Case Study: The BMA “Same Job, Same Pay” dispute and what it means for labour hire, contracting, and bargaining risk

summary

In July 2025, the Fair Work Commission made a landmark set of findings that required regulated labour hire arrangement orders to be made in relation to labour hire workers performing work at three Queensland coal operations run through the BMA structure.

For North Queensland IR and HR teams, the case is a practical roadmap for how the Commission will assess “service contractor” arguments, and what evidence will carry weight when a site is operationally integrated.

The core message is straightforward: if your operating model looks and feels like labour supply into the host’s business, you should assume pay parity exposure, and plan your contracting strategy, pricing, and employee relations accordingly.

Why this was one of 2025’s biggest Queensland IR disputes

The dispute was the first major, high-profile Queensland coal test of the “same job, same pay” labour hire framework.

Key headlines from public reporting included:

• About 2,200 labour hire workers were said to be impacted, with an average pay uplift reported as about $30,000.

• The Australian Resources and Energy Employer Association was quoted as saying the ruling could cost about $1.3 billion a year if applied across all labour hire in the relevant footprint.

• The host argued the relevant workers were providing a “service”, not labour, and was unsuccessful on that argument.

The dispute also matters because it sits in the middle of two ongoing North Queensland realities:

• A contractor-heavy resources workforce model.

• A tight labour market that makes pay equity claims highly combustible at the workplace level.

  
  

The case in brief

Who and where

The Commission’s decision concerned applications linked to operations in the Bowen Basin, including the Saraji Mine, Peak Downs Mine and Goonyella Riverside Mine.

The applications were pursued by the Mining and Energy Union and the Australian Manufacturing Workers' Union.

The dispute involved the host-side BHP entities (including BHP and related coal entities in the decision) and multiple labour hire / contracting arrangements, including WorkPac and Chandler Macleod.

The legal question that drove everything

The Commission’s job was not to “pick a preferred workforce model”. It was to apply the labour hire order framework, including:

• whether the work being performed was really an identifiable service, or instead the supply of labour into the host’s business (the “service vs labour supply” question), and

• whether the Commission should refrain from making an order because it was “not fair and reasonable” in all the circumstances.

  
  

The decision is a detailed illustration of what evidence actually moves those needles.

What the Commission decided (in plain language)

1) The “service contractor” argument did not carry the day

The Commission was satisfied the relevant arrangements did not amount to an identifiable, discrete service distinct from labour being supplied into the host’s operations, and said it was required to make orders as the statutory tests were met.

2) “Fair and reasonable” did not stop orders being made

For the labour hire firms that argued the orders should not be made because it was not fair and reasonable, the Commission was not persuaded. It noted (among other things) the context that workers were doing the same work, in the same crews, while receiving substantially lower remuneration because of the identity of their employer, and concluded it was required to make the orders.

3) Timing and implementation were part of the practical reality

The decision records that the parties sought an opportunity to be heard on timing, and indicated a proposed commitment to pay the protected rate from the date of the decision.

What evidence mattered most (and why IR teams should care)

This is the section HR and site leaders should read twice, because it maps directly onto how many large regional operations actually run.

High direction and control by the host

The Commission accepted evidence showing a high level of direction and control by the host through operational systems and remote oversight, which reduced the force of the argument that supervisors employed by the contractor were delivering a standalone service.

Cross-deployment and practical integration

Even where crews were usually kept separate, the decision notes that cross-deployment and being directed to work with host employees (even on limited occasions) supported the characterisation of labour supply.

Rosters and fatigue frameworks

The Commission considered rostering differences, while also noting evidence that rosters sat inside broader site safety and fatigue management frameworks.

Practical takeaway: if your host business sets the “operating system” (production controls, safety systems, fatigue parameters, embedded procedures, task direction), a “we’re a service provider” label will not do much work on its own.

The North Queensland lens: why this decision travels beyond coal

Even if you do not operate in coal, the risk pattern is recognisable across North Queensland industries:

• Ports and logistics: stevedoring, maintenance, security, and specialist plant operators often work inside the port’s operating system (permits, procedures, shift rules, safety governance).

• Sugar and regional manufacturing: maintenance shutdowns and seasonal spikes frequently rely on labour hire and embedded contractors.

• Tourism and facilities services: cleaning, security, and outsourced labour can become operationally integrated quickly, especially where rostering and supervision sit with the host.

  
  

The key is not the industry label. The key is the degree of operational integration, and whether the labour hire employees are effectively performing work as part of the host’s business.

Data snapshot (labour market + workforce structure)

These data points help explain why labour hire parity disputes gained traction in 2025: the workforce mix and the labour market settings make “same work, different pay” a high-voltage issue.

1) Contractor-heavy workforce in the Bowen Basin

QGSO estimates show that in June 2024 almost 6 in 10 Bowen Basin resource industry workers were contractors (27,815 or 59%), with employees at 19,340 (41%).

2) Significant non-resident workforce

QGSO also reported a Bowen Basin non-resident population (workers on shift) of 23,825 in June 2024, up 1,600 from June 2023, and the highest since June 2012. (For charting purposes below, the June 2023 point is an estimate calculated from that reported change: 23,825 minus 1,600 equals approximately 22,225.)

3) Industrial disputes activity increased through 2025

ABS industrial disputes data shows a sharp lift in the September quarter 2025 (87 disputes, 41,800 employees involved, 55,100 working days lost), up from the June quarter 2025 (44 disputes, 15,900 employees, 28,500 days lost).

4) Mining earnings remain a major anchor point in bargaining expectations

Jobs and Skills Australia reports median weekly earnings in Mining of $2,832, compared with an all-industries median of $1,741.

5) Labour demand is still elevated (even as it cools)

ABS reported total job vacancies of 326,700 in November 2025 (seasonally adjusted), with vacancies down 31% from the May 2022 peak but still historically high.

The compliance framework (the part managers often miss)

The labour hire pay parity concept is not optional when a regulated labour hire arrangement order applies. Under protected pay rate settings, a labour hire employee cannot be paid less than what they would receive if working directly for the host, based on the host’s relevant workplace instrument.

There is also a clear “when did this start” timeline:

• New labour hire order rules commenced from 15 December 2023, and orders made under the regime could not take effect before 1 November 2024.

Lessons learned for North Queensland employers

1) Treat “service vs labour” as an evidence question, not a contract label

If the host controls systems, pace, tasking, safety governance, and performance oversight, assume the arrangement will be scrutinised as labour supply unless the service is genuinely discrete and outcomes-based.

2) Map integration points before the dispute arrives

Do a site-based mapping exercise:

• who directs work day-to-day

• who controls the “operating system” (procedures, safety, fatigue, production systems)

• how mixed crews really operate in practice

• whether labour hire workers “slot into” existing teams.

This is exactly the factual terrain the Commission examines.

3) Align commercial contracts to IR risk

If your labour hire pricing and margin model cannot absorb a protected pay rate shift, you need:

• a clear repricing mechanism

• change-in-law clauses

• data-sharing and classification mapping obligations

• an operational plan for rapid implementation.

The decision’s discussion of commercial arrangements and the “fair and reasonable” arguments highlights how quickly the business risk becomes real.

4) Plan for payroll and classification translation

“Same pay” is not just base rate:

• allowances

• penalties

• overtime rules

• higher duties and classification progression

• site-specific entitlements.

Sites that cannot translate classifications cleanly are the ones that stumble in implementation.

5) Bargaining strategy needs to anticipate the parity narrative

Once parity becomes a live issue, traditional wage-only bargaining strategies often fail. Your strategy should address:

• workforce structure (permanent vs labour hire mix)

• conversion pathways

• training pipelines

• rostering and fatigue governance

• communication and consultation approach.

  
  

6) Do not underestimate the retention effect

Where mining wages materially outpace other sectors, parity issues quickly become retention issues, especially in regional labour markets.

7) Expect flow-on claims across the supply chain

Once one large host is required to move to protected rates, nearby operators often see:

• “me too” applications

• renewed scrutiny of contractor models

• higher bargaining expectations.

  
  

Practical checklist: “Are we exposed?”

Use this as an internal review tool.

1. Do labour hire workers use the host’s systems, procedures, and equipment as if they are part of the host workforce?

2. Who sets daily task priorities and production targets?

3. Who has the practical ability to remove a worker from a task, crew, or site?

4. Are crews ever mixed, cross-resourced, or reallocated at short notice?

5. Are rosters set independently, or constrained by host fatigue frameworks and site rules?

6. Do we have a clear mapping between host classifications and labour hire classifications?

7. Are the host and labour hire employer covered by different enterprise agreements, and does that create a visible pay gap?

8. Do our contracts allow fast repricing if protected pay rates are triggered?

9. Is our payroll ready to implement host-based allowances and penalties correctly?

10. Do we have a communications plan for workforce questions and union engagement?