Employer moves to slash labour hire pay in defiance of Labor
NEWCASTLE: Glencore is testing what could become a precedent in reversing the effects of the Albanese government’s landmark “same job, same pay” laws by seeking to automatically cut pay for labour hire workers by tens of thousands of dollars.
The mining giant has created new classifications that would only apply to labour hire at its Mangoola coal mine in NSW, in a proposed enterprise agreement that is set to go to a vote of the direct workforce at the end of the month.
If voted through, the lower-paying classifications would effectively wipe out the wage rises that labour hire workers secured through Labor’s laws last year because their pay is directly tied to the host company’s agreement.
The Mining and Energy Union said the labour hire workers would face pay cuts of up to $36,000 a year and it fears that other mining giants may introduce similar clauses if Glencore is successful.
MEU NSW northern district president Robin Williams said the proposed agreement would be the first attempt to reverse pay rises won under the “same job, same pay” laws.
“For decades, labour hire has been used across the mining industry to drive wages down and create a cheaper second-class workforce. ‘Same job same pay’ was meant to put an end to that practice,” he said.
“This proposal risks taking the industry backwards by reintroducing lower pay for the same work through a new structure.”
Many coal mine union agreements typically have only one rate of pay for all their direct workforce. The structure has meant labour hire workers in the industry have enjoyed massive pay increases off the back of orders that require them to be paid the same as the direct workforce.
Glencore, the biggest mining employer in the Hunter Valley, has previously introduced new pay tiers at other coal mines that have had the effect of freezing labour hire workers’ pay following the new laws.
But the Mangoola tiers, which would otherwise have no relevance for the existing direct workforce, are the first attempt to cut labour hire pay. Glencore is proposing similar clauses at other mines in the Hunter Valley.
Williams argued labour hire workers stood to lose income without having any say in the outcome. He urged the direct workforce to vote the EA down as approval “could influence bargaining across the region”.
“Once a lower rate exists on site, it becomes the reference point for new hires, and future agreements,” he said. “That is how wages get pushed down across an industry. Not overnight, but bit by bit.”
Glencore’s agreement offer for Mangoola, which will close in 2030, includes a 15 per cent pay rise over four years, starting with 4 per cent this year.
Glencore declined to respond to the union’s claims that the clause was designed to slash labour hire workers’ pay.
“We are not providing comment in advance of the upcoming vote,” a spokeswoman said.
However, in its fight against the same pay orders last year, the miner argued its single pay tier meant less-experienced labour hire would enjoy the same pay as its multi-skilled production workforce – “many of whom have spent their entire career mastering a range of mining equipment”.
Mangoola’s labour hire firm Workpac said the orders threatened to make many of its mining contracts “wholly unviable” and warned it may have to consider “terminating commercially unsustainable arrangements”.
The MEU’s orders have lifted labour hire wages by more than $150 million across the coal industry over the past two years. But the laws have also spread to other sectors such as airlines and logistics.
Employers recently told a statutory review into the laws that the exemption for service contractors needs to be strengthened to ward off meritless union claims encroaching on major LNG projects for the first time.
BHP is currently awaiting a High Court decision on an appeal case that will test the limits of the laws’ exemption.
Unions have fought back and urged the government to tighten the reforms to stop employer attempts to sidestep the regime.
As an example, in 2024, ahead of the laws coming into effect, Aldi introduced a new agreement clause for its distribution centre workers that meant labour hire would be paid less than its direct staff.
However, following a union challenge, the Fair Work Commission held the clause was not genuinely agreed to as Aldi had not sufficiently explained its impact to staff.
