controls the contracted production employees.
WorkPac employees use the host’s systems and are subject to the same industry standards and obligations as the host’s workers.
The production work at the mine is not of a specialist nature.

The Full Bench was satisfied it was fair and reasonable to make the RLHAO, determining that from 1 November 2024, the wages and conditions of these labour hire workers would be no less than the ‘protected rate of pay’ of directly employed workers under the applicable enterprise agreement.

This decision to grant the order, marks a significant step in regulating labour hire arrangements of labour hire workers in Australia, and is the first decision of this kind under the Closing Loopholes legislation.

Importantly, it is noted that neither Workpac nor the Host employer Batchfire Callide Management P/L opposed the application.

We recommend that businesses employing labour-hire workers need to be aware of how the new provisions of the Fair Work Act could impact host employers of contingent labour.

To keep your business up to date on recent changes to Fair Work Legislation and important cases, or to upskill your team visit https://www.industrialrelationslearning.com.au or contact us on 1300 976 583 to discuss your learning needs.

Kind regards,
Susan Weston
Principal Trainer at Industrial Relations Learning