19 July 2024
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Did the CFMEU and the Fair Work Commission conspire to rob workers of their pay increase?

Peter Switzer
10 July 2024

The Australian’s legendary business journalist Robert Gottliebsen has always liked to uncover stories that ‘shock’ people lucky to have common sense. And today my radio 2GB colleague Ben Fordham (who’s again number one in the Sydney breakfast slot) asked me to cover this quite shocking offering from Gottliebsen.

And while it’s about the union CFMEU and mining companies allegedly doing deals to rob mine workers of their right pay, wage theft has become a big issue for all employers and employees. And it’s a shocking look when it appears that the labour market referee, the Fair Work Commission, acted like an accessory to these underpayments to miners!

This is complicated. If you’re a union junkie, union hater or industrial relations type, then check out Gottliebsen’s full story here: https://www.theaustralian.com.au/business/cfmeu-involved-in-deals-linked-to-australias-500m-work-theft-case/news-story/a31797092abbbe1aeb43554919dc5351

What got me in was Gottliebsen’s opening line: “The likely size of Australia’s largest “wage theft” case has exploded from $100m to $500m as a result of a dramatic Fair Work Commission order that highlighted the anomaly”.

Why? Let me try to make this as simple to comprehend as I can. Here goes:

  1. Historically, casual miners in Queensland and New South Wales mines were supposed to get a 25% casual entitlement in their pay.
  2. Inexplicably, Gottliebsen revealed that then the Fair Work Commission, approved a CFMEU backed wage deal that excluded miners from getting their 25% casual entitlement, by mining companies using labour hire firms.
  3. But recently it has reversed that ruling, so that casual miners are entitled to that 25% increase!
  4. This has pushed the affected miners’ pay up by $30,000 (but because of other recent wage law changes under the Albanese Government, “the total miner 2024-25 take home pay therefore rises a staggering $50,000 — more than 40%),” Gottliebsen explains.

Not afraid to point the finger of blame, Gottliebsen says: “Wage deals without the casual entitlement were approved and sometimes negotiated by the CFMEU. They were all approved by Fair Work.”

So how was this brought into the open?

Well, all this saw the light of day because of the black coal award, which makes it illegal for coal mining companies to hire casuals — their workers must be employees. So, to get around it, most coal companies contracted out their mining to five labour hire companies that used casuals but didn’t pay those casuals the 25% casual entitlement!

Now that Fair Work has reversed its ruling and casuals are entitled to the 25% pay increase, mining companies are bound to have an enormous backpay bill. And Gottliebsen tells us that “…five wage hire companies, many of which have large Japanese equity, face the potential of also being forced to repay part of the money”.

The story gets more intriguing because the union that’s accused of doing the wrong thing by casual workers was the CFMEU, which is a key funder of the ALP. This creates a political dilemma for the PM, who surprisingly has Peter Dutton and the Coalition breathing down his neck.

Some analysts think Albanese is thinking about an early election, especially as some economists are pressuring the RBA to raise rates. Clearly, if rates rose again, that would be bad for Labor and its re-election plans.

On the politics of all this, let’s see Gottliebsen’s take on the potential backpay to casual workers: “I would add that surely taxpayers won’t be required the pay the $500m. The most obvious people liable are the Mining and Energy union and/or the CFMEU and the five labour hire companies.”

If the Fair Work Commission had to pay this money, it couldn’t, as it has insufficient money! So, taxpayers will have foot the bill. And this would be a political problem for the Albanese government come election time.

 

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