CFMEU v McConnell Dowell Constructors (Aust) Pty Ltd
[2014] FCCA 594
•27 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CFMEU & ANOR v MCCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD | [2014] FCCA 594 |
| Catchwords: INDUSTRIAL LAW – Construction of Enterprise Bargaining Agreement – principles for construction of industrial instrument. INDUSTRIAL LAW – Stand down of workforce pursuant to s.524 Fair Work Act 2009 (Cth) – offer of continued stand down or alternatively termination – each with attendant entitlements – whether or not adverse action. COERCION – Offer of election to continue stand down or leave without pay or accept termination – offer of lawfully open alternatives not coercion. |
| Legislation: Fair Work Act 2009 (Cth), ss.340, 341, 342, 343, 360, 524, 540 |
| Amcor Limited v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 Australian Meat Industry Employees' Union v Belandra Pty Ltd (2003) 126 IR 165 Australian Workers' Union v BHP Iron-Ore Pty Ltd (2000) 106 FCR 482 Blair v Australian Motor Industries Ltd (1982) 61 FLR 283 Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 290 ALR 647 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Byrne v Australian Ophthalmic Supplies Pty Ltd (2008) 169 IR 236 City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union (2006) 153 IR 426 Employment Advocate v National Union of Workers (2000) 100 FCR 454 General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 Jones v Queensland Tertiary Admissions Centre Ltd (No.2) (2010) 186 FCR 22 Kucks v CSR Ltd (1996) 66 IR 182 Liquor Hospitality and Miscellaneous Union v Arnotts Biscuits Ltd [2010] FCA 770 Lustre Hosiery Ltd v York (1935) 54 CLR 134 Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114 National Union of Workers v Qenos Pty Ltd (2001) 108 FCR 90 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No.3) (1998) 195 CLR 1 Pearce v WD Peacock & Co Ltd (1917) 23 CLR 199 Rojas v Esselte Australia Pty Limited (No.2) (2008) 177 IR 306 |
| First Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Applicant: | JOHN WINTERS |
| Respondent: | MCCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD |
| File Number: | BRG 642 of 2012 |
| Judgment of: | Judge Burnett |
| Hearing dates: | 29, 30, 31 May 2013 |
| Date of Last Submission: | 31 May 2013 |
| Delivered at: | Brisbane |
| Delivered on: | 27 March 2014 |
REPRESENTATION
| Counsel for the Applicants: | Mr C. Dowling |
| Solicitors for the Applicants: | Hall Payne Lawyers |
| Counsel for the Respondent: | Mr A. Herbert |
| Solicitors for the Respondent: | Franklin Athanasellis Cullen |
ORDERS
The application filed on 16 July 2012 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 642 of 2012
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
First Applicant
| JOHN WINTERS |
Second Applicant
And
| MCCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicants contend that the respondent contravened the second applicant’s workplace rights in contravention of s.340 Fair Work Act 2009 (Cth) (“FW Act”) and or engaged in coercive conduct in contravention of s.343 FW Act. The specific contraventions alleged concern a failure to pay an entitlement contended to be payable under an enterprise agreement that existed covering the workplace. The central issue for determination concerns the construction to be applied to cl.5.1(9) of the enterprise bargaining agreement governing the workplace. From that determination all related issues flow leading to a conclusion that no contraventions have been established for the reasons that follow.
Background Facts
In 2011/2012 the respondent, McConnell Dowell Constructors (Aust) Pty Ltd, was part of a joint venture (“MCJV”) engaged in the construction of a gas pipeline between gas fields in the Western Darling Downs and Gladstone in Queensland (“QCLNG Project”). At that time the second applicant, Mr Winters, was employed by MCJV as a serviceman. In that role he serviced plant and other equipment such as bulldozers, graders, trenching machines and small plants. He had commenced employment with the MCJV in about mid-September 2011. The pipeline traverses a distance of approximately 540 kilometres along a 40 metre corridor and the project workforce was arranged around several camps located at various points along the length of the proposed pipeline. Each of the camps housed several hundred workers. Mr Winters was based out of a camp near Wandoan, a small township to the north of Chinchilla. His employment was subject to the McConnell Dowell Constructors (Aust) Pty Ltd MacDow Gas, Oil and Slurry Pipeline Greenfields Agreement 2009-2012 (“the Agreement”). His employment under the Agreement with the MCJV provided a work roster of 28 days on and 9 days off. Payment for his employment was made in accordance with Schedule 1 to the Agreement.
In late December 2011 Mr Winters took leave over the pre-arranged Christmas stand down period. Both prior to and subsequent to that leave the site was adversely affected by rain. Over the Christmas break a decision was taken by the joint venture, upon the recommendation of the respondent, to stand down the workforce. That included Mr Winters. He did not return to site as he was rostered to on 4 January 2012 because he was instructed not to, consistent with that instruction. Transport arrangements for his return were not made. These matters were subsequently the subject of correspondence. In short, Mr Winters agreed to take leave without pay rather than be dismissed.
The applicants’ contend that Mr Winters was entitled by the Agreement to payment for the days in which he was scheduled to work but was unable to work due to the adverse weather. They contend that this entitlement was a workplace right within the meaning of s.341 FW Act. They further contend that the effect of the offer (contained in the correspondence dated 11 January 2012) was a threat to terminate employment if Mr Winters did not forgo the workplace right to payment under the Agreement and, accordingly, it constituted adverse action as defined in s.342 FW Act. Alternatively, it alleges that the letter dated 11 January 2012 was made with the intention to coerce Mr Winters not to exercise his workplace rights. They submitted that these events gave rise to contraventions of s.340 or s.343 of the FW Act.
The facts in this case are largely not in dispute. The dispute in this application principally revolves about the proper construction of the Agreement on the first part and secondly whether it can be contended that the proposal contained in the letter dated 11 January 2012 constituted an act intended to coerce Mr Winters not to exercise a workplace right.
The relevant workplace rights
The first applicant contends that the respondent threatened to take adverse action against the second applicant because he had a workplace right within the meaning of s.341 FW Act.
A “workplace right” is defined in s.341 FW Act:
“341 Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of … a workplace law, workplace instrument or order made by an industrial body; or
…”
In this instance the applicants contend that Mr Winters’ relevant workplace right arises from cl.5.1(a) of the Agreement. Clause 5.1 of the Agreement relevantly provides:
“5.1 Inclement Weather
Adverse weather shall mean the existence of rain or abnormal climatic conditions for the locality by virtue of which it is either unreasonable or unsafe to continue working.
Weather shall not be regarded as adverse unless mutually agreed between the employer and employees concerned. In the event of adverse weather affecting any part of the Project, work shall continue while safe to do so.
In the case where an employee cannot be usefully employed on the site due to the effect of adverse weather conditions, as determined by the employer, one of the following procedures will be applicable as the circumstances dictate:
a) Where an employee is required to remain in the camp or other accommodation and is unable to complete any work on the day, the employee shall be paid 7.2 hours at the hourly rate prescribed in Schedule 1 in lieu of the day rate prescribed in Schedule 1 for each such day and meals and accommodation shall continue to be provided. The Travel Allowance will not be paid on such days. Allowances will continue to be paid as if at work.”
The applicants contend that, upon a proper construction of cl.5.1(a) of the Agreement, employees:
a)who are schedule to work;
b)who are required, by virtue of adverse weather, to remain in the camp or other accommodation; and
c)are unable to complete any work,
are entitled to receive 7.2 hours pay for each and every day that they are unable to attend for work due to the adverse weather. It was the non-payment of entitlements flowing from this provision which is alleged to have constituted adverse action.
Additionally Mr Winters was entitled to continued employment in accordance with the terms of the Agreement, a workplace instrument. The applicants contend the respondent took adverse action against Mr Winters because, in reluctantly agreeing to be stood down for the duration of the rain affected January/February period, he forbore in the exercise his of rights pursuant to the Agreement.
The Proper Construction of Clause 5.1(a)
The principles governing the construction of awards are set out in City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union (2006) 153 IR 426, where at 438 French J (as his Honour then was) observed:
“[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘… the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘… ideas that gave rise to an expression in a document from which it has been taken’ — Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).
[54] The requirement to have regard to purpose in the interpretation of Commonwealth statutes is imposed by s 15AA of the Acts Interpretation Act which provides:
“In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”
It is to be read with s 15AB of that Act which provides, inter alia:
“(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) to confirm that the meaning of the provision of the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure; or
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
...
(3) In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to:
(a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and
(b) the need to avoid prolonging legal or other proceedings without compensating advantage.”
[55] As Lindgren J observed in NAQF v Minister for Immigration, Multicultural and Indigenous Affairs (2003) 130 FCR 456, s 15AB assumes that the ordinary meaning of a provision ‘“taking into account its context in the Act and the purpose or object underlying the Act” has been identified before any occasion arises for the consideration of extrinsic materials’ [70]. Ambiguity or obscurity is not necessary to the application of s 15AB as extrinsic materials may be relied upon to ‘confirm’ that the ordinary meaning conveyed by the text is the true meaning of the provision [69].
[56] The attribution of purpose by reference to context in the wide sense does not await the discovery of an ambiguity in the text. The purpose or object underlying an Act is often determined by consideration of the statutory context — CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ). Nor does discovery of an ambiguity precede resort to extrinsic material under s 15AB. For as Dawson J said in Mills v Meeking (1990) 169 CLR 214 at 235 (speaking of s 35 of the Interpretation of Legislation Act 1984 (Vic) in almost identical terms to s 15AA):
“The approach required by s 35 needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done.”
[57] It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities — City of Wanneroo v Holmes (1989) 30 IR 362 at 378–379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned — see eg Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503–4 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):
“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.””
This approach now appears to be universally accepted: see Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Amcor Limited v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 per Gleeson CJ and McHugh J at 249; Kirby J at 267 and 270; Callinan J at 283.
The applicants contend that cl.5.1(a) obliges the respondent to make payment to an employee who is “required to remain in the camp or other accommodation.” They further contend that the term “accommodation” as used in cl.5.1 includes an employee’s usual residence. The respondent contends that accommodation in cl.5.1 means accommodation provided by the respondent. The applicants contended that the respondent’s submission to the contrary should not be accepted because:
a)It is not consistent with the ordinary meaning of the words contained in the clause: City of Wanneroo v Australian Municipal, Administrative, Clerical And Services Union at [53]. That is, the ordinary meaning of the words is not restricted to accommodation as provided by the respondent; and
b)It would create an inequitable result.
The applicants submitted that on the respondent’s interpretation employees who live locally and have returned home because of adverse weather would not be paid, whereas employees who do not live locally but have returned to their (respondent provided) accommodation would be paid. Accordingly, it contended that upon that interpretation two employees, one living in local rented accommodation provided by the respondent and the other in local rented accommodation provided by the employee, would receive significantly different entitlements. That is, one would be paid and one would not. It contended that none of the subparagraphs in cl.5.1 discriminate on the basis of location and that accordingly cl.5.1 should be construed on that basis.
The applicants particularly rely upon the differential use of the term “employment” in the Agreement. For instance, at cl.3.3.6 the term is used adjectivally before the phrase “provided by the employer.” This, they submit, is in contrast to its use in cl.5.2, where the term “accommodation” is informed by the adjective “other.” They contend that this expression intends to extend the ambit of “accommodation” beyond the limited use intended for example by cl.3.3.6, and that it includes, for instance, an employee’s home accommodation. This construction, they contend, is supported by the negotiated outcome that would otherwise follow between local employees (who do not live in company accommodation) and those who do when both are affected by the same weather event. It follows that, upon the applicant’s construction, employees who are scheduled to work and who are required to remain in accommodation (of any kind) by virtue of adverse weather within the meaning of clause 5, and are unable to complete any work, are entitled to receive 7.2 hours pay for each and every day that they are unable to attend work due to the adverse weather.
For the respondent it was contended that the second applicant, in common with other employees of the respondent, is transported from his home elsewhere in Australia to work in remote locations for 28 days straight during which the employee is accommodated in camps or such other accommodation as the respondent provides. From there they are then transported to their home port at the end of that work period. It was submitted that the respondent was required to provide accommodation for the employees at the relevant “construction camp or other accommodation provided for by the employer” as a practical consequence of the remote location of the works and in accordance with cl.3.3.6 of the Agreement. It was contended that the provision of such camps or other employer supplied accommodation is standard industry practice.
The respondent contended that the difference between “camp or other accommodation” is highlighted by references in related clauses to a “normal place of residence” or “usual place of residence.”[1] It was submitted on this basis that it is clear in the context of cl.5.1(a) that the reference to “or other accommodation” where it appears after the word “camp” is not a reference to an employee’s “normal place of residence” or “usual place of residence,” rather it is a reference to the “other accommodation provided for [the employee] by the employer” to which cl.3.3.6 of the Agreement makes express reference and which the respondent may provide when it cannot provide camp accommodation, such as for instance when camps are full or when the camp is too remote from the site where the particular employee might be working.
[1] See cl.3.3.6 of the Agreement.
On the respondent’s contention, the expression being “required to remain in camp or other accommodation,” is a reference to a case in which the employee is confined to the camp or other accommodation provided by the employer and where the employee cannot leave the camp or other accommodation to work for a reason related to adverse weather, and is thus unable to work on that day. It is not a reference to some more general circumstance in which the employee is at home in the employee’s “normal place of residence” or “usual place of residence.” For its part, the respondent contends that the applicants’ interpretation would lead to bizarre results, such as the respondent being required under cl.5.1(a) to continue to provide meals and accommodation for an employee who cannot attend because of a matter enumerated and who in the meantime continued to live in the employee’s “normal place of residence” or “usual place of residence.” It contended that the requirement to “continue” the provision of meals and accommodation is only sensible if the employee is physically in the employer supplied accommodation at the time. For instance, in the current context the respondent submitted that it would be nonsensical to require the respondent to continue to provide meals for Mr Winters while he continued to reside in Melbourne.
The respondent further contended that on the applicants’ contention cl.5.1(a) would have no work to do at all if an employee is not, at the time of the requisite adverse weather, in “camp” or “other [employer supplied] accommodation.” It contended that plainly the clause is designed to compensate employees who are unable to work due to adverse weather and who are also unable to return to their homes. In that context the clause would have no application:
a)Where, as occurred in December 2011, a stand down of employees under s.524 FW Act occurs, the consequence of which is employees are set home from the site; or
b)Where, as occurred in early January 2012, a decision is made not to mobilise employees and as a consequence those employees are not transported by the respondent to the site (or to camp).
The respondent contended that it would be perverse to suggest that an entitlement predicated upon an employee being required to “remain in” a camp on wet days was also available if the employee was residing half a continent away from the camp.
The applicants contend that their construction requires no narrow or pedantic approach to lead to the outcome which they advance, and which they contend avoids injustice.
Respectfully however the applicants’ construction ignores the uncontested background. The agreement was a ‘greenfields’ agreement governing terms and conditions for employees engaged to work on a pipeline and associated infrastructure in isolated parts of Queensland and the Northern Territory. The relevant pipeline was one between Chinchilla and Gladstone, a distance of approximately 540 kilometres along a 40 metre corridor; this constituted the workplace. Clause 1.3 of the Agreement provided that it would apply to the respondent and its employees engaged “in or in connection with new projects of the construction of gas, oil and slurry pipelines and ancillary works in Queensland and the Northern Territory.” Geographically the ambit covered by it constituted a broad land mass. Given the lineal nature of pipelines the workforce was not confined as might otherwise occur with a remote mine site or other infrastructure project such as a dam or road project. In that context this arrangement addressed ‘FIFO’[2] workers. It was not directed to the engagement of workers local to the works, although naturally they would have not been excluded from employment if otherwise suitable.
[2] I have employed the term ‘FIFO’ (fly in, fly out) not in its literal sense but to reflect the fact that, given its transient nature, none, if any, of the employees were able to reside within 100 kilometres or one hour’s drive of the workplace (as referred to in cl.3.3.6(b)). At any one time most employees lived remote from the site and travelled extensive distances to perform their duties. They enjoyed allowances provided for this purpose.
Significantly however it is plain, particularly given the lineal nature of the workplace (being a lengthy pipeline), that even an employee who was momentarily local to the worksite would only ever be so for a short time. So much is evident from the definition of “site,” which included the workplace(s) “along the right of way where the pipeline and ancillary facilities are to be permanently located.” The contemplated remoteness was also evident by cl.2.2, which required workplace flexibility. Plainly, in a remote context workplace flexibility enhances productivity by requiring employees not to take points of workplace demarcation or to restrict their duties in accordance with functions or organisational status. This flexibility and consequent enhanced productivity requires employees to undertake all tasks for which they are capable. In less remote circumstances, when a larger and potentially more specialised workforce is available, such a provision would not be as essential.
Furthermore, the Agreement provided for allowances such as the “Travel Time Allowance,” “Site Disability Allowance” and “Incidental Expenses Allowance & Camp Accommodation.” These allowances reflect the type of project that the Agreement was intended to govern, that is, in circumstances where employees would have to be transported to and from remote locations. Similarly, Schedule 1 deals with ‘cycle breaks.’ Aside from prescribing the times for “R & R,” an additional allowance of one day is allowed for travel time, again reflecting an expectation that an extended period of time might be taken in travelling both to and from the site before and after the usual work cycle.
The circumstantial background to the Agreement is important. It was plainly negotiated in the context of a FIFO-like workforce. Although the applicants pointed to illustrations of a local employee to highlight apparent injustices, it is plain from the Agreement and its context that its terms do not contemplate such a workforce. That is not to say that a local person would not be eligible for employment under the Agreement, but it is designed to deal with the workforce and worksite mobility necessary to operate a geographically linear project.
Was there Adverse Action?
Accepting the respondent’s construction of cl.5.1, Mr Winters was not entitled to payment for the period from 4 January 2012 because he was not on site and remained at home. The respondent had stood down its workforce, including Mr Winters, in accordance with its rights pursuant to s.524(1)(c) FW Act because of the impact of adverse weather.
It follows that the respondent did not take adverse action by not making payments pursuant to cl.5.1(a). None were due and accordingly the non-payment of monies not due could not injure or alter the position of an employee to his or her prejudice.
Plainly however Mr Winters’ employment circumstances were varied with effect following the 11 January 2012 letter. Accordingly, a question arises as to whether this variation constituted adverse action. Section 342 provides that adverse action is taken by an employer against an employee if the employer “injures” the employee in his or her employment or alters the position of the employee “to the employee’s prejudice.”
The adverse action complained of is alleged to be either:
a)injury to Mr Winters in his employment; or
b)alteration of his position in his employment to his prejudice.
Each of these are a species of adverse action under the FW Act. These concepts are constructed broadly and have been explained in cases following Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No.3) (1998) 195 CLR 1. At page 18 Brennan C J, McHugh, Gummow, Kirby and Hayne JJ referred to injury in employment as a term which “covers injury of any compensable kind”; and referred to alteration to an employee’s position to the employee’s prejudice as:
“… a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question.”
More recently in Australian Workers' Union v BHP Iron-Ore Pty Ltd (2000) 106 FCR 482, Kenny J said that before a provision such as Item 1 of s.342(1) can apply, it must be possible to say of an employee that he or she is in a worse situation after the employer’s acts than before them, that the deterioration has been caused by those acts and the acts were intentional, in the sense that the employer intended the deterioration to occur.
It is now accepted that when determining whether there had been an injury or prejudicial alteration of the position it is necessary to identify and compare the employee’s “position” before and after the alleged adverse action and determine whether it was altered to an employee’s detriment as a result of the alleged adverse action: McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 at [349].
An injury may include a reduction in an employee’s take home pay, a change in an employee’s shifts and/or hours or a diminution of the opportunity to obtain work. As Finkelstein J observed in The Community and Public Sector Union v Telstra Corp Ltd (2000) 99 IR 238 at [20]: “Injury is concerned with an actual adverse effect, usually by the loss or alteration of a legal right, in the position of an employee, in his capacity as an employee.”
The applicants submitted that to “alter” the position of an employee to the employee’s prejudice has been determined to be a broader category than “injury” in employment. The authorities support that contention.
As Evatt J noted in Blair v Australian Motor Industries Ltd (1982) 61 FLR 283 at 290, the words “or alter his position to his prejudice” were added to the Conciliation and Arbitration Act 1904 (Cth). In that case his Honour was considering the matter of injuring an employee in his employment whist he was engaged in duties associated with his industrial organisation. Addressing the issue of altering to prejudice, he observed:
“… the words were added to the section to overcome a situation in which an employer did something short of dismissing an employee but which was something which could be said to be harmful to him in his employment.”
He continued at 291-292:
“… It is possible to read the word ‘position’ in a narrow way merely as referable to the immediate incidents of day-to-day employment. But I do not see any reason why it should be so circumscribed in meaning. It seems to me that the word ‘position’ should be read rather to refer to a man's employment position in all its attributes and that to find what those attributes are in any particular case, you look at the terms of employment, the terms of the agreement in relation to the particular employment …”
In Employment Advocate v National Union of Workers (2000) 100 FCR 454 the Court considered the meaning of “prejudicial alteration” in the context of the freedom of association provision of the Workplace Relations Act 1996 (Cth). At [43], Einfeld J observed:
“It is apparent that as a matter of general approach, a somewhat generous interpretation of what constitutes "injury" or "prejudice" has been adopted by the courts, although it is clear too that employment is not a general condition, and the circumstances of the particular employment are critical to any finding. Prejudicial alteration is plainly wider than the notion of 'injury' and includes that notion. It is a broad additional category.”
In that decision a number of single judge decisions were examined, which illustrated the very wide ambit applied to the words by courts. His Honour however noted a word of caution at [45] that, “No exhaustive catalogue of possibly injurious circumstances could or should be attempted.” It appears however that the words are afforded a very liberal and broad interpretation.
Concerning the term “prejudicial alteration,” the authorities support the contention that that term covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question.
In Jones v Queensland Tertiary Admissions Centre Ltd (No.2) (2010) 186 FCR 22, Collier J stated at [65]:
“The term “alters the position of the employee to the employee’s prejudice” appears to refer to an intentional act directed to an individual employee or prospective employees: BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 97 IR 266 at 275. Further, in Community and Public Sector Union v Telstra Corporation Ltd [2001] 107 FCR 93, where an email was sent within the employer organisation by management proposing alterations to the basis upon which redundancies would be offered to employees, the Full Court held that the employer had altered the position of the relevant employees to their prejudice even where there was no evidence that the email had been the subject of action. In that case the Full Court considered that circumstances which result in the employment of employees becoming less secure, in a real and substantial manner, than it had been previously, constitutes an alteration in their position to their prejudice.”
It thus appears that the concept of “prejudicial alteration” includes prejudice extending beyond legal injury to which the Court has usually applied the ‘before and after’ test.
The types of conduct that have fallen within injury in employment or alteration to one’s prejudice have included discriminatory allocation of less congenial shifts or rosters. A change to working arrangements (in the relevant case, a transfer to a different position) was found by Marshall J in Byrne v Australian Ophthalmic Supplies Pty Ltd (2008) 169 IR 236 at [26] to be:
“… “an injury” and “an alteration” because it was part of a plan devised by [the employer] to make the [employee’s] working life so intolerable that she would have no alternative but to resign. It was nasty and egregious conduct and involved an abuse of power by [the employer] in a relationship where the employer held all the power and [the employee] was doing no more than asserting her right to her correct entitlements.”
However, one caveat upon the unlimited ambit of alteration to prejudice appears to be that the alteration must be “real and substantial, rather than merely possible or hypothetical”: Australian Meat Industry Employees' Union v Belandra Pty Ltd (2003) 126 IR 165 at 187.
In this case the applicants contend that the 11 January 2012 letter gave Mr Winters two alternatives:
a)be terminated with statutory entitlements; or
b)take a week’s pay and the balance of time off on leave without pay.
It was submitted that the offer of the election constituted the taking of adverse action against Mr Winters as he was denied the ability to continue his employment on the basis that it existed immediately prior to the letter of 11 January 2012.
For the respondent it was submitted that there could be no adverse action as an employer has the right to terminate employment when the employer does not require the employee to perform the work that the employee was engaged to do. It submitted that that right exists as a necessary concomitant of the role and function of the employment relationship, that is, to secure the services of an employee to perform such work as the employer wishes to be done, and for such period as the parties agree. It submitted that in the absence of a contractual or statutory provision as to time, a contract can always be terminated by either party on notice: Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 429 (per Brennan CJ and Dawson and Toohey JJ). It contended that in this case no period of notice was set by the Agreement and no provision would have prevented the exercise of the right to terminate employment when it was no longer required by the employer, just as there is and was no impediment to Mr Winters resigning his employment when it no longer suited his needs. It contended that to exercise the right to terminate because the employer does not need the services of the employee for the time being is an everyday event, is not adverse action and is not proscribed by the FW Act. I accept that submission. It follows the termination of Mr Winters could only constitute adverse action if it occurred for a proscribed reason.
Likewise I accept that continuing the employment of a stood down employee in accordance with s.524 FW Act did not injure or cause any prejudice to the employee. It follows that I do not consider the offer of the election contained in the letter of 11 January 2012 constituted adverse action, as on its face the respondent did not take any adverse action against Mr Winters. As I have noted earlier, Mr Winters was lawfully stood down. He would have had a right to return at some later unspecified time when the works were able to resume because the site had dried and the technical issues had been resolved. Given that as a stood down employee he was not entitled to pay and would in any event have returned to employment once the basis for the stand down had been resolved, the offer of leave without pay and a return to his position upon the resumption of works had a benefit, being an additional week’s pay. Otherwise its effect was neutral, providing neither advantage nor disadvantage to him because he had a right to choose continuing employment in any event.
If the respondent had no right to terminate Mr Winters’ employment then termination would have been to his prejudice giving rise to the question of whether or not it was done for a proscribed reason. However, despite being put to an election to take a less favourable option, which arguably would have constituted adverse action, he did not accept it.
Section 342 defines the meaning of “adverse action.” It provides, inter alia:
342 Meaning of adverse action
(1) The following table sets out circumstances in which a person takes adverse action against another person.
| Meaning of adverse action | ||
| Item | Column 1 Adverse action is taken by ... | Column 2 if ... |
| 1 | an employer against an employee | the employer: … (b) injures the employee in his or her employment; or (c) alters the position of the employee to the employee’s prejudice; or …. |
As a matter of statutory construction it is plain from the expression of s.342(1) that the form of inquiry is upon events that have passed. That is in contrast to prospective events such as those contemplated by s.340(1)(a)(iii), which refers to prospective conduct of an employee.
For reasons which follow, the respondent’s conduct may have occasioned as contravention of s.343 FW Act. However, I do not consider it to have constituted adverse action pursuant to s.342(1,) because, on the applicants’ case, the employer only attempted to injure the employee or alter his position to his prejudice (even if the attempt was for a proscribed reason). There must be an actual adverse outcome, not merely an attempted one. So much is consistent with the principle in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No.3), which directs inquiry to injury being of a compensable kind.
The circumstances here have a close analogy with the facts in Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34. In that case the Geraldton Port Authority had been subject to a significant organisational restructure. This process included the redundancy of many of its employees. Although the legislative scheme then extant was not as expansive as that provided for in Part 3-1 FW Act, the legislative framework was similar with the inquiry being directed to whether an employer took adverse action “because” of a “protected reason.” In that context, addressing factors of voluntary redundancy, Nicholson J observed at [244]:
“It is not necessary to proceed to detailed fact finding on these propositions because I consider s298K(1)(b) [Workplace Relations Act 1996 (Cth)] has the following effect in respect of voluntary redundancies:
(1) An offer of voluntary redundancy is not a threat to injure an employee in his or her employment. It is an offer the employee may accept or reject.
(2) Acceptance by an employee of payment of redundancy, a fortiori payment at an enhanced rate, is evidence of absence of injury in the employment to which the redundancy relates.
(3) Once accepted by the employee, the redundancy takes effect and the employment ceases. There is therefore no relevant employment against which to measure any alleged injury arising from the redundancy.
(4) Consequently, allegations of worse terms and conditions being inevitable on engagement in new employment are not relevant to alleged injury in the former employment. S298K(1)(b), even given its wide connotation, does not address employment as a general condition but is referable to the particular employment in which the injury is said to have occurred or been threatened. Cf Australasian Meat Industry Employees' Union v R J Gilbertson (Queensland) Pty Ltd (Gray J, Federal Court of Australia, 8 December 1988) unreported, 15-17.”
This approach was cited with approval by Weinberg J in National Union of Workers v Qenos Pty Ltd (2001) 108 FCR 90 at [53].
In this case, as with Maritime Union of Australia v Geraldton Port Authority, there was no adverse outcome. In fact, the employee’s outcome was beneficial as his position was preserved (as it should have been) but additionally he received a bonus 36 hours pay to which he otherwise had no entitlement.
Even if I were wrong and the threat of Mr Winters’ dismissal was not open at common law, and it was unlawful on the basis it was unfair because he was not “redundant,”[3] the fact remains that he refused that option and suffered no injury. What may have followed is not relevant to the injury: Maritime Union of Australia v Geraldton Port Authority (supra) at 244.
[3] Amcor Limited v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union per Gleeson CJ and McHugh J at [14]; Kirby J at [105]-[107]; Gummow, Hayne and Heydon JJ at [43]; Callinan J at [142].
Mr Winters did not suffer adverse action pursuant to s.342 FW Act.
What if the Circumstances Establish Adverse Action?
However, if the applicants’ contentions are correct and the second applicant suffered adverse action in respect of a workplace right, the threshold issue would be satisfied and the applicants would have made out a credible complaint necessitating an answer by the respondent to the allegations: Jones v Queensland Tertiary Admissions Centre Ltd (No.2) (2010) 186 FCR 22 at [10]. Accordingly, they would bear the onus of establishing that the action was taken with an intent that was other than a reason or intent that would constitute a contravention of the Act: s.360(1)(b). In that event the respondent bears the onus of proof and needs to establish that its subjective intent was not for a proscribed reason or purpose: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 290 ALR 647; Rojas v Esselte Australia Pty Limited (No.2) (2008) 177 IR 306 at [46]-[50]; and Jones v Queensland Tertiary Admissions Centre Ltd (No.2) (2010) 186 FCR 22 at [10].
Was the Action because of a Proscribed Reason?
In this case Mr Winters was not scheduled to work until 4 January 2012. He was given notice on 3 January 2012 that he was not to return to work due to the inclement weather. Accordingly, as he was not scheduled to work he had not been mobilised and was not residing “in camp or other accommodation” within the meaning of cl.5.1(a) of the Agreement. It follows that he could not be required by the weather to remain in “camp or other accommodation” as he was not then present or attempting to be present in the “camp or other accommodation.” As such he was not entitled to payment under cl.5.1(a) of the Agreement at any relevant time and nor was there the possibility of him becoming entitled to any payment under cl.5.1(a) of the Agreement because the factors enumerated therein had not been satisfied.
Weather difficulties were apparent in early December 2011 following a number of days of heavy rain. At that time Mr Geoffrey Rogers, the Project Manager, in consultation with the construction manager decided to suspend some workers because of the risks associated with the performance of their duties. It is not in contest that in the circumstances the inclement weather presented a significant risk to general workplace health and safety, access to the site and the capacity of the respondent to execute the works to the requisite contractual standards.
Affected workers on that occasion were paid in accordance with cl.5.1 of the Agreement. Mr Rogers observed that because of the approaching scheduled Christmas stand down, and the significant and deteriorating weather, he considered demobilising part of the workforce that was then so affected. In anticipation he spoke to the QCLNG Project’s workplace consultant, Mr Greg Power of Drayton’s Workplace Consulting. Mr Rogers took advice about the respondent’s obligations under the Agreement. From his discussions with Mr Power he understood that cl.5.1 only required the respondent to pay employees whilst they were in camp and holding themselves ready to work. Otherwise where employees were unable to work due to circumstances beyond the control of the respondent and stood down and demobilised from Camp there was no obligation upon the respondent to pay such employees.
For reasons addressed later concerning the economic fundamentals of this kind of project, I am satisfied that Mr Rogers was plainly conscious of the impact a stand down would have upon the respondent’s employees. So too was Mr Power. In his email to Mr Rogers of 7 December 2011, he noted:
“… There should be consideration given to the employees being able to access annual leave and accrued RDOs over this period. The roster utilises one RDO per 4 week cycle and accrues one RDO, this accrued RDO can be applied. The Agreement provides that employees with the public holidays if they are stood down in December and re employed in January, which is the likely case.
These options should be discussed with employees, prior to demobilisation so as the claims over confusion are understood.”
With these matters in mind, Mr Rogers addressed Mr Mark Twycross[4] and the MCJV board on 11 December 2011, stating:
“The rain has now set in. Whilst we will probably get some sunshine between now and the 23rd we are losing more time than we are working and what sunshine we do get will not be enough to dry the place out.
Due to wet conditions we are having issues at the welding front end on spread one with the mixture of electrical equipment and water one person has had a minor shock this am.
You will see from the road report from camp 2 that they are at risk of being locked in and the roads around camp 1 most have water over them.
In the interests of safety I am recommending we shut down and send all non-essential people home on early R&R …”
[4] McConnell Dowell’s “Director/General Manager – Pipelines.”
Mr Twycross approved Mr Rodger’s recommendations and accordingly Mr Rogers arranged in consultation with his staff to demobilise those employees whose works were adversely affected by weather. For affected employees action was taken to then stand them down on the basis of the respondent’s entitlement pursuant to s.524(1)(c) FW Act. In particular, affected employees were told that during the stand down period they could access any accrued rest and recreation leave, accrued RDOs and accrued annual leave if they wished. They were also advised that they would otherwise not be paid, nor be paid in accordance with cl.5.1. This matter caused much disquiet. However, Mr Rodger’s assessment was affirmed when the matter came on before Senior Deputy President Richards in the Fair Work Commission on 23 December 2011. Mr Richards plainly agreed with Mr Rogers’ assessment that under the circumstances the stand down action under s.524 was justified.
In the meantime others within the MCJV were also engaged in the prospect of a more extensive stand down to follow because of continuing weather deterioration and expectation of further inclement weather. On 21 December 2011 a board meeting was held. The board resolved that the respondent would not remobilise the workplace for at least the January cycle (that is, the 36 day period commencing 4 January 2012) and that there would be no works in January except for rectification work.
At the meeting the matter of wages was not raised. However, Mr Rogers attended the meeting, informed as he was from his discussions with Mr Powers. The board itself comprised commercial men and women. The matter of wages hardly needed to be expressly discussed. Wages constituted one of the most significant input costs and a formal discussion of them and their general impact was unnecessary. That is, if the workers were not being productive and there was no return on that input cost then, rationally, such an unproductive input cost had to be minimised.
Mr Twycross deposed (under objection) that the board’s reasons for this decision were to limit the joint venture’s exposure to:
a)The practical and cost implications of being unable to meaningfully progress welding (and therefore other works) until the rectification process was completed (which was subject to a number of unknowns); and
b)The environmental, safety and practical implications of the all too real likelihood of wet weather hampering any other work throughout the wet weather season.
Mr Twycross’ evidence on this point was admitted, as it constituted a statement proving a matter within his own knowledge, namely, that this was a conclusion achieved by the board.[5]
[5] Lustre Hosiery Ltd v York (1935) 54 CLR 134 at 138-139.
Unfortunately for the respondent, when this resolution was communicated to the client[6] it was rejected and the board was directed to further consider the matter over the Christmas/New Year period. A further meeting of MCJV was convened on 3 January 2012. In an email sent by Mr Twycross recording the resolutions of the board at that meeting, he noted, inter alia:
[6] QGC Pty Ltd.
“Tonite’s teleconf confirmed our position as agreed on 21st December that only critical activities will be attempted during the wet season of 2012 …
…
The [project management team] is also reminded of the severe cost position on the project and a thorough review of costs during January – March, critically staff and site overheads, must be done immediately and notified to JV Sponsors and Operations Directors.”
Although the decision was not formally taken until late on 3 January 2012, much had been done beforehand in anticipation of it. Following the 21 December 2011 decision, human resources (“HR”) staff were put on standby. Ms Deborah Grgic, the respondent’s project HR Manager, stated that there was a scheduled Christmas shut down of the QCLNG Project from 20 December 2011 until 4 January 2012. She said that on about 24 December 2011 she was asked to attend a meeting with Mr Vince Garde, the McConnell Dowell Construction Manager. Other staff, including an accounts clerk and the project travel co-ordinator, were also present. She said that at the meeting she was advised by Mr Garde that there may be a chance that employees would not return to site on 4 January 2012 as scheduled and that she and the others should prepare themselves as they may be required to work over Christmas. She said that on 26 December 2011 she then received a call from Mr Garde who advised her that it was necessary that some personnel be advised not to return to work because it was not proceeding. She stated that she was instructed to prepare to contact employees and advise that they would not be coming back to site at that time until at least February 2012. She said that on that day she and Mr Garde called as many supervisory construction staff as they could and asked them to disseminate information to their crews. The message was that there would be no work in the January 2012 work cycle; it was anticipated that employees would not be required to return to work until 9 February 2012; and that during that period employees would be paid at the rate of base wages unless otherwise advised.
She said that on 28 December 2011 she emailed her assistant, Ms Lauren Muir, and asked her to assist in contacting employees. She says that she told Ms Muir that the message to be communicated to the Agreement employees was that there was not going to be a January 2012 cycle, that they should be prepared to travel back to work on 9 February 2012 and commence activities on 10 February 2012 and that McConnell Dowell would continue to pay 36 hours per week unless advised otherwise. This statement, referred to as a “spiel” by Ms Grgic, was formulated to ensure that there was a consistency of message transmitted to various employees. The “spiel” was intended to reflect the attendant uncertainty in matters going forward, advising a course of action but ending with a caveat “unless advised otherwise.” However, it is possible that this approach was not necessarily adopted. An email forwarded by Ms Grgic to Ms Muir approximately 1 minute after her original email was identical save that it omitted the words “or unless advised otherwise.” In response to that later email, Ms Muir replied “No problem …” It follows that it is entirely possible, as Mr Winters says, that when he was contacted by Ms Muir on 3 January 2012 the statement that he would be paid until the 9 February 2012 was not subject to any caveat, thus leading him to reasonably believe that he would be paid 7.2 hours per day (Monday to Friday) for the period he was unable to work due to the inclement weather.
In addition to the weather issues the respondent was troubled by technical difficulties associated with weld defects on the pipeline and unacceptably high repair rates in the welds. The rectification processes directed to resolving this issue were complex and cumbersome. It was with those factors in mind that Mr Twycross stated that in December 2011 the board considered the demobilisation of employees due to wet conditions and/or, following the scheduled Christmas stand down, an extended demobilisation arrangement in order to complete the rectification process.
Shortly after Christmas Mr Rogers became aware that the HR staff had been advising stood down employees that they would be paid 36 hours ordinary time per week whilst they were not required to work. This was contrary to his understanding of the respondent’s obligations under the Agreement. It was also contrary to his understanding of the board’s view. Accordingly, he conferred with Mr Twycross. Their exchange of views is reflected in emails which passed between them on 4 January 2012. In an email of that date forwarded by Mr Rogers to Mr Twycross at 9:16:08am, he stated:
“I need to talk to the [Australian Workers’ Union (“AWU”)] and advise them what we are doing before the rumours start.
I am proposing that we advise the AWU that we are in a stand down at present that may continue until the end of Jan.
Whilst some people will be back at work these will be minimal and all others will be paid 36 hours stand by in accordance with the EBA.
Please confirm you are in agreement.”
Mr Twycross responded at 09:47am:
“Standby in the EBA?
Why do we have to go to standby? The site is closed due to the wet season with work commencing in late February. EBA can choose to be paid off or wait until start back at work. Only selected activities will be actioned over next six weeks.”
Given the differing views between himself and Mr Twycross, Mr Rogers again consulted with Mr Power. Their email exchange recalls the relevant discussions.
On 4 January 2012 at 10:10am Mr Rogers wrote to Mr Power:
“At a Board teleconference last night it was decided that we will not return to work now until February.
The thinking is that we give all the EBA labour the choice of either waiting until we restart work without pay or take the option to finish up and seek re employment when we resume work if they wish.
Are you available to discuss this before I call Jack?”
A discussion subsequently ensued between them and in an email forwarded by Mr Power to Mr Rogers at 12:11pm it continued:
“Following on from our discussions, there are 2 options available for the JV as follows;
1. The invoking of stand down provisions of the Act, or
2. The termination of the employees with notice and the re engagement of employees on the resumption of works.
In the case of stand down there needs to be 2 criteria met being;
1. The stand down is due to circumstances beyond the control of the employer, and
2. There must not be any alternative work available.
The reasons for the stand down are as I understand are as follows
1. The effects of inclement weather have made access to the right of way unavailable, and
2. The pipe supplied by a 3rd party is a different specification than the processes engineered and the welding process will need to be re engineered, and this prevents works from proceeding.
…”
Mr Rogers said that his understanding of Mr Power’s advice was that the respondent had two available options to lawfully deal with the employment issues to protect McConnell Dowell from the very significant costs of retaining a large workforce that could not be gainfully employed for an unknown period. The first option concerned the stand down provisions of the FW Act. The second option was that the employment of affected employees could be terminated. He was conscious that if this option was taken employees would have to be given their lawful notice and paid out all lawful entitlements such as annual leave, and that if dismissal occurred employees would be released to seek other full time employment and would also be able to access their redundancy fund entitlements from the Australian Construction Industry Redundancy Trust (“ACIRT”), a fund to which the respondent contributed pursuant to the Agreement. Following Mr Power’s recommendation, Mr Rogers had discussions with the AWU. However, they were unsuccessful and the AWU indicated that it would not support the stand down of employees for the reasons of weather and issues relating to welding. It follows that having considered the options available and, having spoken on a number of occasions to Messrs Power and Twycross, he considered the most suitable way forward was to offer the employees the option of:
a)Having their employment terminated with notice and all termination entitlements being able to be accessed with a view to them reapplying when work recommenced; or
b)As an alternative to termination, having employees apply for leave without pay for the duration of shut down with an additional week’s pay being paid to them. They would then be mobilised when work recommenced.
It was his opinion that the alternative to termination should be offered instead of simply offering outright termination because he considered that the option of taking unpaid leave plus a 36 hour payment might be considered preferable for employees who did not wish to access their accrued redundancy fund monies from the ACIRT. Additionally, this option provided an employee with the certainty of ongoing employment once works resumed. From the respondent’s perspective it was also a desirable option as it would make it easier to remobilise the employees when work was able to recommence. At all times he believed that the respondent was lawfully entitled to terminate the employees but recognised that the second option would only be open if employees agreed to that course.
Mr Twycross’ view was that in the circumstances the employees should be terminated. Mr Twycross considered this the better course given the advice that termination was lawful and the uncertain time frame for a return to work. Importantly, a decision had to be made swiftly, or the respondent would have been at risk of significant ongoing employment costs of a redundant workforce.
This was the difficult situation which the respondent faced. However, in accordance with the desire of Mr Rogers to avoid terminations and to keep the workforce available in the expectation that there would be a return to work, the respondent settled upon a letter in terms of that forwarded to Mr Winters dated 11 January 2012. That letter followed a template letter forwarded to Ms Grgic on 10 January 2012. Relevantly, it provided:
“Dear John,
Regretfully due to prolonged wet weather experienced in December and likely to occur during the next month or so and other circumstances beyond the control of the Joint Venture we are unable to recommence works at this stage other than with minimal activities.
The activities that are currently continuing are as follows:
·Re-scanning of all wells completed to date;
·Environment and sediment control maintenance;
·CRC preparations for the 3rd spread;
·Engineering and procurement.
As and when further activities recommence we will be mobilising people back to site.
As a result of this situation we are offering employees the following options going forward:
·Option 1 - Employees can take the option to be terminated with appropriate notice and the payout of accrued annual leave and RDOs and reapply when work recommence; or
·Option 2 - Employees can apply for leave without pay until the works resume. The employee in electing this option will be paid 36 hours normal time as a one off payment and all further time will be Leave Without Pay, with the Employee being entitled to their position on the resumption of work.
Employees must elect one of the two options or be terminated.
Your response is required in writing. Please advise your decision by 5.00pm, Tuesday 17th January 2012. If advice is not received by this time, you will default to Option 1.
All employees will be paid from 04th January 2012 up to the date of this notice.
…”
As I earlier noted, Mr Winters had received a call from Ms Muir on 3 January 2012 informing him that he was not returning to work to commence the January cycle. Subsequently, on 14 January 2012, he received the letter of 11 January 2012 as outlined above. He noted the contents of the letter and in particular that the letter afforded him two options. He stated that he was concerned by the letter because its contents were inconsistent with his conversation with Ms Muir and that based upon that earlier discussion he understood that he would be paid until at least 9 February 2012. He says that he also understood that if, as a result of the weather, he was not able to return to work in February 2012 he would be paid for that further period. He says that he was very confused about the situation in relation to his employment because of the mixed messages he received from the MCJV and was concerned that his employment would come to an end as result of the inclement weather conditions, something he did not want to occur.
Accordingly, on 16 January 2012 he sent an email to Ms Grgic accepting the second option, that is, that he would take leave without pay until the weather abated and work resumed. Relevantly, his email observed:
“I will elect to take option two. I wish to point out that this is a forced option put to me by MCJV and not a decision I would personally take. I have been ready to recommence work as of 4/1/2012 as per the EBA.”
Mr Winters says that he continued to remain confused concerning the ongoing position with the respondent and his employment and that he unsuccessfully attempted to contact HR personnel to seek clarification. He said that on 30 January 2012 he sent an email to Ms Muir who then telephoned him. He says that in his email to Ms Muir he sought payment of wages during the period of stand down. His email was short, questioning:
“Are we getting paid to 9/2/12 as originally promised.”
Ms Muir responded:
“Hi John,
No, I don’t think that was a promise.
You should have received a letter in the post and on e-mail a couple of weeks ago regarding options that were being offered to you. I’m assuming you took option 2 as you are coming back onboard which means you should have received one more payment of 36 hours normal time. The rest of the time off is LWOP.”
Ultimately Mr Winters returned to work on 9 March 2012. However, during the period of stand down (4 January 2012 to 9 March 2012) he did not receive any income from the MCJV. During this period he contends that he was required to seek alternative employment, which he did, but which did not pay as well as that which he had with the respondent.
Although the relevant decisions made by the MCJV involved a myriad of factors, some of greater importance than others, some unspoken and others clearly foremost in mind, the issue for resolution in respect of each of those matters is which of them were the particular reasons or intent, if any, directed to the decisions to take the adverse action.
In Board of Bendigo Regional Institute of Technical and Further Education v Barclay, French CJ and Crennan J at [42] said:
“[42] Determining why a defendant employer took adverse action against an employee involves consideration of the decision-maker’s “particular reason” for taking adverse action (s 361(1)), and consideration of [Mr Winters’ entitlement to the benefit of a workplace instrument].”
In considering that matter, their Honours continued at [44]:
“… The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains “why was the adverse action taken?””
What the employer must establish is that the proscribed matter was “not an operative factor in taking adverse action.” To like effect, Gummow and Hayne JJ accepted the statements of Gibbs J as adopted by Mason J in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605, which statements had been accepted by French CJ and Crennan J. At [88] their Honours Gummow and Hayne JJ observed:
“[88] Gibbs J accepted the “substantial and operative factor” criterion adopted by Mason J, and added:
“The onus of proving that the fact that the employee held the position was not a substantial and operative factor in the dismissal is to be discharged according to the balance of probabilities and is not to be made heavier by any presumption that if an employee who is dismissed for disruptive activities happens to be a shop steward the latter circumstance must have had something to do with his dismissal …”[7]
[7] In that instance the workplace right in issue concerned the employee’s membership of an industrial organisation.
In accepting General Motors Holden Pty Ltd v Bowling, Gummow and Hayne JJ restated with approval the approach of the trial Judge (Tracey J) when observing at [109]:
“[109] His Honour continued, after considering what was decided in Bowling:
“In all of the cases to which I was referred … and others which I have examined, the court proceeded on the basis that evidence of the employer’s subjective reasons for taking the impugned action was relevant in deciding whether the employer had taken the action because of the existence of one or more of the circumstances in which such action was impermissible.””
Later at [125] they observed, adopting Lord Bingham in Derbyshire v St Helens Metropolitan Borough Council [2007] 3 All ER 81 at 96:
“… [w]hat matters is the discriminator’s subjective intention: what was he seeking to achieve by treating the alleged victim as he did?”
Likewise, Heydon J at [146] noted:
“[146] To search for the “reason” for a voluntary action is to search for the reasoning actually employed by the person who acted. Nothing in the Act expressly suggests that the courts are to search for “unconscious” elements in the impugned reasoning of persons in [the employee’s] position.”
Each member of the Court broadly appears to have accepted the conclusion of French CJ and Crennan J that, at [62]:
“… it is a related error to treat an employee’s union position and activity as necessarily being a factor which must have something to do with adverse action, or which can never be dissociated from adverse action. It is a misunderstanding of, and contrary to, Bowling to require that the establishment of the reason for adverse action must be entirely dissociated from an employee’s union position or activities. Such reasoning effectively institutes an interpretation of the relevant provisions indistinguishable from that of Isaacs J in Pearce,[8] which was rejected in Bowling. The onus of proving that an employee’s [workplace right] was not an operative factor in taking adverse action is to be discharged on the balance of probabilities in the light of all the established evidence.”
[8] Pearce v WD Peacock & Co Ltd (1917) 23 CLR 199.
Accordingly, it appears authority requires that the inquiry must commence first with a consideration of ‘what were the reasons?’ Then consideration must be given to whether the reasons were substantial and operative.
At the outset it must be observed that if the respondent is correct in its submission concerning the proper construction of cl.5.1(a) (which I accept it is) then there was no adverse action. Accordingly there is no prima facie basis for a contravention, the presumption does not arise and no inquiry need be made.
The evidence concerning the failure to pay Mr Winters the inclement weather payments is that the employer did not do so because it believed Mr Winters did not satisfy the qualifying factors required by cl.5.1(a) of the Agreement. This was the substantial and operative reason.
However, if Mr Winters’ contention is correct the question still remains, as the respondent’s reasoning and intention remains the same. That is, it held a bona fide, reasonable and plainly arguable opinion that the second applicant had no right to the benefit of cl.5.1(a) of the Agreement, a workplace instrument. That was and remains the substantive and operative basis for its decision to take adverse action against Mr Winters by not paying him the entitlements under that clause.
The focus of the applicants’ complaint was that the debate at board level that lead to the decision not to pay cl.5.1 benefits and offer Mr Winter an election was informed by Mr Winter’s entitlement under the Agreement.
The evidence demonstrates that the issue of employee entitlement was very much alive within the corporate mind of the respondent. So too were the uncertainties related to the respondent’s obligations under the Agreement, a matter which had been the subject of external advice. Plainly the Agreement was an element in the respondent’s decision. However, the question remains as to whether it was the “substantial or operative” reason.
The applicants’ arguments appeared to suggest there was something unholy about the respondent’s focus on project labour costs. Their contention was that the focus on the cost of paying for a potentially redundant workforce meant by association that the Agreement was the substantial or operative reason for the decision to take adverse action. Whether its views were correct or not, the respondent’s decision was informed by a bona fide and reasonable view held concerning the proper construction of the Agreement. However, in that sense the Agreement was, in context, abstract. Once the status of the Agreement was resolved the matters foremost in the board’s mind in deciding upon adverse action were the operational and project labour costs going forward. It is no secret that the respondent was anxious to save whatever costs it reasonably and lawfully could. Such an attitude is not only economically rational but also consistent with director’s governance obligations and duties owed to financial stakeholders.
As I see it, the more difficult issue is determining to what extent must a matter be dissociated from the decision not to be regarded as “substantial or operative”; and, by corollary, to what extent is the respondent expected to address such matters in rebuttal.
As this case illustrates, this is not always an easy question to answer. For instance, I do not understand the applicants to contend that any adverse action could be said to follow in the event that the respondent’s construction of the Agreement was correct. Plainly that would be so, for in that instance there would be no adverse action.
Accepting that matter, it seems the corollary is, if the respondent is wrong in its construction of the Agreement, then arguably it could be contended on that basis there is a sufficient connection between the ultimate decision to take adverse action and the workplace right because of the relativity of that action to the workplace right in issue. Unlike the factual circumstances considered in General Motors Holden Pty Ltd v Bowling or Pearce v WD Peacock & Co Ltd, where positive evidence could be adduced to gainsay any suggestion that the union association of the relevant employee, being a union representative, was the “operative or substantial” reason for adverse action, here the Agreement and its construction necessarily underlays the ultimate decision. As matters presently stand, authority does not appear to support an examination of the bona fides of an employer’s decision if adverse action follows because an employee has a workplace right to payment under an agreement or award in circumstances where there may be dispute between those parties concerning entitlement. Accordingly, it seems that even if the respondent had a bona fide and reasonable basis for its decision, as I am satisfied it did, evidence of those matters may not be sufficient to dissociate the statutory connection between adverse action and the employee’s workplace right in circumstances such as these which involve disagreements about wages, allowances and entitlements.
Given my principal findings on the construction point I do not think it is necessary for me to resolve this issue. However, I note in passing that circumstances may have been different if, for instance, the question revolved around the bona fides of arithmetic or other errors resulting in non-payment of benefits being the cause of the adverse action. However, that is not this case. Here the decision was made because of a view taken on the obligations due under a contract. For these reasons I do not think that it is necessary to address the arguments advanced by the applicant concerning the manner in which the respondent advanced its case on this point.
Likewise I do not think it is necessary to address the applicants’ other contentions concerning the respondent’s discharge of the onus of proof. As I have earlier noted, the respondent does not resile from the commercial basis for its decision. In those circumstances, given my principal conclusions as to the respondent’s non contravention the exercise of examining whether the respondent had rebutted the onus of proof is entirely redundant. In this case the respondent’s explanation was simply one based on its construction of cl.5.1.
The second alleged contravention concerns the respondent’s offer to Mr Winters of an election to either continue being stood down on terms, or to be dismissed with full entitlements. If this action constituted adverse action (which for reasons I stated earlier I do not accept), the question arises whether this action was because the second applicant had a workplace right or sought to exercise a workplace right, namely his entitlement to the benefit of the workplace instrument by way of a right to continued employment. It is apparent from the facts that the respondent’s substantial and operative factors in respect of this adverse action were:
a)Weather and its impact;
b)Uncertainty concerning the related delay and the foreseeable impact on the progress of works; and
c)The cost of an unproductive workforce then not mobilised but stood down and expecting to be advised of their immediate future on the Project following the Christmas break.
Mr Winters fell within the group considered, but was himself not subject of discrete consideration until he wrote advising of his election on 16 January 2012. Here too the respondent’s construction of the Agreement underlay its decision. That is, the respondent believed that it was following a course of conduct lawfully open to it. However, beyond that broad premise the evidence does not demonstrate any greater or more detailed consideration of cl.5.1of the Agreement except to observe it was a reason for the action and accordingly would be captured by s.360 FW Act.
For reasons explained above I do not need to consider whether these circumstances would also satisfy any onus cast upon the respondent.
Coercive Conduct
The applicants also contend that the respondent’s conduct in requiring Mr Winters to make an election in terms contained in the email of 11 January 2012 constituted a contravention of s.343 FW Act, which provides:
“343 Coercion
(1) A person must not organise or take … any action against another person with intent to coerce the other person … to:
(a) exercise or not exercise, or propose to exercise or not exercise, a workplace right; or
(b) exercise, or propose to exercise, a workplace right in a particular way.”
In this instance the applicants contend that there was a complete negation of Mr Winters’ choice to be paid under cl.5.1 of the Agreement and further that the nature of the offer was offensive in that he had an unqualified right to continuing employment together with an unqualified right to the benefit of cl.5.1, both of which rights were negated by the manner of choice offered to him. That is, he was offered two choices, namely to receive leave without pay or to be terminated, when a third choice (his entitlement to payment under cl.5.1) was not offered. In that sense his choice was negated.
There is no dispute that as a matter of general principle for conduct to be coercive it must be compulsive in that the pressure in a practical sense negates choice: National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114 at 97.
However, in response the respondent contends first that, accepting its construction of cl.5.1, no choice was negated because there was no entitlement to payment in terms of that provision. I have earlier addressed that matter and conclude consistent with my earlier views the corollary is that no contravention can be established on this ground.
Secondly, the respondent contends that the choices open to Mr Winters were not coercive because the offer was a lawful offer made in order to provide possible relief from a prospective lawful termination which was capable of being accepted or rejected by the exercise of the free will of Mr Winters. For the respondent it was contended this case was on all fours with Liquor Hospitality and Miscellaneous Union v Arnotts Biscuits Ltd [2010] FCA 770. Respectfully I agree. As Logan J. noted in Arnotts at [54],
“… It is to be remembered , too, that the workplace right at least to perform , for the rates of pay there set out, the hours of work set out in the certified agreement was not an unqualified or absolute right. That right was always subject to such right as the employer had lawfully to terminate the contract of employment.”
As I have earlier explained, I am satisfied that each of the options open to Mr Winters were options lawfully available to the employer. In reality, there were only two options available: termination with appropriate notice or leave without pay whilst stood down until the works resumed. Whilst there may be some room to argue about the terms of the stand down, I think it is plain from the circumstances that what the respondent intended was that if Mr Winters accepted the second option he would return to work as soon as the project resumed. It is evident from the facts that the respondent was anxious to return to the project to full productivity as soon as possible owing to the pressure it was under to complete the project within the time provided for in the contract. Accordingly, there is no basis to expect that he would not have been returned to work as soon as he could have been meaningfully employed, as did occur.
Conclusion
The applicants submitted the respondent underpaid Mr Winters by not paying him moneys they contended he was entitled to under an enterprise agreement governing the worksite. They contended the underpayment was adverse action and was because of his workplace right being the right to payment of those moneys under the Agreement. The background to that dispute was the closure of the relevant worksite and stand down of the workforce pursuant to s.524 FW Act. During the stand down the second applicant was informed he was not required to return to work in accordance with his roster until later advised. He was subsequently offered to be stood down on leave without pay until works could resume, or alternatively termination with full termination entitlements. In the event of accepting the second option he would have been required to re-apply for his position once the site re-opened. These circumstances gave rise to the second complaint of adverse action.
Underlying each of these complaints was the proper construction of cl.5.1(a) of the Agreement. Contrary to the applicants’ submissions the second applicant was only entitled to the entitlement claimed whilst he was “in camp”. At the material time he was at home. He had been stood down because of inclement conditions and was not required to return to work whilst stood down despite his roster. He had not entitlements as contended. There was no adverse action.
ORDERS
The application filed on 16 July 2012 be dismissed.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of Judge Burnett
Date: 27 March 2014
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