BHP Coal Pty Ltd v Mining and Energy Union

BHP Coal Pty Ltd v Mining and Energy Union [2025] FCAFC 194 is a Full Federal Court case about the Fair Work Commission's power to make regulated labour hire arrangement orders under Part 2-7A of the Fair Work Act 2009 (Cth). The Court was dealing with a judicial review challenge to orders made in relation to workers supplied to three Queensland coal mines.

The available judgment text shows that the Court dismissed the application and held that no jurisdictional error had been established. It also made suppression and non-publication orders over specified confidential material for ten years.

This page is based on the publicly available judgment text currently accessible for the case. That text is truncated, so while the result and major issues are clear, some of the Court's detailed reasoning on each ground may not be fully visible. For that reason, this page remains at review status.

The commercial setting was a large mining operation in central Queensland. The three mines involved were Goonyella Riverside, Peak Downs and Saraji. They were operated by BM Alliance Coal Operations Pty Ltd as corporate manager and agent for the relevant joint venture. BHP Coal had a 50 per cent interest in that joint venture and was treated as the host employer for the Commission's decision.

Two related BHP group entities, OS Production and OS Maintenance, supplied workers to the mines under framework agreements. The unions, being the Mining and Energy Union and the AMWU, applied to the Fair Work Commission for regulated labour hire arrangement orders. In broad terms, the object of those orders is to entitle employees of labour hire providers to be paid at rates no less than would apply under industrial instruments, such as an enterprise agreement, that apply to the host employer.

The key fight before the Commission was not whether workers were being supplied to the mines. The real fight was whether the work they performed was for the provision of a service, rather than the supply of labour. That distinction mattered because section 306E(1A) says the Commission must not make an order unless it is satisfied that the performance of the work is not or will not be for the provision of a service, rather than the supply of labour.

BHP Coal and the OS entities argued that the arrangements were service arrangements. The Commission heard extensive evidence about mine operations, scheduling, site practices, policies, procedures, the interrelationship between the OS entities and BHP Coal, and the nature and extent of what the OS entities provided. It ultimately rejected the service characterisation and made six orders on 26 August 2025, after first deciding on 7 July 2025 that orders should be made. The orders came into force on 14 September 2025 and linked certain OS employees to the BMA Enterprise Agreement 2022.

BHP Coal and the OS entities then went to the Federal Court seeking judicial review. They asked for certiorari to quash the orders and mandamus directing the Full Bench to determine the applications according to law. Their case was that the Commission had misconstrued the legislation, asked itself the wrong question and mishandled the statutory factors.

The central legal issue was whether the Commission had made a jurisdictional error in applying section 306E(1A) of the Fair Work Act. The available judgment text shows that the applicants advanced three overlapping complaints.

First, they said the Commission applied the wrong test by asking whether the work was for the provision of an identifiable and discrete service distinct from the supply of labour. They argued that this imposed an extra requirement not found in the text of section 306E(1A) and risked leaving the service provision exception with little practical work to do.

Second, they said the Commission focused on characterising the performance of the work itself rather than identifying the objective for which the work was performed. On their argument, the Commission should have asked what additional substantial actions, activities or functions the OS entities provided in conjunction with the work performed by their employees.

Third, they said the Commission erred in dealing with the statutory matters in section 306E(7A), including involvement in planning, supervision, training and other operational features.

The Court therefore had to decide whether the Commission had misconstrued the section, misdirected its inquiry, or otherwise erred in a way that invalidated the orders.

The available judgment reproduces important parts of the Commission's reasoning. That is useful because it shows the practical framework the Commission applied when deciding whether the work was for the provision of a service rather than the supply of labour.

The Commission treated section 306E(1A) as a jurisdictional precondition. In other words, section 306E(1) could not operate unless the Commission was positively satisfied that the work was not or would not be for the provision of a service rather than the supply of labour.

The Commission said the word for in the statutory phrase required an examination of the purpose or object of the work of the regulated employees, or the function served by that work. It accepted that this inquiry was necessarily bound up with the arrangements between the labour hire employer and the host, including commercial and contractual arrangements, but it was not limited to the contract terms. The Commission also said the statutory factors in section 306E(7A) made clear that it had to consider the arrangements in practice.

The Commission then described the core question as whether the performance of work by the regulated employees was properly characterised as being for the provision of an identifiable and discrete service to the host which was distinct from the supply of the labour of the workers to work in or as part of the host's business. That language became a major target of the judicial review challenge.

The Commission also set out a broader summary of its approach. The available judgment records that the Commission considered the inquiry to be an evaluative one requiring all relevant matters to be taken into account, at least including the matters in section 306E(7A). It said the inquiry could not be reduced to asking whether the employer provided anything more than merely the supply of labour. It also said the focus had to remain on the performance of work by the regulated employees, even though the contractual arrangements and the nature of the employer's operations could be relevant in characterising the purpose or function of that work.

The clearest point from the available judgment is the outcome. The Full Court dismissed the application. It said it was not satisfied that the applicants had established the errors they asserted, and therefore the judicial review application should be dismissed.

That means the Court did not accept, on the material before it, that the Commission had fallen into jurisdictional error by using the wrong test, focusing on the wrong subject matter, or mishandling the statutory factors in a way that invalidated the orders.

The available text also confirms that the Court understood the applicants' arguments in some detail. It recorded their complaint that the Commission's references to an identifiable and discrete service distinct from labour imposed a wrong test. It also recorded their argument that the Commission should have asked what more, by way of additional substantial actions, activities or functions, the OS entities provided for the host's benefit. But the Court's orders and introductory reasons show that those arguments did not succeed.

Because the publicly accessible text is truncated, it does not set out the Court's full step-by-step reasoning on every ground all the way to the end. Even so, the result is clear: no jurisdictional error was established, the challenge failed, and the Commission's orders remained on foot.

For business readers, one of the most useful parts of the available judgment is the Commission's summary of the evidence it considered most significant. Those features show the kinds of facts that can influence whether an arrangement is characterised as service provision or labour supply.

First, the framework agreements and site work packages described what the OS entities were to provide as services, but the expected number of full-time equivalent employees required by BMA was central, and the price paid was overwhelmingly determined by the cost of employing those workers. That points toward labour supply rather than payment for a separate output.

Second, the OS entities had some involvement in planning and gave feedback, but the mine and maintenance plans were determined by BMA. Those plans set the timing, priority and nature of the work. That suggested the host remained in control of the operational agenda.

Third, OS supervisors had an important day-to-day role, but workers still had to perform work in accordance with detailed and highly prescriptive BMA requirements, including SOPs, SWIs and other policies and procedures. They were also subject to monitoring, intervention and direction through BMA systems including Minestar and Modular.

Fourth, the workers used plant, equipment and systems provided by BMA, and those were the same plant, equipment and systems used by BMA's own production and maintenance employees in operating the mines.

Fifth, while the work could be described as specialist or expert in a general sense, it was the same kind of specialised work performed by BHP Coal employees at the same mines. The Commission treated that as suggesting that, in substance, what was being provided was labour.

Finally, the Commission considered that many matters relied on by BHP and the OS entities to show service provision were also applicable to labour supplied at the mines by other labour hire providers. In the Commission's evaluative assessment, those similarities weighed in favour of labour supply rather than a distinct service.

This case should be read as a practical warning about substance over labels. A business may genuinely think it has outsourced a function or engaged a managed service provider, but if the provider's people are effectively working inside the host's business under the host's planning, systems and operational controls, the arrangement may still be characterised as labour supply for the purposes of the Fair Work Act regime.

That does not mean every outsourced arrangement is caught. The available judgment does not say that. What it does show is that the inquiry is evaluative and fact-heavy. Businesses should expect close attention to the real commercial and operational structure, not just the drafting of the agreement.

Host businesses should review whether they are buying a distinct output or mainly obtaining access to workers. If the provider's personnel are rostered into the host's operations, use the host's equipment, follow the host's procedures, and do the same work as the host's own employees, risk increases. Providers should also review whether their operating model matches their contract language. A contract that says service may carry limited weight if the day-to-day reality looks like labour supply.

This is especially important where the host is covered by an enterprise agreement and is not a small business employer, because those are part of the broader statutory setting for regulated labour hire arrangement orders.

The case also involved confidentiality issues. The applicants sought suppression and non-publication orders over information said to be commercially sensitive and previously subject to confidentiality orders in the Commission. The Full Court was satisfied those orders should be made.

The Court ordered that, for ten years from 19 December 2025, specified parts of the application book, evidence, submissions, an aide memoire and a document headed Annexure A be suppressed and subject to non-publication other than to the parties. For businesses, this is a reminder that even where a judicial review challenge fails, the Court may still protect genuinely sensitive commercial material where the statutory test for suppression is met.

This explainer is based on the Federal Court of Australia judgment in BHP Coal Pty Ltd v Mining and Energy Union [2025] FCAFC 194, dated 19 December 2025. The available text clearly records the parties, the statutory issue, the Commission's key reasoning, the dismissal of the judicial review application, and the suppression orders.

The available text is truncated before the end of the Court's full analysis. Because of that, this page does not claim to reproduce every part of the Court's reasoning on every ground. It is intended as general information for business readers and should not be relied on as legal advice for any specific labour hire, contracting or enterprise agreement issue.