Contractors running one of only two coal mines in Western Australia have pulled out after pay disputes with the owners.

The Construction, Forestry, Mining and Energy Union (CFMEU) said contractors Carna Civil Mining had removed equipment from the Griffin Coal Mine site, which in conjunction with nearby Premier coal, produces the state's entire coal supply.

The ABC understands the contract between Carna Civil Mining and Griffin Coal has been terminated.

The union said Carna told workers yesterday evening a payment from the mine's owner, Lanco Infratech, had not cleared.

Carna has ordered workers home on full pay, according to the union.

It is the fourth time in four and a half months Carna has pulled its workforce offsite, but the union said this time was different.

"I think that it's coming to a head on both sides," CFMEU secretary Gary Wood said.

"I think both the company Lanco and Carna have to position themselves to accept in one way, shape or form their responsibilities for the mining of coal."

Mr Wood said he did not believe electricity supply would be affected in the immediate future, as coal reserves at the power station Griffin supplies were satisfactory.

Bluewater Power Station has a clause in its contract, in which it can take over operation of Griffin Coal Mine to ensure supply.

In a statement, Bluewater says it is monitoring the situation closely and hopes there will be resolution soon.

Mr Wood said Bluewater was "no doubt involved in discussions with either Lanco and or Carna about their ongoing coal supplies".

"They have the step-in rights but it's only for their coal supply, which would still leave a void where there is no supply for other employees so ... from our point of view it could mean there could be [job] losses."

"It is a concern what's occurring out there, and we can only hope that in the interest of workers and the state's power supply that it is resolved satisfactorily and gives certainty going forward, particularly at a time nearing Christmas."

The union have invited Carna and Lanco to meet with workers this evening.

Company pledged to retain workers: Local MP

The Member for Collie-Preston, Labor's Mick Murray, said he was disappointed with the lack of communication with workers from the company.

"People won't be spending money, people will be concerned about their jobs, so it's going to go a long way in to damaging some people's Christmas," Mr Murray said.

"Lanco have told me this morning that they'll keep all the people on at this moment, so I'm sure that there's some sorting out to be done, but they've given me that commitment and I'm sure they'll honour that."

Mr Murray said he thought Lanco could be looking to take back responsibility for running the mine.

He said the mines or energy ministers should be in Collie helping resolve the situation.

A spokesman for Energy Minister Mike Nahan said the State Government would not get involved.

"This is a commercial matter for Griffin Coal and its contractors to work through and resolve," he said.

Lanco declined to comment.

Carna has been contacted for comment.