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OPINION: Mining Depends on Flexibility and Choice in Employment

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Information provided at Senate Estimates on 16 February 2022 highlights the importance of flexibility and choice in employment and the likely cost of legislating to prescribing terms and conditions above awards.

During Senate Education and Employment Estimates hearings, the Attorney General referred to analysis by Deloitte Access Economics which showed that if mining companies were required to grant labour hire workers and service contractors the same pay and entitlements as direct employees:

  • Employment in coal mining would decline by approximately 2,300 full-time-equivalent jobs a year to 2031
  • Employment in minerals and other mining would fall by 4,900 jobs a year
  • Employment in mining-related construction would contract by 4,000 jobs a year.

Australian mining successfully employs a range of agreement options to drive productivity and incomes, with 99 per cent of mining workers earning above-award wages and conditions.

The industry pays the highest average wages ($143,000 a year) and the vast majority of mining workers are full-time (96 per cent) and permanent (88 per cent).

Mining companies tailor their employment arrangements to suit very different locations, ore bodies, production techniques, occupations and worker preferences.

Enterprise bargaining – as introduced and modified by Labor – replaced centralised wage fixation and industry-wide bargaining and enabled differential pay rates above award minima to be linked to productivity and performance.

This is why there is no requirement under the Fair Work Act for enterprise agreements to provide for a particular level of pay above the award safety net.

Under enterprise bargaining, mining employment has trebled over the past 20 years (from 81,400 to 256,800) and the industry has reached its target of creating 5,000 new apprenticeships.

Requiring labour hire workers and service contractors to receive the same above-award wages and entitlements as direct employees would reduce labour efficiency, discourage investment and ultimately cost jobs.

Policies that promote investment and productivity growth – including more practical and constructive workplace relations rules – will help the mining industry increase the number of secure, highly skilled, highly paid jobs in Australia and drive economic growth.

Tania Constable

CEO, Minerals Council of Australia

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