COVID-19 slowdown: Don’t treat labour hire as disposable

Published: 13 May 2020

Peabody’s Coppabella and Middlemount mines in Central Queensland are among the first coal mines starting to cut jobs citing falling demand and prices for coal due to the COVID-19 pandemic.

The Union is calling on mining companies to do everything possible to retain jobs, including those of labour hire workers and contractors, and not simply cut people loose at the first sign of a slowdown.

While the mining industry is doing better than most – like retail, tourism and education -there is a decline in demand for coal around the world. Lower industrial output and activity is impacting on demand for electricity, and steelmaking and other heavy industry has been curtailed in those countries with severe lockdowns.

Consequently, a slow drift down for spot thermal and coking coal prices over the course of this year has accelerated in recent weeks, with thermal coal dropping to the low US$49 per tonne rather than being in the US$66 bracket. Coking coal has dropped from the US$130/t bracket to under US$100/t.

If these low prices persist or get worse in the months ahead, coal producers will rethink whether to continue with their current levels of production. However, some companies are acting early to cut jobs – or using the pandemic as an excuse to make pre-planned staffing changes.

Peabody stood down 40 production and maintenance workers at Coppabella mine last Thursday after informing staff that: “The demand for coal has eased so much in the opening weeks of April that we have seen sales fall out of the Q2 schedule very quickly… we have no way to know when it will recover.”

While the first round of job cuts at Coppabella affects labour hire workers and contractors, another digger fleet will be parked up in June with a reduction of a further 40 permanent employees.

At Middlemount Mine, a joint venture between Peabody and Yancoal, workers were told this week that 25 labour hire production jobs would be cut.

In other parts of the industry there is evidence of project work slowing down or being cut.

Last week, South32 axed 96 jobs from its Appin mine in NSW after revising the terms of its contract with labour hire company Mastermyne, blaming “uncertainty due to COVID-19, coupled with lower pricing and demand for metallurgical coal.”

However, South West District Vice President Bob Timbs said the Mastermyne cuts were at least in part due to maneouvring by South32 to push labour hire workers on to agreements containing lesser employment conditions.

Queensland District President Stephen Smyth said widespread casualisation and contracting out meant that labour hire workers were especially vulnerable in a downturn, and many would have no entitlements to fall back on.

“Labour hire and contract jobs matter too – many of these workers have been long-term, loyal employees,” he said.

“Mining companies should do everything they can to keep people in work at this time. Labour hire workers and contractors shouldn’t be treated as disposable and cut loose at the first sign of a slowdown.”