What is the problem with casuals in mining?
Over the past 10 years mining companies have replaced large parts of their permanent workforces with labour hire contractors. These workers in most cases do the same work on the same rosters as permanent employees, but on a casual basis with no paid leave or job security.
Instead of earning more to make up for the lack of entitlements, casual mineworkers usually earn at least a third less than permanents, even with their casual ‘loading’.
This is because labour hire companies – at the direction of mine owners – set pay rates at just above the Black Coal Industry Award minimum, and not the industry standards reflected in enterprise agreements covering permanent employees negotiated through collective bargaining.
Half or more of mineworkers at many mine sites are now casual. At a conservative estimate of 40 per cent casualisation in coal mining, mining regions are losing $1 billion a year in economic activity due to lower wages paid to labour hire casuals. (Download the Wage-cutting Strategies in the Mining Industry The cost to workers and communities report: here)
What did the Federal Court say?
CFMEU Mining and Energy has successfully challenged the unfair ‘permanent casual’ labour hire business model in the courts. The Federal Court has twice ruled it unlawful, affirming that work undertaken by coal miners Paul Skene and Robert Rossato was regular, on-going and subject to a roster set many months in advance. The work was not genuinely ‘casual’ and therefore should attract entitlements such as paid annual leave.
- WorkPac v Skene Paul Skene was a casual labour hire coal miner employed by WorkPac, working a typical 7/7 roster set 12 months in advance. He argued that his work arrangement did not fit the legal definition of a ‘casual’ and was therefore owed annual leave entitlements. In August 2018, a full bench of the Federal Court agreed, paving the way for other casual labour hire coal miners to also claim unpaid entitlements.
- WorkPac v Rossato Instead of appealing it to the High Court, WorkPac initiated a new case in the Federal Court, in the hope of undermining the Skene decision’s definition of casual as intermittent and irregular and reduce their potential financial liability for backpay claims. In May 2020 the full court rejected their arguments and found that like Paul Skene, Robert Rossato was also not a genuine casual and was also eligible for paid leave entitlements.
Employers claim they will face billions of dollars in backpay claims as a result of these decisions. This is a gross exaggeration. The decisions are highly relevant in coal mining and some other parts of the economy where the outsourced labour hire business model is prevalent. They are relevant to workers employed on regular, full-time hours on a flat hourly rate with a fixed roster extending well into the future.
WorkPac is appealing the Rossato decision to the High Court while employers call on the Federal Government to overturn it through legislation.
What does the IR Omnibus Bill do?
In December, Attorney-General Christian Porter introduced the Fair Work Amendment (Supporting Australia’s Economic Recovery) Bill 2020 (known as the IR Omnibus Bill).
The Bill proposes a definition of casual that goes against the WorkPac Federal Court judgments. The Government’s proposed definition means that if you sign a contract saying you’re a casual then you’re a casual – regardless of whether your work hours and commitments end up being permanent and on-going in nature.
By making this definition retrospective, the Bill would prevent legal claims for backpaid compensation stemming from our court wins.
The Bill says employers must offer permanent work after 12 months if there has been six months with a regular pattern - unless there are business grounds not to. With no provision for arbitration, that’s just lip service.
The IR Omnibus Bill passing Parliament in its current form would legalise the ‘permanent casual’ rort, not end it.
Read CFMEU Mining and Energy’s Senate Inquiry submission. https://me.cfmeu.org.au/sites/me.cfmeu.org.au/files/uploads/ME_Submission_FW%20BILL_050221.pdf