Construction, Forestry, Maritime, Mining and Energy Union, Peter Cowan, Darren Sisson, Rod McLean, Dayle Marriott, David Bickhoff v Falcon Mining Pty Ltd T/A Falcon Mining - [2022] FWC 2969

[2022] FWC 2969

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739—Dispute resolution

Construction, Forestry, Maritime, Mining and Energy Union, Peter Cowan, Darren Sisson, Rod McLean, Dayle Marriott, David Bickhoff
v

Falcon Mining Pty Ltd T/A Falcon Mining

(C2020/4783)

DEPUTY PRESIDENT SAUNDERS

NEWCASTLE, 9 NOVEMBER 2022

Application for the Commission to deal with a dispute under an enterprise agreement – alleged entitlement to notice and redundancy payments – fixed and maximum term employment – ordinary and customary turnover of labour

Introduction

The CFMMEU is the first applicant in these proceedings. It is also the representative of the second, third, fourth, fifth and sixth applicants, who were formerly employed by Falcon Mining Pty Ltd (Falcon Mining).

Falcon Mining is part of the Mastermyne group of companies, which provides contract services to the mining industry.

The second to sixth applicants (Employees) were covered by the Falcon Mining Enterprise Agreement 2017 (Enterprise Agreement) during their employment with Falcon Mining. They worked on a services contract which Falcon Mining had with Narrabri Coal Operations Pty Ltd, part of the Whitehaven Coal group of companies (Whitehaven), to undertake development work at the Narrabri underground coal mine (Mine). The employment of each of the Employees with Falcon Mining came to an end when the contract between Falcon Mining and Whitehaven was terminated on 26 June 2020.

On 19 June 2020, the applicants filed an application in the Fair Work Commission (Commission) pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) and the dispute resolution procedure in clause 7 of the Enterprise Agreement (Application). The Application concerns the proper characterisation of the employment of the Employees and their claim to a range of entitlements which they say were owing to them as a result of the termination of their employment.

The dispute the subject of the Application clearly falls within the scope of disputes which may be dealt with in accordance with the dispute settlement procedure set out in clause 7 of the Enterprise Agreement. There is no dispute that the preliminary steps set out in the dispute settlement procedure were met before I arbitrated the dispute.

The Applicants adduced evidence from Mr Keenon Endacott, Industrial Officer of the CFMMEU, Mr Jeremy McWilliams, Vice President of the Northern Mining and New South Wales Energy District of the Mining and Energy Division of the CFMMEU, Mr Peter Cowan, Mechanical Coordinator, and Mr David Bickoff, Leading Hand (Miner Driver). Falcon Mining adduced evidence from Mr David Skyes, Executive GM Strategy, Technology and Growth, Ms Vivienne Gayton, General Manager Human Resources, and Mr Darren Baumann, Mechanical Engineering Manager.

Questions for arbitration

The following questions were identified by the parties as arising and requiring determination by the Commission in the arbitration:

1.          Are the Employees “fixed term” (including maximum term) employees under clause 8.2 of the Enterprise Agreement? (Question 1)[1]
2.          Whether any of Falcon Mining’s employees engaged to perform work at the Narrabri Underground Coal Mining Operation are entitled to:
a.          notice of termination (or payment in lieu of notice) pursuant to clause 11 of the Enterprise Agreement? (Question 2(a))
b.          payment of untaken paid personal/carer’s leave at the termination of their employment pursuant to clause 11.8 of the Enterprise Agreement? (Question 2(b))
c.          payment of severance pay and/or retrenchment pay pursuant to clause 12 of the Enterprise Agreement? (Question 2(c))
d. payment in respect of their accrued entitlement to paid annual leave under clause 21 of the Enterprise Agreement and s 90(2) of the Act? (Question 2(d))

3. If the answer to any of the questions in 1 above is “yes”, what amount is payable in respect of each employee? (Question 3)[2]

It is agreed that Question 2(d) does not require determination because the applicants no longer contend that employees who were engaged by Falcon Mining on a casual basis were, in truth, casual employees.

Both parties agree that Question 3, together with the identity of which, if any, particular employees of Falcon Mining are entitled to any of the benefits addressed in Questions 2(a), (b) and (c), may be put off until a later time, after the parties have had an opportunity to consider this decision and confer in relation to any such outstanding questions. I will adopt that course, and will determine Questions 1, 2(a), 2(b) and 2(c) in relation to Mr David Bickhoff, who is one of the applicants.

Relevant provisions of the Enterprise Agreement

The Enterprise Agreement covers “employees of Falcon Mining for whom classifications are defined in clause 13” (clause 4.1). Those classifications relevantly include inexperienced mineworker, experienced surface mineworker and experienced underground mineworker.

The scope of the Enterprise Agreement is “all mining and maintenance activities that Falcon Mining is contracted to perform on mine sites in the State of New South Wales; provided that it does not apply to any work under a contract where Falcon Mining is contracted as the mine site operator” (clause 4.2).

The Enterprise Agreement “excludes all industrial instruments (awards, modern awards or enterprise agreements) that would otherwise apply to the employees” (clause 4.4).

Clause 8.1 of the Enterprise Agreement permits Falcon Mining to employ an employee as a full-time, part-time or casual employee in one of the classifications covered by the Enterprise Agreement. Clause 8.2 permits Falcon Mining to “employ such categories in fixed-term (including maximum term) and fixed task employment”.

Clause 11 of the Enterprise Agreement deals with termination of employment. It relevantly provides:

“11 Termination of employment
11.1Notice of termination is provided for in the NES. This clause supplements the entitlement to notice of termination in the NES and provides industry specific detail.
11.2 Appropriate notice or payment / part payment in lieu to be given by Falcon Mining (save for casual employees and employees in their probation period) is:

Employee’s Continuous Service (A)
Notice Period (B)
If the employee is over 45 years old and has completed at least 2 years of continuous service with Falcon Mining

Not more than 1 year 1 week 1 week

Greater than 1, not more than 2 years 2 weeks 2 weeks

Greater than 2, not more than 3 years 2 weeks 3 weeks

Greater than 3, not more than 5 years 3 weeks 4 weeks

Greater than 5 years 4 weeks 5 weeks
…
11.7 Where termination occurs due to redundancy as defined in clause 12 the employee (other than a casual or a fixed term employee) whose employment is terminated is entitled to a minimum of four weeks' notice of termination or pay in lieu thereof at the ordinary time rate.
11.8An employee whose employment is terminated:
(a)by retrenchment;
(b)by retirement at or after age 60;

(c)by Falcon Mining because of ill health; or

(d)by death;

must, if the employee has 70 or more hours of untaken personal leave entitlement, be paid for that entitlement at the employee's base rate of pay…”

Clause 12 of the Enterprise Agreement governs redundancy. It provides:

“12 Redundancy
12.1This clause does not apply to employees engaged for a fixed term or a specified task or casual employees.
12.2An employee is made redundant where an employee's employment is terminated at Falcon Mining's initiative:
(a) because Falcon Mining no longer requires the job done by the employee to be done by anyone except where this is due to the ordinary and customary turnover of labour; or
(b)because of insolvency or bankruptcy of Falcon Mining.

12.3Except where clause 12.5 applies, when terminations occur due to redundancy the employees terminated are entitled to severance pay equal to one ordinary week's pay for each completed year of employment.
12.4Except where clause 12.5 applies, where redundancies occur due to:
(a)       technological change;
(b)       market forces; or
(c)       diminution of reserves,
the employees terminated are entitled to retrenchment pay equal to two ordinary weeks' pay for each completed year of employment. This payment is additional to the payment prescribed in clause 12.3. This makes a total of three ordinary weeks' pay for each completed year of employment with a minimum payment of two ordinary weeks' pay.

12.5Falcon Mining is not liable for the payment in clauses 12.3 and 12.4 if Falcon Mining obtains, or causes to be made available for the employee, work:
(a) that the employee is competent to perform;
(b) in a position that carries the same or a higher classification rate of pay than the employee's previous position;
(c) that can reasonably be regarded as permanent; and
(d) allows the employee to reside in the same general locality as the employee's previous residence.
12.6 Despite anything in this clause, Falcon Mining may make application to the Fair Work Commission to be granted relief from the obligation to make a payment pursuant to clause 12.”

Principles applicable to the interpretation of enterprise agreements

There is no dispute between the parties as to the principles that I must apply in properly construing the Enterprise Agreement. Those principles were summarised by the Full Bench in AMWU v Berri Pty Ltd² (Berri) as follows:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which
it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

More recently, the Full Court of the Federal Court of Australia stated the principles applicable to the interpretation of an enterprise agreement in James Cook University v Ridd:³
“(i) The starting point is the ordinary meaning of the words, read as a whole and in context.

(ii) A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind”. The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose”.
(iii) Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to “... the entire document of which it is a part, or to other documents with which there is an association”.

(iv) Context may include “... ideas that gave rise to an expression in a document from which it has been taken”.

(v) Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form...”

(vi) A generous construction is preferred over a strictly literal approach, but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties”.

(vii) Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.” [references omitted]

These principles were not disturbed on appeal, but the High Court did make the following observation (at [17]) in relation to the interpretation of enterprise agreements:[3]

“In that process of interpretation, an important matter of context is the industrial nature of the instrument. Industrial instruments are not always drafted carefully by lawyers or professional drafters, and hence the literal words of a provision might more readily be understood to have a meaning other than their ordinary meaning if the context so suggests.”

Question 1 – was Mr Bickhoff a “fixed term” or “maximum term” employee under clause 8.2 of the Enterprise Agreement?

Interpretation of “fixed term” and “maximum term” employment under the Enterprise Agreement

Falcon Mining submits that it engaged the Employees as “fixed-term (including maximum term)” employees within the meaning of clause 8.2 of the Enterprise Agreement. Falcon Mining does not contend that any of the Employees were engaged in “fixed task employment” within the meaning of clause 8.2.

The terms “fixed-term” and “maximum term” are not defined in the Enterprise Agreement. “Maximum term” employment within the meaning of the Enterprise Agreement is clearly a type or sub-category of “fixed term” employment. So much is clear from the expression “fixed-term (including maximum term) … employment” in clause 8.2 of the Enterprise Agreement.

In Andersen v Umbakumba Community Council,[4] Justice von Doussa considered whether an employee was excluded from the unfair dismissal provisions of the Industrial Relations Act 1988 (Cth) on the basis that he was “engaged under a contract of employment for a specified period of time” within the meaning of the Industrial Relations Regulations (Cth). His Honour reasoned as follows (at 106-7) in deciding to reject the employer’s argument:

“A “specified period of time” is a period of time that has certainty about it. A contract of employment for a specified period of time would be one where the time of commencement and the time of completion are unambiguously identified by a term of the contract, either by the contract stating definite dates, or by stating the time or criterion by which one or other end of the period of time is fixed, and by stating the duration of the contract of employment. As the period of time is defined in this way, it is apt to refer to a contract of employment for a specified period of time as a contract of employment for a fixed term, although this is not the description used in the regulation.
A contract of employment to run throughout a nominated number of days, weeks, or years would be a contract of employment for a specified period of time. If the terms of the contract of employment, instead of identifying in this manner the period of time during which it is to run, provides that it is to run until some future event, the timing of the happening of which is uncertain when the contract is made, the contract will be for an indeterminate period of time.
…
In the present case cl 3 and Sch 1 of the Employment Agreement clearly state both a commencement date for the employment and a cessation date, but in light of the right of either party to the contract arising under cl 21(c) to bring the employment to an end on two weeks notice, and the right of the employer under cl 21(d) to bring the employment to an end without notice on payment of two weeks salary, the cessation date merely records the outer limit of a period beyond which the contract of employment will not run (unless a new Agreement is entered into pursuant to cl 29). Within the period stated in Sch 1 the period of the contract of employment is indeterminate. At any point during the two year period identified by the commencement and cessation dates neither side could know with any certainty when the period of the contract of employment might come to an end.

It is significant that the rights to terminate the contract of employment arising under cl 21(c) and (d) are not conditioned on a breach of any term of the contract. The rights are unqualified. Different considerations may apply where a contract of employment for a period of time fixed by clearly stated dates of commencement and cessation contains a term which permits either side to terminate the contract on breach by the other side. In such a case, it is possible that the contract would be characterised as a contract of employment for a specified period of time notwithstanding the possibility that on breach of its terms by one side or the other it may sooner come to an end. In this case, however, the unqualified rights to terminate without reason under cl 21(c) and (d) make it clear, in my opinion, that the contract cannot be so characterised.”

Justice von Doussa’s judgment in Andersen v Umbakumba Community Council concerning contracts of employment for a specified period of time, otherwise known as contracts of employment for a fixed term, and outer limit contracts, otherwise known as maximum term or time-limited contracts of employment, has been applied consistently in industrial law cases for about three decades.[5]

Absent clear language or definitions indicating a contrary intention, there is significant merit to the argument that the expressions “fixed term” employment and “maximum term” employment, where they appear in the Enterprise Agreement, were objectively intended to have their well-settled industrial law meanings.

There is no indication in the language used in the Enterprise Agreement, or any relevant context, to suggest that the expressions “fixed term” employment and “maximum term” employment were objectively intended to mean anything different from their well-settled industrial law meanings. Accordingly, in my opinion, the proper construction of those terms in the Enterprise Agreement is as follows:

(a)“Fixed term” employment means employment under a contract of employment where the time of commencement and the time of completion are unambiguously identified by a term of the contract, either by the contract stating definite dates, or by stating the time or criterion by which one or other end of the period of time is fixed, and by stating the duration of the contract of employment. If instead of identifying that the contract is to run for a nominated number of days, weeks, or years, the terms of the contract of employment provide that it is to run until some future event, the timing of the happening of which is uncertain when the contract is made, the contract will be for an indeterminate, or unfixed, period of time. If the contract contains an unqualified right to terminate the employment, without reason, during the term of the contract, the period of the contract is indeterminate and thus not for a fixed term.
(b)“Maximum term” employment, as a sub-category or type of “fixed term” employment, means employment for a fixed term, as explained in subparagraph (a) above, save that the contract contains an unqualified right to terminate the employment, without reason, during the term of the contract.

Mr Bickhoff’s employment contract

Mr Bickhoff’s contract of employment includes the following relevant provisions:

“This Contract supersedes and replaces all prior representations and agreements, whether oral or in writing, concerning your employment with Mastermyne Group of Companies.
…
3. NATURE AND LOCATION OF EMPLOYMENT
Your classification of employment is prescribed in Schedule A. Unless terminated earlier in accordance with the terms of this Contract, you will be employed on a full time fixed term basis for the maximum commercial term of the Project defined in Schedule A. Upon completion of the Project, your employment (and this contract) will end without the need for either party to provide notice or Mastermyne to provide any termination payment.
Your site location may change during your employment. This may result in a change to your roster or to your pay arrangements. Changes of work location and other workplace changes shall be made in accordance with the relevant Enterprise Agreement.
…

14. TERMINATION

Other than in the case of serious misconduct, in order to terminate your employment Mastermyne must give you the period of notice based on your period of continuous service calculated as at the time the notice is given to you. The particular period of notice is to be determined from the following table:

Not more than 1 year 1 week (or 2 weeks if your [sic] engaged under the Mastermyne Queensland Drivage EA)

More than 1 year but not more than 3 years 2 weeks

More than 3 years but not more than 5 years 3 weeks

More than 5 years 4 weeks
If you are 45 years of age at the time of the giving of the notice, and have not less than two years continuous service with Mastermyne, you are entitled to an additional week’s notice.
Mastermyne may:
·Require you to work for your notice period;
·Pay you in lieu of your notice period; or
·Require you to work for part of your notice period and pay you in lieu of the balance of the period.

The notice of termination required to be given by you is the same as that required of Mastermyne, except that there is no requirement you to give additional notice based on your age. Where you provide Mastermyne with less than the required amount of notice of termination Mastermyne may withhold from your entitlements the monetary value of the amount of notice that you otherwise should have provided.

15. REDUNDANCY

As you are employed on a fixed term basis, for a specified task, in the event your employment is terminated due to the Project contract completing or downsizing, decreases in manning associated with the performance of Mastermyne’s Project contract or parts of the Project contract, this will be deems [sic] as “ordinary and customary turnover of labour” and therefore you are not entitled to a redundancy or severance payment.

…

Except as provided by the Enterprise Agreement, this contract sets out all of the terms of your employment with Mastermyne (and supersedes and replaces all prior representations and agreements, whether oral or in writing, concerning your employment with Mastermyne).

Prior to agreeing to this contract it is important you bring to the attention of your Mastermyne contact any matters you believe have been previously discussed or committed, but are not covered in this contract. Once you agree to this matter, you are confirming the contract is complete and no agreed terms are missing. You are also acknowledging that you are employed on a fixed term basis for a specified task.
…
SCHEDULE A: CONTRACT SUMMARY

Item 1 Name of Employee: David Bickhoff

Item 2 Employee Address: …

Item 3 Enterprise Agreement: Falcon Mining Enterprise Agreement 2017

Item 4 Classification: Experienced UG Mineworker

Item 5 Name of Project / Location: Contract Number: NC1705 - Cut and Flit Development Work
Narrabri

Item 6 Employment Start Date: 9^th January 2018

Item 7 Person to whom the Employee reports to: Mastermyne Site Management Representative

Item 8 All Inclusive Hourly Rate: …

Item 9 Additional Benefits: …

Item 10 Annual Leave Accrual: As prescribed in the relevant Enterprise Agreement

Item 11 Personal Leave Accrual: As prescribed in the relevant Enterprise Agreement”

By letter dated 18 March 2019, Mastermyne informed Mr Bickhoff that he had “progressed from an Experienced Miner to Leading Hand (Miner Driver)”. As a result of this progression, Mr Bickhoff’s hourly rate of pay was increased but “all other terms and conditions of … [his] employment contract dated 5 December 2017 remain[ed] unchanged”.

Applicable principles re interpretation of contracts of employment

The terms of a contract of employment may be affected in their operation by a statutory instrument such as an enterprise agreement approved under the Act. The contract of employment may provide for matters additional to and not inconsistent with such a statutory instrument, and in that circumstance the instrument and the contract may be said to co-exist, but where the contract contains provisions inconsistent with those in the instrument, the provisions in the instrument will apply by virtue of the statute which gives it effect, and the inconsistent provisions of the contract will be displaced in their operation and rendered inoperative.[6]

The proper approach to be taken when construing a contract was set out by the High Court (French CJ, Nettle and Gordon JJ) in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited:[7]

“[46] The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

[47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
[48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.

[49] However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals.
[50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations.
[51] Other principles are relevant in the construction of commercial contracts. Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption “that the parties ... intended to produce a commercial result”. Put another way, a commercial contract should be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.
[52] These observations are not intended to state any departure from the law as set out in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales and Electricity Generation Corporation v Woodside Energy Ltd. We agree with the observations of Kiefel and Keane JJ with respect to Western Export Services Inc v Jireh International Pty Ltd.” (citations omitted)

In addition, in the absence of a suggestion that contract was varied after it was originally made, its meaning and effect must be determined as at the time it was entered into.[8]

As to the proper characterisation of the relationship between the parties to a contract, where the terms of the parties’ relationship are comprehensively committed to a written contract, the legal rights and obligations established by the contract are decisive of the character of the relationship.[9] Notwithstanding this emphasis on the terms of a written contract, parties to a contract cannot determine the nature of their relationship by simply attaching a “label” to describe their relationship in one or more of the terms of the contract. The plurality explained this point in the following way in CFMMEU v Personnel Contracting Pty Ltd:[10]

“[58] …The parties’ legitimate freedom to agree upon the rights and duties which constitute their relationship should not be misunderstood. It does not extend to attaching a “label” to describe their relationship which is inconsistent with the rights and duties otherwise set forth.
…
[66] As a matter of principle, however, it is difficult to see how the expression by the parties of their opinion as to the character of the relationship can assist the court, whose task it is to characterise their relationship by reference to their rights and duties. Generally speaking, the opinion of the parties on a matter of law is irrelevant. Even if it be accepted that there may be cases where descriptive language chosen by the parties can shed light on the object of understanding of the operative provisions of their contract, the cases where the parties’ description of their status or relationship will be helpful to the court in ascertaining their rights and duties will be rare.” [references omitted]

Similarly, Justice Gordon observed:[11]

“This Court has previously cautioned against ascribing too much weight to “labels” used by parties to describe their relationship. The whole of the contract is to be construed including whatever labels the parties have used to describe their relationship, but those labels are not determinative: ‘parties cannot deem the relationship between themselves to be something not’.” [references omitted]

Was Mr Bickhoff a “fixed term” employee under clause 8.2 of the Enterprise Agreement?

Mr Bickhoff’s contract of employment makes numerous references to him being employed on a “fixed term basis”. According to the authorities discussed above, those parts of the contract must be given weight, but they are not determinative of whether Mr Bickhoff was a “fixed term” employee within the meaning of clause 8.2 of the Enterprise Agreement. All other relevant provisions of the contract of employment must be considered and accorded due weight.

Importantly, clause 3 of Mr Bickhoff’s contract, read together with clause 14, conferred on Falcon Mining an express right, at any time during the term of the contract, to terminate his employment on notice or by making a payment in lieu of notice. Such a right could be exercised for any reason or no reason. This unqualified right to terminate Mr Bickhoff’s employment at any time meant that he was not employed for a fixed term. Instead, his employment was for an indeterminate period of time, since at any point during the “fixed term” of the contract neither side could know with any certainty when the period of the contract of employment might come to an end.[12] Accordingly, I reject Falcon Mining’s contention that Mr Bickhoff was a “fixed term” employee under clause 8.2 of the Enterprise Agreement.

Was Mr Bickhoff a “maximum term” employee under clause 8.2 of the Enterprise Agreement?

As explained above, the fact that Falcon Mining had an unqualified right to terminate his employment at any time during the term of his contract meant that he was not a “fixed term” employee but he might have been a “maximum term” employee within the meaning of clause 8.2 of the Enterprise Agreement. However, for such a finding to be made, the time of completion of Mr Bickhoff’s employment with Falcon Mining must have been sufficiently certain.

Clause 3 of the contract informed Mr Bickhoff that he would be employed for “the maximum commercial term of the Project contract defined in Schedule A” and that his employment would end, without the need for notice or a payment in lieu, upon “completion of the Project”. Item 5 of Schedule A to the contract identified the name and location of the Project as “Contract Number: NC1705 – Cut and Flit Development Work” at Narrabri. No further information was provided in the employment contract about the nature of the Project, the extent of work to be undertaken by Falcon Mining on the Project, the number of employees who would be engaged to work on the Project, or the likely duration of the Project. Neither Mr Bickhoff nor any of the other Employees were provided with a copy of “Contract Number: NC1705 – Cut and Flit Development Work” (Project Contract). They had no means of knowing, or finding out, when the “maximum commercial term of the Project” might be reached, or the criteria by which “completion of the Project” would be assessed under the Project Contract.

Prior to signing his contract of employment, Mr Bickhoff was told by Mr David James, a Mastermyne Project Manager, that the job at the Mine was expected to last for 18 months to two years, with the Mine having an option of another 18 months to two years.[13] Although Mr James was not responsible for managing the Project Contract on behalf of Falcon Mining or for Falcon Mining’s employment arrangements, what Mr James said to Mr Bickhoff is consistent with Falcon Mining’s job advertisements which described the Project Contract as being an “18 months + contract”.[14]

At the time he entered into his contract of employment with Falcon Mining in about December 2017, the information available to Mr Bickhoff in his contract and the pre-employment representations to which I have referred did not enable him to know, or calculate with any degree of certainty, when the maximum commercial term of the Project would be reached or the Project would be completed. The timing of the happening of those events was highly uncertain at the time the contract was made.

Mr Bickhoff would not have been any better informed had he been given access to a copy of the Project Contract when he entered into his employment contract in about December 2017 or at any time thereafter. That is because the Project Contract has the following relevant features:

(a)The Project Contract has a commencement date of 1 November 2017. It does not have an end date.
(b)Clause 4(a) of the Project Contact requires Falcon Mining to complete the “Works”, which are defined in clause 1 to mean “all work which the Contractor is or may be required to perform to comply with its obligations under this Contract (including all works described in the Scope of Works and any ancillary works) and which is to be handed over to the Company”.

(c)Clause 4(b) of the Project Contract provides that the scope of the Project Contract includes “the supply of all labour, Materials, Temporary Works, Plant and Equipment, facilities, services and other things necessary to perform the Works… and all construction, installation, testing and commissioning work, which is necessary to bring the Works to Practical Completion”.
(d)Part A of the Project Contract defines the “Date for Practical Completion” to mean “the date for Practical Completion of the Work, as shown in the Program (as the Program is updated from time to time)”. The Program contained in Schedule 3 to the Project Contract projects only so far into the future as April 2019, at which point production in “MG2 South” was predicted to be occurring.
(e)Clause 4(d) of the Project Contract provides:
“The Contractor acknowledges and agrees that:
(1)any works described in the Scope of Works as forming part of a ‘Separable Portion 2’ do not, unless and until directed by the Company in writing, form part of the Works;
(2)the Company is not bound or obliged to direct or otherwise engage the Contractor to perform the ‘Separable Portion 2’ works; and

(3)The Company may elect any time and for whatever reason to perform the ‘Separable Portion 2’ works in itself or … engage a third party to perform those works.”

(f)Clause 1 of the Project Contract defines “Scope of Works” to mean “the scope of works set out in Schedule 1”.
(g)Schedule 1 to the Project Contract relevantly provides:
“Scope of Works
1 Introduction
This Scope of Works outlines the scope and specifications for the Cut and Flit Development works at Narrabri Mine. The Cut and Flit Development includes the formation of MG201 and MG202 gateroads, face and bleeder headings and associated roadways, totalling approximately 20,222 m.

The Contractor is required to carry out a complete the Works at the Narrabri Coal Operations (NCO) Mine Site, situated approximately 28 km south – east of Narrabri on the North West Slopes in New South Wales.

…
11 Development Production Using Cut and Flit System
11.1 Separable Portion 1
Operation of a Cut and Flit development system in MG201 and MG202 gateroads to form the first southern longwall block.
…

11.2 Separable Portion 2

The Company will consider whether it wishes to develop MG203 Roadway. Specification for the drivage will be determined closer to the date.

At this stage, Separable Portion 2 is unapproved by the Company and the Contractor should not assume or forecast of this work being commenced within the term of this Contract.”

(h)Clause 49(a) of the Project Contract provides that “At any time and for any reason the Company may terminate the whole or any part of this Contract for its convenience by giving the Contractor thirty (30) days prior written notice.”

The information contained in the Project Contract would not have permitted Mr Bickhoff to know, or calculate with any degree of certainty, when the “maximum commercial term” of the Project would be reached or the Project would be completed. In addition to the Project Contract containing broad definitions of terms such as “Work” and “Scope of Works”, the Project Contract gave Whitehaven the right to determine, at any time during the term of the Project Contract, whether “Separable Portion 2” of the Works would form part of the “Works” and therefore potentially extend the date for completion of the “Works” under the Project Contract. This meant that it was impossible for Mr Bickhoff, or any other person, to know, at the time he entered into his contract of employment in about December 2017, when his so called “fixed term” employment would or might come to an end. There was simply was no certainty as to the duration or likely time of completion of Mr Bickhoff’s employment with Falcon Mining.

The significant degree of uncertainty associated with the timing of the “completion of the Project” or the duration of the “maximum commercial term of the” Project Contract leads inevitably, in my opinion, to the conclusion that Mr Bickhoff was not a “maximum term” employee under clause 8.2 of the Enterprise Agreement.

Accordingly, the answer to Question 1 for Mr Bickhoff is “no”.

Question 2(a) - whether Mr Bickhoff is entitled to notice of termination (or payment in lieu of notice) pursuant to clause 11 of the Enterprise Agreement?

Clause 11 of the Enterprise Agreement deals with two different types of terminations: first, termination “due to redundancy as defined in clause 12” (clause 11.7); and secondly, termination for any reason or no reason (clauses 11.1 and 11.2). A termination due to redundancy gives an employee an entitlement to a minimum of four weeks’ notice or payment in lieu (clause 11.7). A termination for any or no reason gives an employee an entitlement to notice or payment in lieu, the amount of which depends on the length of the employee’s continuous service with Falcon Mining (clause 11.2). In either case, an entitlement to notice of termination or payment in lieu does not arise unless the employee has been terminated by Falcon Mining.

A termination by Falcon Mining is one that occurs at the initiative of Falcon Mining. A termination at the initiative of the employer is one “that is brought about by an employer and which is not agreed to by the employee”.[15]

If parties to a contract of employment genuinely agree that the employment of the employee will end in particular circumstances and it does so end, the termination occurs by reason of the agreement between the parties and there will be no termination at the initiative of the employer.[16] This is so whether or not the contract is sufficiently certain as to its duration to be classified as a fixed term/specified period of time contract or a maximum term/outer limit/time-limited contract.

Mr Bickhoff and Falcon Mining genuinely agreed in clause 3 of Mr Bickhoff’s employment contract that, unless terminated earlier in accordance with unqualified right to terminate at any time, Mr Bickhoff would be employed “on a full-time fixed term basis for the maximum commercial term of the Project defined in Schedule A”. There is a question of construction as to what is meant by the expression “maximum commercial term of the Project defined in Schedule A”. This provision must be construed in context. Relevant context includes the following sentence in clause 3: “Upon completion of the Project, your employment (and this contract will end without the need for either party to provide notice or Mastermyne to provide any termination payment.” Falcon Mining contends that clause 15 of Mr Bickhoff’s contract is also contextually relevant. As set out above, it provides:

“15. REDUNDANCY

As you are employed on a fixed term basis, for a specified task, in the event your employment is terminated due to the Project contract completing or downsizing, decreases in manning associated with the performance of Mastermyne’s Project contract or parts of the Project contract, this will be deems [sic] as “ordinary and customary turnover of labour” and therefore you are not entitled to a redundancy or severance payment.”

I accept that clause 15 of the contract provides context as to the circumstances in which Mr Bickhoff’s employment may be terminated in connection with the Project. However, the purpose of clause 15 is to address what is meant by the expression “ordinary and customary turnover of labour”, which is an exception to what otherwise might be an entitlement to a redundancy or severance payment.

In my opinion, there is an important distinction between the commercial term of a project contract and the maximum commercial term of such a contract. It is clear from the inclusion of the word “maximum” in the expression “maximum commercial term of the Project”[17] that the parties did not agree for Mr Bickhoff to be employed for whatever the commercial term of the Project Contract turned out to be, whether that be (a) as little as a few months (if Whitehaven chose to exercise its right to terminate the Project Contract for convenience a matter of weeks after the Commencement Date), (b) as long as three years or more (if Whitehaven exercised its right to require Falcon Mining to perform the Works in Separable Portion 2 and all Works under the Project Contract were completed), or (c) somewhere in between. The inclusion of the word “maximum” in the expression “maximum commercial term of the Project” suggests that the parties objectively intended for Mr Bickhoff to be employed, subject to the right of early termination, until all Works under the Project Contract were completed by Falcon Mining. That would be the maximum term for which the Project Contract could remain in operation. This construction is supported by the expression “Upon completion of the Project” in the following sentence of clause 3. The ordinary meaning of “completion” is “1. the act of completing. 2. state of being completed. 3. conclusion; fulfilment”.[18] Construed in context, “completion” of the Project Contract would take place when all Works under the Project Contract were completed or fulfilled.

Falcon Mining contends that “completion of the Project” took place when Whitehaven exercised its right to terminate the Project Contract for convenience and Falcon Mining stopped working on the Project in accordance with the notice of termination served on it by Whitehaven. This amounts to a contention that termination of the Project Contract constitutes “completion of the Project” within the meaning of clause 3 of Mr Bickhoff’s contract. I do not accept that this is the correct construction. It is arguable that the word “completion” could include “termination” in the sense that termination of the Project Contract resulted in the Project, so far as Falcon Mining was concerned, being completed because Falcon Mining had no further work to do on the Project Contract after it was terminated. However, it is more natural to think of completion of a contract for the performance of Works as the completion of all Works under the contract. Further, the use of the word “maximum” in the preceding sentence provides a strong indicator that the parties objectively intended for the employment to continue until all Works under the Project Contract were completed.

For the reasons given, I am of the opinion that the expression “maximum commercial term of the Project defined in Schedule A” means, on its proper construction, completion of all Works under the Project Contract.

I accept the evidence of Mr Darren Baumann, Mastermyne’s Project Manager who worked on the Project Contract at the Mine, that, at the time the Project Contract was terminated by Whitehaven for convenience, Falcon Mining had more Works to do under the Project Contract. I explain my reasons for making this finding below as part of my consideration of the factual matrix which is relevant to the question of whether Mr Bickhoff’s employment with Falcon Mining came to an end due to the ordinary and customary turnover of labour.

The termination of the Project Contract led directly to the termination of Mr Bickhoff’s employment with Falcon Mining. So much is clear from the terms of the following letter sent by Falcon Mining to Mr Bickhoff on 9 June 2020:

“Dear David
Cessation of your employment – NC1705 contract end
As you are aware Falcon Mining has received written notification from Whitehaven that the Contract Number: NC1705 - Cut and Fleet Development Work (“the Contract”) at Narrabri Mine will end on 26 June 2020.
Mastermyne has consulted with you and other employees in regards to the Contract coming to an end, and we have sought your views on any alternatives prior to making a final decision.
You are employed by Falcon Mining on a fixed–term basis for the maximum commercial term of the Contract, in accordance with clause 3 of your employment contract (Employment Contract).
Further to our discussions today, we now confirm that your employment will come to an end on 26 June 2020, the date that the Contract will reach its maximum commercial term. You are required to attend site to work your remaining rostered shifts up until including 26 June 2020.

Your entitlements

On cessation of your employment, Falcon Mining will pay you any accrued but untaken annual leave entitlements up to and including 26 June 2020.

As discussed, your employment is coming to an end in accordance with the fixed–term of your Employment Contract. Therefore, Falcon Mining is not required to provide you with notice of termination or redundancy pay…”

Because the Project Contract was terminated by Whitehaven for convenience prior to the completion by Falcon Mining of all Works under the Project Contract, the Project Contract did not reach its “maximum commercial term”. It follows that Mr Bickhoff’s employment with Falcon Mining did not come to an end by the agreement contained within clause 3 of the employment contract. Instead, I am satisfied that Mr Bickhoff’s employment was terminated at the initiative of Falcon Mining.

I am also satisfied, for the reasons set out below, that Mr Bickhoff’s termination did not occur due to redundancy as defined in clause 12 of the Enterprise Agreement. It follows that Mr Bickhoff is entitled to notice of termination, or payment in lieu, in accordance with clause 11.2 of the Enterprise Agreement.

Accordingly, the answer to Question 2(a) for Mr Bickhoff is “yes”.

Questions 2(b) and (c) - whether Mr Bickhoff is entitled to payment of untaken paid personal/carer’s leave pursuant to clause 11.8 of the Enterprise Agreement and severance pay and/or retrenchment pay pursuant to clause 12 of the Enterprise Agreement?

Mr Bickhoff’s entitlement under clause 11.8 of the Enterprise Agreement to a payment in respect of his untaken personal leave turns on whether his employment was “terminated by retrenchment”. The term “retrenchment” is not defined in the Enterprise Agreement. Clause 12.4 of the Enterprise Agreement does, however, govern when an employee is entitled to “retrenchment pay”. It provides that an entitlement to retrenchment pay arises where redundancies occur due to technological change, market forces or diminution of reserves. It follows, in my view, that where an employee meets the criteria for an entitlement to retrenchment pay under clause 12.4 of the Enterprise Agreement, the employee has been “terminated by retrenchment” within the meaning of clause 11.8 of the Enterprise Agreement. It is because of this close connection between clauses 11.8 and 12.4 that I am dealing with Questions 2(b) and (c) together.

Clause 12.1 of the Enterprise Agreement provides that the clause “does not apply to employees engaged for a fixed term or a specified task or casual employees”. This exclusion does not apply to Mr Bickhoff, because I have found that he was not employed by Falcon Mining for a fixed term or a maximum term and Falcon Mining does not contend that he was engaged for a specified task or as a casual employee. Had I found that Mr Bickhoff was employed for a maximum term but not a fixed term, it would have been necessary to determine whether, on its proper construction, the reference to “fixed term” in clause 12.1 includes “maximum term”. If the proper construction of “fixed term” in clause 12.1 includes “maximum term”, then clause 12 of the Enterprise Agreement would provide for a lesser benefit than both the redundancy provisions in the National Employment Standards (NES) and in the Black Coal Mining Industry Award 2020. As to the NES, the provisions of the Act which confer notice and redundancy entitlements on employees do not apply to employees employed for a specified period of time,[19] but there is no equivalent exclusion for employees employed on a maximum term/outer limit/time-limited contract. A term of an enterprise agreement has no effect to the extent that it excludes any provision of the NES.[20]

The definition of redundancy in clause 12.2 of the Enterprise Agreement has three elements, each of which must be satisfied. First, the employee’s employment is terminated at Falcon Mining’s initiative. Second, the termination occurs because either Falcon Mining no longer requires the job done by the employee to be done by anyone or Falcon Mining has gone into insolvency or bankruptcy. Third, the termination is not due to the ordinary and customary turnover of labour.

The first element of termination at the initiative of Falcon Mining is satisfied in the case of Mr Bickhoff, for the reasons explained above.

As to the second element, there is no suggestion in this case that Falcon Mining has gone into insolvency or bankruptcy. I am satisfied on the evidence that Mr Bickhoff’s employment with Falcon Mining was terminated because Falcon Mining no longer required the job he was doing to be done by anyone. The job that Mr Bickhoff was doing for Falcon Mining involved work on the Project Contract at the Mine. Whitehaven’s termination of the Project Contract for convenience meant that Falcon Mining’s work on the Project Contract came to an end. Falcon Mining no longer needed Mr Bickhoff or any other employees to do that work.

As to the third element, there is a significant contest between the parties in relation to whether any of Falcon Mining’s employees who worked on the Project Contract were dismissed due to the ordinary and customary turnover of labour. Falcon Mining contends that Mr Bickhoff and its other employees who were dismissed as a result of the termination by Whitehaven of the Project Contract were dismissed due to the ordinary and customary turnover of labour. The applicants contend that the ordinary and customary turnover of labour exception to redundancy was not met in the circumstances of this case.

Principles re ordinary and customary turnover of labour

The relevant question that arises under the ordinary and customary turnover of labour exception is whether a “reasonable person in the position of both parties to the contract of employment would have understood or expected, from its inception or nature or as the length of the employee’s service grew, that the job was not of a permanent or an ongoing nature, but would come to an end within a reasonably foreseeable timeframe”.[21]

The test is an objective one. To the extent that the evidence of the subjective understanding or expectation of an employee is inconsistent with the plain words of the employee’s employment agreements objectively understood, it is irrelevant.[22]

Relevant facts re ordinary and customary turnover of labour

I have set out in paragraph [25] above the relevant parts of Mr Bickhoff’s contract of employment.

A reasonable person in receipt of Mr Bickhoff’s employment contract with Falcon Mining would have understood from its terms that he could not have any expectation to be employed beyond the time that Falcon Mining completed its work on the Project Contract at the Mine. Falcon Mining did not operate the Mine. It was engaged by the Mine operator to perform contract services in the nature of “Cut and Flit Development Work” at the Mine. “Cut and flit” refers to a method of mining. The work Falcon Mining was engaged to perform at the Mine was “development” in nature because it involved preparatory work to enable the Mine operator to use long wall mining to extract coal from areas (long walls) of the Mine. Falcon Mining supplied both labour and equipment in order to undertake its cut and flit development work at the Mine.

The terms of clause 15 of Mr Bickhoff’s employment contract would have informed a reasonable person in the position of the parties to the contract that Mr Bickhoff’s employment could be terminated “due to the Project contract completing or downsizing, or decreases in manning associated with the performance of Mastermyne’s Project contract or parts of the Project contract”, which would be part of the ordinary and customary turnover of labour, in which case Mr Bickhoff would not be entitled to a redundancy or severance payment under the contract or clause 12 of the Enterprise Agreement. In my view, the expression “Project contract completing or downsizing” is broad enough, on its proper construction, to encompass either the completion of all Works under the Project Contract or a downsizing of the Project Contract by reducing the amount of Work which the Mine operator required Falcon Mining to perform under the Project Contract, either by terminating the Project Contract for reasons other than for cause or reducing the Scope of Works under the Project Contract. The reference to “decreases in manning” immediately after “the Project contract completing or downsizing” in clause 15 suggests that “downsizing” was not objectively intended to be limited to a reduction in the size of the workforce. I consider that a reasonable person would construe the expression “downsizing” of the Project Contract to mean a reduction in the scope or amount of Work that Whitehaven could require Falcon Mining to perform under the Project Contract.

The terms of Mr Bickhoff’s employment contract concerning his employment to work on the Project Contract at the Mine are consistent with what he was told by Mr James and in the job advertisement about the job being to work on the cut and flit development contract, which was “expected to last for 18 months to two years, with the Mine having an option of another 18 months to two years”.[23]

Mobilisation of Falcon Mining’s crews to work on the Project Contract at the Mine took place in late 2017. Actual production by way of cut and flit mining commenced in February 2018. Cut and flit mining does not just involve cutting and delivering coal. It requires many other tasks to be performed, including early works, commissioning, preparation, ventilation and support, services, overcasts, changing floor and roof levels, pillar work, belt work and drill and blast tasks.[24]

Detailed evidence was adduced as to the actual work performed by Falcon Mining’s employees at the Mine in the period from early 2018 until 26 June 2020. I do not need to make detailed findings about every aspect of that work over the two and a half year period leading up to 26 June 2020 because the questions I have been asked to arbitrate do not require such detailed findings of fact. However, I will analyse evidence which is relevant to the following contentions advanced by the applicants:

First, across 12 pre-tour meetings between around October 2019 and April 2020, Mr Baumann told Falcon Mining’s employees that Falcon Mining was either waiting for a new contract to be signed or a new contract had been signed.
Secondly, Whitehaven did not direct Falcon Mining to do any of the Works contemplated by Separable Portion 2 of the Project Contract. In the period from November 2019 until June 2020, Falcon Mining was not performing Work under the Project Contract; it was performing work for Whitehaven at the Mine as a paid “volunteer”.
Thirdly, the Employees’ contracts were effectively varied after November 2019 by Falcon Mining’s conduct in undertaking work outside the scope of the Project Contract (in MG203, 200 mains and MG202), and the acquiescence of the Employees in that course. Effectively, by their conduct, the parties agreed that the employment contracts would be ongoing and would involve the performance of such work as directed, whether or not it fell within the scope of the Project Contract.

The Project Contract was varied in May 2018. The variation changed the references in Schedule 1 to the Project Contract from “MG1” and “MG201” to “TG201” and “MG2” and “MG202” to “MG201”. “MG201” is a reference to the “main gate” for longwall block 201. “TG201” is a reference to the “tail gate” for longwall block 201. It is necessary to understand some of the basic features of longwall mining to comprehend these terms. Longwall mining involves a series of gate roads (rectangular tunnels), otherwise known as roadways, being driven down either side of a long rectangular block of coal in an underground coal mine. The gate roads in which the coal haulage system is to be installed across the face of the coal seam is referred to as the “main gate”, with the gate roads on the other side of the rectangular block of coal being referred to as the “tail gate”. When there are two longwall blocks directly next to one another, the “main gate” of the first longwall block may become the “tail gate” of the second longwall block. There are further roadways running across the top (i.e. along one of the narrow sides of the longwall block) which are used to deliver services such as air and water and remove coal (on a belt system). These roadways are often referred to as “mains”. Depending on the design of a particular mine, there may also be “mains” running down between two longwall blocks to deliver the necessary services to other parts of the mine.

The part of the Mine where Falcon Mining was undertaking cut and flit development work was near three adjacent longwalls, referred to as longwall 201, longwall 202 and longwall 203. In between longwall 202 and longwall 203 there was, albeit not initially, a plan to run 200 mains down to other parts of the Mine. There were also “mains” across the top of longwalls 201, 202 and 203. Consistent with the notion explained above whereby the main gate for one longwall block may become the tail gate for the next longwall block, MG201 became TG202 for longwall 202.[25]

The variation to the Project Contract in May 2018 also:

· deleted sections 9 and 10 of Schedule 1 – Scope of Works to the Project Contract and replaced them with new provisions. As a result, the Scope of Works now referred to the two gate roads on either side of the first southern longwall block (longwall 201). No references to MG202 were included in the variation to the Project Contract. The varied Scope of Works did not make any reference to any work in 200 mains.

· deleted 63 days from section 3.10 – Setup of Schedule 2 to the Project Contract and replaced it with 104 days; and
· replaced the Program in Schedule 3 to the Project Contract with a revised Program.

After the variation to the Project Contract, Falcon Mining continued developing the roadways into TG201. The work was carried out by using a continuous miner which cuts the roadways and has a conveyor system to load the cut coal for transportation. In addition to cutting the roadways, Falcon Mining supported the roadways by bolting the roof, installing services and establishing the ventilation required for those roadways. Falcon Mining’s work in TG201 reached practical completion on 11 March 2019.

Falcon Mining’s work in MG201 commenced on 6 March 2019. That work was much the same as the work which had been performed in TG201.

In about September 2019, overtime for Falcon Mining’s employees working on the Project Contract was cancelled. Mr Cowan says that Mr Baumann told the employees that overtime had been cancelled because Falcon Mining was “dipping out of the next bucket” as all the money from the original contract had been spent.[26] Mr Baumann denies informing employees that Falcon Mining was dipping into the next contract and says he was still able to get limited overtime approved if the work was necessary to continue cutting coal. Mr Baumann says that the decision to cancel overtime was a cash flow decision made by Whitehaven in relation to coal prices.[27] Mr Baumann also says that he explained to employees that they would be able to offer overtime when they started on a new “bucket of money” from Separable Portion 2 of the Project Contract.[28]

The Employees say that from at least the beginning of 2019 they had been working with two drift runners, but in about October or November 2019 Falcon Mining took the second drift runner out of the Mine and Mr Baumann told the employees that when the new contract started they would get a second drift runner again. Mr Baumann says that Falcon Mining commenced work at the Mine with the approval for one drift runner; a second drift runner was never provided for in the contract. Sometime in late 2018, Mr Baumann says that Falcon Mining outlined to Whitehaven the extra production potential that could be obtained in using a second drift runner. Whitehaven permitted the use of a second drift runner for a limited period but removed that as a cost saving device as a result of lower coal prices. Mr Baumann also says that when discussing Falcon Mining’s proposal with Whitehaven for a new contract relating to work in 200 mains it included provision for a second drift runner paid for by Whitehaven, and Mr Baumann passed this on to the employees.

In about October 2019, Mr Bickhoff says that Mr Baumann told employees at a pre-tour meeting that the continuous miner was booked in and would be sent for overhaul in about November 2019. Mr Bickhoff also says that at this meeting Mr Baumann said words to the effect, “we’re pretty much done for what we had to do, but we’re going to continue to use the machine until it’s due to go off site.”[29] Mr Baumann says that the continuous miner was not taken out due to the completion of any work under the Project Contract; it was sent for repairs, not overhaul. Further, Mr Baumann says that his comment about work being done was in relation to the drivage work for MG201 only.

I prefer Mr Baumann’s evidence in relation to the contested issues addressed in the previous three paragraphs. As the Project Manager for the Project, Mr Baumann was in regular communication with Whitehaven about the status of work under the Project Contract and the prospect of additional work on MG203 (Separable Portion 2) and/or by way of 5-10km of development work in 200 mains being approved by Whitehaven. In light of Mr Baumann’s detailed knowledge of these matters, I consider it more likely that he would be able to recall the detail of these events and conversations than the employees undertaking the physical work on the Project. In saying that, I have no hesitation in finding that all witnesses who gave evidence in this case did their best to truthfully and accurately recall what happened and what was said in relevant discussions. Further, Mr Baumann’s evidence about these matters is consistent with the certificates of practical completion issued by Whitehaven under the terms of the Project Contract.

From about October 2019 until about April 2020, during the pre-tour meetings, employees regularly asked Mr Baumann about the status of the Project Contract and what was next. This is consistent with the employees understanding that they were not employed on an ongoing basis and had their employment with Falcon Mining tied to the Project Contract.[30] Mr Cowan says that Mr Baumann’s response was almost always the same: we are waiting for a new contract to be signed. Mr Cowan also says that occasionally Mr Baumann said that a contract had been signed, but this was never a consistent position. Mr Bickhoff gave evidence to a similar effect.[31] Mr Baumann denies that he told the employees that a new contract had been signed. He says he told them that agreement had been reached with Whitehaven for Falcon Mining to do 5-10km of development work on 200 mains and they were waiting for Whitehaven to sign the contract. Mr Baumann accepts that he used words to the effect that the contract was as good as signed, but he did not say that it was signed because he knew that it was not.

Even taking the evidence of Mr Cowan and Mr Bickhoff at its highest, the communication by Falcon Mining of inconsistent positions concerning whether a new contract had been signed would not give rise to a reasonable expectation of a further period of employment under a new contract. A reasonable person would not rely on some statements that a contract had been signed when the response which was more often given was that Falcon Mining was waiting for a new contract to be signed. In any event, I prefer Mr Baumann’s evidence that he did not tell the employees that a new contract had been signed. That is consistent with the fact that, according to my assessment of the evidence as a whole, no such new contract was signed. I do not believe that Mr Baumann would tell the employees that a new contract had been signed when he knew it had not. Furthermore, even if the employees were told that a new contract had been signed, that might give rise to a reasonable expectation that their employment may be extended until completion of work under the new contract but it would not give rise to a reasonable expectation of permanent or ongoing employment with Falcon Mining. The employees were aware at all times that Falcon Mining was performing mining services at the Mine pursuant to a contract with the Mine operator. There was nothing to reasonably suggest that the employees would have permanent or ongoing employment at the Mine or otherwise with Falcon Mining.

The Works in MG201 were practically completed on 21 November 2019.

Mr Baumann gave evidence that work in MG203, which was Separable Portion 2 of the Project Contract, was released under the Project Contract and approved in around November 2019.[32]

There is no dispute that Falcon Mining’s employees did undertake cut and flit development work in MG203.[33] This work commenced just after Christmas in 2019[34] and was approved by Whitehaven in its Authority to Mine document, which approved the performance of the work but did not state who had been approved to do the work. The work in MG203 was also the subject of oral directions by Whitehaven managers to Mr Baumann.[35]

Falcon Mining did not adduce into evidence any document which constituted a written direction from Whitehaven, in accordance with clause 4(d) of the Project Contract, that the Works in Separable Portion 2 (i.e. developing the MG203 roadway) formed part of the Works under the Project Contract. Clause 4(d) states that, “unless and until directed by the Company in writing”, Separable Portion 2 does not “form part of the Works”. Falcon Mining submitted that it should be inferred that such a written direction was issued or the parties waived the requirement for it to be issued. I am not prepared to draw an inference that such a written document was issued. Falcon Mining was ordered to produce a range of documents to the Commission in answer to an order for the production of documents. One of the categories in that order required the production of any written direction issued in accordance with the relevant provision of the Project Contract. No such document was produced, nor did Falcon Mining adduce any evidence to suggest that the document existed but could not be located or was otherwise not available. I am, however, satisfied that the parties to the Project Contract waived the requirement to provide such a written direction because there is no doubt that work in MG203 was undertaken by Falcon Mining’s employees, at the direction of Whitehaven, both orally and in its Authority to Mine issued in December 2019, which was communicated to Falcon Mining. Whitehaven also issued a certificate of practical completion in respect of Falcon Mining’s work in MG203. That certificate was issued by Whitehaven under clause 28 of the Project Contract, which, read together with the definition of Practical Completion in clause 1, requires Whitehaven to issue such a certificate if it is of the opinion that the Works have been completed in accordance with the terms of the Project Contract. In all the circumstances I am satisfied that Whitehaven directed Falcon Mining to do the Works contemplated by Separable Portion 2 of the Project Contract (development of MG203 Roadway) and Falcon Mining undertook work in accordance with that direction.

There is a dispute as to what was said in a meeting involving Mr Keenon Endacott, Industrial Officer of the CFMMEU, and Ms Vivienne Gayton, General Manager Human Resources of the Mastermyne group, in December 2019. Mr Peter Jordan, who was at that time the President of the CFMMEU Mining and Energy Division, Northern District, and Mr David Sykes, a Mining Engineer employed in the Mastermyne group, also attended the meeting. The purpose of the meeting was to discuss an issue concerning the correct payment of an afternoon shift penalty to some members of the CFMMEU who worked for Falcon Mining. As well as discussing that issue, Mr Endacott says Ms Gayton also “gave a report on the status of their contract at the Mine”.[36] Mr Endacott says that Ms Gayton informed himself and Mr Jordan at the meeting of the following matters:

(a)there were around 40 production and engineering employees engaged on the site;
(b)the contract expired that month;

(c)Falcon Mining was hopeful about getting a further contract;

(d)the existing workforce were being provided with ongoing work; and

(e)until a further contract was confirmed, the employees were performing a different scope of work, in a different area than that which they had been doing under the contract, but that the work being performed was the same type of work, plus other work.

In support of his recollection of this discussion, Mr Endacott relied on a file note from his meeting with Ms Gayton. The file note relevantly states:

“= Extended 3 years
= Expired this month – current 1
* Different scope different area same work +
* Provide existing work force with on going work”

Ms Gayton says that she provided the following information to Mr Jordan and Mr Endacott at the meeting:

(a)The Narrabri project was going well. It was performing strongly.
(b)We had developed a good working relationship with the client. Employees are highly engaged and supported by a good management team.

(c)We were negotiating a new contract which we hoped to get over the line. This new contract would secure our ongoing presence at the operation and result in ongoing employment for the existing employees, beyond the current contract.

(d)The cut and flit work and other work we are asked to deliver to meet the mine plan and commercial contract was ongoing and hopefully we could negotiate more work.

Ms Gayton recalls being asked about specifics as to where Falcon Mining was working in the Mine. Ms Gayton recalls saying that they were working in different areas but she would not have been able to provide any detail or clarification as she did not understand that level of detail. Ms Gayton denies saying that the contract had expired that month because she knew that it had not.

Mr Sykes did not play an active part in the meeting. He gave uncontested evidence, which I accept, that he could not recall Ms Gayton saying that the Narrabri contract was completed or that Falcon Mining was starting on a new contract. However, I do not place much weight on this evidence because Mr Sykes was not involved to any significant extent in the discussion and was “doing things on his email and messaging” during the meeting.[37]

I am satisfied that Mr Endacott and Ms Gayton did their best to give accurate and reliable evidence as to what was said by Ms Gayton in their meeting in December 2019. The purpose of that meeting was not to discuss the status of the Project Contract. It was to discuss another industrial matter. The discussion continued into what I would describe as a general conversation about work being undertaken by Falcon Mining in the Hunter Valley region, including at the Mine. I prefer Ms Gayton’s evidence in relation to the disputed parts of the conversation. In particular, I prefer Ms Gayton’s evidence that she did not say words to the effect that the “contract had expired”. I accept Ms Gayton’s evidence that she knew the Project Contract had not expired at that time. That is consistent with the finding I have made elsewhere in these reasons that the Project Contract remained on foot until it was terminated on 26 June 2020. At the time of their discussion in December 2019, I have found that Separable Portion 2 had been awarded to Falcon Mining. That involved work of the same type at a different location (MG203) in the Mine. It provided ongoing work for Falcon Mining’s workforce at the Mine. Those matters are consistent with most of the handwritten notes made by Mr Endacott at the time. December 2019 was also a time when Falcon Mining had been holding discussions with Whitehaven about the possibility of further work being given to Falcon Mining to undertake 5-10km of development work in 200 mains. That is consistent with the recollection of both Mr Endacott and Ms Gayton that Ms Gayton spoke about Falcon Mining being hopeful of getting a new contract.

In the period from about December 2019 until termination of the Project Contract in June 2020, Falcon Mining engaged a number of new employees, known as “cleanskins” because they did not have any prior experience in mining, to work on the Project Contract at the Mine. Mr Baumann explained that this was done in accordance with instructions given by Whitehaven for “local” employees to be engaged whenever Falcon Mining needed more employees to work on the Project Contract, regardless of the fact that it took up to six months for a “cleanskin” to be trained to a point where they could work out of the eyesight of the person supervising them. The applicants rely on the engagement of “cleanskins” in the last six months during which the Project Contract was on foot to support their argument that this would not have happened if there was an expectation that Falcon Mining’s work was to come to an end in mid-2020. True it is that Falcon Mining did not expect the Project Contract to be terminated in June 2020 prior to the completion of all Works under the Project Contract. However, Falcon Mining knew that the Project Contract could be terminated “for convenience” at any time on 30 days’ notice and a reasonable person in Mr Bickhoff’s position would have understood from his employment contract that his employment might be terminated if the Project Contract was completed or downsized. In any event, the engagement by Falcon Mining of “cleanskins” in the last six months of the Project Contract was simply a consequence of the instruction given by Whitehaven to Falcon Mining to employ and train local employees so that there would be a greater pool of local employees to choose from when more labour was required at the Mine in the future. Having regard to those circumstances, I do not consider that a reasonable person would interpret the employment by Falcon Mining of “cleanskins” in the period from December 2019 to June 2020 to work on the Project Contract as an indicator that the job of employees such as Mr Bickhoff had become permanent or ongoing, rather than tied to the Project Contract.

In December 2019, Falcon Mining’s employees undertook some work in 200 mains. That was before there had been any drivage of the roads into MG203 below the “A heading” of the mains that ran across the top of the three longwall blocks.

In early 2020, Falcon Mining’s employees undertook work in MG203. After 4 March 2020, Falcon Mining’s employees were moved across to work in 200 mains. They did not return to perform any work in MG203 after that time. The work undertaken by Falcon Mining’s employees in 200 mains included belt works to prepare the belt to feed into 200 mains and driving roadways from the main headings down to the third cut-through on A and B headings and the fourth cut-through on C and D headings in 200 mains.

In addition to the work in 200 mains, Falcon Mining’s employees also undertook work in 202 panel entry (MG202). In his statement Mr Baumann described this as the performance of “work for MG202 including necessary associated work around 200 mains and the trunk belt under excavation and lowering to facilitate our MG work” and “the panel entry at MG202 requiring major ventilation work in the mine by way of shot-fired overcasts at … [a series of locations]”.

On a weekend during mid-May 2020, Falcon Mining, at the request of Whitehaven, arranged for all its employees at the Mine to work on a longwall recovery for the entire weekend. This involved Falcon Mining’s employees going to a different area of the Mine to assist Whitehaven’s employees to fix a problem with a longwall by shovelling coal so that the longwall could start running again.

As at 18 May 2020, Mr Baumann had no sense at all that the Falcon Mining’s Work on the Project Contract was about to reach some sort of a conclusion. Falcon Mining’s earlier Work on the Project Contract had been delayed for a number of reasons.[38]

By letter dated 26 May 2020, Whitehaven gave Falcon Mining notice of termination of the Project Contract “for convenience” pursuant to clause 49(a). The notice was in the following terms:

“I refer to the contract between Narrabri Coal Operations Pty Limited (Company) and Falcon Mining Pty Ltd (Contractor) dated on or around 10^th August 2017 for the provision of cut and flit services by the Contractor to the Company at the Site (Contract No. 2017-NC1705) (Contract).
Unless otherwise defined or the context otherwise requires, capitalised terms in this letter at the same meaning as set out in the Contract.
In accordance with clause 49(a) of the Contract, the Company notifies the Contractor that it terminates the Contract.
The date of termination of the Contract will be 26^th June 2020.
As a result of the termination of Contract, the Contractor is required to undertake those activities set out in clause 46.5.
Please let me know your availability for a meeting to discuss the process for completion of the Contractor’s activities and demobilisation.
The Company thanks the Contractor for the performance of Works it has undertaken.”

On 27 May 2020, representatives from Whitehaven held briefings with Falcon Mining’s employees who were working at the Mine and informed them that Whitehaven was giving Falcon mining notice of termination of the Project Contract, but it was in no way related to the work Falcon Mining and its employees had been performing under the Project Contract. The Whitehaven representatives spoke to Falcon Mining’s employees about:[39]

the excellent safety performance;
the fact that they were happy with Mastermyne and the Project/Project team and workforce on the Project Contract; and
the decision had been purely cost driven to wind the contract up due to global prices.

There is no suggestion that the Project Contract was terminated in connection with any poor performance by Falcon Mining or its employees.

On 29 May 2020, Falcon Mining notified the CFMMEU that the Project Contract would be terminated as of 26 June 2020 and the impact this would likely have on employees working on the Project Contract.[40] Consultation with affected employees also commenced on 29 May 2020.

On about 9 June 2020, letters of termination were sent to Falcon Mining’s employees who were working on the Project Contract at the Mine. The terms of those letters are set out in paragraph [51] above.

In June 2020, Whitehaven issued Falcon Mining with the following certificates of practical completion, under clause 28(a) of the Project Contract, in respect of the Work undertaken by Falcon Mining on the Project Contract:

(a)a certificate of practical completion for work in TG201. The certificate states that the date of practical completion was 11 March 2019. The certificate was signed by the Whitehaven “Contract Holder” on 16 June 2020 and by Mr Baumann on 12 June 2020.
(b)a certificate of practical completion for work in MG201. The certificate states that the date of practical completion was 21 November 2019. The certificate was signed by the Whitehaven “Contract Holder” on 16 June 2020 and by Mr Baumann on 12 June 2020.

(c)a certificate of practical completion for work in MG203 and Belt Chamber. The certificate states that the date of practical completion was a date in March 2020. The certificate was signed by the Whitehaven “Contract Holder” on 16 June 2020 and by Mr Baumann on 12 June 2020.

(d)a certificate of practical completion for work in 202 Panel Entry. The certificate states that the date of practical completion was 11 June 2020. The certificate was signed by the Whitehaven “Contract Holder” on 16 June 2020 and by Mr Baumann on 12 June 2020.
(e)a certificate of practical completion for work in 200 Mains. The certificate states that the date of practical completion was 15 June 2020. The certificate was signed by the Whitehaven “Contract Holder” on 16 June 2020 and by Mr Baumann on 12 June 2020.

I accept Mr Baumann’s unchallenged evidence that he conducted a “walk” with Whitehaven’s representative to get approval of practical completion when Falcon Mining finished a portion of separable works.[41] The dates of these final “walks” were as follows:

TG201 inspection a walk on 11 March 2019;
MG201-TG201 face line inspection walk on 21 October 2019;
MG201 including MG201-MG202 face line inspection walk on 21 November 2019;
MG203 panel entry inspection walk on 4 March 2020; and
MG202 panel entry inspection walk on 11 June 2020.

Mr Endacott attached to his witness statement a number of publicly available documents in the nature of Mastermyne’s half year and full year results presentations and reports, Mastermyne’s annual reports, Mastermyne’s capital raising presentations, Mastermyne’s annual financial reports, Mastermyne’s ASX results release announcements, Mastermyne’s website, Mastermyne’s job advertisements, and media articles. There is no evidence to suggest that any of these documents were provided or disclosed to any of Falcon Mining’s employees who worked on the Project Contract at the Mine. Accordingly, the documents are not relevant to any argument concerning what a reasonable person in the position of both parties to the contract of employment would have understood or expected in relation to whether the job was of a permanent or an ongoing nature. The documents are, however, relevant to the applicants’ contention that, in the period from November 2019 until June 2020, Falcon Mining was not performing Work under the Project Contract. The documents show, amongst other things:

documents created in 2018 and 2019 refer to a “Narrabri Development” contract at Whitehaven commencing in 2017 and expecting to conclude in 2019;[42] and
documents created in February 2020 refer to a “Narrabri Development” contract having two components: a past contract from 2017 until 2019 and a current contract from 2019 until about mid-2020.[43]

The documents created in 2018 and 2019 are consistent with Falcon Mining’s representation in its job advertisements that it believed the Project Contract would be an “18 months +” contract. These documents were created before Separable Portion 2 of the Project Contract was awarded to Falcon Mining in late 2019. The documents created in February 2020 refer to a “current contract from 2019 until about mid-2020”. Having regard to the high-level representations contained in these documents, I consider those statements to be consistent with either Separable Portion 2 of the Project Contract being awarded to Falcon Mining in late 2019 or a new contract being awarded to Falcon Mining at Narrabri in late 2019. For the reasons explained elsewhere in this decision, I have found that Separable Portion 2 of the Project Contract was awarded to Falcon Mining in late 2019 and work continued by the Employees on the Project Contract until it was terminated on 26 June 2020. A new contract was not awarded to Falcon Mining to undertake work at the Mine.

Consideration re ordinary and customary turnover of labour

The applicants contend that the work undertaken by Falcon Mining’s employees in 200 mains and MG202 was not within the scope of the Project Contract. It is important to recall that the definition of Works in clause 1 of the Project Contract includes “all work which the Contractor is or may be required to perform to comply with its obligations under this Contract (including all works described in the Scope of Works and any ancillary works) and which is to be handed over to the Company” [emphasis added]. This included a range of work to support the cut and flit mining, such as establishing ventilation and services, conveyor installation and roof support.

Mr Baumann gave evidence to explain, persuasively in my view, how the work undertaken in 200 mains and MG202 was directly ancillary to the development mining work being undertaken by Falcon Mining in MG203, which was part of Separable Portion 2. As Mr Baumann explained at various points during his oral evidence:

(a)“So far as the work in 200 mains is concerned you see the red arrow and the blue arrow, what relationship, if any, does that have to 203?---That’s obviously – the blue arrow is the intake airways and the red arrow is the return airway.
But what relationship, if any, did that have to panel 203?---To 203, well that’s how it was ventilated, so it will get its air from the intake roadways and then it will have to return through the return roadways.
Through 200 mains?---Yes, or the entry to 200 mains.”[44]
(b)“So at that point, so we’ve built the infrastructure, the lead-in to the panel around that area and then we went back down to the mains area to get that through that they were going to come across with those two roads … They were coming across, turning up this way and then it was we needed to get the entry in the 200 mains sorted for a belt so that the tailgate had somewhere to put a cross-belt through so that they could actually develop 203.”[45]
(c)“… Then we were moved down to the mains 200 because that was the next point there was going to be required to facilitate that 203 block. So for a belt and ventilation and all that sort of jazz in the mains 200.”[46]

(d)“So Falcon is actually driving and cutting coal into the gate roads that are projected to extend down 200 mains?--- Setting up the panel entry, yes.”[47]

(e)“… So we were entrusted to get this work done in 200 mains, to get the belt and everything in there, cut enough roadways in that panel entry to get the belt across from 203.”[48]

(f)“…It’s obviously in the plan and it was there to be cut and it needs to be done to allow for the ventilation circuit for these guys when they get up there to turn forward and head out to the south. So if we hadn’t done the mains 200 entries, this still no way to adjoin that to get gas when they get to there. They had enough ability to ventilate down to where they are but then when it started to come up north they needed to be ventilating back through the mains which unless we cut the mains to provide an access, it would work.”[49]

I found Mr Baumann to be a credible and reliable witness. In his position as Project Manager for the Project Contract Mr Baumann had and has a detailed understanding of the work performed by Falcon Mining at the Mine and the reasons why such work was undertaken in the order in which it was. Mr Baumann was in the unique position of attending regular meetings with representatives of Whitehaven in relation to the discussion of the status of work on the Project Contract and the potential for a new or varied contract for Falcon Mining to undertake 5-10km of development work into 200 mains, as well as communicating with Falcon Mining’s employees at the Mine in relation to those and other operational matters.

Mr Baumann’s evidence as to the connection between the work undertaken by Falcon Mining’s employees in 200 mains and MG203 is consistent with the following evidence given the applicants:

(a)Mr Cowan gave the following evidence during cross examination:[50]

“And we had a very long discussion about the work done in 200 mains which you’ve accepted, I think, that as shown on this map, had an ultimate purpose of providing ventilation into and out of tailgate 203?---Yes, as it [sic] going off the map, that’s correct.

Yes, so the work that you show in the MG203 and belt chamber, and also the 200 mains, appears to be associated with development of longwall 203?---Yes, as on the map, yes.”

(b)Mr Bickhoff gave the following evidence during cross examination:[51]
“So that, again, the plan would seem to indicate that at least the ventilation services were planned to go through mains 200 up into the tail gate we’ve established, tail gate 203?---Yes.
…
And the 200 mains, when you refer to that, that was that work we discussed earlier in relation to the vent ways, etcetera?---Yes.
There was also work done in the mains, was there not, to facilitate the later development mining of the 203 main gate?---Yes.”

I agree with Mr Baumann’s assessment that the work undertaken by Falcon Mining at the Mine prior to the termination of the Project Contract formed part of the Works required to be performed within the scope of the Project Contract, save for a limited number of instances such as the weekend in mid-May 2020 when Falcon Mining, eager to assist its client,[52] arranged for its employees to assist Whitehaven with a longwall recovery and issued a separate purchase order to Whitehaven for that work.[53] Mr Baumann’s evidence in this regard is supported by the certificates of practical completion issued by Whitehaven under clause 28 of the Project Contract, the notice of termination of the Project Contract issued by Whitehaven to Falcon Mining on 26 May 2020, the instructions given by Whitehaven to Falcon Mining to undertake work (including ancillary work) in MG203, and the Authority to Mine authorising work in MG203 and 200 mains to be undertaken.

Because Falcon Mining’s employees kept working on the Project Contract from November 2019 until it was terminated on 26 June 2020, I do not accept the applicants’ contention that the employees’ contracts were effectively varied after November 2019 by Falcon Mining’s conduct in undertaking work outside the scope of the Project Contract, and the acquiescence of the Employees in that course.

I also agree with Mr Baumann’s assessment that there was more Work to be undertaken on the Project Contract at the time it was terminated in June 2020.[54] This is supported by the sudden way in which the Project Contract was terminated and the reasons for termination communicated by Whitehaven to Falcon Mining’s employees,[55] together with the limited amount of work undertaken by Falcon Mining in MG203 prior to the termination of the Project Contract.[56]

It is apparent from the evidence to which I have referred in paragraphs [96] to [97] above that Whitehaven decided not to continue to engage Falcon Mining to perform the balance of the Works under the Project Contract due to the state of global coal prices at the time the decision was made. This resulted in a reduction, or downsizing, of the amount of Work which Whitehaven required Falcon Mining to undertake under the Project Contract. The termination of the Project Contract for this reason also led directly to the termination of Mr Bickhoff’s employment. I am satisfied that Mr Bickhoff’s employment was terminated due to the Project Contract downsizing within the meaning of clause 15 of the employment contract.

Having regard to all the circumstances, I find that a reasonable person in the position of both parties to Mr Bickhoff’s contract of employment would at all times have been bound to have understood and expected, particularly in light of the terms of the contract and the Enterprise Agreement, together with the nature of Falcon Mining’s business and the development contract they were working on, that his job was not permanent and ongoing, but would inevitably come to an end within a reasonably foreseeable timeframe. A reasonable person would have understood and expected that the reasonably foreseeable timeframe within which the employment would come to an end could have extended to the completion of Falcon Mining’s work on the Project Contract at the Mine, but may have been shorter as a result of an event such as a downsizing of the Project Contract. I am satisfied in all the circumstances that Mr Bickhoff’s dismissal was due to the ordinary and customary turnover of labour.

It follows that Mr Bickhoff was not made redundant within the meaning of clause 12.2 of the Enterprise Agreement. Further, because Mr Bickhoff was not made redundant, he has no entitlement to severance pay under clause 12.3 of the Enterprise Agreement, retrenchment pay under clause 12.4 of the Enterprise Agreement, or a payment in respect of untaken personal leave under clause 11.8 of the Enterprise Agreement.

Accordingly, the answer to Questions 2(b) and (c) for Mr Bickoff is “no”.

Conclusion

For the reasons given, the answers to the questions for arbitration in respect of Mr Bickhoff are as follows:

(f)Question 1 – “no”

(g)Question 2(a) – “yes”

(h)Question 2(b) – “no”

(i)Question 2(c) – “no”

The parties have liberty to apply in relation to any outstanding issues or disputes concerning:

·   Question 1 (for employees other than Mr Bickhoff);
·    the identity of which, if any, particular employees of Falcon Mining are entitled to any of the benefits addressed in Questions 2(a), (b) and (c); or
·    Question 3.

DEPUTY PRESIDENT

Appearances:

Ms L Doust, counsel, for the Applicants
Mr J Murdoch KC for the Respondent

Hearing details:

2022
Newcastle
7, 8 and 9 September 2022 and 6 October 2022

[1] Question 1 was posed by Falcon Mining

[2] Questions 2 and 3 were posed by the applicants

[3] Ridd v James Cook University [2021] HCA 32

[4] (1994) 56 IR 102

[5] Khayam v Navitas English Pty Ltd[2017] FWCFB 5162 (Navitas) at [77]-[96]

[6] DL Employment Pty Ltd v AMWU[2014] FWCFB 7946 at [42]; WorkPac Pty Ltd v Rossato [2020] FCAFC 84 at [956]

[7] (2015) 256 CLR 104

[8] Connelly v Wells (1994) 55 IR 73 at 74

[9] CFMMEU v Personnel Contracting Pty Ltd (2022) 312 IR 1 at [43]

[10] Ibid; see, too, Workpac Pty Ltd v Rossato & Ors (2021) 271 CLR 456 at [62]-[63] and ZG Operations Pty Ltd & Anor v Jamsek & Ors (2022) 312 IR 74 at [51]

[11] CFMMEU v Personnel Contracting Pty Ltd (2022) 312 IR 1 at [184] and [172]-[173]

[12] Andersen v Umbakumba Community Council (1994) 56 IR 102 at 106-7 (see paragraph [21] above)

[13] Ex A7 at [13]

[14] Ex R2 at [72]-[74] and annexure VG-4

[15] Mohazab v Dick Smith Electronics Pty Ltd [1995] IRCA 625, 62 IR 200 at 205-6

[16] Navitas at [75(4)]

[17] As set out above, Schedule A to Mr Bickhoff’s contract defines the Project to mean the Project Contract

[18] Macquarie Dictionary, Revised Third Edition

[19] Section 123(1)(a) of the Act

[20] Section 56 of the Act

[21] CEPU v Delta FM Australia Pty Ltd (2021) 308 IR 94 (Delta) at [43], applying Berkeley Challenge Pty Ltd v United Voice (2020) 279 FCR 249 at [32]

[22] Delta at [44]

[23] Ex A7 at [13]

[24] Ex R3 at [21]-[22]

[25] Ex R4 at [22]; PN819

[26] Ex A4 at [34]

[27] Ex R3 at annexures DB-2 and DB-4

[28] Ex R3 at [80]

[29] Ex A7 at [41]

[30] See, for example, PN1050

[31] Ex A7 at [48]-[49] & [58]

[32] Ex R3 at [50]-[57]; PN2013

[33] PN1040

[34] PN661-662

[35] PN2015-PN2021

[36] Ex A1 at [10]

[37] Ex R2 at [54]

[38] Ex R3 at [42]-[51]

[39] Ex R2 at [86]

[40] Ex R2 at [88] and VG-6

[41] Ex R3 at [64]-[66]

[42] Court Book at pp 80 & 88

[43] Court Book at pp 94 & 98

[44] PN1753-1755

[45] PN2172

[46] PN2173

[47] PN2356

[48] PN2454

[49] PN2466

[50] PN840-1

[51] PN1027 & PN1041-1042

[52] PN2006

[53] Ex R3 at [62]

[54] PN2552-PN2556

[55] See paragraph [94]-[96] above; Ex R3 at [88]; Ex A4 at [63]

[56] Ex A4 at [79]

Printed by authority of the Commonwealth Government Printer

Employee’s Continuous Service	(A) Notice Period	(B) If the employee is over 45 years old and has completed at least 2 years of continuous service with Falcon Mining
Not more than 1 year	1 week	1 week
Greater than 1, not more than 2 years	2 weeks	2 weeks
Greater than 2, not more than 3 years	2 weeks	3 weeks
Greater than 3, not more than 5 years	3 weeks	4 weeks
Greater than 5 years	4 weeks	5 weeks

Not more than 1 year	1 week (or 2 weeks if your [sic] engaged under the Mastermyne Queensland Drivage EA)
More than 1 year but not more than 3 years	2 weeks
More than 3 years but not more than 5 years	3 weeks
More than 5 years	4 weeks

Item 1	Name of Employee:	David Bickhoff
Item 2	Employee Address:	…
Item 3	Enterprise Agreement:	Falcon Mining Enterprise Agreement 2017
Item 4	Classification:	Experienced UG Mineworker
Item 5	Name of Project / Location:	Contract Number: NC1705 - Cut and Flit Development Work Narrabri
Item 6	Employment Start Date:	9^th January 2018
Item 7	Person to whom the Employee reports to:	Mastermyne Site Management Representative
Item 8	All Inclusive Hourly Rate:	…
Item 9	Additional Benefits:	…
Item 10	Annual Leave Accrual:	As prescribed in the relevant Enterprise Agreement
Item 11	Personal Leave Accrual:	As prescribed in the relevant Enterprise Agreement”