A resources multinational will spend more than expected on proposed pay increases.
BHP recently discovered wages need to increase by more than its previously anticipated $1.3 billion due to the federal government’s new same job same pay (SJSP) bill. The proposed legislation closes loopholes that allowed employers to outsource permanent positions instead of directly employing them in-house.
“Given it is now clear that the bill does not expressly exclude service contractors, which make up a significant part of the overall resources workforce, and given the bill provides no certainty as to how the Fair Work Commission will exercise its discretion it must be assumed that they will be impacted by the SJSP provisions,” the employer said in a submission to the Senate inquiry into the Fair Work legislation amendment
“We therefore expect a significant upward revision to our initial costing … [and] the significant increased labour cost of SJSP will not be accompanied by any associated increase in productivity, indeed it will most likely decrease productivity.”
The proponent also believes its $300 million FutureFit Academy will be impractical to keep funding.
“As a result of the government’s legislation BHP’s continued FutureFit investment, and the opportunities it is providing to a new wave of Australians to enter the resources industry, may become unfeasible,” it said.
BHP expects to cover rising costs through deferring or cancelling investments, and even closing mines with “uncompetitive” underlying cost bases.