Labor has welcomed a major industrial win for 100 coalminers in NSW, locking in the party’s focus on shifting more workers from casual to permanent if it wins the federal election.

The Construction Forestry Maritime Mining Energy Union confirmed the deal for workers at Wongawilli Colliery, a Wollongong Coal-owned mine near the NSW coastal city.

The workers will get the right to convert from casual to permanent employees, along with better pay and conditions, ending an industrial stand-off.

Labor’s workplace relations spokesman Brendan O’Connor congratulated both sides for negotiating in good faith.

“Shifting an entirely casual workforce to permanent workers with pay and conditions on par with nearby sites, stops the race to the bottom on pay and conditions, which benefits both workers and employers,” Mr O’Connor said on Thursday.

After CFMEU members decided to go on a two-week strike on Monday, a deal was struck on Wednesday, with workers securing a 12 per cent increase in the hourly pay rate and a 12.5 per cent boost to the bonus rate.

The deal lifts them from low-paid casuals to permanent employees with comparable pay and conditions to other coalminers in the region.

Union membership at the site soared from 13 to 80 over nine months, prompting the workforce, which is outsourced to labour hire firm CAS Mining, to seek an enterprise agreement.

Under a new two-year agreement with CAS, coalminers at the site will also get an annual two per cent pay increase.

Casual workers’ rights is shaping as a key issue in the industrial relations policy battle ahead of this year’s federal election.

Mr O’Connor said Labor would legislate a definition of casual and reform the labour hire industry with a national licensing scheme and a “same job, same pay” guarantee for workers.

Employer groups have expressed grave fears about the plan, which they say will reduce flexibility and competitiveness.

The coalition has argued militant unions want to destroy the labour hire industry.

CFMEU mining and energy southwestern district vice president Bob Timbs said the “massive” victory for the coalminers was a crystal clear example of union power.

“These were un-unionised, casual workers who were being exploited by their employer. They were the lowest paid labour hire casuals in the region,” Mr Timbs said.