The same job, same pay legislation is aimed at stopping the exploitation of workers who do the same function as full time employees but are employed on contracts through labour hire companies.

It has been an issue for BHP’s coal operations in Queensland for several years where it has fought a long-running legal action by mining unions.

The company runs its own in-house labour hire business known as Operation Services.

In a submission on the legislation, BHP said Australia already had some of the highest labour costs of any mining nation with average wages of $148,000 a year.

“Same job, same pay will add inflationary pressure by ratchetting up wages without any link to productivity and will introduce economic uncertainty by interfering in the competitive labour market,” BHP’s submission said.

“BHP estimates the financial impact of same job, same pay to our Australian operations will be up to $1.3 billion annually. This cost is equivalent to the labour cost of approximately 5000 full-time employees across our operational workforce.

“In order to address a cost impact of this magnitude, we will clearly need to review its implications for our Australian operations and the workforce that supports it.

“Same job, same pay also directly undermines BHP’s Operations Services business unit, which supports 4500 permanent, high-paid jobs as well as the FutureFit training academy. Same job, same pay threatens our ability, through Operations Services, to create a further 2000 jobs over the next two to three years, as well as our ability to continue to deliver 2,500 training positions through the BHP FutureFit academy over the next three to five years.”

The submission claimed the legislation was shaped by ideaology, not economics and that it “wandered well beyond the limited circumstances of the problem it tried to resolve”.

The company said the legislation should be pared back to the addressing insecure work caused by casualisation and “the practices of cowboy labour hire oeprators”.

The Government’s consultation paper on the reforms said same job, same pay would seek to address labour hire that “deliberately undercut the bargained wages and conditions set out in enterprise agreements made with their employees”.

“Evidence recently accepted by several Senate inquiries has shown that some employers use these arrangements to deliberately undercut bargained pay and conditions and to avoid bargaining for an enterprise agreement,” the consultation paper said.