Australia’s offshore gas industry is already under pressure from rising costs, complex regulation and global competition for investment and now workplace rules are emerging as the next big battleground. The national union body wants the government’s relatively new “same job, same pay” framework, which was originally designed to stop labour hire firms undercutting permanent staff, to stretch further into the lucrative hydrocarbons sector. Employer groups in resources argue the regime is already causing confusion and uncertainty, especially for large LNG operations that rely heavily on specialist contractors rather than traditional labour hire.
Under laws that began operating in 2024, labour hire workers are meant to be paid at least as much as directly employed workers doing the same role and unions have already used these rules to target labour hire arrangements in coal mining and big retail distribution centres. The offshore LNG space is now in the spotlight, with unions filing four claims in the past year against service contractors at major gas facilities, chasing pay rises in the range of $60,000 to $120,000 per worker. Most of those cases have been settled privately or withdrawn but a high profile claim involving around 50 electrical workers at a major LNG project is heading to a May hearing, where a top tier maintenance contractor will argue it should be exempt as a genuine specialist service provider.
Behind this test case sits a broader policy clash over how far the law should go. The union movement says the rules have worked reasonably well so far but need to cover more than just base pay, extending into areas like paid leave, redundancy and roster patterns, and should reach not only private corporations but also state and local government agencies. It also wants the government to narrow the existing “service contractor” carve out, arguing offshore hydrocarbons projects are filled with contractors doing ongoing operational work, often at significantly lower rates than earlier directly employed workforces. Employer representatives counter that the service contractor exemption is already weaker than intended and say recent decisions by the workplace tribunal have lowered the bar for launching “same job, same pay” cases, making it easier for unions to challenge legitimate service contracts and pushing companies to settle rather than fight lengthy disputes.
The outcome of the current review and upcoming tribunal decisions looks like it could reshape how offshore LNG projects structure their workforces and manage costs but the direction is far from settled. If the laws tighten and begin to treat more contracting arrangements like labour hire, workers on big gas projects could see substantial pay and condition gains, yet operators warn this may add to cost pressures, delay investment decisions and flood the workplace tribunal with complex speculative cases. On the other hand, if the contractor exemption is strengthened it seems likely that unions will keep searching for new legal angles to close what they see as loopholes in how large resource projects outsource work, especially as examples emerge of roles once performed in house returning on contracts at markedly lower pay.
