Skilled Workforce Solutions (NSW) Pty Ltd v Mining and Energy Union

Skilled Workforce Solutions (NSW) Pty Ltd v Mining and Energy Union [2025] FCAFC 195 is a Full Federal Court judicial review decision about the new regulated labour hire arrangement order regime in Part 2-7A of the Fair Work Act 2009 (Cth). The case concerned two Fair Work Commission orders affecting labour supplied by Skilled Workforce Solutions to the Mt Arthur and Bengalla coal mines in New South Wales.

The Full Court held that jurisdictional error was established, quashed both orders and required the Fair Work Commission to hear and determine the applications again according to law. The decision is important because it shows that even where the statutory purpose of labour hire pay parity is accepted, the Commission still has to identify the covered employees and frame the order within the limits of the Act.

The commercial story starts with the Closing Loopholes reforms. In December 2023, new federal industrial legislation commenced and gave the Fair Work Commission power to make regulated labour hire arrangement orders. The purpose described in the judgment was to protect bargained wages in enterprise agreements from being undercut by labour hire workers who are paid less than those minimum rates.

Skilled Workforce Solutions supplied workers to two large open cut coal mines, Mt Arthur and Bengalla. At both sites, the supplied workers were employed by Skilled under a different enterprise agreement and were paid less than directly employed host workers covered by the host enterprise agreement. That made the new regime commercially significant for everyone involved: the labour hire provider, the host mine operators and the union.

At Mt Arthur, the arrangement had changed over time. The original services contract commenced on 1 November 2021 and initially operated as a managed services arrangement. Under that model, Skilled was essentially contracted to deliver haul truck services, while Mt Arthur provided the infrastructure, including haul trucks and site facilities. On 24 November 2023, the contract was amended. From then on, the arrangement operated as a more traditional labour hire contract, with Skilled providing labour to operate haul trucks, charged at an hourly rate, and Mt Arthur scheduling and managing the work, although Skilled still provided some front-line supervisors.

The amended contract described the purpose of the services as the provision of haul truck operators with adequate supervision and support to minimise haul truck downtime and optimise productivity. The evidence before the Commission was that Skilled supplied 12 fuel attendants, 109 haul operators classified as ML2s and 126 haul operators classified as ML3s to the Mt Arthur Mine.

At Bengalla, the supply contract was not said to be limited only to haul truck operation. Even so, the evidence still focused on a defined set of production-related workers supplied by Skilled. Those workers included trainees, mineworker level 3 employees predominantly operating haul trucks, bench hand workers assisting drill and blast operators, mineworker level 2 employees with transferable heavy equipment experience, and casual wash technicians.

The Mining and Energy Union applied for regulated labour hire arrangement orders in relation to both mines. In practical terms, the applications sought to trigger the statutory consequence that covered regulated employees must be paid no less than the protected rate of pay they would receive if the host instrument applied to their employment.

The judgment identifies three practical grounds of challenge, and they are worth understanding in plain language.

First was the Cohort Ground. This was raised in relation to the Mt Arthur order. The argument was that the Commission made an order covering a cohort of regulated employees that went beyond the evidence before it. In other words, the applicants said the Commission had only reached the required state of satisfaction under s 306E(1) about a narrower group of workers, but the order it made was broader than that group.

Second was the Specificity Ground. This was argued in relation to both orders. Section 306E(9)(c) says a regulated labour hire arrangement order must specify the regulated employees covered by the order. The applicants argued that this required the Commission to identify the covered employees in precise terms, or at least by reference to the work they performed as established by the evidence. They said the Commission instead defined the employees by reference to whether they would be covered by the host instrument if directly employed by the host, which was said to be too broad or insufficiently specific.

Third was the Uncertainty Ground. The applicants argued that the orders were uncertain and void. The extract does not set out the full detail of the Court's reasoning on uncertainty, but it does show that uncertainty was treated as a distinct ground and that the width and wording of the orders were central to the challenge.

The Full Court held that jurisdictional error was established. It ordered certiorari quashing the Mt Arthur regulated labour hire arrangement order made on 21 February 2025 and the Bengalla order made on 13 March 2025. It also ordered mandamus requiring the Fair Work Commission to hear and determine the relevant applications again according to law.

The extract makes clear that the Court's reasoning centred on the proper construction of s 306E and the scope of the orders the Commission had power to make. The catchwords and introductory reasons identify the key questions as whether the Commission could make an order in respect of all employees supplied by the labour hire employer when the state of satisfaction under s 306E(1)(a) had been reached only in relation to a limited cohort of regulated employees, whether the orders failed to specify the regulated employees under s 306E(9)(c), and whether the orders were otherwise uncertain.

For Mt Arthur, the Court noted that the order covered all employees of Skilled who performed work at the Mt Arthur North site and was not limited to only those employees presently being supplied to work at that mine. The judgment expressly says that this factual circumstance was at the centre of the dispute. For Bengalla, the dispute similarly centred on the width and scope of the order in light of the text and context of s 306E.

The Court did not reject the legislative purpose of protecting bargained wages from being undercut. Instead, it held that the Commission had to apply that purpose through the statutory conditions and drafting requirements Parliament had set. That is the key legal and commercial point of the case.

The case shows how much turns on the underlying documents and on what workers actually do on site. At Mt Arthur, the move from a managed services arrangement to a traditional labour hire contract was important because Part 2-7A distinguishes between the supply of labour and the provision of a service. Section 306E(1A) says the Commission must not make an order unless it is satisfied the work is not for the provision of a service rather than the supply of labour.

The amended Mt Arthur contract described the purpose as providing haul truck operators with supervision and support. That wording, together with the evidence about how the work was scheduled and managed, formed part of the factual setting in which the Commission and then the Court considered the order.

Role mapping also mattered. The evidence at Mt Arthur was about fuel attendants and haul operators. The evidence at Bengalla was about trainees, mineworkers, bench hand workers and wash technicians. The applicants emphasised that Skilled was supplying only a subset of the broader categories covered by the host enterprise agreements and the Black Coal Mining Industry Award classifications. That mattered because the broader the order, the more important it became to show that the statutory state of satisfaction had been reached for the whole cohort captured by the wording.

For businesses, this means the legal risk does not sit only in the contract label. It also sits in the evidence trail. If workers move across tasks, if classifications are loose, if site duties are not recorded clearly, or if the proposed order is drafted by broad reference to host instrument coverage rather than the proved workforce, the arrangement becomes harder to defend or harder to challenge with confidence.

If you are a labour hire provider, this case is a reminder that broad future-facing wording can be dangerous. The Mt Arthur order, as described in the judgment, was not limited only to workers presently being supplied. That breadth was central to the dispute. If your workforce changes over time, or if your contract allows workers to be deployed across a wider range of roles than the evidence currently supports, a proposed order may end up being challenged as too broad.

If you are a host business, the case shows that enterprise agreement coverage is not just an industrial relations issue for HR. It is also a legal risk issue for operations, procurement and contract management. You need to know which labour hire workers are on site, what kind of work they perform, whether they are really being supplied as labour rather than as part of a service, and which host instrument would apply if they were directly employed.

The case also matters for businesses that use mixed models. At Mt Arthur, the arrangement changed from managed services to labour hire. That kind of shift can alter the legal analysis significantly. A contract review alone is not enough if the day-to-day reality on site points in a different direction. Courts and tribunals will look at the practical operation of the arrangement, not just the heading on the agreement.

Finally, businesses should note what the Court did not decide. It did not say the labour hire regime is invalid. It did not say parity orders are unavailable. It did not finally determine the underlying applications. It sent them back to the Commission. So the practical lesson is to prepare for the regime properly, not to assume it can be ignored.

These questions matter whether you are preparing for a possible application, responding to one, or reviewing an existing labour hire model. The Court's decision shows that the answer may turn on the interaction between the evidence, the statutory conditions and the wording of the proposed order.

The Full Court's judgment is dated 19 December 2025. The orders quashed were the Mt Arthur order made by the Fair Work Commission on 21 February 2025 and the Bengalla order made by the Full Bench on 13 March 2025. The Court directed the Commission to hear and determine the relevant applications again according to law.

That means the decision is best understood as a judicial review ruling about the validity of the original orders, not the final industrial outcome for the parties. Businesses should watch for any redetermination or later developments in the Commission.

This page is based on the published Federal Court judgment for Skilled Workforce Solutions (NSW) Pty Ltd v Mining and Energy Union [2025] FCAFC 195, including the catchwords, orders, introductory reasons and factual summary. That material clearly supports the account of the parties, the statutory setting, the grounds argued, the factual background at Mt Arthur and Bengalla, and the Court's orders quashing both regulated labour hire arrangement orders.

Some finer detail of the Court's reasoning is summarised rather than reproduced in full in the published material used for this page. For that reason, this page focuses on the parts of the decision that can be stated confidently and avoids over-claiming on points not fully set out in the published reasons excerpt.