AGL Loy Yang v Construction, Forestry, Mining and Energy Union

[2014] FWC 8093

[2014] FWC 8093

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

AGL Loy Yang
v
Construction, Forestry, Mining and Energy Union
(C2014/3750)

Electrical power industry
COMMISSIONER BISSETT	MELBOURNE, 21 NOVEMBER 2014

Alleged dispute regarding the code of conduct and training - lawful and reasonable direction - refusal to complete training not industrial action.

[1] AGL Loy Yang Pty Ltd (AGL LY) has made an application to the Commission to deal with a dispute in accordance with the dispute settling procedures of the Loy Yang Power Enterprise Agreement 2012 (the Agreement). The dispute is in relation to the AGL Code of Conduct, questions in an associated online training module and a requirement that employees, on completion of the training module, complete a declaration.

[2] The operations employees at AGL Loy Yang who are members of the Construction, Forestry, Mining and Energy Union (CFMEU) have refused to complete the training module including the declaration.

[3] The CFMEU says that some requirements of the Code of Conduct, the direction to complete the training module and the direction to complete the declaration at the end of the training module are not reasonable and lawful directions to employees. In these circumstances the CFMEU says that employees are not required to comply with those requirements of the Code of Conduct or the directions given.

[4] AGL LY is part of AGL Energy Limited (AGL) - a private owner and operator of energy assists in Australia. AGL has approximately 3300 employees.

Background

[5] On 3 December 2013 a ‘Loy Yang Brief’ was issued to staff at AGL LY advising that all employees were required to complete four compliance modules. The modules are:

• Code of Conduct 1 (the Code)

Diversity and Inclusion

Health Safety and Environment

Information Security

[6] Each module has associated with it an online training module. 2 The online training module in relation to the Code of Conduct is referred to as the Module throughout this decision.

[7] On 18 February 2014 Bryan Walsh, the CFMEU Lodge President, issued a memo to all members at AGL LY expressing concern that, in undertaking the training, individuals were required to formally agree to abide by the expectations set out in the Code.

[8] Russell James, the Manager Station Operations for AGL LY clarified in an email to Mr Walsh that it was only the Code of Conduct module that required employees to tick a box next to a declaration on completion of the module. Mr Walsh advised his members on 26 February 2014 that this module ‘remains of considerable concern to the CFMEU.’

[9] On 21 March 2014 another ‘AGL Brief’ was sent to employees at AGL LY indicating that discussions with workplace representatives with respect to completion of the Module had occurred and the concerns had been addressed. The brief then advised that all employees ‘are required to undertake these mandatory modules.’ Mr Walsh put out a memo to CFMEU members the same day indicating that, contrary to the brief from AGL LY, he had not been informed of any changes made to the Module and remained concerned about it.

[10] On 1 April 2014 Mr Walsh issued a further memo to CFMEU members indicating that the CFMEU still takes issue with the Module and that he had indicated to the Company that the ‘CFMEU would find the module acceptable if the part requiring mandatory agreement was removed.’

[11] The CFMEU subsequently issued a directive to its members not to complete the Module. 3

[12] AGL LY then notified this dispute to the Commission.

Matters in dispute

[13] In submissions during the hearing of the dispute Mr Forbes for AGL LY put that:

The issue currently between the parties relates to what we might call the code of conduct module and the code of conduct module requires employees to undergo some training on a computer which involves the sharing of information regarding the AGL code of conduct, a question and answer type quiz, and then at the end of that training a requirement, in order to certify completion of the training, to tick a particular box. It involves a mouse click onto a box to indicate that the employee has read and understood the training and agrees to abide by the code. 4

[14] In submissions filed with the Commission in accordance with directions issued for the hearing of the matter the CFMEU says that it does not object to the Code and the Module in their entirety but does object to specific parts of the Code, specific questions in the Module and the declaration. The specific parts of the Code that it objects to deal with non-disclosure of information and public comment or political activity attributable to employment with AGL. The specific questions in the Module it objects to are questions 2, 8 and 18. 5

[15] In submissions, Mr Walkaden of the CFMEU says that its written submissions clearly set out what it says the dispute is about. The CFMEU says that, while its initial concerns went to the declaration, following the notification of the dispute and conciliation between the parties further matters were raised that went to matters in the Code and questions in the Module, identified in paragraphs 7 and 8 of its submissions. AGL LY, it says, has been aware of these issues since 1 August 2014 when the CFMEU filed its submissions in accordance with the directions of the Commission. 6

[16] Despite the late notification of further issues to AGL LY the CFMEU says that the dispute settling procedure is quite wide and allows any party, in the interests of speedy resolution of the matter in dispute, to refer a matter to the Commission at any stage. It now brings these issues before the Commission.

[17] I am satisfied that the matters in dispute go to:

• Whether it is reasonable and lawful to require employees to agree to two items in the Code of Conduct referred to by the CFMEU as the ‘ban on providing information’ and the ‘ban on public comment and political activity.’



• Whether it is a reasonable and lawful direction to require employees to answer questions 2, 8 and 18 in the training module in relation to the Code of Conduct;



• Whether it is a lawful and reasonable direction to require employees, on completion of the Module in relation to the Code of Conduct, to tick a box next to a declaration.

[18] The determination of the matters in dispute requires a consideration of a range of diverse issues. This decision deals with each of those issues in the following order:

• whether the matters in the Code and the direction to complete all questions in the Module are reasonable directions;



• whether the matters in the Code and the direction to complete all questions in the Module are lawful direction. This includes a consideration of the applicability of the Charter of Human Rights and Responsibilities Act 2006 (Vic) and whether the matters in the Code and the questions in the Module are matters relating to employment or arising from the contract of employment and therefore whether the Code and direction to complete the Module are lawful directions;



• whether the direction to complete the declaration at the end of the Module is a lawful and reasonable direction;



• if there are any restrictions imposed on training under the Agreement such that the direction to undertake the training is contrary to the provisions of the Agreement;



• if non-compliance with the direction to complete the Module is industrial action;



• if non-compliance is industrial action, whether the Commission should issue orders that the action stop.

Jurisdiction

[19] The dispute resolution procedure at clause 24 of the Agreementestablishes a process for resolving disputes ‘arising as to the interpretation or application of this Agreement or any matter arising in the course of employment.’

[20] I am satisfied that the Module and the Code are matters arising in the course of employment such that they fall within the scope of matters subject to the dispute resolution procedure.

[21] The dispute resolution procedure sets out four steps in the resolution of disputes. It also provides that either party may refer a matter to the Commission at any stage of the dispute in the interest of seedy resolution.

[22] I am satisfied that the provisions of the dispute resolution procedure have been met such that the Commission has jurisdiction to deal with all matters in dispute, including those notified by the AGL LY and those raised by the CFMEU.

IS THE DIRECTION TO COMPLETE THE MODULE A REASONABLE DIRECTION?

[23] It is not disputed between the parties that an employee is required to comply with a lawful and reasonable direction issued by the employer. The test for whether a direction is reasonable and lawful is set out in R v Darling Island Stevedoring and Lighthouse Ltd; Ex parte Halliday and Sullivan 7 where Justice Dixon stated:

If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable. In other words, the lawful commands of an employer which an employee must obey are those which fall within the scope of the contract of service and are reasonable. Accordingly, when the award was framed, the expression “reasonable instructions” was adopted in describing the employees' duty to obey. But what is reasonable is not to be determined, so to speak, in vacuo. The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award, governing the relationship, supply considerations by which the determination of what is reasonable must be controlled. 8

[24] In Woolworths Ltd (t/as Safeway) v Brown 9 a Full Bench of the AIRC was considering an appeal from a decision in an unfair dismissal matter. Central to the appeal was whether an employee’s refusal to comply with directions to remove an eyebrow ring whilst at work was a reasonable direction.

[25] In that decision the Full Bench observed that:

In the modern era employers face an often bewildering array of statutory obligations in relation to matters such as health and safety, discrimination, taxation, trade practices and fair trading to mention the most obvious examples. Employers face potential liability arising from their common law duty of care to their employees and to members of the public. Employers may be subject to contractual obligations that require them to conduct their business in a particular way or to meet particular standards or observe particular constraints. For these reasons it is entirely reasonable, and often necessary, for employers to put in place policies, with which employees must comply, to facilitate the employer's compliance with its obligations and duties. 10

[26] After considering authorities in relation to breaches of policy and the effect on employment the Full Bench said:

What is reasonable will depend upon all the circumstances including the nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument governing the relationship. A policy will be reasonable if a reasonable employer, in the position of actual employer and acting reasonably, could have adopted the policy. That is, a policy will only be unreasonable if no reasonable employer could have adopted it. A policy will not be unreasonable merely because a member of the Commission considers that a better or different policy may have been more appropriate. As the Full Bench observed in the XPT Case, albeit in a somewhat different context, it is not the role of the Commission “…to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.” 11

[Footnotes omitted]

[27] In order to determine if the direction is reasonable it is necessary to consider each of the matters objected to by the CFMEU in turn.

The limitation on providing information

[28] The provision to which the CFMEU objects is in the Code under the heading of ‘Respecting confidentiality’. It states:

Respecting confidentiality

In the course of business we have access to information about the affairs of our employees, our shareholders, our customers and our business partners. Each of these groups expects that AGL will respect the confidential nature of information given in good faith to AGL. The Privacy Act requires that AGL keep confidential certain categories of information about individuals. A number of contracts AGL is party to also impose legally binding obligations to maintain confidentiality.

To assist our employees to respect confidentiality, AGL will

● Provide secure facilities in which to store confidential documents...

AGL’s employees are expected to:

● Safeguard the personal information of our customers and our shareholders.

● Comply with the confidentiality obligations in our contracts of employment...

● Comply with contractual and other legal obligations...

● Not disclose to a fellow AGL employee information we know to be confidential...

● ...

● Not disclose to any person outside AGL information obtained from the performance of our jobs unless we are expressly authorised to do so by the person who provided the information OR the information is already in the public domain OR the law requires the information be made available to the person requesting it.

[underlining added]

[29] The CFMEU says that the provision to which it objects (underlined above) is ‘unnecessarily wide, oppressive and impractical.’

[30] It says that the effect of the provision is that an employee who discusses ‘any matter related to their employment with a range of persons, including their partner, child, doctor, counsellor unions official...etc, would contravene the ban and consequently the Code.’ The ban extends, it says, beyond AGL LY’s legitimate interests.

[31] The CFMEU says that this ban imposes additional restrictions on its members that go beyond privacy laws.

[32] AGL LY says this part of the Code is directed at safeguarding personal information and ensuring employee compliance with confidentiality obligations placed on AGL. It submits that the opening paragraph makes this clear. It says it is reasonable that an employee not disclose information gained in the performance of their job unless authorised to do so. It says it is not inconsistent with the Privacy Act 1988 (Cth) or the Corporations Act 2001 (Cth).

[33] AGL LY submits that the Code needs to be read sensibly and as a whole. In submissions Mr Forbes says:

if you go back a page and look at the section of the code that that's contained in, you will see that that's headed Respecting Confidentiality, and everything spoken through that particular part of the code of conduct deals with the maintenance of confidentiality of information and the clear objective of that part of the code is to ensure that confidential information is not disclosed.

The fact that the word "confidential" has not been inserted in the last dot point before "information" does not give it any broader application. One should construe this code sensibly, read it as a whole, and I think when it is read as a whole, that part of the code discloses that it's directed at maintaining what would ordinarily be regarded as confidential information, hence the exclusions, which include information in the public domain. It's clearly intended to deal with the information which is not. 12

[underlining added]

[34] To the extent that the ban on the provision of information relates to confidential information obtained during the course of employment as put by AGL LY, I do not consider the limitation to be wide, oppressive or impractical. It is entirely reasonable for an employer to seek to protect information, whether that is information it has created or information properly obtained.

[35] I accept the submissions of AGL LY on this matter. The Code must be construed ‘sensibly, read as a whole.’ There is nothing in the Code that suggests an employee cannot discuss any information arising from work with his or her doctor, lawyer or partner, rather the Code seeks to protect confidential information gained through employment.

[36] In all of the circumstances I find that the restriction in the Code is reasonable.

The limitation on public comment and political activity

[37] The second provision to which the CFMEU objects in the Code is under the heading of ‘Managing conflicts of interest’. It reads in part:

Managing conflicts of interest

A conflict of interest exists if an employee has a personal interest which may influence, or could be perceived to be influencing, the proper performance of the employee’s duties and responsibilities. The existence of a conflict is not uncommon. It is the way in which conflicts of interest are managed which determine how we are judged.

The keys to effective management of conflicts of interest are:

Full disclosure of personal material interests which give rise to the conflict...

Refraining from participation in activities arising from the conflict...

To assist our employees to manage conflicts of interest, AGL will:

● Put in place procedures to allow employees to disclose conflicts of interest.

● Adopt an even-handed approach to all mainstream political parties...

AGL’s employees are expected to:

● Seek consent of senior management before accepting a role as a director of a non-AGL company.

...

● Not make public comment about any matter, or participate in any political activities, which can be attributed to our employment with AGL.

[underlining added]

[38] The underlined provision is the provision the CFMEU says does not constitute a reasonable direction. It says that the limitation regulates and restricts speech and political activity engaged in by employees in their own time. To this extent it says it is unreasonable.

[39] AGL LY says that the requirement is reasonable. It submits that the provision sets a limitation (that of making public comment) in a context (which can be attributed to our employment with AGL).

[40] My consideration with respect to this matter has been difficult. Employees at AGL LY are members of, and have a right to participate in the democratic process of, civil society. This freedom includes the right to express political views and make public comment. It also includes the right to express views through joining and participating in trade union activities. Participation in trade union activities will, at times, include the right to take protected industrial action. This is something, particularly in this industry, that may well attract interest from the media. It would be most concerning if AGL LY took the restriction on public comment and political activity to include the right of employees to participate in legitimate activities associated with their union membership in circumstances where AGL LY may not approve of that activity.

[41] I consider that it may often be a fine line between activity and comment as a private citizen and what may be seen by AGL as attributable to employment with AGL. However, AGL’s Code, of course, does not exist in isolation of laws governing employment. In this case the restriction is only on public comment or political activity that can be attributed toemployment with AGL. It does not seek to limit engagement by employees in their private time in political activity or making a public comment as a private citizen. This distinction is important and must be recognised.

[42] I do not consider the position of AGL as stated in the Code of Conduct itself to be unreasonable. There is nothing unreasonable in AGL seeking to protect its reputation by ensuring that comment and activity attributable to it is actually representative of its views and is done by those properly authorised to do so. I have taken into account that the restriction complained of is within the context of managing conflicts of interest and that the Code does not seek to banish the existence of such conflicts but rather to try and put in place a regime that allows such conflicts to be managed.

[43] In all of the circumstances I find that the restriction in the Code is reasonable.

The objectionable questions

[44] The CFMEU objects to three questions - questions 2, 8 and 18 - in the Module on the grounds that they are unreasonable as they each require an employee to accept the premise of each of the questions.

[45] A screen ‘dump’ of the Module is attached to the witness statement of Mr Walsh. 13 This shows a number of introductory slides and then both the ‘question’ screen and the ‘answer’ screen which pops up once an answer is submitted. The answer screen indicates if the question has been answered correctly or not. If the answer is incorrect the correct answer is displayed.

Question 2

[46] Question 2 14 asks:

Which one of the following is a true statement?

• Ethical behaviour is central to AGL’s approach to business.



• The way we behave individually only effects how successful AGL is.



• Ethical behaviour does not play a part at all in AGL’s success.



• We should only be concerned with our own ethical behaviour.

[47] The correct answer, according to the Module, is (i).

[48] The CFMEU says that the ‘employer can't compel the employee to agree that the company places ethical behaviour at the centre of its business’ 15 which, it says, is what question 2 does.

[49] The Code states:

It is crucial that AGL acts - and be seen to act - in accordance with our core values and the ethical standards of the wider community within which we operate. Ethical behaviour is central to AGL’s approach to business. Our success as a Company depends greatly on the extent each of us individually, and all of us collectively, demonstrate exemplary ethical behaviour.

[50] The Code then, under seven ‘overarching principles’ sets out what AGL will do and the expectation of employees and explains that the Code applies to AGL, its directors and all employees and contractors.

[51] Question 2 in the Module is based on this broad principle adopted by AGL. While the CFMEU suggests that AGL can’t compel its employees to agree that it acts ethically, question 2 does not ask employees to answer the question as put by the CFMEU. AGL has made a statement of principle, the Module asks employees to identify which statement is true, in that it reflects the Code, given the adoption of the Code by AGL. There is nothing unreasonable in the question. It is no more than a check to see if the employee has read and comprehended what is in the Code.

Question 8

[52] Question 8 16 asks:

Acting professionally is the foundation of earning the respect and confidence of customers, our suppliers and our fellow employees.

What will AGL do to help employees to value and maintain this professionalism?

(Click the correct statement/s. There could be more than one that is correct).

A. Support employees in developing the skills required to perform the duties of employment.

B. Support employees in managing their careers.

C. Provide leadership development support.

D. Treat all employees with respect and courtesy.

E. Ensure leaders only have access to career support.

[53] The correct answers are A, B, C & D.

[54] The CFMEU says that the correct answers restricts an employee from holding and expressing a contrary view, including, for example, that they may consider that AGL will do little or nothing to help them.

[55] With respect to professionalism the Code says that:

Professionalism is the pursuit of excellence which will help us achieve our goal of being Australia’s leading integrated energy company. Acting professionally is the foundation of earning respect and confidence of our customers, our suppliers and our fellow employees.

To assist our employees to value and maintain professionalism, AGL will:

● Support employees in developing the skills required to perform the duties of employment.

● Support employees in managing their careers.

● Provide leadership development support.

● Treat all employees with respect and courtesy.

[56] These are the obligations that AGL takes on. Question 8 in the Module does no more than reflect the principle. In the Code AGL has established its position and given a commitment to what it intends to do. Question 8 asks employees to identify what is in the Code. It does not ask them to not hold any view, for example, as to how well AGL may do these things.

Question 18

[57] Question 18 17 asks:

AGL is committed to maintaining its reputation as a good corporate citizen which behaves responsibly towards the community in which it operates. Is the following statement true or false?

AGL considers the broader impact of material business decision they make in the conduct of their business.

True/False

[58] The correct answer is ‘true’.

[59] The CFMEU says that the limitation imposed by question 18 is that an employee is required to ‘agree that the company is a good corporate citizen and considers the broader impact of material business decisions’. 18

[60] The CFMEU relies on the passage from the Tramways Case cited in Graham George Clive McManus v Robin Scott-Charlton¹⁹. It says that, just as it was in the Tramways Case, an employer can’t direct an employee to attend a particular church or wear a particular singlet, so, while AGL think they are a good corporate citizen, they cannot require that employees agree with that view and that employees have a right to hold an alternative view.

[61] The CFMEU says that the phrasing of the question does not allow an alternative view and that the premise of the question is restrictive.

[62] The Code, on the subject of looking after the Community, says

AGL is committed to maintaining its reputation as a good corporate citizen which behaves responsibly toward the communities in which we operate.

This means AGL will...

● Consult with community representatives and otherwise consider the broader impact of material business decisions we make in the conduct of our business.

[63] The premise of question 18 is, again, no more than a statement of a principle held by AGL. In the Code AGL says this is what it will do. The Module does no more than ask the employee if they understand this is what AGL says.

Conclusion as to reasonableness of the requirement to answer the questions

[64] There is generally nothing remarkable about the Code, particularly at a time when many companies seek to improve their relationship with customers and the public at large who are perhaps more questioning of the ethics of a company today than they were a generation ago. When the Code is examined it does not contain any statements of intent that would not be found on many company websites today.

[65] I agree with the submission of AGL LY that parts of the Code must be considered in context of the Code in total. Further, the Module does not stand alone and only exists in the context of the Code. The questions in the Module cannot be considered in isolation of the Code.

[66] The questions in the Module do no more than ask employees to identify those things AGL has committed to. It does not ask employees if they hold these views. However, as an observation I would say that the questions could have been better structured. I make no more than an observation on this point as I was not taken through the entire Module, either on paper or on screen.

[67] In completion of the Module employees can honestly answer as to the intentions of AGL as a corporate entity as expressed through the Code although, of course, they cannot know how individual employees will behave, on a day to day basis.

[68] The premise of the three questions complained of is no more than a statement of principle already adopted by AGL and endorsed by its Board, and the answer reflects those commitments given by AGL. I do not see anything unreasonable in them. Of course employees will have a diverse range of opinions as to whether or not AGL is meeting its principled position but this does not mean AGL does not hold those principles. It has stated that it holds these principles and, ultimately, will be held to account by its Board, its shareholders, its employees and its customers as to whether or not it has put the principles into practice.

[69] I therefore find that there is nothing unreasonable about questions 2, 8 and 18 of the Module.

IS THE DIRECTION TO COMPLETE THE MODULE UNLAWFUL?

[70] In order to determine properly if the direction to complete the Module is lawful it is necessary to consider the application of the Charter of Human Rights and Responsibilities Act 2006 (Vic) to AGL and then whether the matters in the Code are connected to employment.

The Charter of Human Rights and Responsibilities Act 2006 (Vic)

[71] The CFMEU submits that that AGL LY is subject to the provision of the Charter of Human Rights and Responsibilities Act 2006 (Vic) (Charter) such that some of those matters of which it complains are a breach of the Charter and are therefore unlawful.

[72] The CFMEU says that AGL LY is a public authority within the meaning of s.4(1)(c) of the Charter.

[73] It says that the Charter operates to protect freedom of expression 20 and freedom of association.21 To this extent it says that the requirement to answer questions 2, 8 and 18 of the Module and the restriction on public comment and political activity as defined in the Code breach the Charter and are therefore unlawful.

[74] The Charter was assented to on 25 July 2006 and came into operation, in part, on 1 January 2007 with the remainder on 1 January 2008.

[75] Section 38 of the Charter provides:

38. Conduct of public authorities

(1) Subject to this section, it is unlawful for a public authority to act in a way that is incompatible with a human right or, in making a decision, to fail to give proper consideration to a relevant human right.

(2) Subsection (1) does not apply if, as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law, the public authority could not reasonably have acted differently or made a different decision.

Example

Where the public authority is acting to give effect to a statutory provision that is incompatible with a human right.

(3) This section does not apply to an act or decision of a private nature...

[76] A ‘public authority’ and ‘functions of a public nature’ is defined in s.4 of the Charter:

4. What is a public authority?

(1)     For the purposes of this Charter a public authority is—

...

(c) an entity whose functions are or include functions of a public nature, when it is exercising those functions on behalf of the State or a public authority (whether under contract or otherwise);

Example

A non-government school in educating students may be exercising functions of a public nature but as it is not doing so on behalf of the State it is not a public authority for the purposes of this Charter.

...

(2) In determining if a function is of a public nature the factors that may be taken into account include—

(a) that the function is conferred on the entity by or under a statutory provision;

(b) that the function is connected to or generally identified with functions of government;

(c) that the function is of a regulatory nature;

(d) that the entity is publicly funded to perform the function;

(e) that the entity that performs the function is a company (within the meaning of the Corporations Act) all of the shares in which are held by or on behalf of the State.

(3) To avoid doubt—

(a) the factors listed in subsection (2) are not exhaustive of the factors that may be taken into account in determining if a function is of a public nature; and

(b) the fact that one or more of the factors set out in subsection (2) are present in relation to a function does not necessarily result in the function being of a public nature.

(4) For the purposes of subsection (1)(c), an entity may be acting on behalf of the State or a public authority even if there is no agency relationship between the entity and the State or public authority.

[some examples in Charter omitted]

[77] The issue to determine is if AGL LY’s functions include functions of a public nature and, if they do, in the circumstances before me, it is exercising those functions on behalf of the State.

[78] In Metro West v Sudi²² (Sudi) Justice Bell gave detailed consideration to the purpose of the Charter:

The central purpose of the Charter is to protect and promote human rights.²³ This is indispensable in a democratic and inclusive society which respects the rule of law, human dignity, equality and freedom.²⁴ The interests protected by the Charter are those of individuals, whose birthright is freedom, equality and dignity in rights.²⁵ The responsibility for respecting human rights is placed on public authorities. Their actions and decisions are unlawful when incompatible with human rights, subject only to contrary legislation.²⁶ Therefore the concept of a public authority is of fundamental importance to the achievement of the central purpose of the Charter.²⁷

[footnotes in original]

[79] Justice Bell considered international legislation and jurisprudence from the United Kingdom, Canada and New Zealand relevant to the meaning of the term ‘public authority’ in the Charter. He went on to make a number of salient observations about s.4(1)(c) and the Charter in general:

The scheme of the Charter is that only public authorities are bound to act compatibly with human rights. 28 Private individuals, organisations and businesses are public authorities and so bound only to the extent that they exercise public functions on behalf of the state or public authorities. They must comply with the general laws of the land.29 But otherwise they can act according to their own interests and are not legally obliged to act compatibly with the Charter.30

...

The premise of the broad concept of a public authority in s 4 is that the purposes of the Charter are equally important, whether the capacity to engage human rights is in the hands of the state or a private entity exercising public functions on its behalf...

When the state acts in the public interest on its own behalf, it is responsible for respecting the human rights of individuals affected. When the state acts in the public interest through others exercising public functions on its behalf, it is they who are responsible. The direct 31 obligations in the Charter extend to private parties in civil society to that extent.32

[footnotes in original]

[80] It is apparent that AGL LY is caught by the Charter only when it is exercising public functions. This much is clear from the decision in Sudi at [119].

[81] In the supply of electricity it may well be that AGL LY comes within the definition of a public authority. However, the matter before me does not relate to the supply of electricity by AGL LY but rather its relationship with its employees. The question, therefore, is does the Charter extend that far into the operations of AGL LY? I think not.

[82] In determining matters associated with the employment of its employees AGL LY is not exercising a function on behalf of the state. As Justice Bell said, an organisation is a public authority and so bound by the Charter to the extent that it exercises a public function on behalf of the state. It must, in doing so, abide by the Charter, but otherwise it can act according to its own interests. 33 The obligations of the Charter only extend to AGL LY to the extent that it is exercising public functions on behalf of the State.34

[83] I am satisfied that, in managing its staff, AGL LY is exercising a private function. It is not, in doing so, subject to the Charter.

[84] I therefore find that the requirement of AGL LY on its employees in respect to the Code and Module is not a breach of the Charter and, on this basis, is not unlawful.

Does the restriction on public comment and the objectionable questions fall within the scope of the contract of employment?

[85] The CFMEU submits that the ‘ban on public comment and political activity’ do not fall within the subject matter of employment or the contract of employment as it seeks to regulate activities of employees in their own time. It also says that questions 2, 8 and 18 do not fall within the subject matter of employment or the contract of employment as each of the questions requires the employee to agree with a particular proposition propounded by AGL LY. These propositions, it says, do not relate to the manner in which employees perform their duties.

[86] The CFMEU rely on the decision in Graham George Clive McManus v Robin Scott-Charlton³⁵ (McManus) in which Finn J accepted the test with respect to a reasonable and lawful direction and went on to say:

Questions of illegality and reasonableness apart, the alternate formulations of lawfulness proposed by Dixon J are that the command "relates to the subject matter of the employment" or falls "within the scope of the contract of service." It is clear that these were intended to be synonymous in the limitation they expressed.

The need for some such limitation is patent: employment does not entail the total subordination of an employee's autonomy to the commands of the employer. As was said by the President in Australian Tramway Employees' Association v Brisbane Tramways Co Ltd:³⁶

"A servant has to obey lawful commands, not all commands. The servant does not commit a breach of duty if he refuse to attend a particular church, or to wear a certain maker's singlets. The common law right of an employee is a right to wear what he chooses, to act as he chooses, in matters not affecting his work."

There are obvious, and powerful, considerations of civil rights and liberties and of due process which inform this. These need not be laboured here although they are of no little significance in the resolution of this case.

[87] The CFMEU submits that the requirement for employees to agree with the propositions behind the questions it objects to is analogous to the examples given in the Tramways Case as cited in McManus. Just as an employer cannot direct an employee on what church to attend or what brand of clothing to wear so it cannot dictate the views that employees should hold. To this extent the CFMEU submits that the ban on public comment and political activity and the direction to answer questions 2, 8 and 18 of the Module are unlawful.

[88] AGL LY concedes that any limitation or restraint on comment or activity outside work must have a reasonable connection to work. It relies on the decision of the AIRC in Rose v Telstra Corporation Ltd 37for the test of reasonable limits on employee conduct outside work hours. Further, it submits numerous cases of the Commission and its predecessors have ‘explored the boundaries of reasonable limitations on public comment.’38

[89] AGL LY says it is entitled to secure and protect its financial and reputational interests and that it is unremarkable that it have a policy on public comment.

[90] I am not convinced that the limitation on public comment or political activities as set out in the Code or that the questions in the Module fall outside the contract of employment. In considering if the direction to complete the questions in the Module is reasonable (see above) I have considered in some detail the formulation of the questions, how the Code should be read and the need to read the Module in context. To that extent the reach of the Code in particular must be understood to only go to those points where there is some reasonable connection with work. This much is conceded by AGL LY. For the reasons given above I am not satisfied that the matters fall outside the employment contract.

[91] In reaching my conclusion I have also had careful regard to the wording of the Code and contextualisation this provides to the requirements placed on employees in the Code and in answering the questions in the Module.

[92] I therefore do not consider the requirements of AGL LY on its employees with respect to the Code and Module to be unlawful.

Conclusion as to lawfulness

[93] For the reasons given above I am satisfied that that the limitation on public comment and political activity as set out in the Code and the requirement to answer questions 2, 8 and 18 of the Module are not unlawful directions.

CONCLUSION AS TO REASONABLENESS AND LAWFULNESS OF THE CODE AND DIRECTION TO COMPLETE THE MODULE

[94] For the reasons given above:

• I am satisfied that the direction to complete questions 2, 8 and 18 in the Module is a lawful and reasonable direction.



• I am satisfied that restriction on the provision of information as set out in the Code is lawful and reasonable.



• I am satisfied that the restriction on public comment and political activity as set out in the Code is lawful and reasonable.

IS THE DIRECTION TO COMPLETE THE DECLARATION A REASONABLE AND LAWFUL DIRECTION?

[95] At the completion of the Module with respect to the Code employees are required to tick a box that says:

I have read and understood the AGL Code of Conduct, and agree to abide by it.

[96] The evidence of Jason Clark, Head of Group Risk & Compliance with AGL, is that the ‘tick a box’ is necessary:

to close out the module so that the employee is recorded as having completed the module. If an employee does not tick the box acknowledging that they have read, understood and agree to abide by the Code of Conduct, then the system will not record them as having completed the training.

Recording the completion of the training modules in this manner is a practical way for AGL to keep track of who from thousands of AGL employees has, or has not completed the Code of Conduct training and record their acknowledgment that they agree to comply by the Code... 39

[97] Mr Clark’s evidence is that a similarly worded declaration does not exist on the other three training modules employees are required to complete. Despite not requiring a declaration Mr Clark’s evidence is that AGL is still able to maintain an accurate record of who has completed those modules. 40 Mr Clark agrees that if the declaration was not in the Module in relation to the Code the company could still keep an accurate record of those employees who had completed the Module by reference to the unique ‘A’ number41 each employee has and uses to log into the training modules.

[98] I understand that a training module cannot be completed if an employee does not achieve a particular percentage of correct answer. For the Code this is 80%. I and not sure what a ‘pass’ mark is on the other three modules but do understand that there is a set pass level. However, even if an 80% ‘pass’ rate is achieved with respect to the Code, the Module cannot be ‘successfully’ completed without completing the declaration.

[99] In its submissions AGL says that:

acknowledgement from an employee as to the completion of training and an understanding of a policy serves a mutual benefit. First, it is in the employer’s interest, in seeking to establish and maintain behavioural boundaries, for employees to fully understand what is required of them. If an employee is unable to acknowledge his/her understanding, then this may reveal a deficit or defect in the employer’s communication processes or the effectiveness of its training. It is important that any flaws in the process are revealed so they can be rectified.

The employer does not want to hold an employee to account against a set of behaviours if the employee has not understood the parameters and boundaries within which they are expected to conduct themselves. 42

[100] I find the submissions of AGL disingenuous on this matter. If its concerns are so sincerely held it does not explain why it does require such a level of compliance with respect to modules in relation to Diversity and Inclusion, Health Safety and Environment and Information Security. These are, I trust, just as important to AGL as its Code of Conduct yet none of them requires a declaration of the type sought with respect to the Code.

[101] AGL LY does not need the declaration to be made to have knowledge of the completion of the training. This is clear from the evidence of Mr Clark and from the training in the other three compliance areas.

[102] I also reject the statement in AGL LY’s notification of dispute (Form F10) where it suggests that the Code of Conduct is an ‘over arching module’ and the declaration indicates a willingness to abide by the policies (plural). There is no evidence that the Code is an ‘over arching’ policy. In fact the evidence seems to suggest that each policy and training module stands alone and can be completed alone. Further, there is nothing to indicate that the declaration on the Module relates to all of the policies.

[103] It seems to me that employees either successfully complete the training or they do not. The signing of a declaration as evidence of completion or as a means of ensuring the employees are not held to account if they do not understand the parameters within which they are expected to conduct themselves does not stand up to any scrutiny.

[104] Further, the declaration sought goes further than is reasonable. At the completion of the Module an employee can reasonably declare that he or she has read the Code and successfully completed the training. It is not evident that completion of the Module leads to a complete understanding of the Code. Nor is it evident that an employee, on completion of the Module, is aware of the extent to which he or she is bound by the Code or the implications of a breach of the Code - either deliberate or accidental - such that he or she can agree to abide by it.

[105] It could be that this information is contained in the Module but I was not taken to it such that I could be satisfied on this point.

[106] There being no reasonable or logical explanation as to why the declaration is required for the Code it is reasonable that there is some suspicion of the motivations of AGL (or AGL LY).

[107] Whilst it might not be considered unreasonable for an employer to ask an employee to complete such a declaration on completion of training, the inconsistency in approach by AGL LY along with the other reasons given above, is enough to convince me that the requirement to sign the declaration is unreasonable.

LIMITATIONS IMPOSED BY AGREEMENT

[108] The CFMEU made a submission during the hearing that the requirement placed on employees to undertake the training was inconsistent with the requirements of clause 69 of the Agreement which states:

The Operations Group training requirements, standards, content, priorities and delivery shall be decided by the Station Operations Training Committee (hereinafter referred to as the ‘Training Committee’). The Training Committee shall operate by a consensus and consist of the Manager Station Operations, the Human Resources Manager Generation and three representatives elected by and from the Operations Group.

[109] The CFMEU submits that this clause requires that any and all training for operations group employees can only occur after it has been agreed to by the training committee established by the clause and that this is obvious from a plain reading of the clause.

[110] I reject the submissions of the CFMEU on this point. The Agreement is structured such that Part 1 deals with Common Issues, Part 2 deals with the Warehouse Group, Part 3 Environmental and Scientific Services, Part 4 Station Engineering, Maintenance & Planning Group, Part 5 Station Operations, Part 6 Mine Operations Group, Part 7 Mine Shift Electrical.

[111] Each of Parts 2-7 contains specific conditions for the nominated group of employees.

[112] Clause 34 in part 1 of the Agreement contains general provisions relating to training and development. Each of Parts 4, 5 and 6 contain a training clause similar in wording to that set out above.

[113] I do not accept that AGL LY cannot roll out general training across the Loy Yang site without the express agreement of at least three separate group training committees as to the content and standard of delivery of that training. On the CFMEU’s construction the Company could not deliver training on Diversity in the Workplace or general OH&S issues to Operations Group employees without specific agreement of the Operations Group training committee.

[114] It seems to me more likely that the intention is that the specific group training committees should deal with the training matters unique to that group (as opposed to generic, company-wide training). This being so I consider the training on the Code, Diversity and Inclusion, Health Safety and Environment, and Information Security are matters which fall outside the control of the specific group training committees.

[115] I am satisfied that the wording of the clause suggests such an interpretation and the meaning I attribute to the clause will not result in a capricious outcome.

IS THE ACTION BY THE CFMEU UNPROTECTED INDUSTRIAL ACTION?

[116] AGL LY submits that that the refusal by the CFMEU members to comply with a lawful and reasonable direction is industrial action and enlivens s.418 of the Act. AGL LY seeks orders that the industrial action stop.

[117] I do not intend to grant the order sought by AGL LY. To grant the order sought would circumvent the intent of the disputes settling procedure. To grant the order suggests that a dispute about the application of the Agreement or any matter arising out of employment which results in work being done in a way not agreed to by AGL LY may be subject of an order to stop industrial action.

[118] In any event the dispute resolution procedure requires that ‘normal work’ continue while the dispute is being resolved. ‘Normal work’ is defined at clause 24.1(d) to include the performance of work prior to the introduction of a change where the dispute relates to that change.

[119] I am satisfied in this case that the change subject to the dispute is the requirement that employees complete the Module. The continuation of normal work is therefore the practice in place immediately prior to the introduction of the requirement to complete the Module.

[120] I am not convinced that a properly notified matter for resolution under the disputes resolution procedure can be described as industrial action by the CFMEU in circumstances where the AGL LY is the party that has invoked the dispute resolution procedure.

[121] I decline to grant the order sought.

Orders

[122] In accordance with my decision I intend to issue the following orders:

1. It is reasonable and lawful for AGL Loy Yang to direct its employees to complete all the questions in the training module associated with the Code of Conduct;

2. The Code of Conduct is lawful and reasonable;

3. It is not a reasonable direction for AGL Loy Yang to direct employees to complete the declaration as it appears at the end of the training module for the Code of Conduct.

COMMISSIONER

Appearances:

A. Walkaden of the CFMEU.

J. Forbes of Counsel with K. Lehane of Minter Ellison Lawyers for the Respondent.

Hearing details:

2014.

Melbourne:

22 September.

 1   Exhibit AGL4, attachment JL-1.

 2   Exhibit CFMEU1, attachment BW-2.

 3   Exhibit CFMEU1, attachment BW-9.

 4   Transcript PN56.

 5   Exhibit CFMEU2, paragraphs 6-8.

 6   Transcript PN 415-7.

 7 (1938) 60 CLR 601.

 8   Ibid at 621-2.

 9 (2005) 145 IR 285.

 10 Ibid, at [24].

 11 Ibid, at [35].

 12   Transcript PN704-5.

 13   Exhibit CFMEU1, attachment BW2.

 14   Exhibit CFMEU1, attachment BW2, page 33.

 15   Transcript PN506.

 16   Exhibit CFMEU1, attachment BW2, page 38.

 17   Exhibit CFMEU1, attachment BW2, page 48.

 18   Transcript PN517.

19 [1996] FCA 904.

 20   Charter s 15.

 21   Ibid.

22 [2009] VCAT 2025.

23 Charter s 1(2)(a).

24 Preamble; see also the general discussion in Kracke v Mental Health Review Board [2009] VCAT 646, [19]-[27].

25 Ibid.

26 Charter s 38(1) and (2).

27 Sudi, at [118].

 28   Charter s 38(1).

 29   Where that law is statutory, the special interpretative obligation in s 32(1) applies, so that the statute must be interpreted, so far as possible consistently with its purpose, consistently with human rights.

 30   Sudi at[119].

 31   The indirect obligation arising under s 32(1) apply universally.

 32   Sudi, at[121]-[122].

 33 Ibid, at [119].

 34 Ibid, at [122].

35 [1996] FCA 904.

36 (1912) 6 CAR 35 at 42.

 37 [1998] AIRC 1592.

 38   Exhibit AGL5, paragraph 47.

 39   Exhibit AGL4, paragraph 22-3.

 40   Transcript PN240-1.

 41   Transcript PN248.

 42   Exhibit AGL5, paragraph 55-6.

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