Take 2: What the Alp’s Agenda may mean for WA’s mining sector this time

Three years ago, before the last Federal election, we published an article about what the ALP’s agenda, which was lengthy, detailed and ambitious, might mean for WA’s mining sector. Of course, the coalition were ultimately successful at retaining government, and so we never got to see this agenda enacted. As a result, other than in relation to significant changes regarding casuals (as part of the Omnibus that didn’t quite leave the station), the current term of parliament only saw relatively incremental legislative changes in the employment and industrial relations space.

WA’s Mining sector: From strength to strength

Since the last election, we have gone through a period of tumult and disruption, which included a global pandemic and the attendant economic upheaval and government restrictions on freedom of movement not seen in many of our lifetimes. Despite these challenges, WA’s mining section has continued to be the engine room of WA’s, and Australia’s, economy: Minerals and petroleum sales reached record highs (they grew by $38 billion to $210 billion from 2019-20 to 2020-21), there was strong job growth (from 135,000 jobs in 2019-20 to 149,400 in 2020-21) and almost $21 billion was invested in the sector, largely due to significant exploration and project development activity (almost $21 billion was invested into the sector in 2020-21, a five-year high, up from $19 billion in 2019-20).

In the mining sector, much of this success has been on the back of significant ongoing investments by Rio Tinto (Koodaideri), BHP (South Flank) and Fortescue Metals Group (FMG) in large-scale iron ore production sustaining projects, with investment in lithium projects coming in a distant, but still significant, second (most notably Covalent Lithium’s Mt Holland lithium project and the expansion of Talison Lithium’s Greenbushes lithium project). There continues to be a strong pipeline of noteworthy projects that have been announced, including BHP’s Western Ridge iron ore project, Newcrest Mining’s Telfer West Dome Stage 5 gold project, King River Resources Limited’s Kwinana high purity alumina plant, and Talison Lithum’s Greenbushes tailings retreatment plant.

Given these large-scale investments, and particularly in light of the uncertainties and supply-chain and labour-availability issues driven by the COVID-19 pandemic, reliability and flexibility in all aspects of a mining operation and its supply chain is as essential as ever in the continuous operations of our large WA miners, and therefore in the continued growth and strength of the sector as a whole.

What is on the agenda this election?

This time around, the ALP’s IR agenda is somewhat more circumspect and opaque, which reflects the “small target” strategy some were calling for after the detail and complexity of their previous agenda failed to win over key parts of the electorate. Gone are (most) references to sweeping policy and legislative changes, and to the union-movement’s IR wish list (the ‘Change the Rules’ campaign). Nevertheless, the issues outlined in our previous article are still likely to be high on the agenda of an Albanese-led Federal ALP government, with engagement arrangements (labour hire, casuals, use of contractors) still being an area of close scrutiny, particularly in light of various High Court decisions that have been characterised by some as moving the needle in favour of employers in relation to these issues.

In this article, we focus on three changes announced or adopted by the ALP, in the context of the key characteristics of the mining industry, and consider what impact they might have on the sector.

A return to compulsory arbitration

The ALP proposes to ensure all employees, employers and unions have access to assistance from the FWC to resolve modern award, NES, EA and other disputes by arbitration where disputes cannot be resolved through discussion, conciliation or mediation. Labor have indicated they will legislate to provide parties with access to arbitration of disputes, potentially by mandating that the dispute settlement clause in any EA must provide a compulsory power to the FWC to arbitrate any disputes.

Dispute resolution clauses in enterprise agreements that allow compulsory arbitration by the FWC, a regular feature of mining industry agreements in other jurisdictions, are less common in WA’s mining industry. Direct relationships with employees typically see disputes resolved at the workplace level. If universal compulsory arbitration were to be available, it is possible that parties will be less likely to focus on collaborative problem solving, in favour of seeking the intervention of the tribunal – which largely restricts the outcomes to win/lose. It would also open the door for the FWC to make ‘interim orders’ that alter the status quo and put at risk continuous processing while the dispute resolution process is followed.

These changes will also allow unions and the FWC to be more interventionist when it comes to proposed changes aimed at increasing productivity, for example the implementation of autonomous mining techniques, changing rosters or making other changes to working arrangements. As the past 24 months have shown us all, the ability to be flexible and nimble to make changes in real time in response to external events is critical to continued operations and growth, and any fetter on this flexibility is likely to operate as a handbrake to WA’s mining sector.

Legislative responses to ‘unpopular’ decisions

As alluded to already, there have been a number of significant Court decisions during the last term of Parliament which have been unpopular with the ALP and union movement, particularly in relation to casuals (Workpac v Rossato [2021] HCA 23), independent contractors (CFMMEU v Personnel Contracting [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2), redundancy pay (CEPU v Delta FM Australia Pty Ltd [2021] FCAFC 107) and NES leave entitlements (Mondelez Australia Pty Ltd v AMWU [2020] HCA 29). After each of these decisions were handed down, the ACTU called for legislative intervention to unwind or overturn these decisions, which are calls we expect to grow stronger if the ALP is elected.

We have written extensively about all of these decisions, and so will not repeat our analysis of their implications here, other than to note that Courts have increasingly adopted an “orthodox” approach in relation to these issues, focussed on the contractual arrangements agreed between the parties at the commencement of the working relationship (our articles discussing these cases can be found using the following links: Workpac, Personnel Contracting and Jamsek, Delta FM, and Mondelez).

In relation to casuals, the ALP’s National Platform proposed to set an objective test in the FW Act for the determination of when an employee is a casual employee based on all the circumstances of the relationship, rather than simply at the time that the offer of employment is made. This announcement was made before the High Court’s decision in Workpac, and so it remains to be seen whether the ALP will re-enliven this call, but given the focus on ‘job security’, we expect that this will be high on the priority list. Any moves to amend the test for casual employment away from a strict focus on the terms of the employment contract will raise the risk of bringing back the significant uncertainty that employers faced following the Full Federal Court decision in Workpac, although hopefully without the potential for the huge backpay liability about which many large employers were so concerned.

In relation to the independent contracting cases, which have only been handed down very recently, it is unclear what (if anything) the ALP is planning to do. One potential response is for the ALP to strengthen the ‘sham contracting’ prohibitions in the Fair Work Act to expressly provide for Courts to look at the totality of the working relationship (rather than just the original contract) in order to determine whether a particular arrangement is a ‘sham’. Another approach, which has been adopted by some transport unions in relation to ‘gig economy’ workers, has been to seek to have these workers brought within the umbrella of State IR laws. In any case, the High Court’s decision in Personnel Contracting certainly impacts on some independent contracting arrangements – those that adopt the so-called ‘Odco model’ of engaging independent contractors through a labour hire intermediary, which is a model that has been adopted by some in the mining sector.

Focus on ‘insecure’ work: multi-employer bargaining and labour hire

While the ALP’s National Platform refers to facilitating multi-employer bargaining, in November 2021, Jim Chalmers confirmed that multi-employer agreements are not part of Labor’s policies that it would take to this Federal election. Nevertheless, the ACTU continues to advocate for collective bargaining beyond the enterprise to include sectors, industries, supply chains and other groups of workers who have a community of interest, which would then facilitate the ability to hold industry wide strikes. This is seen as a key issue to reducing ‘insecure’ types of working arrangements.

If the ALP secures government, particularly if they obtain a majority in both Houses, they may start exploring ways to facilitate this process, potentially by focussing on the industries where the labour movement feels that large proponents and operators exert a great deal of influence and control over the workers engaged by other employers – the mining sector is a clear example of this, where unions are very keen for a mechanism that would allow them to negotiate directly with large operators in relation to all workers engaged in their operations.

Another angle to this issue is in relation to the ALP’s push for ‘same job, same pay’ protections for labour hire employees. In November 2021, the ALP introduced the Fair Work Amendment (Same Job, Same Pay) Bill 2021 which would have amended the Fair Work Act 2009 to ensure workers employed through a labour hire agency receive the same pay and conditions as those employed directly by a host-employer. While there were significant issues with the specific mechanisms under which this would be enacted and enforced, a bill with a similar philosophy at its core may come back on the agenda in the new Parliament. Recently we have also seen calls for a national labour hire licensing scheme (which was tentatively backed by the coalition in 2019), similar to those schemes which have been brought in in Queensland and Victoria.

Finally, the ALP has pledged to develop a national approach to the portability of employment entitlements, such as annual leave, sick leave and long service leave, for employees engaged in “insecure work”. Many employers will be familiar which these concepts, as every State and territory has some form of portable entitlements scheme (mostly limited to portable long service leave entitlements in the “construction industry”), and the significant administrative burden that they impose on businesses.

Other issues that might affect the sector

While not directly related to the ALP’s IR platform, there are three other major issues that are likely to have an impact on WA’s mining sector in the immediate future:

• Changing composition of the Fair Work Commission: Long-tenured and well-respected Perth-based Commission member, Commissioner Bruce Williams, will reach statutory retirement age in 2023. Given the already-busy workflows through the Perth Registry, and the ALP’s very public promises to “actively and deliberately return" the Commission bench to balance, we expect that an ALP-government would swiftly move to appoint a replacement for Commissioner Williams, likely with someone with a union or employee background. Commissioner Williams’ retirement will be part of a period of significant change for the Commission more broadly, with a number of other senior members (including President Ross, Deputy Presidents Hamilton and Bull and Commissioners Bissett and Cambridge) also due to reach retirement age in the next 12-24 months.
• Labour-market supply issues: With the world returning to some degree of normalcy (or, as some have euphemistically called it, ‘living with the virus’), we expect to see some of the labour-market supply issues that have plagued operators begin to ease in late 2022 and early 2023, as interstate and international sources of labour become accessible once again. However, in relation to overseas labour, the ALP has repeatedly foreshadowed bringing in additional, more stringent, requirements to ensure “genuine testing” of the Australian labour market before temporary overseas labour is engaged, which might dimmish the benefits of the world, and our borders, opening up.
• Respect@Work – We certainly anticipate that sexual assault and sexual harassment, particularly in the mining and resources industry, will continue to be a hot button issue that will attract the attention of the public, media, unions and governments at all levels. At the Federal level, the ALP has indicated that, if elected, they will impose a positive legislative duty on employers “to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation, as far as possible”.