The January registration is called OS MCAP Pty Ltd and the May one OS ACPM Pty Ltd. They are each operated by a new BHP business group called BHP Operating Services. And it has evolved over 18 months of hard thinking by the president of BHP’s Australian operation, Mike Henry, and another clever guy called Mark Swinnerton.
Like Henry, Swinnerton is a marketing guru turned coal miner. I recall talking to Swinnerton during his time running the BMA-owned Goonyella mine about the potential that might be released by the creation of a standing pool of casual workers that could work across the BHP coal fleet in Queensland.
But that idea has evolved into something far more substantial and substantive.
Currently BHP relies on labour hire and contractors to fill about 60 per cent of the jobs across its Queensland coal business. And the Daunia and Caval Ridge operations are collectively unique because they are 100 per cent fly-in, fly-out operations. The process in train will rebalance both those equations to meet changed regulatory and community expectations.
Refreshing workplace culture
BHP Operational Services delivers the Australian business a means of capturing the cost benefits of contract mining and the cumulative cultural and productivity benefits that arrive with direct employment. BHP will be able to sate the gathering political challenge to casualised workforces while retaining the flexibilities and protections that outsourcing can offer.
One of the problems identified with outsourcing is that the turnover of people is excessively high. As we understand it, Henry now believes the impermanence of labour hire and contract mining makes an impossibility of his ambitions to build world-class culture and capability across his business.
The bottom-line effect of the long-baked plan that is now being rolled out is that the new permanent employees that will be seeded across BHP’s core Australian operations will earn less than those employed under the standing enterprise agreement like the one that shapes conditions and pay at BMA.
But the broader effect is that this new permanent casual model will allow BHP to very deliberately refresh workplace culture across its mainstream mining business in Australia while building and retaining the capability of the work teams it proposes to build.
The idea is to create work teams that can be used across the group. For example, one of these new agile teams might work at the Goonyella met-coal mine for a couple of years and then find itself redeployed to BHP’s other Queensland joint venture, BHP Mitsui Coal. They might also be dispatched, with fair notice, as far at the Mount Arthur thermal coal operation in NSW or to one of BHP’s operations in the Pilbara.
The new employees will be hired as casuals and be given the opportunity to become permanent employees after six months of continuous services with the business. The new workers will be selected on the basis of capability and their cultural fit with BHP’s new teams. And their individual and collective employment futures will be guaranteed by performance.
If a particular team of imbeds struggles to fit into a selected site, then they will be withdrawn and their tasks most likely returned to external contractor options. That contracting remains a live benchmark for performance is identified as another of the positives of BHP’s third way.
BHP’s new class of workers will earn the standard 25 per cent loading in lieu of annual leave, paid personal and carers leave, notice of termination and redundancy benefits. Those benefits will flow to them should they become permanent. And the new arrivals will also likely earn the right to share in BHP’s incentive bonus schemes.
But they will remain on the lower rates of base pay that is a feature of casual employment and they will continue to work with the same flexibility as would be demanded by a labour hire firm.
Agreement in plain English
To be clear on this, the folk being hired to fill jobs at Daunia and Caval Ridge will earn more than contract miners might but less than those workers employed under the BMA enterprise agreement.
To explain why all of this effort might be worth the global Australian’s time, consider the fact that a coal truck driver working for a major miner on a standard employment contract would likely earn $160,000 a year on the sort of seven-day roster that BHP has foreshadowed in the draft EA.
But the “heavy mobile equipment” operators that join BHP’s labour hire firm to work in coal mines will earn $105,000 a year for working an average rostered week of 43.75 hours. Truck drivers employed for deployment at non-coal operations will earn an average $125,000 a year for working an average 58.33-hour week.
The proposed employment is admirably brief and written in the sort of plain English that BHP attempted, without success, to force on the union agreement that shapes legacy employment arrangements at BMA. And one of the things spelled out is that workers employed by the in-house labour hire will need to be flexible about where they work and what function they actually perform.
“Organisational requirements may necessitate employees transferring to other positions, operations or locations,” the employment agreement says. “Reasonable notice will be provided in these circumstances and terms and conditions of employment will be reviewed in light of any change in responsibilities but will remain at least as beneficial as set out in this agreement.
Central mission ready
The Northern Territory gas junior that could, Central Petroleum, is now ready to start pumping gas to the east coast.
Central is the product of Richard Cottee’s attempt to revisit the legendary gas success story that was Queensland Gas. There Cottee took a broken penny dreadful to a point when BG Group was prepared to pay $5.6 billion for the pioneer of Queensland coal seam gas production.
Cottee landed at Central in 2012 with ambitions to recover gas production from its largely dormant Mereenie gas field as the first step to offering central Australian gas as one answer to the supply calamity on the east coast.
Thursday revealed that Central is on track to fulfil the first chapter of Cottee’s mission statement. The refit of the Mereenie field is complete and the place is ready to produce at the rate required to meet the supply deal Cottee’s team struck with gas-short Incitec Pivot back in June.
With just the field boosting compressor left to fully test, Central says it will be sending gas eastwards to Incitec by December 29, which is just two days before penalties might start flowing to Incitec under the terms of the contract.
So, Central has made it to the finish line. But, as we have noted a few times here, Cottee has not.
Central’s new chairman, Martin Kriewaldt, ceased Cottee’s employment in July. Kriewaldt has since said he assessed Cottee as a “balcony man” whereas Central required a “corridor man”.
The search for that man of corridors remains live with Cottee’s long-time colleague, Leon Devaney, retaining his ownership of the acting CEO title.
Mind you, Devaney is already a director of the business despite his apparently temporary status. That oddity was made necessary by a stunning shareholder revolt in November that saw two of Central’s four independent directors surrender their positions rather than allow the quantum of their rejection become public.
Sometimes the best yarns come from the smallest places. So we will continue to watch this one with interest.