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Union campaign targets BHP Operations Services rip-off

September 17, 2019

CFMEU Mining and Energy is running a major advertising campaign to expose BHP’s sneaky new wage-cutting trick – outsourcing coal mining jobs to its own subsidiary.

At the same time, the Union is taking legal action against BHP over its introduction of a new cut-price workforce driving down industry pay and conditions.

CFMEU ads have been running in prime time nationally and in the NSW Hunter Valley and Central Queensland communities where BHP owns and operates coal mines, reaching hundreds of thousands of viewers on TV, catch-up TV and YouTube.

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In mid-2018, BHP created two $1 shelf companies to act as employing entities for a second-class labour hire workforce, essentially in-housing labour hire, under the name ‘Operations Services’.

Find out more about Operations Services at

The Union is challenging two non-union agreements in the Fair Work Commission, the Operations Services Maintenance Agreement 2018 and Operations Services Production Agreement 2018, contain pay rates of some $50,000 a year less than current BHP agreements for coal mines with no pay rise over their four-year term.

The Union also this month lodged a dispute in the Fair Work Commission over alleged breaches of the union-negotiated BMA Enterprise Agreement 2018 in relation to the deployment of Operations Services at Peak Downs and Saraji mines. The dispute has been raised on the grounds that permanent BHP workers haven’t been consulted or given an opportunity to develop their skills or take on the work being diverted to Operations Services teams.

Despite BHP promoting the popularity of Operations Services jobs, the CFMEU has become aware that they are struggling to fill and retain workers in Operations Services roles and have employed a number of people previously deemed unsuitable by BHP or other contractors.

The launch of the ads has generated significant media and public discussion about the latest employment strategy of BHP, which posted record shareholder dividends and a US$8.3 billion profit last month.

BHP CEO Andrew Mackenzie told an investor teleconference after the profit result announcement that the Operations Services strategy was designed to cut wages costs.

“There are labour cost pressures around … We have addressed this via our Operations Services model, where we are actually steadily converting a lot of our more permanently contracted workforce and some not so permanent to our own contracting organisation for the whole of Australia. We pay contract rates… Already we see … a 20% reduction in costs.”

General President Tony Maher said the Operations Services model was based on robbing workers to pay shareholders and executives.

“BHP shareholders are doing incredibly well out of Australia’s coal, so the bare minimum BHP could do is offer Australians decent mining jobs with proper site conditions,” he said.

“BHP have led the destructive casual outsourcing charge and now they’ve found an even trickier way to drive down wages by outsourcing jobs to themselves.

“Many of these Operation Services hires thought they were getting a proper job at BHP, because that’s the way it’s sold to them.

“Then they find out they’re earning 40 per cent less with worse conditions. It’s causing huge discord at coal mines. Unsurprisingly, turnover within Operation Services is also high, which is disruptive and bad for safety.”

The Union’s campaign against BHP’s Operations Services will continue.

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