[2020] FWC 3788

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Construction, Forestry, Maritime, Mining and Energy Union-Mining and Energy Division
v
BHP Coal Pty Ltd
(C2019/5474)

DEPUTY PRESIDENT ASBURY

BRISBANE, 20 JULY 2020

Application for Commission to deal with a dispute in accordance with a dispute settlement procedure in an enterprise agreement – Model Consultation term – Change to contractor carrying out work at mine – Whether employer obligated to consult – Construction of Model Consultation term – Whether agreement provisions in relation to training and career paths triggered – Replacement of one contracting entity with another contracting entity is a major change where insourcing occurs – No significant effect on employees – Model Consultation term and Agreement provisions in relation to training and career progression not triggered – Application dismissed.

OVERVIEW

[1] This decision concerns applications by the Construction, Forestry, Maritime, Mining and Energy Union – Mining and Energy Division (CFMMEU) under s. 739 of the Fair Work Act 2009 (the FW Act) seeking that the Fair Work Commission (Commission) deal with disputes arising under a dispute resolution procedure in the BMA Enterprise Agreement 2018 (Agreement). The Respondent is BHP Coal Pty Ltd (BHP), the employing entity covered by the Agreement. The disputes arose at the Peak Downs Mine and the Saraji Mine. The Mines are managed by the BHP Billiton Mitsubishi Alliance (BMA). The dispute at the Saraji Mine (C2019/5475) was not pressed by the CFMMEU and this Decision deals only with the dispute as it relates to the Peak Downs Mine (C2019/5474).

[2] The dispute relates to the deployment of an entity, OS MACP Pty Ltd, known as BHP Operations Services (OS), at the Peak Downs Mine (the Mine). The deployment of OS at the Mine was announced BMA in or around May 2019. OS was deployed at the Mine to provide excavation services and replaced a contractor, HSE Mining, which had previously provided those services.

[3] In its Form F10 Application the CFMMEU contends that the OS deployment has been undertaken in a manner that is inconsistent with a number of BHP’s obligations under the Agreement with respect to career paths, training and progression for employees and consultation as required by the Model Consultation Term, which forms part of the Agreement. The CFMMEU’s argument is premised on the proposition that OS is a part of BHP and under its control, for reasons including that both have the same ultimate holding company – BHP Group Limited.

[4] The CFMMEU also contends that BHP is using the OS deployment to effectively circumvent the conditions and obligations created by the Agreement on the basis that the wages and conditions of OS employees are less than those applying to BHP employees covered by the Agreement. The CFMMEU sought determination of the dispute with the following effect:

(a) BHP and its associated entities cease all activity, including recruiting and/or deployment associated with the OS deployment.

(b) The Respondent follow the steps in clause 8 of the Agreement in respect of the relevant positions including taking steps to facilitate access to those positions by employees covered by the Agreement:

(c) The Respondent comply with clause 6 of the Agreement and the Model Consultation Term incorporated in the Agreement, in respect to the OS deployment by:

• Obtaining agreement from the parties to the Agreement prior to engaging employees of OS [which is part of BHP] who are not covered by the Agreement; and

• Following the consultation requirements of the Model Consultation term in full.

[5] BHP maintains that the Commission does not have jurisdiction to deal with the dispute. BHP also maintains that the provisions referred to by the CFMMEU have not been triggered. BHP contends that the deployment of employees of OS is not a “major workplace change” for the purposes of the Model Consultation term and had no effect on employees covered by the Agreement. Accordingly, BHP maintains that it was not required to consult with employees on where/when/how OS is engaged; advertise positions and career paths in OS or any other businesses under clause 8; and seek approval from every EA employee under clause 6 for engagement of OS.

[6] The dispute was not resolved by conciliation and was listed for arbitration. A hearing was conducted by video on 7 April 2020. As of right under the dispute settlement procedure in the Agreement, the parties were represented by Counsel at the hearing. The CFMMEU was represented by Mr S Crawshaw SC instructed by Ms E Sarlos. BHP was represented by Mr Follett of Counsel instructed by Mr M Coonan of Herbert Smith Freehills.

[7] The parties agreed on the following questions for arbitration:

1. In what circumstances is the Respondent, in terms of its consultation obligations under the Agreement, required to consult with its employees and their representatives on the Operations Services (OS) Deployments?

2. Does the OS Deployment trigger obligations for the Company under clause 8.1(a) and (b) and if so, what is the extent of those obligations?

3. What is the extent of the Company’s obligation under clause 8.1(g) of the Agreement?

4. What is the extent of the Company’s obligation under clause 8.2(a) of the Agreement?

[8] The following persons gave evidence in the form of written statements on behalf of the CFMMEU:

• Ms Nadine Maree Doolan, Trainer Assessor Peak Downs Mine 1;

• Mr Travis Luke Curtis, Operator in Mine Services, Peak Downs Mine 2;

• Mr Ashley Ryan Sullivan, Operator and Trainer Assessor, Peak Downs Mine 3; and

• Mr Scott Keith Leggett, Peak Downs Mine Lodge Secretary 4.

[9] Evidence on behalf of BHP was given by Mr Douglas Graham Ross McGibbon, Overburden Manager, Peak Downs Mine. Mr Leggett and Mr McGibbon were required for cross-examination. The statements of other witnesses for the CFMMEU were admitted with objections from BHP which I noted and indicated would be considered on the basis of the weight to be placed on the passages subject of the objections.

RELEVANT AGREEMENT PROVISIONS

[10] The Agreement provisions on which the questions for arbitration centre, are as follows. Question 1 concerns the Model Consultation term as defined in the Fair Work Regulations 2009. The Model Consultation term is a term of the Agreement by virtue of s. 205 of the Act, which relevantly provides:

Consultation term must be included in an enterprise agreement

(1) An enterprise agreement must include a term (a consultation term) that:

(a) requires the employer or employers to which the agreement applies to consult employees to whom the agreement applies about:

(i) a major workplace change that is likely to have a significant effect on employees; or

(ii) a change to their regular roster or ordinary hours of work; and

(b) allows for the representation of those employees for the purposes of that consultation.

(1A) For a change to the employees’ regular roster or ordinary hours of work, the term must require the employer:

(a) to provide information to the employees about the change; and

(b) to invite the employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and

Model consultation term

(2) If an enterprise agreement does not include a consultation term, or if the consultation term is an objectionable emergency management term, the model consultation term is taken to be a term of the agreement.

[11] Section 205(3) provides that the Fair Work Regulations must prescribe the model consultation term for enterprise agreements. The absence of a consultation term in an agreement, or inclusion of a term that does not meet the requirements in s. 205, means that the agreement is taken to include the model consultation term.

[12] The Agreement in the present case contains a consultation term at clause 15. That term does not meet the requirements of the Act in relation to s. 205(1A) which is not relevant for the present purposes. The other provisions of the consultation term in clause 15 of the Agreement do meet the requirements in s. 205. The wording in the Model Consultation term differs slightly to that in clause 15 of the Agreement but there is no substantive difference in meaning. As a result, in the circumstances of the present dispute, no issue arises as to the interaction between clause 15 and the Model Consultation Term. The Model Consultation term as incorporated in the Agreement is as follows:

“Model consultation term

(1) This term applies if the employer:

(a) has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(b) proposes to introduce a change to the regular roster or ordinary hours of work of employees.

Major change

(2) For a major change referred to in paragraph (1)(a):

(a) the employer must notify the relevant employees of the decision to introduce the major change; and

(b) subclauses (3) to (9) apply.

(3) The relevant employees may appoint a representative for the purposes of the procedures in this term.

(4) If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(5) As soon as practicable after making its decision, the employer must:

(a) discuss with the relevant employees:

(i) the introduction of the change; and

(ii) the effect the change is likely to have on the employees; and

(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and

(b) for the purposes of the discussion—provide, in writing, to the relevant employees:

(i) all relevant information about the change including the nature of the change proposed; and

(ii) information about the expected effects of the change on the employees; and

(iii) any other matters likely to affect the employees.

(6) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(7) The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

(8) If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph (2)(a) and subclauses (3) and (5) are taken not to apply.

(9) In this term, a major change is likely to have a significant effect on employees if it results in:

(a) the termination of the employment of employees; or

(b) major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or

(d) the alteration of hours of work; or

(e) the need to retrain employees; or

(f) the need to relocate employees to another workplace; or

(g) the restructuring of jobs.

Change to regular roster or ordinary hours of work

(10) For a change referred to in paragraph (1)(b):

(a) the employer must notify the relevant employees of the proposed change; and

(b) subclauses (11) to (15) apply.

(11) The relevant employees may appoint a representative for the purposes of the procedures in this term.

(12) If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

(13) As soon as practicable after proposing to introduce the change, the employer must:

(a) discuss with the relevant employees the introduction of the change; and

(b) for the purposes of the discussion—provide to the relevant employees:

(i) all relevant information about the change, including the nature of the change; and

(ii) information about what the employer reasonably believes will be the effects of the change on the employees; and

(iii) information about any other matters that the employer reasonably believes are likely to affect the employees; and

(c) invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).

(14) However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

(15) The employer must give prompt and genuine consideration to matters raised about the change by the relevant employees.

(16) In this term:

relevant employees means the employees who may be affected by a change referred to in subclause (1).”

[13] Questions 2 and 3 concern clause 8.1 which provides as follows:

“8.1 Development

The Company is committed to ensuring that all Employees have equitable access to training and development opportunities, in order to provide job security, job satisfaction, workplace flexibility and increased productivity. The Company will:

(a) Make information available to all Employees about the requirements of each position on the Mine and the potential career paths that will enable progression to each role;

(b) Identify for Employees the training available to attain the required skills to facilitate progression within the various career paths so that Employees can assess their skill needs against the designated skill requirements for their preferred path.

(c) Offer the relevant courses in accordance with a training calendar published annually. Such courses may be classroom-base, on-line, computer-based, on-the- job or self-paced distance learning;

(d) Have a transparent process to identify the Employees who will receive training or be provided with other career development opportunities in recognition of their performance, aptitude, attendance and length of service with the Company and Individual Development and Performance Review (IDPR) assessments (as outlined in clause 36)”.

…

g) Provide preference to Employees covered by the Agreement for any development opportunities that arise over any labour hire and contractor employees, subject only to operational requirements, such as where there is an identified immediate need for a particular skill. …”

[14] Question 4 concerns clause 8.2 which deals with career progression and relevantly provides:

“8.2 Career Progression

The Company is committed to addressing Employees’ career aspirations and will give preference to Employees by:

(a) Inviting expressions of interest for current roles or future opportunities (via a designated noticeboard in each Functional Work Area) from Employees at the Mine who have acquired a majority of the necessary skills for a position prior to the Company advertising the position externally.

(b) Assessing any expressions of interest and where there is a single candidate assessed by the Company as being suitable for the role, appointing that candidate directly to the role. Where there are multiple candidates assessed by the Company as being suitable for the role, they will be shortlisted, invited to submit a formal application and interviewed in accordance with clause 8.3.

(c) Advising all successful internal candidates that their application for the position has been successful. Once successful candidates have been advised the Company may advertise the position externally while the formal appointment process is being conducted.

(d) Offering unsuccessful candidates with feedback to assist them in pursuing future opportunities. Where there are no internal candidates assessed as suitable for a role, the Company may advertise the position externally. However, nothing in this clause prevents any Employee from applying for any role that is advertised externally.

(e) Providing preference for employees to move into the roles of OCEs, ERZ Controllers and Dragline Operators or other positions where shortages have occurred or are likely to occur where they have undertaken the necessary training and meet the criteria for the position, in accordance with clause 8.1(f).”

[15] The Dispute Settlement Procedure in clause 37 of the Agreement empowers the Commission to arbitrate a dispute. Relevantly, at 37.4 the Procedure provides as follows:

“This procedure does not apply in relation to the exercise of rights or implementation of processes or systems provided for under this Agreement (for example, the right of the Company to have free and unfettered access to contractors) or under other relevant prevailing legislation.”

EVIDENCE

[16] Ms Doolan has worked in the black coal industry since 2007 and has worked directly for BHP at the Mine since 2008. Ms Doolan states that apart from notices on site about the OS deployment, it has been difficult to obtain information about OS, other than BHP employees having been told to keep separate from OS employees. Ms Doolan and her co-workers have asked questions at pre-start meetings and have been told by Supervisors that they are unable to answer those questions. It is Ms Doolan’s understanding that OS took over entirely from HSE in around September 2019.

[17] According to Ms Doolan, the OS deployment has made things harder on site. OS has taken a lot of operators, who are people that Ms Doolan has trained from labour hire companies. This means that equipment is being parked up because there are insufficient people to operate it and Ms Doolan’s job is a lot harder as labour hire companies recruit to fill the jobs vacated because of movement to OS, and Ms Doolan is required to train the new people coming in.

[18] Ms Doolan is concerned that the worker next to her is not meant to talk to her and is on different pay and conditions. This leads to a divided workforce. The situation is different to when labour hire was introduced because now it is three tiers: labour hire, BHP direct employees and OS. There is no set progression through the ranks, and it is not clear how the three tiers of the workforce are meant to work. Ms Doolan is also concerned that there is uncertainty, people are cutting corners out of concern for keeping their job, and this impacts safety and morale.

[19] In terms of her career development and progression, Ms Doolan said that OS has been introduced at a time when it is already hard to get any kind of career development or progression. Under the Agreement, each employee is meant to participate in a review of their performance, training and development each year. This process is called an Individual Development and Performance Review (IDPR). Ms Doolan’s last IDPR was around four years ago. Ms Doolan has found that an IDPR, done properly, provided positive feedback from her boss and was helpful to set goals and understand what needed to be done to work towards them. Without these regular check-ins, Ms Doolan feels that her career is at a standstill. Ms Doolan is not aware of how to access training and said that it is hard to find information about how to achieve a particular competency that she is interested in obtaining.

[20] Ms Doolan said that BHP is meant to identify available training to facilitate progression, but this does not happen, and training can only be accessed if you ask for it – many times. Ms Doolan has not seen a training calendar published by BHP. As a Trainer Assessor, Ms Doolan trains other people in equipment that she is authorised to operate. Ms Doolan has wanted to expand the equipment that she knows and over the past five years has been asking to be trained on another piece of equipment to further herself.

[21] When Ms Doolan recently made a request to her boss about when she could start training again. The response was that there were not enough people at the moment and new people were coming in, and that Ms Doolan needed to put her training on hold to train those new people. Ms Doolan said that this response made sense, as she is busier with training as labour hire employees move over to OS and she needs to train up new workers from scratch, again. Ms Doolan said that it is tough to look over to the other side of the Mine and see trainer assessors OS has employed getting trained on, and then working on new equipment. Ms Doolan is concerned that her training has been sporadic and that gaps mean she will have to go back to the start with her training.

[22] Ms Doolan said that the current approach taken by BHP feels like the Company is actively preventing her from upskilling, and as a 51 year old woman who has a limited skillset, she has used her training to train a lot of labour hire employees as requested and feels like she has received next to no training in return. Ms Doolan is concerned that BHP has plans to roll out automation, and if she is not able to progress her career when that time comes, she will be unable to secure ongoing work.

[23] Mr Curtis started working in the black coal mining industry in 2005. In his current role in Mine Services, Mr Curtis does a range of things from maintaining roads; operating mine ranger float machinery; moving dozers, diggers and drills; servicing equipment in the field; drill prep; building ramps for pre-strip and other departments. To do this role, Mr Curtis needs to be able to operate a range of equipment and can operate diggers, loaders, dozers, graders, service trucks, CAT trucks, water carts, floats and scrapers. Mr Curtis has a trainer assessor ticket, a supervisor ticket and light, heavy and medium rigid vehicle licences, as well as competencies in the coal preparation plant.

[24] Mr Curtis has previously used processes set up by the Company to develop his skills and further his career. This has mainly been done through IDPR assessments and Mr Curtis’ last such assessment was done three years ago. According to Mr Curtis, IDPRs used to be a regular thing and employees had an opportunity to choose to learn three skills in the next 12 months. The IDPR worked as an agreement between the employee and the supervisor, to see that the development happened. Mr Curtis has found the IDPR process useful and has used it to develop his career, including by moving from the wash plant to the field. Mr Curtis believes that the IDPR process meant more people were trained. Around three years ago, BHP stopped doing IDPRs and Mr Curtis states that he was not told why. Mr Curtis asked his supervisor about them around two years ago and was told that they had been stopped.

[25] Mr Curtis does not know how to find about positions in the Mine or how to identify training to progress his career. Mr Curtis is not aware of any formalised or structured training process to help progress his career and has not seen or had access to a training calendar since undertaking at traineeship at the start of his career.

[26] In around May 2019, Mr Curtis heard that OS would be starting at the Mine and taking over HSE’s contract. The roll out of OS started in July 2019 with a handover being recently completed and OS now having taken over control from HSE. In his role in Mine services, Mr Curtis interacts with everyone including OS employees, even though they are kept separate to the rest of the site. It is Mr Curtis’ view that OS employees lack experience and knowledge of the Mine’s rules, how BHP employees work, and how the Mine runs. Mr Curtis is also aware of OS employees not following procedures and has reported this to their supervisors.

[27] Since coming to site, OHS have been given exclusive use of a range of equipment, including the Liebherr 9800 excavator, service carts, and the Liebherr 282 electric trucks. Mr Curtis is always looking for ways to develop his skills and would like to be trained to operate the Liebherr 9800 and 282s, and the service carts. Mr Curtis said that as this new equipment has been earmarked for OS use only, his opportunities on site have been limited.

[28] Mr Curtis finds it strange the BHP would dedicate this equipment to a less experienced part of its workforce and believes that more experienced operators are being kept away from it.
If Mr Curtis was given the opportunity to train on the 9800, the training he would need is fairly straightforward, and would consist mainly of familiarisation, assessment, and getting used to the feel of the machine. Mr Curtis believes that having experience on equipment that size would put him ahead of the field, in looking for work.

[29] Mr Sullivan started working in the black coal mining industry in around 2003 and started to work at the Peak Downs Mine in 2006. Mr Sullivan is employed by BHP as an operator and trainer/ assessor under the Agreement. Mr Sullivan is currently competent to operate most equipment on site, including the Electric rope shovel P&H XPC 4100, Hitachi Excavators 5600s, 0&K 170s Excavator, the Liebherr 996 Excavator, CAT dozers, CAT graders, and CAT trucks and is a PDM appointed trainer assessor.

[30] Mr Sullivan’s last IDPR was conducted four years ago. He does not remember the company ever making information specifically available to employees about each position on the Mine, or the career paths that might exist to enable progression to those positions. This would have been helpful to Mr Sullivan so that so he could identify positions available and the training needed to get to that level. Mr Sullivan states that he has been lucky on site in that he has pushed to have training and there is no upskilling unless employees push for it.

[31] Mr Sullivan first heard about OS 6 months ago but was not consulted about them coming onto site. It is Mr Sullivan’s belief that OS employees are on individual agreements where they earn around $30,000 less than employees under the Agreement and have worse conditions. Mr Sullivan feels less secure about his job because of this. The OS and BHP workforces are not integrated with BHP and OS being kept separate. This is different to the situation with other contractors or labour hire where dig units, crib huts and dumps have been shared. The change with respect to OS has not been explained.

[32] Having OS on site means that there are now OS, labour hire and BHP employees all working side by side. Previously, when there were only BHP and labour hire employees, if labour hire employees proved themselves they could get a job with BHP. Now those employees have to choose whether to stay employed by labour hire companies and hope for a job with BHP, or work for OS and get a permanent job on less pay and conditions. This has reduced morale on the site.

[33] It is Mr Sullivan’s view that OS is the new path that BHP want to take and that the Company is doing everything they can to make OS look good, including giving them new equipment and ignoring the development of employees under the Agreement. Mr Sullivan said that long term employees look forward to the chance to operate something different, or bigger and that gives them the opportunity for skills development. OS has been given equipment including the Liebherr 9800, 282 Liebherrs and some other equipment that employees of BHP do not have access to. Mr Sullivan’s view is that the Liebherr 9800 diggers are becoming a big thing in the industry, and it is an important skill to have. Mr Sullivan has been looking forward to getting skilled up on the Leibherr 9800 and has not been given that opportunity because it has been allocated to OS.

[34] Mr Sullivan has held his excavator tickets for 16 years and to train him on the Liebherr 9800 would be very straightforward and would consist of an onsite recognition of current competency (RCC). This is a one page document where a trainer assessor assesses his current competency, and they would do a walk around of the machine, then operate it with the trainer assessor there, in production. This process would take an hour or two. As a trainer assessor, there is an extra benefit on site in Mr Sullivan having this skill, as he can pass it on to others.

[35] Mr Leggett started working in mining around 1992. He has worked in 18 mines – 1 hard rock mine and 17 coal mines. Mr Leggett’s first job was learning to become a rigger. Since then Mr Leggett has developed his skills and has qualifications as a site senior executive, open cut examiner, supervisor, trainer assessor and in shotfiring. Mr Leggett also has multiple qualifications and competencies in mines rescue, heavy equipment, and others. Mr Leggett commenced at the Peak Downs Mine in late 2003 and became a shift delegate within a few months. In 2006, Mr Leggett was elected as a member of the PDM lodge executive, as Lodge Secretary and still holds that position.

[36] Mr Leggett’s success in developing his skillset has depended on support mechanisms at the Mine including an expression of interest (EOI) process to support moving to other areas of the Mine and the IDPR assessments. In the past, IDPR assessments have been used as a measuring stick of what an employee has done in the past twelve months, identifying opportunities to develop and training to help with development. Mr Leggett’s last IDPR was in 2015. In the past, Mr Leggett has used the IDPR process to identify that he wanted to get into the dragline training program and he was able to work on the dozers close to the draglines and was then selected for the dragline training program. Mr Leggett used the process in 2011 to obtain his OCE competencies. The first time that Mr Leggett applied he was not selected but he received feedback and through the IDPR process and collaboration with his supervisor to identify tickets and other experience he needed, Mr Leggett was successful on the second occasion he applied.

[37] Mr Leggett believes that because he has not had an IDPR in the last 4-5 years, his training is a bit of a mess and that if he had an IDPR tomorrow there would be a swag of competencies that need attention because they have either expired or are expiring. Mr Leggett has tried to address this outside of the IDPR but without a dedicated opportunity to review and identify development and training requirements it is extremely difficult to arrange. Mr Leggett stated that BHP does not:

• make information accessible about the requirements of each position on the Mine and the potential career paths to be able to progress to each role;

• idenfity for all employees the training available to attain the skills to facilitate career progression; or

• publish a training calendar.

[38] Mr Leggett said that since the cessation of the IDPR's there has not been any formal process in place to replace it, with BHP saying that its employees can raise their development with their supervisor at any time. While this may be true, in Mr Leggett’s view this is not formal, measured, open or transparent. The IDPR was a more formal process which could help with that. The Company would know what information people sought and what courses were required and published the courses and a calendar showing who was getting trained, on what, and when.

[39] In relation to OS, Mr Leggett said that in around August 2019 the deployment started with OS personnel being inducted and HSE transitioning out of the Mine. At this time there was also a transition of equipment to where OS would be working including three existing Hitachi excavators, and a commissioning of the new Liebherr 9800, along with some other equipment. Mr Leggett said that OS was having trouble getting numbers they needed and started drawing more heavily on labour hire employees to move over.

[40] OS recruitment of labour hire has impacted on already undermanned crews with pre-strip for example, operating with 12 less people on each shift. As a result, any training that was underway has been stopped, as those employees need to get back to their previous tasks to keep manning levels up. The effect of this is that employees aren't getting opportunities to train. It also means that for those employees that have been trained up are getting pushed back onto, for example, the trucks to fill gaps, meaning they don't get to develop their new skills because they're not using them, and are getting de-skilled. It also means that trainer assessors no longer train BHP employees as they have been redirected to train the new labour hire employees engaged to fill the gaps that OS has created. Due to the huge influx of untrained or low skilled labour hire employees, our trainer assessors are tied up to help plug the skills shortages left on site due to the OS deployment. Mr Leggett is concerned that this situation has placed pressure on trainer assessors, to pass people out more quickly due to gaps and the long list of new labour hire workers that need to be trained.

[41] BHP employees have also been affected by their inability to access new equipment that has been brought on site, which has been made available to OS employees only. Mr Leggett is the OCE of the crew which means that he needs to know what equipment departments have and what they are doing with it. The pre strip crew Mr Leggett works with has one shovel and two 5000 excavators, whereas the OS pre strip will have four excavators and all associated equipment. The OS pre strip also has a Liebherr 9800 excavator, the only one on site. It is a huge piece of equipment and is the future of excavators. To be trained up on the Liebherr 9800 hugely expands an operator’s skill set and the opportunities available. To have equipment available to OS exclusively means that there are positions at the Mine and opportunities for development, which are closed off entirely to BHP employees. Mr Leggett is aware that there are three new Liebherr 9800 excavators – one per year for three years – earmarked for OS at the Mine.

[42] Mr Leggett said that OS has 10 – 15 T282 Liebherr trucks which are electric drive while BHP employees have mechanical drive trucks. This means that BHP employees don’t have an opportunity to develop their skills by driving an electric truck. As the equipment at coal mines changes, it is important for employees to continue to develop their skills. The effect of the decisions made by BHP is to deny their employees opportunities. Mr Leggett states that this is effectively deskilling while on the other side of the Mine, OS employees are being trained. Mr Leggett also states that there is a strange dynamic on site, with BHP employees feeling sorry for OS employees because of their terms and conditions, while at the same time being “pissed off” and feeling that BHP is using OS to avoid commitments to develop its own workforce.

[43] Mr Leggett said that all the opportunity for growth is going to this new workforce, and it removes the possibilities for employees under the Agreement. If BHP employees are not given opportunities to upskill or effectively maintain skill sets, then the security of their employment, and our prospects in future employment, come into play. Mr Leggett said:

“There’s a very genuine concern among members that BHP are looking to shut down parts of the Mine to BMA EA [Agreement] employees and give whole work areas over to OS. We’ve had plenty of discussions at monthly meetings about this and there is a lot of unrest on site, because of concerns that BMA EA employees have about job security and the effect that the removal of training and development opportunities has on job satisfaction and job security.”

[44] Mr Leggett also provided a supplementary statement in response to the statements of Mr McGibbon. In relation to the employee numbers given by Mr MacGibbon, Mr Leggett said that since November 2019, more labour hire employees have left the BMA crews to move to OS and the number is more than 20 and probably around 50. In relation to Mr McGibbon’s evidence that no employee had complained to him about IDPRs, Mr Leggett said that he found them useful and had, since 2015, regularly asked when he would be having an IDPR. After being told that they are no longer being done, Mr Leggett stopped asking. Mr Leggett also said that Mr MacGibbon is a top-line manager who reports directly to the General Manager and if an employee had an issue with wanting to develop skills, it would be raised with the employee’s supervisor and not with Mr McGibbon. A matter would only end up with Mr MacGibbon if it needed high level attention.

[45] Mr Leggett maintained that there is no formal process for substantive training and development at PDM. In relation to the training log tendered by Mr MacGibbon, Mr Leggett said that it does not provide a structure for training and development but only assists work allocation. Mr Leggett also said that the document establishes that no one in the crew subject of the log was in any kind of training when this document was printed. Mr Leggett also maintained that there have been a number of times that labour hire employees have been offered opportunities to develop skills ahead of BHP employees, and that the only time he had really seen the Company follow the obligations set out in clause 8.2 of the Agreement were for things like OCE training, dragline training and, once, for shotfirers. That last example for shotfirers only occurred after a dispute was raised and advanced to the level of a State Level Conference.

[46] In relation to the training transcripts that are appended to Mr MacGibbon’s statement, Mr Leggett said that most of the contents are mandatory training, procedures, updates on policy or requirements to maintain a competency. Mr Leggett said that there is very little in the transcripts that counts as training or could be characterised as a development opportunity, particularly in recent years. As an example, Mr Leggett referred to his skills portfolio and training history as discussed in Mr MacGibbon’s statement. Mr Leggett said that the OCE training which Mr MacGibbon refers to was completed with his appointment as OCE in 2013. Since then Mr Leggett has utilised his OCE ticket and maintained all of his standard operating procedures (SOPs) to make sure they are current, but there has been no extra career progression.

[47] In response to Mr MacGibbon’s evidence in relation to the parking up of trucks also being attributed to leave and absenteeism, Mr Leggett said that these are things which occur regularly on site and are factored in to crew numbers. The only thing which changed when crews were depleted around the time of the OS Deployment, was that the deployment had occurred. Mr Leggett maintained that when OS first started coming on site, crews were depleted and trucks, graders and loaders were parked up because of the impacts on manning. This has gotten better in the months since OS came to site, but crew numbers are consistently not at the levels they were before the OS deployment, and a lot of “green people” have been put on through both OS, and labour hire engaged to replace old labour hire workers who have gone to OS. This means there are a lot of new faces on site and that effects everyone as they have varying levels of experience generally, and experience on site specifically.

[48] Mr Leggett also maintained that BHP relates differently to OS than other contractors. For example, OS uses BHP machinery more, so that dozers, water carts and the like will be diverted for use by OS. When HSE was on site Mr Leggett would have expected to know if this was happening and he is not aware that it ever happened. Mr Leggett said that if the Liebherr 9800 digger was just leased there would be no point requesting training on it as it could be removed from site at any time. Now that the equipment is owned by BHP there is a future for developing skills after being trained on it. In relation to Mr MacGibbon’s evidence that there is another Liebherr 9800 digger on site run by a Thiess crew on the Mine site, Mr Leggett that Thiess owns the 9800 that the crew uses.

[49] Mr Leggett also said that there is no use training or getting RPL on equipment. Skill requires use of the equipment. A development opportunity, or a job opportunity, is more than just obtaining an RPL but having the chance to develop and maintain that skill. For this reason, CFMMEU members would not run a dispute over leased equipment. However, where the equipment is acquired by the Company, but is inaccessible to BHP employees covered by the Agreement, it is a development opportunity.

[50] In response to Mr MacGibbon’s evidence that no coal mine worker had raised an issue with him with respect to safety relating to the OS deployment, Mr Leggett said that such a concern would not be raised with Mr MacGibbon. Mr Leggett also said that if a coal mine worker had asked to access a development opportunity on either the 9800s or the 282 Liebherr’s this request would not be made to Mr MacGibbon. Further, Mr Leggett said that he knows that concerns have been raised on site about the skills and experience of OS workers, because he has raised some of those concerns. Mr Leggett’s concerns have arisen though his interaction with the OS workforce in his capacity as OSE. According to Mr Leggett, an influx of new or different workers on site will always impact the rest of the workforce and will lead to safety issues while a crew is developing familiarity with safety procedures on site that is new to them. These issues are more significant with an inexperienced workforce like that of OS.

[51] Under cross-examination, Mr Leggett agreed that there is a regular turnover of labour hire employees from month to month, and said that he was not aware of the percentage involved. In relation to his evidence that 50 labour hire employees had moved to OS, Mr Leggett said that the majority of these had gone to OS at Peak Downs and that he was not aware of the exact figures. Mr Leggett rejected the proposition in Mr MacGibbon’s evidence that training had not been offered to labour hire employees unless all BHP employees had the training or had refused to undertake that training. Mr Leggett also said that there have been occasions when training has been offered to labour hire employees and his members have disputed this and the matter has been resolved without the need for an application to be made to the Commission.

[52] Mr Leggett accepted that there were trucks parking up before OS came to site, but maintained that there was a higher volume when OS first came on the site. Mr Leggett also accepted that the consequence of trucks parking up is that there is a loss of production for BHP. In relation to his evidence that there is a difference in the use by OS of BHP equipment in comparison with contractors, Mr Leggett maintained that if OS equipment breaks down replacement equipment is taken from BMA strips to their detriment. In response to a question about the nature of such detriment, Mr Leggett said that it could be a production, manning or training detriment and that meant that the utilisation of a piece of equipment was taken away from the BMA strip. Mr Leggett maintained that it is not usual for BMA equipment to be provided to contractors in the event of breakdown, but in response to the proposition that BHP can move equipment around to ensure peak production, Mr Leggett said: “Well we can’t stop them from doing it.” 5

[53] Mr Leggett agreed that a lot of the equipment used by HSE was leased. Mr Leggett did not agree that BHP employees had been trained on that equipment. In response to the proposition that the 5600 diggers which preceded the 9800, were leased and that BHP employees were trained on them, Mr Leggett said that the BHP employees were trained on the diggers on their own circuit and not those operated by HSE on its circuit.

[54] Mr MacGibbon is responsible for all overburden at the Peak Downs mine, which includes pre-strip, draglines and drill and blast. Mr MacGibbon manages up to 183 employees of BMA covered by the Agreement, who work in overburden, and 90 in pre-strip, including 11 staff employees, at the Peak Downs mine. Mr MacGibbon said that OS has been engaged as a contractor at the Peak Downs mine to conduct overburden load and haul operations, through operating four excavator, truck and ancillary fleets. HSE previously had the contract to perform this work. Mr MacGibbon tendered a Site Information Brief issued by the Acting General Manager of the Mine on 30 May 2019 advising that OS would be deployed at the Mine on providing excavation services for four excavator and truck fleets in pre-strip. The Brief stated that the deployment would replace the services currently provided by HSE Mining when the contract with that Company expired on 30 September 2019. The Brief also stated that:

“We expect to see approximately 230 Operations Services roles be deployed here on the site, and we are pleased to welcome Operations Services into our operation.

There will be no impact to other service contractors or existing labour hire workers in pre-strip, or to any existing BMA employee’s terms and conditions – BMA employees terms and conditions will remain the same and no redundancies are expected.

Operations Services is a new team operating across all Minerals Australia Coal assets with their recent deployment at other BMA sites, BMC and Mt Arthur in the Hunter Valley which are providing permanent production and maintenance jobs.

The Operations Services leadership team and support roles including supervision and trainers will be established on the site and their production crews are expected to commence their mobilisation at Peak Downs during September 2019.

Operations Services has so far recruited hundreds of people in Queensland, New South Wales and Western Australia and will continue recruitment including for these 230 roles at Peak Downs, ensuring that current Peak Downs labour hire employees have an opportunity to apply for new permanent Operations Services roles if they are interested. …”

[55] Mr MacGibbon said that around 70 of the workers with HSE have moved from HSE to OS. In relation to Ms Doolan’s evidence that BHP has lost a lot of labour hire to OS, Mr MacGibbon said in his November 2019 statement that his estimate is that less than 20 of the labour hire employees in Company pre-strip crews have moved to OS at the Peak Downs mine and that labour hire turnover is at its usual historical levels. In response to the evidence of Ms Doolan and Mr Leggett that BHP employees have not received much information about OS, Mr MacGibbon tendered a site information brief about OS at site. Mr MacGibbon also said that the only time that Mr Leggett has raised the questions about OS with him was in the dispute settlement process and Mr MacGibbon told Mr Leggett that what he was demanding to settle the dispute was outside the authority of Mr MacGibbon and Mr Zietsman (Superintendent, Production Overburden). As far as Mr MacGibbon is aware, Mr Leggett has never returned to this matter.

[56] Mr MacGibbon agreed that BHP stopped requiring employees to participate in the IDPRs in about 2015 but was not involved in the decision by BHP in this regard. Mr MacGibbon is aware that there was some resentment around IDPRs when they were being used. No employee has raised with Mr MacGibbon the fact that the Company no longer requires them to participate in IDPRs. No employee has complained to Mr MacGibbon about not having an IDPR and Mr Mc Gibbon is not aware of any disputes being commenced by employees after BHP stopped requiring employees to attend IDPRs. Mr McGibbon also said that any employee can raise a development aspiration with BHP even without an IDPR.

[57] Despite no longer conducting IDPRs at the Peak Downs mine, different training and development processes are maintained for BMA employees. The pre-strip department has a training and development matrix (for each pre-strip crew, which includes both BHP and labour hire employees. The Matrix enables Mr MacGibbon to keep track of whether the department has sufficient skills to operate efficiently, the training completed by each crew member and any training gaps. The Training Matrix also enables training to be prioritised and assessment of operators' skills that will soon expire or are otherwise a priority due to low numbers of crew members who are trained on particular skills that are needed in that crew.

[58] Mr MacGibbon said that the Company has recently trained extra trainer assessors in pre-strip as part of an effort to improve skills development. These trainer assessors are focused on up-skilling and improving operator skills and proficiencies in BMA crews and labour hire, as well as RPL assessments for on-boarding new starters. Mr MacGibbon has implemented a range of training programs for operators, four new trainer assessor positions and the use of a new 24/7 machine health monitoring system. Mr MacGibbon also said that Supervisors ensure that BMA employees are offered the chance to develop skills that they do not have, before this skills training is offered to labour hire employees. It is only offered to labour hire employees if BMA employees do not want the skills training, or all already have the skills training.

[59] In relation to Ms Doolan’s statement that it is difficult to get training and development, Mr MacGibbon tendered a copy of Ms Doolan’s skills portfolio and training history. Mr MacGibbon agreed that the dozer training that Ms Doolan commenced in September was stopped. However, this was not because the training was offered to labour hire or contractor employees. There were several reasons for this including some short absences of her training and that the business needed her to deliver training in her accredited skills.

[60] This training had been requested by Ms Doolan to her Supervisor. Ms Doolan's Supervisor reviewed the number of dozer skills on crew and decided that an additional dozer skill on crew would assist in more efficient “hot seating” at times when manning was potentially at a low (for example, in times where many staff members were ill, or during school holidays) and approved Ms Doolan's training. Mr MacGibbon also said that he had reviewed Ms Doolan’s training transcript, and other than the issue with the dozer training, Ms Doolan had received extensive training. Mr MacGibbon also tendered copies of training histories for Mr Leggett, Mr Curtis and Mr Sullivan. Mr MacGibbon said that Mr Sullivan is also involved with the roll-out of BHP Operating Systems which is a recent initiative focused on identifying skills for continuous improvement of operations and customer service. Mr Sullivan was selected for this role not because he “pushed” but because of the success of his work in assisting with other training programs and to help him develop a number of leadership and management skills that will assist his career development. Mr Leggett had also asked BMA to support him in OCE training. BMA agreed and Mr Leggett was given six months of paid study leave to complete his OCE qualification.

[61] In response to the evidence of Ms Doolan and Mr Leggett that labour hire employees moving to OS was resulting in reduced crew numbers and parking up of gear, Mr MacGibbon said that while at one stage pre-strip crew sizes reached 52, this was temporary and the aim is 46 people in each BMA crew on the current fleet. In his oral evidence, Mr MacGibbon said that currently the maximum is 46 people per crew. Mr MacGibbon accepted that for approximately five weeks in late August to early October, numbers in some crews fell below the optimal 46 with one crew reaching 38 and another reaching 36 although neither Ms Doolan nor Mr Leggett were in these crews. Mr MacGibbon also said that no detail is given by Ms Doolan and Mr Leggett as to when trucks were parked but accepted there was a period when trucks were parked up for limited times for multiple reasons such as absenteeism, annual leave and sick leave, and not just the movement of some labour hire employees to OS. Further, Mr MacGibbon said that at the lowest point in terms of crew numbers, the Department did not have the crib relief on all crews to run the trucks through the crib breaks. As a result, some trucks for these crews had to be parked up, but to the best of Mr MacGibbon’s recollection, only for crib breaks and only for a short time.

[62] In response to the evidence of Mr Sullivan, that OS are kept as a separated workforce to the BHP employees, Mr MacGibbon said that the starting point was always that the facilities are kept separate for BHP and for HSE and Thiess and it is no different for OS. Mr MacGibbon also said that when HSE was on site, they were assigned crib huts allocated to certain diggers and circuits which would come with set crib huts, and which were separate from the BMA crib huts. OS are using the HSE facilities and equipment allocated to HSE when they were on site. Mr MacGibbon also said that from a management perspective, it is logical to keep HSE (and now OS) separate from BHP because for him, supervision of the various works is easier when there is this general geographic separation. HSE and BHP were kept separate unless emergency or unplanned events occurred.

[63] In relation to OS working in separate pits, Mr MacGibbon said that BHP, Thiess and OS crews are generally each allocated to different areas of the mine. Thiess is generally allocated to pits in the south part of the Peak Downs mine, and OS in the most northern parts of the pits (just as HSE were). Despite allocating OS, BHP and Thiess crews to different parts of the mine, it often eventuates that fleets will be working very close to each other. Similarly, while fleets will be allocated to use different dumps, they can end up running to the same dump for operational reasons such as a breakdown, or operational availability of dumps, resulting in them working in close proximity on some occasions.

[64] Mr MacGibbon also disputed allegations that all new equipment, such as a Liebherr 9800 digger, 282 Liebherr trucks and other similar equipment, is being allocated to OS rather than to BMA crews. Mr MacGibbon said that with the exception of a Liebherr 9800, the equipment that OS is now using is the same equipment assigned to or used by HSE under its contract. In relation to the Liebherr 9800, Mr MacGibbon said that it was introduced on or about 15 September 2019, as HSE was in the final stages of transitioning out of the mine. If HSE had remained it would have been allocated to them. Mr MacGibbon also said that to the extent that Mr Leggett states that OS Overburden has the only 9800 Liebherr Loader on site, he is incorrect. The Thiess crews also run a 9800 Liebherr.

[65] Mr MacGibbon also said that the reason why the Liebherr 9800 was allocated to the pits where HSE were, and now to OS, was that he decided that this was the most productive way to match the capacity of digging and truck fleets in order to minimise bottlenecks and operate the mine in the most efficient manner. There is no other reason why the BMA fleet has not been allocated the new Liebherr 9800. Further, Mr MacGibbon said that more Liebherr 9800s will be coming to the Peak Downs mine in the future. To the extent that Mr Leggett says that any new Liebherr 9800s have been earmarked for OS, he is incorrect. No decision has been made regarding the allocation of these machines. Allocation will be made on the best utilisation returns for the machine and the optimum use of truck fleets and to optimise suit the Company’s operations and production.

[66] Mr MacGibbon agreed that it would be straightforward to qualify Mr Sullivan on the Liebherr 9800 as Mr Sullivan already has an excavator competency and is experienced in operating large-sized excavators. Mr MacGibbon said that once a worker has the excavator competency, all that is required for them to operate a new piece of excavator machinery is for them to familiarise themselves with that machinery to obtain Recognition of Prior Learning (RPL). This is not a difficult process nor usually a training process. Mr MacGibbon believes that two BMA employees have already obtained an RPL in relation to the Liebherr 9800.

[67] Mr MacGibbon said that BMA has a fleet of 16 Caterpillar 797 diesel mechanical haul trucks, which are (and always have been) operated on the BMA circuit. Of these, five are on hire from third parties. In his oral evidence at the hearing, Mr MacGibbon updated these figures and said that there are currently 18 Caterpillar trucks which are owned by BMA and that the five on hire that he had previously referred to, are no longer on hire. The 282 Liebherrs are electric drive haul trucks. The Mine has a fleet of nineteen 282 Liebherrs, 14 of which are owned by the Mine. All of these 282 Liebherrs were allocated to the HSE circuits and this has been the case historically. Mr MacGibbon said that there are good practice reasons why the 282 Liebherrs are allocated to the HSE/OS circuits. It is Mr MacGibbon’s decision that it provides the best allocation of trucks to digger capacity. In addition it made sense then to try and standardise the fleet used by HSE and it does so now as well for OS. Mr MacGibbon agreed that there are three Hitachi excavators allocated to OS and said that these Hitachi excavators were those being run by HSE, for the same reasons. In his oral evidence at the hearing, Mr MacGibbon said that there are now two Hitachi excavators allocated to OS.

[68] In relation to Mr Sullivan and Mr Leggett’s evidence that the lack of 282 Liebherrs in the BHP crew means that BHP employees are missing out on developing particular competencies, and that not having those competencies may mean that their career progression is limited, Mr MacGibbon said that the same competency is required to drive the 282 Liebherrs and the Caterpillar 797s. Once a worker has the competency, they are able to do a transitional RPL to be able to drive the other trucks. There are differences in the way that the braking systems work in the electric 282 Liebherrs and the mechanical Caterpillar 797s. But the competency is the same and the familiarisation would typically take up to two shifts to complete. To date, Mr MacGibbon is not aware that any BMA employee has asked to obtain this RPL.

[69] In relation to safety issues raised by CFMMEU witnesses, which they claim have been caused by the OS deployment, Mr MacGibbon is the designated "supervisor" as defined in the CMSHA/SHMS management structure. Mr MacGibbon said that no coal mine worker has raised such concerns with him, but he is advised by BHP Legal that these concerns have been forwarded to the SSE to deal with in accordance with the CMSHA.

[70] In his supplementary statement of 27 March 2020, Mr MacGibbon said that OS continue to operate like any other contractor and that he has not witnessed or been made aware of any animosity between BMA employees and OS employees. Mr MacGibbon also said that BHP does not offer any training to OS employees. OS has its own trainers and delivers its own training. In relation to equipment, Mr MacGibbon said that there has still been no decision made regarding the allocation of any new Liebherr 9800s. Since Mr MacGibbon made his first statement on 6 November 2019, he is not aware that any more BMA employees have asked to obtain RPL in relation to the Liebherr 9800. To date, Mr MacGibbon is still not aware that any BMA employee has asked to obtain RPL to be able to drive 282 Liebherrs.

[71] In relation to safety issues, Mr MacGibbon said in his supplementary statement that he is aware that Stephen Watts, the Industry Health and Safety Representative under the Coal Mining Safety and Health Act, attended the Peak Downs Mine in October 2019. Mr Watts made a Mine Record Entry (MRE) in relation to OS. Mr MacGibbon tendered correspondence from Mr Watts in relation to this matter indicating that inquiries were made about risk management and safety management in relation to OS. Confirmation was also sought about a discussion on 23 October 2019 where it was stated that OS is considered a contractor for safety legislation purposes 6. Mr MacGibbon also tendered a response to this correspondence from the site SSE Mr Lynn, stating that he considers that OS is a contractor within the meaning of, and for the purposes of, the Coal Mining Health and Safety Act.7 The response also provided responses to the various safety matters raised by Mr Watts. Finally, in relation to this matter, Mr MacGibbon tendered correspondence from Mr Watts dated 8 November 2019, stating that he was satisfied with the responses provided, and considered the matter closed out.8

[72] In oral evidence at the hearing, Mr MacGibbon said that BHP does not train labour hire employees. Mr MacGibbon is aware of some situations where BHP has trained labour hire employees provided that everyone on the crew who is a BHP employee has the skill or does not wish to acquire it, and the crew accepts or approves labour hire employees being trained. Mr Leggett said that during the transition period when OS was coming to the site, trucks were parked up during crib breaks because of manning shortages, resulting in lost production. Mr Leggett also said that there was some leased equipment operated by HSE and BHP prior to OS coming to site, and BHP employees were trained on that equipment, except for the T82s.

[73] In cross-examination, Mr MacGibbon was asked about the decision making process involved in OS being introduced and whether there was a Company wide policy to introduce OS to all sites where BHP operates. Mr MacGibbon said that the Company is always reviewing its operations and that matter was above his level. Mr MacGibbon also said that his understanding is that each site would evaluate options and make a decision as to what suits the site. Mr MacGibbon was not involved in the decision to introduce OS at the Peak Downs Mine and believes that the decision was made by Mr Linn, the General Manager.

[74] In response to a question about how he was informed of the decision, Mr MacGibbon said that it was announced in May 2019 as set out in the document appended to his witness statement. Mr MacGibbon also said that he knew that OS was under consideration before 30 May but could not recall how he became aware of this information. In relation to employee numbers in overburden, at the time OS was introduced, Mr MacGibbon said that there were approximately 230 HSE employees, 180 BHP employees, 160 – 180 labour hire employees and approximately 240 Thiess employees. The total number of employees on the site is in the order of 1800 to 2300.

[75] At the time this matter was heard, Mr MacGibbon said that there were 220 OS employees, 180 BHP employees and 240 Thiess employees. There were also 90 labour hire employees working in overburden in BMA areas. In response to a question as to whether HSE had used BMA equipment when its own equipment was down, Mr MacGibbon said that all the equipment run by HSE was owned by BMA. Mr MacGibbon also said that OS does not have any of its own equipment. Mr MacGibbon agreed that if a piece of OS equipment, such as a grader, broke down, BMA may supply a replacement or OS may have to run short, until the equipment was repaired. Mr MacGibbon also agreed that OS and BHP employees can share the same haul roads and both be digging in different areas of the same pit. Mr MacGibbon agreed that OS would have an allocation of equipment to do their work which may or may not be replaced in the event of breakdown.

[76] In response to questions about the safety assessment appended to his witness statement, Mr MacGibbon said that the document is a risk assessment about the change between HSE and OS and considered issues that may impact the mine site and production. In response to the proposition that it did not address the health and safety of BMA employees, Mr MacGibbon said that it addresses the health and safety of coal mine workers on site.

SUBMISSIONS

CFMMEU

[77] The CFMMEU relied on submissions filed on 8 October 2019 (conciliation submissions) and submissions filed on 6 March 2020 for the hearing (arbitration submissions). In its conciliation submissions, the CFMMEU contended that OS is a BHP company and for all intents and purposes is indistinguishable from the Respondent except that it is understood that those who are employed through OS enjoy inferior terms and conditions.

[78] The deployment of OS has already been completed at both sites. On or about 30 May 219 the Respondent advised its employees through a site information brief that there would be a deployment of OS at the Peak Downs Mine. The deployment was to provide execution services currently being carried out by HSE for four excavator and truck fleets in pre-strip. This involved about 230 positions.

[79] The CFMMEU alleged in its conciliation submissions that the Respondent’s conduct is inconsistent with clauses 6.1, 8.1, 8.2 of the Agreement, and the Model Consultation Term which is taken to be a term of the Agreement by virtue of the approval decision. 9 At the hearing, Mr Crawshaw for the CFMMEU submitted that there are undisputed facts including that there has been a wholesale replacement of a contractor employing 230 workers at Peak Downs. OS, the employer of the replacement labour is related to BHP, though ultimately controlled by the BHP Group Limited. OS employees have been publicly identified as a new team within BHP and the information provided to employees at Peak Downs is that there is no difference between OS and BHP, and that OS is a key part of BHP’s competitive strategy.10

[80] The CFMMEU’s submissions in relation to each of the questions for arbitration, can be summarised as follows.

Question 1

[81] In its conciliation submissions the CFMMEU submitted that the model consultation clause is applicable because the employer has made a definite decision to introduce a change of the nature contemplated by clause 1(a). Firstly, the CFMMEU submits that the actual relevant terminology used in clause 1(a) of the model consultation clause is whether there is a “major change to production, program, organisation, structure or technology in relation to its enterprise”. The CFMMEU submits that the wholesale replacement of contractors employing 230 workers at Peak Downs is a major change to the organisation and/or structure at that enterprise.

[82] Secondly, clause 1(a) is applicable when that major change “is likely to have a significant effect on the employees” which, in turn, depends on whether there is an effect set out in one of the subclauses in clause 9 of the model consultation clause. The CFMMEU submits that clause 9(b) is met because there is a major change to the composition and/or operation of the “employer’s workforce”. The employer’s workforce is not confined to its employees. It includes all workers who work for it, including employees of contractors. If Clause 9(b) had intended to only cover employees, it could have qualified the word “workforce” by the words “employee workforce”.

[83] According to the CFMMEU, the change from the employees of contractors to the OS personnel has also made a major change to the operation of the employee workforce. For example, new equipment has been acquired by the respondent for exclusive operation by OS personnel, closing off opportunities for skills and career development that would have otherwise been available to the employee workforce. The introduction of OS has also led to a reduction in the manning on crews worked by the employee workforce, and the diversion of training resources away from those employees.

[84] The CFMMEU also submits that clause 9(c) of the consultation term is met because the major change has resulted in “the elimination or diminution of job opportunities (including opportunities for promotion or tenure).” When replacing the employees of the contractors, the respondent has not given any opportunities to current employees to carry out the work previously carried out by those employees.

[85] In relation to Question 1, in its arbitration submissions, the CFMMEU contends that BHP’s decisions in relation to the OS Deployments in 2019 gave rise to circumstances in which the Model Consultation Term applies. These circumstances are appropriately characterised as the wholesale replacement of contractors employing 230 workers at Peak Downs. Accordingly, the OS Deployment is a major change to both the organisation and the structure at the Mine.

[86] The CFMMEU submits that the identity of the new contractors is pivotal in considering whether the Model Term required consultation. It appears from the company searches tendered by the CFMMEU that there are at least two OS entities – OS ACPM Pty Ltd and OS MCAP Pty Ltd. Each of the OS entities has a separate ABN and ACN. BHP Group Limited (ACN 004 028 077) is the Ultimate Holding Company for each of the OS entities and the share structure indicates that BHP Group Operations Pty Ltd holds a share in each of the OS entities. BHP Group Limited is also the Ultimate Holding Company with respect to BHP Coal Pty Ltd. As previously noted, BHP Coal Pty Ltd is the employing entity covered by the Agreement, in respect to mines managed by BMA.

[87] The CFMMEU also tendered a document setting out FAQs [Frequently Asked Questions] in relation to OS which was circulated to employees of BHP. The FAQs include the questions and answers:

What is the difference between OS and BHP?

There is no difference. OS is a key component of BHP’s strategy to maintain our competitive edge in the current operating environment.

Is OS still BHP?

Yes. OS is a key part of the BHP’s ongoing strategy to maintain our competitive edge in the current operating environment.

What is Operations Services and what will it do?

Operations service is a new team within BHP that will provide Production and Maintenance services. Employees of Operations Services will be permanent BHP employees. 11

[88] It is submitted that this evidences that the “new team within BHP” is better described as a type of “in house” labour provider, where BHP source labour through the OS entities at a cheaper rate than the labour provided through engaging employees directly under the Agreement. In relation to this assertion, the CFMMEU referred to an information package in relation to enterprise agreements to cover employees of OS as set out in applications for approval of such agreements. 12

[89] Further, it is submitted that the above circumstances mean that the OS Deployments relevantly introduce a “major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees” for the purposes of clause 1(a) of the Model Term. First, the OS Deployments relevantly introduce a ‘major change’ for the purposes of clause 1(a), which requires that there be a “major change to production, program, organisation, structure or technology in relation to its enterprise”.

[90] It is submitted that given the circumstances of the OS deployment, there has been a major alteration to the organisation and structure of the Respondent’s enterprise because there has been the wholesale replacement of external contractors by a companies that share the same controlling entity as the Respondent. Notwithstanding the creation of a separate legal status of these new entities, this constitutes a change whereby the Respondent effectively controls most of the labour on site.

[91] Further, the change introduces an internal, low cost employment model which fundamentally differs from the approach taken to date of having a substantial amount of work done by employees of contractors whose conditions of employment are not controlled by the Respondent. However, rather than directly employ these employees the respondent has effectively circumvented the conditions and obligations created by the BMA EA.

[92] Secondly, the major change “is likely to have a significant effect on the employees” for the purposes of clause 1(a) of the Model Term. This phrase is defined in clause 9 of the Model Term. In the above circumstances there has been a major change to the composition and/or operation of the “employer’s workforce” for the purposes of clause 9(b) of the Model Term. The Respondent’s workforce is not confined to its employees. It includes all workers who work for it at the Sites. If Clause 9(b) had intended to only cover employees, it could have qualified the word “workforce” by the words “employee workforce”.

[93] The CFMMEU submitted that it cannot be doubted that there has been a major change in the composition and operation of the workforce because a substantial number of employees of external contractors have been replaced by employees of companies connected to the respondent. The introduction of OS has also led to a reduction in the manning on crews worked by the employee workforce. In support of this submission, reference was made to the evidence of Ms Doolan and Mr Leggett.

[94] In addition, the CFMMEU submitted that clause 9(c) is satisfied because the change from the employees of external contractors to the OS personnel has resulted in “the elimination or diminution of job opportunities”. New equipment has been acquired by the Respondent for exclusive operation by OS personnel, closing off opportunities for skills and career development that would have otherwise been available to the employee workforce. This is said to be evidenced by the statement of Mr MacGibbon and by the statements of Mr Leggett and Mr Curtis. The evidence of Ms Doolan, Mr Curtis and Mr Leggett is also said to evidence that the introduction of OS has led to the diversion of training resources away from those employees.

[95] Applying the Model Term, the CFMMEU submits that it follows that consultation obligations arose under the Agreement in relation to the OS Deployments in 2019 as they occurred on the site, and there existed a requirement to consult with employees and their representatives in relation to these deployments at the point at which a definite decision to make the deployments was made.

[96] In oral submissions at the hearing, Mr Crawshaw said that the CFMMEU does not submit that the replacement of an external contractor not part of BHP, with another external contractor, would not be a major change. The CFMMEU contends that if 230 employees of one external contractor were replaced with 230 employees of another, this could well have been a major change to the organisation and structure in relation to the Peak Downs enterprise. In relation to the term “enterprise” Mr Crawshaw submitted that the Agreement is made under the Act, which defines that term in s. 12 as a business, activity, project or undertaking. Therefore, the enterprise relevant to the current dispute, is not BHP itself, but the business, activity, project or undertaking at the Peak Downs site.

[97] Mr Crawshaw also submitted that BHP Coal controls the Respondent in these proceedings and OS and as a result, now effectively controls most of the labour on the Peak Downs site and that:

“Anyone with any knowledge of industrial relations would consider the introduction of BHP companies to do the work done by external contractors to be a major change in organisation and structure. To adopt the words of one journalist, ‘This is a radical new model for the coal industry’.” 13

[98] In relation to the term “likely to have a significant effect on the employees” it is submitted that in the particular case, paragraphs 9 (b) or (c) of the model term are satisfied in that there has been a major change to the composition of the Company’s workforce and the elimination or diminution of job opportunities. It is also submitted that the workforce referred to in subclause (9) of the model consultation term, is not confined to employees of BHP but includes all workers who work for the Company at the site. While the model term has operation beyond the Peak Downs site, there is no reason why it should not be construed as including within the workforce, employees who are not directly engaged in relation to the particular enterprise. If that construction is accepted, there has been a major change in the composition of the workforce because a substantial number of employees have been replaced by a substantial number of other employees. 14

[99] In the alternative, it is submitted that the introduction of the OS employees has brought a major change to the composition of BHP’s direct employees by leading to a reduction in manning of crews, the movement of labour hire employees to OS and the fact that there has been a change of such significance for the site that a risk assessment was conducted for the site in relation to OS and BHP employees. Reference in relation to this point was also made to the evidence of Mr Leggett that ongoing safety issues had been raised in relation to work practices of OS employees.

[100] A further significant effect relied on by the Union is the elimination or diminution of job opportunities. The CFMMEU does not particularly suggest that this refers to opportunities for promotion, but rather to the opportunity to develop new skills and to expand experience. It is submitted that the importance of a job opportunity of this kind is particularly pronounced in the context of employment terms and conditions which offer no formal path for promotion and a remuneration structure, based on years of experience rather than skill level. Reference was also made to Mr Leggett’s evidence which established that a development or job opportunity is more than obtaining a skill and includes maintenance of skill by using and perfecting those skills.

[101] It was also submitted that no other clause in the Agreement obviated the need to consult and that even if this submission was not accepted, the jobs themselves were an opportunity that should have been made available to BHP employees prior to OS employees as required by clause 8.1(g). The assertions made by BHP in relation to the opportunities provided to its employees are not supported by any evidence. It is also the case that there is no formal process for substantive training and development at the Mine.

Question 2

[102] Question 2 concerns clauses 8(1)(a) and (b) of the Agreement which provide for a commitment on the part of BHP to ensure that employees have equitable access to training and development opportunities for their benefit. In its conciliation submissions, the CFMMEU contended that the cessation of existing contractor arrangements with HSE gave rise to development opportunities for employees of the Respondent. It is submitted that there were positions held by employees of the contractors that required the exercise of more or different skills than the position held by employees of the Respondent. However, there were employees of the Respondent that could be promoted to the positions held by employees of the contractors following recognition of their current competency or following a short period of training.

[103] The CFMMEU also submitted that no information was made available to employees about the requirements of the positions to be filled by the OS Deployment and potential career paths that would enable progression to those roles. There was no identification of the training available for employees to attain the skills to facilitate that progression, no process to identify employees for career development opportunities, and employees were not given preference in respect of these positions. It follows that BHP failed to comply with its obligations in respect of development opportunities of its employees, in accordance with clause 8.1(a) and (b) (and also (c), (d) and (g)) of the Agreement.

[104] The CFMMEU further submitted that it was known in advance that the previous contractors would be terminated and that the positions taken up by OS personnel would be coming available. Therefore, there is no identified immediate need to fill the positions or other discernible operational requirement which would otherwise be an exception to following the requirements of clause 8.1.

[105] In its arbitration submissions the CFMMEU contended that the nature of the obligation under clause 8.1 will be guided by the context of each of its provisions. The obligations which arise under clause 8.1 are framed by the prefatory remarks of that clause, which refer to a commitment by the Company to ensure equitable access to training and development opportunities for employees, to provide job security, job satisfaction, workplace flexibility and increased productivity. It is submitted that the commitment that these prefatory remarks refer to is not a one-off commitment which exists at a single point in time or is subject to expiry. Instead, it is a continually existing obligation.

[106] It is also submitted that when replacing the employees of the contractors with the OS Deployments in 2019, BHP did not give any opportunities to current employees to carry out the work previously carried out by those employees, instead designating existing and new opportunities, including those attached to certain equipment, to the OS employees. This is established by the evidence of Mr Leggett and other CFMMEU witnesses. Notwithstanding the ongoing nature of the commitment established by clause 8.1, a heightened obligation will be triggered (or re-triggered) in circumstances where there is a change on site which impacts that commitment.

[107] According to the CFMMEU, the extent of those obligations, is made clear by the words of the provisions. Firstly, they relate to “each position on the Mine”. For the purposes of clause 8.1 there is no basis to confine the positions on the Mine to the positions that are currently held by direct employees of the Respondent. Secondly, the obligation extends to making information available to alldirect employees about:

(a) the requirements of the positions;

(b) the potential career paths that enable progression to each role; and

[153] In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited 29 Logan J traced the history of consultation provisions in industrial instruments. In relation to the meaning to be given to consultation and the right to be consulted, his Honour observed:

“A key element of that content is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation”. 30

[154] His Honour went on in that case to cite authorities where it was held that consultation:

• is never to be treated perfunctorily or as a mere formality; 31

• is no empty term; 32

• can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal; 33

• is a right that is valuable and should be implemented by giving those who have the right an opportunity to be heard at a formative stage of proposals, before the mind of the executive becomes unduly fixed; and 34

• though a valuable right, is not a right of veto.

[155] The effect of s. 205 of the Act is to mandate that enterprise agreements contain a consultation term that addresses, as a minimum, the matters set out in that in that section. Those matters include a major workplace change that is likely to have significant effects on employees. Where the Model Consultation term is taken to be a term of an agreement, the parties cannot derogate from the minimum requirements the term must meet. However, by virtue of clause 8 of the Model Consultation term, where the parties to an enterprise agreement agree to a specific agreement term, that provides for a major change in relation to the enterprise of the employer, the requirements in the Model term with respect to notification and consultation do not apply to such change.

[156] Where the parties to an enterprise agreement include a consultation term in the agreement which does not meet the requirements in s. 205, they will be required to comply with both that term, and the Model Consultation term, where there is an inconsistency. In the present case, there is no relevant inconsistency.

[157] Once the model term becomes a term of an enterprise agreement, it operates in the context of that agreement and the enterprise covered by it. However, in construing the term, regard must also be had to its historical and legislative context. In this regard, the object of the Act and the objects in Part 2 – 4, and the subject matter of the Model Consultation term, support a construction that gives the term a broad effect. It is a beneficial term requiring that employees be consulted about major workplace change that is likely to have significant effects upon them. Change to which the term relates is not limited to the wages or conditions of employment of the employees concerned and nor is it limited to work directly performed by them, or the means by which they undertake that work. The term deals with change in the enterprise in which employees are working, which is major change, likely to have a significant effect on those employees.

[158] I turn now to consider the text of the Model Consultation term in the context of the Agreement in the present case. In the present dispute it is not contended by any party that another consultation process is prescribed in the Agreement in relation to the OS deployment and the exclusion in clause 8 of the Model Consultation term does not apply.

[159] Clause 1(a) of the Model Consultation term has two limbs which must be satisfied before the term applies:

1. The Company has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise; and

2. That change is likely to have a significant effect on employees.

[160] The term “that” linking the two limbs has a conjunctive effect so that both must be satisfied. In relation to the term “enterprise” in the first limb of the clause, the Agreement at clause 1.1 covers 7 nominated mines, including Peak Downs. In my view the term “enterprise” refers to each mine or the mines collectively, or a number of mines, depending on the nature of the major change in respect of which a definite decision has been made. An obligation to consult may be triggered where BHP makes a definite decision to effect a major change at all of the mines covered by the Agreement, or one of those mines, or a number of them.

[161] That term “enterprise” encompasses all mechanisms and structures used by BHP to conduct the enterprise, including organisational structures, labour (whether employed by BHP or another entity), plant and equipment. It is not necessary that the major change giving rise to the likelihood of a significant effect, is specifically directed at employees covered by the Agreement. A major change to the organisation or structure of an enterprise can be a change likely to have a significant effect on employees covered by an enterprise agreement, notwithstanding that the change concerns only the employer or a third party.

[162] In the present case, the relevant enterprise is the Peak Downs Mine. The relevant change in the present case is said to be the OS deployment. It is not in dispute that BHP has made a definite decision to replace HSE (a contractor supplying labour at the Mine) with OS. At the time of the deployment, HSE employed some 230 employees at the Mine, undertaking the same or similar work as that undertaken by the employees covered by the Agreement. The number of employees concerned is significant, in proportion to the number of BHP employees undertaking the same or similar work. OS and BHP have the same ultimate holding company. The information distributed by BHP to its employees, states that there is no difference between BHP and OS, and that OS is still BHP, and a key part of its ongoing strategy. I assume that BHP refers to BHP Coal Pty Ltd. There is no evidence to the contrary in the present proceedings.

[163] BHP and HSE do not have the same ultimate holding company. There is no evidence of any relationship between BHP and HSE other than the contract under which HSE provides services to BHP. The extent of the services is not clear, although there is evidence that HSE supplied labour and BHP supplied all of the plant and equipment used by HSE, at least the plant and equipment referred to in the present proceedings.

[164] An ultimate holding company is a company that has control over other subsidiary companies. While subsidiary companies undertake day to day work, an ultimate holding company holds assets and oversees the subsidiary companies. BHP asserts that the CFMMEU has not established the nature of the relationship between BHP and OS or that the former has any control over the latter or over the terms and conditions of employment of OS employees. It could equally be said that BHP has not established that it has no control over OS or the terms and conditions of its employees.

[165] I accept that the replacement of one labour hire company with another labour hire company may not, of itself, amount to a major change, for the purposes of the Model Consultation term. However, whether such a change is a major change, depends on all the facts and circumstances in the relevant enterprise. There are many scenarios related to the replacement of one contractor for another in an enterprise which may result in a major change being introduced at the enterprise.

[166] In the present case, regardless of the level of control over OS exercised by BHP, or that BHP and OS are separate legal entities, the fact remains that a contractor with no connection to BHP beyond the terms of a contract to supply labour at the Peak Downs Mine, has been replaced with an entity that does have a relationship with BHP by virtue of sharing the same ultimate holding company. BHP has stated to its employees that OS is BHP and there is no difference between the two entities. It is arguable that, for all intents and purposes, BHP has insourced the work being undertaken by HSE by allocating that work to an entity with which it has a relationship and which is part of a group of companies who share a common ultimate holding company. There are a significant number of employees involved and the structure of employment arrangements at the Mine has changed. I am satisfied that this is a major change to the organisation and structure of the enterprise conducted by BHP at the Peak Downs Mine.

[167] In relation to the second limb, to trigger the operation of the Model Consultation term, the major change must be change that “is likely to have a significant effect on the employees”. It is important to note that the effect is not required to be an actual effect, but rather, a likely effect – being an effect that well might happen or is probable. It is also clear that the effect must be on employees covered by the Agreement and not another group of employees such as those of HSE or OS. In this regard, notwithstanding the definition of “relevant employees” in clause (16) of the Model Consultation term as “the employees who may be affected by the major change” the term is included in an enterprise agreement which covers BHP and its employees. Accordingly, there is no basis for considering that the Model Consultation term in the Agreement gives rights to be consulted to any person who is not an employee of BHP covered by the Agreement.

[168] It is not any effect of a major change that is caught by the second limb in clause 1(a) of the Model Consultation term. The term “likely to have a significant effect on employees” is defined in clause (9) of the Model Consultation term. The definition is one that limits the operation of clause (1)(a) by specifying matters that are likely to have a significant effect, and requiring that to come within clause (1)(a), the change results in one of the listed matters, namely:

(a) The termination of the employment of Employees; or

(b) Major change to the composition, operation or size of the Company’s workforce or to the skills required of employees; or

(d) The alteration of hours of work; or

(e) The need to retrain employees; or

(f) The need to relocate employees to another workplace; or

(g) The restructuring of jobs.

[169] In summary, the first limb of clause (1)(a) of the Model Consultation term operates broadly, with respect to a definite decision by an employer to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise. It is not necessary that the change operates directly or immediately on the terms and conditions of employment of employees of the employer or that it is a change that directly concerns them. For example, a decision caught by clause (1)(a) may include the employer moving its location, outsourcing or insourcing some of the work performed in the enterprise, or a technological change. All such changes are major changes. The second limb operates on a narrower basis and requires that the major change has a significant effect – as defined in clause (9) – on the employees of the employer.

[170] For the purposes of clause (1)(a) and clause (9) of the Model Consultation term, the employees affected and/or the relevant employees, must be employees who are covered by the agreement in which the term is found. It is only employees who are covered by an agreement incorporating the Model Consultation term (or some other term that meets the requirements of s. 205 of the Act) who have a right to be consulted. A Model Consultation term in an enterprise agreement cannot give rights to be consulted to employees who are not covered by the agreement.

[171] In my view, the removal of a contractor from an enterprise by a principal, and the replacement of that contractor with another contractor, or by some other means, is capable of being a major change to the enterprise of the principal, so that the conditions in the first limb in clause (1)(a) are met. Such a change may also be one which will likely have a significant effect on the employees of the principal, depending on the facts and circumstances surrounding the removal of the contractor, and the effect this has on employees of the enterprise, in terms of the matters described in clause (9).

[172] For the reasons set out above, the deployment of OS, is a major change caught by the first limb in clause (1)(a) of the Model Consultation term. This is so notwithstanding that the employees of OS and/or HSE have no right to be consulted under the Model Consultation term in the Agreement and are not covered by the Agreement. The next question is whether that change is likely to have a significant effect on employees covered by the Agreement as provided in the second limb in clause (1)(a) and clause (9).

[173] Subclauses (9)(a) and (d) – (g) can be disposed of as being irrelevant in the present case. In relation to clause (9)(a) the OS deployment has not resulted in the termination of the employment of any employees covered by the Agreement and nor is this outcome likely. There has been no alteration to hours of work as provided in (9)(d); no need to retrain employees as a result of the change as provided in (9)(e); no relocation as provided in (9)(f); and no restructuring of jobs as provided in (9)(g). There is no evidence upon which I could be satisfied that there is any likelihood of those matters occurring.

[174] In relation to clause (9)(b), I am of the view that the term “workforce” includes all persons undertaking work in the relevant enterprise, including employees of contractors. Given the nature of the Model Consultation term and the matters it is directed to, it is readily apparent that a company’s workforce can include its direct employees and employees of contractors carrying out work in the enterprise. It is also readily apparent that major change to the numbers of contractor employees as a proportion of an employer’s workforce, could have a major effect on the direct employees of that employer. Such a reduction is a workplace change and a change to a workforce. If clause (9) (b) was restricted to a change to the number of employees of the employer, then it would be expressed in those terms.

[175] To construe the clause by concluding that “workforce” refers to a directly employed workforce, would be to read the clause down so that it did not apply to many of the kinds of changes it is intended to address. I also do not accept that the clause should be narrowly construed because it is in a Model Term that applies to all employers making an enterprise agreement, whether they are large or small. It is trite to say that an enterprise agreement is made in respect of a particular enterprise. Once the Model Consultation term is taken to be a term of an enterprise agreement, it operates in the context of the agreement read as a whole, and in the particular circumstances of the enterprise covered by the agreement.

[176] On the facts in the present case, while the organisation or structure of the enterprise has changed as a result of the OS deployment, there is no evidence that this change has brought about any change to the composition, operation or size of BHP’s workforce. While the identity of the contractor undertaking the work previously performed by OS has changed, the numbers of employees concerned has not changed, and neither has the number of BHP employees. Accordingly, there has been no change to the composition or makeup of the Company’s workforce. This is the case regardless of whether the reference to “workforce” in clause (9)(b) includes employees of OS or other third parties.

[177] There is also no evidence of a change to the operation of the Company’s workforce. The numbers of BHP employees and the numbers of contractor employees is unchanged, other than by virtue of ordinary turnover or absences on leave. While there is evidence of a turnover of labour hire employees caused by those employees taking up employment with OS, this reduction is not a reduction in the number of BHP employees. Mr MacGibbon’s evidence also established that there are optimal crew numbers and BHP aims to keep crew levels at those levels. To the extent that any crews have been operating at reduced levels at or around the time of the OS deployment, there is insufficient evidence upon which I could conclude that this was as a result of the deployment. Further, there is evidence that any reductions in numbers has been addressed and rectified. There is no evidence of any changes to the skills required of BHP employees as a result of the OS deployment. Further, there is no evidence of any changes to the skills required by employees of BHP as a result of the change.

[178] In relation to clause (9)(c), I do not accept that the OS deployment has eliminated or diminished job opportunities for BHP employees, including for promotion or tenure, as provided in clause (9)(c). The starting point is to consider the position of employees, in terms of job opportunities, before the decision of the employer to introduce a major change in terms of clause 1(a).

[179] At clause 41, the Agreement gives BHP the right to establish functional work areas, being identifiable segments of the Mine, which have their own specific skills requirements. Clause 5.1 provides that BHP has the right to determine a skills mix appropriate to its business needs for each functional work area. Clause 7 gives BHP free and unfettered access to contractors.

[180] When these provisions are considered, it is apparent that BHP has the right to organise the operations of the Mine as it sees fit. In this regard, the Company can designate a work area and assign a contractor to operate exclusively in that area. BHP can also allocate plant and equipment as it requires, including by allocating particular types of equipment to particular areas and employees, or contractors operating in those areas. By virtue of clause 4.1 of the Agreement, employees are required to perform such tasks as reasonably required by the Company and accept that the Company can require the performance of any operational, mining, maintenance or technical tasks that employees are trained, competent or authorised to perform.

[181] Clause 4.4 requires that employees are required to work as directed and clause 6.1 requires that there is no demarcation of work and any employee is required to perform production and engineering tasks covered by the Agreement where they are skilled, competent, and trained, where required, or authorised to do so. It is also the case that the wages and classification levels of employees and their remuneration under the Agreement are not determined by the equipment they operate, as evidenced by clause 10 of Schedule 7 of the Agreement which provides salaries for employees at Peak Downs Mine.

[182] These rights predate the OS deployment and operate regardless of that deployment. In short, if HSE’s contract had not been terminated, BHP had the right to allocate any of its equipment to HSE or to any other contractor in order to meet its operational needs. The evidence of Mr MacGibbon is that the Liebherr trucks referred to in the evidence of witnesses for the CFMMEU, would have been assigned to HSE if the contract was not terminated and are now assigned to OS. BHP has the right to assign the trucks or any other equipment, in this manner.

[183] I accept the submissions of BHP that there is no evidentiary foundation for the assertion that the ability to operate a different digger or truck is a job opportunity or promotion. For the reasons set out above, the Agreement expressly enables the Company to allocate any work on any piece of equipment, to an employee or a contractor. There has been no elimination or diminution of any job opportunity, as the equipment referred to by the CFMMEU witnesses was always going to be operated by contractors and could have been allocated to a contractor at any time. It is also the case that employees can seek training and competency assessments on the equipment identified.

[184] Further, I accept the evidence of Mr MacGibbon to the effect that the OS deployment did not result in the allocation of the equipment and that this was a separate and distinct decision. Any issues related to training and its availability, are also not related to the OS deployment, and in this regard, I note that, to the extent there are issues, they arose before the OS deployment.

[185] I am also of the view that the rights that BHP has in relation to the unfettered use of contractors, allocation of work, designation of work areas and assignment of machinery and equipment, are a further contextual indication that matters relating to the exercise of these rights are not major changes having a significant effect on employees, in circumstances where there is no resulting change (actual or likely) to the terms and conditions of employment of BHP employees or their status as such. However, if BHP decided – for example – to replace existing employees with OS employees, such a change would be major and likely to have a significant effect on BHP employees. The fact that BHP has an unfettered right to use contractors, would not remove its obligation to consult employees about such a change.

[186] In the present circumstances, I have concluded that the Model Consultation term was not triggered in the circumstances of the OS deployment, and BHP was not required to consult employees and their representatives, in relation to the OS deployment.

Question 2 - Career development and progression

[187] Question 2 concerns clauses 8.1(a) and (b) of the Agreement and whether the OS deployment triggered obligations under them. The obligations in clauses 8.1(a) are to make information available to all employees about the requirements of each position on the Mine, and potential career paths that will enable progression to each role. The obligations in 8.1(b) are to identify training available to attain required skills, to facilitate progression within career paths, to enable employees to assess their skill needs against designated skill requirements for their preferred path.

[188] The CFMMEU asserts that the OS deployment triggered these obligations in respect of positions previously filled by employees of HSE which were to be filled by OS employees. I am unable to accept this interpretation of the provisions.

[189] Read literally, the term “each position on the mine” could be construed as referring to positions held by both employees of BHP and employees of contractors. However, there are other considerations which tell against such a construction. Firstly, both clauses contain references to “requirements” or “required” with respect to skills. These requirements can only be those of BHP. If BHP does not require a position to be filled by one of its own employees, but rather that certain work will be undertaken by contractors and their employees, that is a matter for BHP. Where BHP decides to contract work, the effect is that either BHP does not require its own workforce to hold the skills being exercised by the contractor employees, or alternatively, BHP wishes to supplement its direct employees who hold particular skills, with other employees who also hold those skills, but who are employed by contractors rather than directly by BHP.

[190] In short, there is nothing in either clause to indicate that when BHP changes the identity of a contractor undertaking work on the Mine, the Company is required to give its direct employees an opportunity to undertake training to carry out the work that was previously undertaken by the employees of the contractor. BHP has the right to change the identity of a contractor and if a decision is made to do so, then BHP will not require any of its direct employees to obtain any additional skills to enable them to undertake the work. Accordingly, the Company can be under no obligation to take the actions in clause 8.1(a) or (b) in respect of skills required to do such work. Where a contractor is performing certain work, and BHP wishes to have the same work performed by another contractor, there are no available positions for its direct employees. The only available positions are positions in the employment of the replacement contractor. There is no basis for construing the Agreement so that BHP is obligated to provide its employees with details of those positions to enable them to assess the training they would require to fill them.

[191] Clauses 8.1(a) and (b) would only be triggered if BHP terminated a contractor and decided to perform the work itself using its own employees covered by the Agreement. OS is not covered by the Agreement and is simply replacing HSE. As such, no obligation arises under those clauses for BHP in the circumstances.

[192] There are other contextual provisions that support this construction. Clause 8.1(g) requires that BHP provide preference to its own employees covered by the Agreement for development opportunities that arise, over any labour hire and contractor employees. This clause indicates that there is a distinction between employees directly employed by BHP and employees of labour hire companies or contractors. Other clauses of the Agreement also make clear that BHP has the right to determine the skills it requires, and that any obligation to make training and career progression available to employees is subject to this right.

[193] Clause 5.1(b) of the Agreement provides that BHP has the right to determine a skills mix appropriate to its business needs for each functional work area and clause 5.1(c) provides that employees will undertake training as determined by the Company to suit its business needs, other than where training is scheduled on an employee’s RDO when clause 11.9 provides that employees can opt to attend such training. It is also the case that the Company can vary or add to functional work areas as listed in clause 41, and that such areas are relevant for the right of the Company to determine a skills mix under clause 5.1(b). Further, by virtue of clause 7, BHP has an unfettered access to contractors. All of these provisions are contrary to the proposition that when the identity of a contractor changes, BHP is required to give information about positions available

[194] Notwithstanding that OS is a related entity, it is a separate legal entity engaged to perform work in a particular part of the Mine. BHP has the right to designate that work area and to allocate plant and equipment to OS in order for it to conduct the work. I do not accept that any obligation for BHP under clause 8.1(a) or 8.1(b), was triggered by the OS deployment.

Question 3 – preference to direct employees

[195] Question 3 concerns the extent of BHP’s obligations under clause 8.1(g) of the Agreement which provides for preference to be given to employees covered by the Agreement, over labour hire or contractor employees, subject only to operational requirements such as where there is an identified immediate need for particular skills. In its conciliation submissions the CFMMEU asserted that the change in the identity of the contractor performing the relevant work, from HSE to OS, constituted the positions being undertaken by HSE employees being advertised externally.

[196] The CFMMEU also contended that when deciding to engage OS, BHP was first required to give preference to its direct employees to undertake the work previously undertaken by HSE. In relation to Question 3, I accept the submissions of BHP. First, when it decides to change the identity of a contractor performing particular work at the Mine, BHP is not obligated to treat the jobs undertaken by the employees of the contractor, as development opportunities for its own workforce. The effect of such a construction of the Agreement would be to obligate BHP to offer work performed by any contractor to its own employees, before replacing the contractor with another contractor.

[197] Notwithstanding that OS shares the same ultimate holding company, and the fact it was described by BHP as part of its operations, OS is a separate legal entity that has contracted with BHP, to undertake work that was previously undertaken by HSE. The positions are not available to BHP’s employees and there is no requirement under the Agreement that they be made available.

[198] In my view, clause 8.1(g) does not operate in the manner contended for by the CFMMEU. Rather that clause operates so that where there is a vacancy in BHP’s direct workforce, the Company is obligated to give preference to its own direct employees, where the vacancy is a development opportunity sought by a BHP employee or employees. In such circumstances, BHP is required to give preference to its own direct employees for such positions unless there is an operational requirement such as an identified immediate need for a particular skill.

[199] For example, if BHP purchased additional Liebherr trucks of the kind that have been discussed in evidence in these proceedings, and allocated those trucks to areas where its own direct employees are working, the Company would be required to give preference to its own employees for training to drive those trucks, notwithstanding that there may be contractor employees or labour hire employees who are already trained to drive them.

Question 4 – career progression

[200] For the reasons set out above in relation to questions 2 and 3, the reference to current roles and future opportunities in clause 8.2(a) relates to roles and opportunities with BHP and not with other entities. BHP has no obligation under clause 8.2 in relation to the OS deployment. Rather, the obligation is to invite expressions of interest in current roles or future opportunities within BHP’s workforce for its direct employees, before advertising such roles or opportunities externally.

CONCLUSION

[201] I accept that BHP employees may be aggrieved at the fact that the Company is not conducting IDPRs and there is dissatisfaction at the mechanisms with which they have been replaced. I also accept that there is concern about access to new equipment and training necessary to operate it. However, these are concerns which may be addressed via the dispute settlement procedure in the Agreement. In the present case, I answer the questions for arbitration as follows:

1. Question: In what circumstances is the Respondent, in terms of its consultation obligations under the Agreement, required to consult with its employees and their representatives on, or in relation to, the Operations Services (OS) Deployments?

Answer: In the present circumstances the Respondent was not, and is not, required to consult with its employees and their representatives on the OS deployments. The Respondent will be required to consult with its employees if it makes a definite decision of the kind in clause (9) of the Model Consultation Term – for example to replace existing direct employees with OS employees or implement some other significant change such as by altering the present ratio of labour hire and contractor employees to direct employees.

2. Question: Does the OS Deployment trigger obligations for the Company under clause 8.1(a) and (b) and if so, what is the extent of those obligations?

Answer: No. the OS Deployment does not trigger obligations for the Company under clause 8.1(a) or (b) of the Agreement.

3. Question: What is the extent of the Company’s obligation under clause 8.1(g) of the Agreement?

Answer: The OS deployment did not trigger any obligations under clause 8.1(g) of the Agreement. The extent of the Company’s obligations under clause 8.1(g) is to give preference to its direct employees where there is a vacancy in BHP’s direct workforce, and the vacancy is a development opportunity sought by a BHP employee or employees.

4. Question: What is the extent of the Company’s obligation under clause 8.2(a) of the Agreement?

Answer: The OS deployment did not trigger any obligation under clause 8.2(a) of the Agreement. The Company’s obligation under that clause is to invite expressions of interest in current roles or future opportunities within BHP’s workforce for its direct employees, before advertising such roles or opportunities externally.

[202] Accordingly, the relief sought in the application is refused and it is dismissed. An Order to that effect will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr S Crawshaw SC instructed by Ms E Sarlos for the CFMMEU.

Mr M Follett of Counsel instructed by Mr M Coonan for BHP.

Hearing details:

7 April.

2020.

By Video.

Printed by authority of the Commonwealth Government Printer

1 Exhibit A1, Statement of Nadine Maree Doolan.

2 Exhibit A2, Statement of Travis Lee Curtis.

3 Exhibit A3, Statement of Ashley Ryan Sullivan.

4 Exhibit A4, Statement of Scott Keith Leggett.

5 Transcript PN110.

6 Exhibit R2 Annexure DM-A.

7 Exhibit R2 Annexure DM-B.

8 Exhibit R2 Annexure DM-C.

9 BHP Coal Pty Ltd [2018] FWCA 2869, [3].

10 Transcript PN587 – 590.

11 - FAQs, attached to the CFMMEU submissions dated 6 March 2020 and marked Attachment 4.

12 The terms and conditions of employment for the OS employees are set out in OS ACPM Pty Ltd T/A OS ACPM Pty Ltd [2019] FWCA 8595 and OS MCAP Pty Ltd T/A OS MCAP Pty Ltd [2019] FWCA 8601.

13 Transcript PN602.

14 Transcript PN 606 – 610.

15 [2017] FWCFB 3005.

16 [2018] FCAFC 131; (2018) 264 FCR 536 at 580 [197]. This approach has been applied by the Federal Court (including numerous Full Courts) subsequently.

17 Amcor Ltd v CFMEU [2005] HCA 10; (2005) 222 CLR 241 at 270-1 [96]; SDAEA v

Woolworths SA Pty Ltd [2011] FCAFC 67 at [18]; Meatpak Pty Ltd v Moran [2005] FCAFC 111; (2005) 145 IR 248 at 250-1 [11]-[12]; Kucks v CSR Limited [1996] IRCA 166; (1996) 66 IR 182 at 184. See also Cooper Brookes (Wollongong) Pty Ltd v FCT [1981] HCA 26; (1981) 147 CLR 297 at 321.

18 [2017] FWCFB 3005 at [14].

19 [2017] FWCFB 4487.

20 [2014] NSWCA 184 at [71] – [85].

21 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.

22 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].

23 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].

24 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)

25 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].

26 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].

27 Kucks v CSR Limited (1996) 66 IR 182 at 184.

28 [2010] FCAFC 150.

29 [2010] FCA 591.

30 Ibid at 45.

31 Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 at 1124

32 TVW Enterprises Ltd v Duffy (No 2) (1985) 7 FCR 172.

33 Sinfield v London Transport Executive [1970] 1 Ch 550 at 558.

34 Ibid.

Construction, Forestry, Maritime, Mining and Energy Union-Mining and Energy Division v BHP Coal Pty Ltd

[2020] FWC 3788

20 JULY 2020

DECISION

OVERVIEW