Appin miner South32 is using COVID-19 as an excuse to cut costs by paying up to 250 contractors less, according to union leaders.
According to the CFMEU South32 has ended arrangements with labour hire companies Mastermyne and Nexus, which affects 250 contract workers.
New labour companies have stepped into the breach, doing the same work for less pay.
Those 250 workers can join these new firms and continue to work at Appin - but with a pay cut of what the CFMEU says is $5 an hour and accept poorer conditions.
South Western District Vice President Bob Timbs said the South32 "slash and burn squad" was taking advantage of the COVID-19 situation to lower wages.
"We accept the pandemic may have necessitated some short-term cost-cutting," Mr Timbs said.
"But the calculated way that South32 have exploited this health crisis to drive down wages in the Illawarra is shameful.
"I know there are members who were employed through Mastermyne who have just quit the industry in disgust over this. Others are being forced to take their old jobs back with inferior deals."
Mr Timbs said there were concerns around bonuses being linked to productivity rather than safety.
"This a surefire way to incentivise unsafe work practices and it's exactly the sort of thing our union and the community has fought hard against in the past," Mr Timbs said.
A South32 spokesman confirmed the "cost reduction program" was in part driven by COVID-19.
"Illawarra Metallurgical Coal (IMC) has recently made changes to contractor arrangements at Appin Mine as part of a site-wide cost reduction program and as commercial contract terms end," the spokesman said.
"These changes are also in response to uncertainty due to COVID-19, coupled with lower pricing and demand for metallurgical coal, and the recent mine plan change.
"Safety is our absolute top priority at all times."
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