17 June 2025
6 min read
#Workplace Relations & Safety, #Renewable Energy
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Australia’s clean energy workforce needs to almost triple within the next five years to implement the optimal development path outlined in the Australian Energy Market Operator’s 2024 Integrated System Plan. Although many renewable energy projects remain in the preliminary stages of securing land or obtaining approvals, workforce planning is an equally crucial component that cannot be neglected during the planning phase.
In the short term, the construction sector is predicted to dominate the workforce profile. Given its heavy reliance on contracting and labour hire arrangements, employers need to ensure they are up to date and compliant with the most recent industrial relations reforms. Specifically, understanding the implications of the Same Job, Same Pay regime and the associated liabilities for worker entitlements is crucial to avoid costly missteps down the track.
While large-scale hiring may not occur until later in the project, decisions about whether to engage employees directly, use labour hire, or rely on subcontractors can significantly affect project cost, resource planning, compliance obligations, risk exposure and project delivery.
Proactive planning in the early stages of the project ensures employment models are fit for purpose, legally sound, and adaptable to the rapidly shifting industrial relations landscape. Getting it wrong may expose employers to potential legal or industrial relations risks.
As renewable projects progress from the planning to delivery stage, employers are likely to consider labour hire arrangements to meet the increase in workforce demands during the construction phase. While these arrangements offer flexibility, they also bring new legal risks, especially regarding the Same Job, Same Pay (SJSP) regime that is now embedded in the Fair Work Act 2009 (Cth).
Under this regime, if an application is granted by the Fair Work Commission, labour hire workers who perform the same duties as directly engaged employees must receive the same pay rates and entitlements as outlined in the host employer’s relevant enterprise agreement.
The application of the SJSP regime was demonstrated in a recent case where the Mining and Energy Union (MEU) filed two applications for regulated labour hire arrangement orders (RLHAO) relating to labour hire workers supplied by Skilled Workforce Solutions (NSW) Pty Ltd (Skilled) and CoreStaff NSW Pty Ltd (CoreStaff) to carry out work at Bengalla Mining Company Pty Ltd (Bengalla).
Bengalla operates an open-cut coal mine in NSW and employs approximately 750 employees, with approximately 190 labour hire workers supplied by Skilled and CoreStaff. Although these labour hire workers were covered by separate enterprise agreements, they performed the same duties as those directly employed by Bengalla but were paid at lower rates.
Similarities between the two groups included that all employees:
Despite the above, Bengalla, CoreStaff and Skilled opposed to the making of RLHAOs, citing constitutional and fairness grounds. The parties argued that the orders were unfair and unreasonable due to differences in shift patterns, employment classifications and entitlements of labour hire employees.
The Fair Work Commission accepted the possibility of ‘overcompensation’ for some part-time and casual labour hire employees, but ultimately found that the overall pay disparity between those covered by labour hire arrangements and those directly employed by Bengalla justified the orders, with some labour hire workers potentially increasing their annual earnings by up to $52,730 under the orders.
This case illustrates the importance of early review of contract terms, pay rates and employment structures in renewable energy projects that involve both direct hires and third-party workers. It also highlights the potential commercial exposure if a SJSP order is granted by the Commission.
In the early stages of renewable energy projects, employers often turn to independent contractors to meet the demands of the initial ‘boom’ period. This approach allows principal contractors to undertake urgent and specialised tasks, without having to commit to long-term employment and associated entitlements. Like labour hire arrangements, contractor arrangements come with benefits like flexibility and cost efficiency, but they also carry risk.
Recent Victorian Supreme Court rulings in EnergyAustralia Pty Ltd v CoInvest Ltd [2025] VSC 100 and Detector Inspector Pty Ltd v CoInvest Ltd [2025] VSC 135 (collectively, EnergyAustralia and Detector Inspector) confirmed that when engaging workers as independent contractors, employers are not automatically exempt from providing employee-like benefits.
The dispute centred on whether EnergyAustralia and Detector Inspector were required to make contributions on behalf of certain maintenance employees to the Construction Industry Long Service Leave Fund, in respect of whom the defendant, CoInvest (trading as LeavePlus), is the trustee.
Both companies argued that they were not required to make contributions to the portable Long Service Leave Scheme (Scheme), claiming their maintenance, repair and safety inspection workers were ineligible because they are not performing ‘construction industry’ work. This argument was rejected, and the Court held that mandatory safety checks, residential maintenance and the maintenance and repair of power infrastructure all qualify as ‘construction work’ under the Scheme, regardless of the industry the employer predominantly operates in.
The rulings demonstrate the Scheme’s expansive reach and clarifies that portable entitlements not only apply to work performed on new construction sites but also work for energy, home maintenance and electrical projects. Although these decisions relate to the Scheme covering workers in the Victorian construction industry, a similar audit is equally required in other States. Employers should keep in mind that broader reforms, including the potential for a nationalised model like Victoria’s, have been flagged.
In this context, employers in the renewable energy sector should take particular care during the construction phase to assess whether contractors fall within the scope of the Scheme and ensure all relevant entitlements are accounted for and properly managed.
Workforce compliance in the renewable energy sector is becoming increasingly complex, particularly during the construction phase where employers engage a mix of labour hire and contractor arrangements. To mitigate compliance issues, employers should consider the following when staffing their projects:
If you have any questions about how current industrial relations reforms may impact your workforce or labour hire arrangements, please get in touch with our team below.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate
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