PERTH (miningweekly.com) – Diversified spin-off South32 could face industrial action at its Dendrobium coal mine, in New South Wales, after the collapse of enterprise agreement negotiations.

Union CFMEU said on Thursday that mineworkers at the Dendrobium operation would down tools from Friday, with the strike expected to last seven days.

CFMEU mining and energy division South West district VP Bob Timbs said the union had been attempting for the past 18 months to reach a new enterprise agreement, without any positive outcomes.

He added that the main stumbling block was a security of employment clause, which would protect permanent employment and provide future job opportunities for contract mineworkers.

Union members were calling for a security of employment clause in the next enterprise agreement that would require the company to replace a permanent full-time employee with another permanent full-time employee and, in times of redundancy, maintain permanent employees over labour hire.

“In recent years, BHP and now South32 have increasingly made use of lower paid labour hire and contractors to do work normally performed by permanent full-time employees. Contractors can be paid around $500 a week less than full-time employees. Most contractors employed in recent times do not have access to conditions such as annual leave, sick leave, redundancy pay and top up accident pay,” Timbs said.

He added that contractors were supposed to be used to fill temporary gaps in the labour force, not to replace permanent full-time jobs.

“The company appears to be entering into a strategy of replacing permanent full-time employees with contractors when workers retire, resign or are promoted, meaning the permanent workforce is slowly but surely being casualised.

“Around 20% of the workers employed at this mine are now contractors and that number is considerably higher at other South32 mines. It’s going to keep increasing unless we take a stand.”

Timbs said the clause had little to do with the prevailing market prices for coal, but was rather part of a concerted effort by the company to casualise its workforce and avoid its obligations to permanent workers.

“We have contractors who have been here for years, so they’re not filling gaps, they’re just being ripped off and should be offered permanent positions at the mine.

“BHP and now South32 are multinational companies that have extracted billions of dollars out of the Illawarra and they’re using every trick in the book to dodge their obligation to workers.”

A spokesperson for South32 told Mining Weekly Online that the company was disappointed with the CFMEU’s decision to start a protected action at the Dendrobium mine.

Illawarra Coal asset president Troy McDonald said the company had been working with employees and their representatives to develop a new agreement since late 2013.

“We are extremely disappointed in this action given that, since we started negotiating this agreement, we have put a number of proposals to employees to address their concerns.

“In addition, we have commenced the payment of a wage increase as a sign of good faith to our employees while discussions are continuing. Industrial action in return is both disingenuous and irresponsible,” he said.

McDonald noted that, like several other industries in the Illawarra region, the mining industry was facing a difficult business environment, adding that disruptive industrial action by the CFMEU would create further uncertainty for the company, its employees and the broader community. 

He said Illawarra Coal remained committed to working with the Dendrobium employees and their representatives to achieve a speedy resolution.