Whitehaven Coal has been accused of using a workplace loophole to wipe out $30 million in accrued entitlements from hundreds of senior managers at its recently purchased BHP mines in Queensland. The miner is invoking Fair Work Act provisions to exempt 300 supervisors at BHP’s Daunia and Blackwater coal mines from the industry award, effectively cancelling their accrued redundancy and termination payouts, which average $100,000 per worker.
The resources industry is closely watching the move, understood to be a first in respect to transferring entitlements during asset sales, and unions fear the tactic will become common as firms look for quick cost savings in the transition to net-zero. The Collieries’ Staff and Officials Association, a division of Professionals Australia, said workers had been blindsided by the changes after accepting assurances from BHP and Whitehaven that their wages and conditions would be “no less favourable”.
“With the stroke of a pen, BHP and Whitehaven have erased tens of millions of dollars in workers’ entitlements,” organiser Zac Gallagher said.
“Thanks to these Howard-era WorkChoices individual contracts, they can get away with this, unless this major loophole is closed.”
Whitehaven’s $6.4 billion purchase of the mine won’t be completed until April but last week it gave transferring workers seven days to sign the new contracts. The company is using deeds known as a “guarantee of annual earnings” that Labor included in the Fair Work Act to appease employers following the Rudd government’s scrapping of Australian Workplace Agreements, which operated outside awards.
The provision means employees earning more than the high-income threshold, currently $167,500 a year, can agree to be exempted from awards. The contracts maintain supervisors’ incomes but they exempt them from award conditions like accident pay, consultation rights, roster change notice periods and generous redundancy pay.
The contracts also mean workers will not be able to be paid out their accrued sick leave on retirement – an award entitlement that averages $96,000 – or their award redundancy pay, which in some cases totals 17 years’ worth of accrued entitlements. Instead, they will accrue entitlements in line with the National Employment Standards, which caps redundancy pay at 16 weeks’ pay.
If workers refuse to sign, they will not be able to receive redundancy pay from BHP because Whitehaven has offered them “comparable” positions.
‘No less favourable’
A Whitehaven spokesman said: “We stand by our commitment that every transferring employee will be offered employment with Whitehaven on terms that are no less favourable than their current terms.
“We have extended the period of time employees have to accept their offer and we will continue to work with employees and their union representatives to finalise this process.”
Mr Gallagher has raised concerns BHP has misled workers and is urging it to step in to ensure workers’ entitlements are not stripped away, pointing to the sale of South Walker Creek and Poitrel to Stanmore, where it did a deal to preserve award entitlements. A BHP spokesman said: “We are aware of the matters raised by the CSOA and will continue to work with Whitehaven, our people and their representatives to ensure a smooth handover.”
In an information pack circulated in early November, BHP told workers that Whitehaven was “incredibly impressed with the professionalism and expertise of employees displayed during site visits”.
“On that basis, Whitehaven will provide an offer of employment to each BHP employee directly supporting the sites on terms and conditions that are overall no less favourable,” it wrote.
Whitehaven management has told the union in response to its concerns that “whether the offer is substantially similar to and overall no less favourable is assessed globally, and a line by line comparison of entitlements is not required”. Mr Gallagher said the case was a test of what a just transition for coal miners looked like as asset sales increase in the move to net-zero.
“It’s bad for the workers and bad for the transition to net-zero if BHP and Whitehaven can get away with deals that dud workers,” he said.
The situation of the senior managers does not apply to the 2000 other BHP miners who have maintained their entitlements through enterprise agreements that transfer over.