BHP Faces AU$1.3 Billion Wage Adjustment for Queensland Coal Miners

Mining giant BHP (ASX:BHP,NYSE:BHP,LSE:BHP) has been ordered to pay 2,200 of its Central Queensland coal miners an average of AU$30,000 more following a ruling from the Fair Work Commission (FWC).

The ruling stems from a case brought by the Mining and Energy Union and the Australian Manufacturing Workers’ Union against BHP. It was centered on 2024's Same Job, Same Pay reforms.

The unions argue that BHP is underpaying workers at its Queensland coal operations by using an internal labor hire firm, OS Production and Maintenance. The case cites the Same Job, Same Pay legislation, which requires labor hire workers to receive equivalent pay and conditions as direct employees performing the same roles.

The FWC made the ruling on Monday (July 7), saying BHP must adjust each of its 2,200 workers at the Sarahi, Peak Downs and Goonyella Riverside coal mines’ wages with an additional AU$30,000.

The amount will align the workers’ wages with those of BHP’s direct employees performing the same roles, and could total to roughly AU$1.3 billion per year for the major mining company.

Several local and national labor groups commented on the decision, with the Australian Council of Trade Unions (ACTU) calling it a “winning wage justice for workers.”

“(This) stops labor hire workers (from) being treated as second class citizens,” said ACTU Secretary Sally McManus in a Monday release. “Wealthy mining companies like BHP have clawed money out of workers’ pay packets for many years when the income should be returned to workers, their families and the communities they support.”

She added that the ruling will have “a flow-on effect” throughout the mining industry and beyond, highlighting that the use of labor hire rorts to undercut wages is no longer lawful.

Meanwhile, the Mineral Council of Australia commented that the ruling is “incredibly disappointing.”

In a Monday statement, Minerals Council of Australia CEO Tania Constable said the decision will “directly threaten thousands of specialized contractors who play a vital role in mining operations across the country.”

She added, “(It) also confirms that instead of a ‘straight exclusion’ for service contractors, almost any service contractor could be captured by the legislation unless they can litigate their way out."

Constable also noted that the Australian mining industry supports 1.25 million jobs, adding that service contractors contribute essential expertise across a wide range of tasks.

BHP has not yet released a statement following the reports, but a spokesperson told NewsWire that it notes the ruling and is studying the decision; it will comply with any orders made.

“Clearly this will have implications for our business," the spokesperson said.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.