BHP Ordered to Pay Labour Hire Workers $30,000 More in Landmark Ruling

BHP has been ordered to pay 2,200 labour hire workers an average of $30,000 more due to a landmark labour hire ruling. The ruling requires labour hires to receive the same pay and conditions as full-time employees when doing the same work. If applied to all labour hires across its mines, the ruling could cost BHP around $1.3 billion a year. The Mining and Energy Union made the application to the Fair Work Commission, and BHP had argued for an exemption on the grounds that the workers were providing a service, not labour.

In a landmark decision, the Fair Work Commission has ruled that BHP must pay 2,200 labour hire workers an additional $30,000 annually due to the "same job, same pay" legislation. The ruling, which took effect on Monday, July 2, 2025, requires labour hire workers to receive the same pay and conditions as full-time employees performing the same work. This decision has significant implications for BHP and the broader mining industry.

The ruling covers 2200 workers at three of BHP's Queensland coal mines, with the Mining and Energy Union (MEU) making the application to the Fair Work Commission. BHP had argued that the workers were providing a service, not labour, and should be exempt from the new laws. However, the Commission disagreed, stating that BHP's subsidiary Operation Services was not an exempted service contractor.

The decision is expected to cost BHP around $66 million per year in wage increases for these workers. If applied to all labour hires across BHP's mines, the total annual cost could reach approximately $1.3 billion, according to estimates provided by BHP's former chief financial officer, David Lamont [1].

The ruling has sparked concern within the industry, with the Minerals Council of Australia (MCA) expressing deep concern over the precedent set by the Commission. The MCA argued that the legislation was designed to target only the "limited circumstances" where labour hire is used to deliberately undercut wages, and that the ruling goes beyond this scope [2].

The impact of the ruling is likely to extend beyond BHP, with the Commission's decision potentially leading to similar wage increases for labour hire workers across the mining industry. Employers may reassess their use of labour hire firms to ensure compliance with the new laws, which could have broader economic implications.

References:
[1] https://www.afr.com/work-and-careers/workplace/bhp-loses-66m-fight-over-labour-hire-laws-in-landmark-ruling-20250704-p5mclj
[2] https://thenightly.com.au/business/mining/workplace-umpire-rules-against-bhp-sending-shock-waves-through-industry-and-jeopardising-thousands-of-jobs--c-19278200