Australia’s peak mining lobby has issued a warning over the future of contract services in the mining sector after the Fair Work Commission (FWC) ruled that diversified major BHP’s in-house labour hire arm falls under the scope of the government’s ‘Same Job, Same Pay’ laws.

The Minerals Council of Australia (MCA) labelled the decision “incredibly disappointing”, arguing it would entangle thousands of specialised service contractors in complex legal uncertainty, despite government assurances that only traditional labour hire arrangements were targeted by the reforms.

“This is an incredibly disappointing decision that will directly threaten thousands of specialised contractors who play a vital role in mining operations across the country,” said MCA CEO Tania Constable.

The FWC’s decision, handed down on Monday, confirmed that BHP Operations Services, which the miner established to provide in-house labour to its mining operations, was not exempt from new labour hire laws introduced last year. The legislation mandates that workers employed through labour hire firms receive the same pay and conditions as directly employed staff performing equivalent roles.

Constable warned the ruling effectively broadens the law’s reach to include not just labour hire firms, but also service contractors providing technical, operational and support functions to mines.

“These businesses exist to provide a specialised service, not just workers, and should never have been covered by these laws,” she said. “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.”

Introduced in 2024, the ‘Same Job, Same Pay’ laws were framed as a means to stop companies from using labour hire to undercut wages. However, the decision has sparked fears across industries reliant on subcontractors – from mining and construction to logistics – that the legal framework may unintentionally affect broader service arrangements.

The MCA argues the decision creates a chilling effect on investment and undermines operational flexibility, efficiency, and mining productivity. “These businesses now face the risk of being drawn into complex and costly legal proceedings,” Constable said.

The mining industry supports more than 1.25-million direct and indirect jobs nationally. Many operations depend on external contractors for everything from underground development to site catering and haulage.

The MCA has urged the federal government to correct what it calls an “unintended consequence” of the law, warning the precedent set by the FWC could erode the viability of contracting models that underpin many of Australia’s largest resource operations.

“It is now incumbent on the government to find a legislative fix,” Constable said, “to address the unintended consequence of all service contractors being captured.”