Construction, Forestry, Maritime, Mining and Energy Union v Moolarben Coal Operations Pty Limited

[2021] FWC 5473

[2021] FWC 5473

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437 - Application for a protected action ballot order

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION
v
MOOLARBEN COAL OPERATIONS PTY LIMITED
(B2021/712)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 2 SEPTEMBER 2021

Proposed protected action ballot of employees of Moolarben Coal Operations Pty Limited

Introduction and background

[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has made an application under s 437 of the Fair Work Act 2009 (Act) for a protected action ballot order in relation to employees of Moolarben Coal Operations Pty Ltd (MCO) who will be covered by a proposed enterprise agreement and for whom the CFMMEU is a bargaining representative (Employees). The Employees work at MCO’s underground mine in Mudgee, New South Wales (Mine).

[2] There are 165 employees at the Mine. About 103 of those employees are employed as operators or tradespersons. About 90% of the operators and tradespersons are members of the CFMMEU. Accordingly, the number of Employees who will be balloted and who may take protected industrial action, if the ballot succeeds and a notice of intention to take protected industrial action is given, is about 93 (90% of 103 = 93). It follows that there are about 10 operators and tradespersons who are not going to be balloted and who will not be able to give notice to take protected industrial action.

[3] There is no dispute between the parties that a protected action ballot order should be made. On the basis of the material before the Commission, I am satisfied that the relevant requirements set out in the Act for the making of such an order have been met.

[4] The only dispute between the parties is whether I should exercise my discretion under s 443(5) of the Act to extend the period of written notice referred to in s 414(2)(a) from three working days up to the seven working days sought by MCO, or some lesser period between three working days and seven working days.

[5] On 1 September 2021, I conducted a hearing to determine the issue in dispute. Evidence was given by Mr Shane Pegg, MCO Underground Operations Manager; Mr Anthony Dowler, an Employee at the Mine; and Mr Leslie Schefe, the South Western Organiser for the organising branch of the Mining and Energy Division of the CFMMEU. The hearing took most of the day.

[6] For the reasons given below, I have decided not to exercise my discretion to make an order under s 443(5) of the Act. Given the emphasis in s 441(1) of the Act on determining these matters quickly, my reasons below for not acceding to the request sought by MCO under s 443(5) are relatively brief.

Legislation

[7] Section 443 of the Act governs when the Commission must make a protected action ballot order. Section 443(5) governs when a protected action ballot order may specify an extended notice period. It provides:

“If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.”

[8] In NTEIU v Charles Darwin University, 1 a Full Bench of the Commission provided the following guidance to the proper interpretation and application of s 443(5) of the Act:

“[20] The exercise of a discretion under s.443(5) results in an interference with the right of a bargaining representative to otherwise give three working days’ written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. That this right should not lightly be curtailed by the imposition of a longer period of notice is evident in the grant of power itself. There must be “exceptional circumstances” in relation to the proposed industrial action the subject of the order justifying a longer period.

[21] The meaning of “exceptional circumstances” in the context of s.463(5) of the Workplace Relations Act 1996 (WR Act) was discussed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation.17 In the case, Lawler VP said:

‘[10] … In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances “justifying” the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441.’

[22] Section 463(5) of the WR Act is in all material respects the same as s.443(5) of the Act. We consider the discussion extracted above is apposite to the phrase “exceptional circumstances justifying” in s.443(5).

[23] The determination of whether the circumstances in a particular case are ‘exceptional’ involves an evaluative judgement. A proper approach to the exercise of the Commission’s discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase “exceptional circumstances” carries its ordinary meaning.

[24] Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances “justifying” a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb “justifying” in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice.

[25] Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period).”

[9] In CFMMEU v DP World Sydney Ltd, 2 the Full Court of the Federal Court held (at [16]):

“The Full Bench in National Tertiary Education Industry Union v Charles Darwin University was not suggesting that in order to properly discharge the statutory function the reasons for a decision had to be structured into three separate and distinct parts. The Full Bench was providing guidance on the statutory provision which provides that if the FWC is satisfied that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a), being longer than 3 working days, the protected action ballot order may specify a longer period.”

Summary of MCO’s submissions

[10] MCO submits that the exceptional circumstances threshold is met by reason of a combination of the following facts and circumstances:

(a) MCO operates the Mine, which is composed of underground workings, being the longwall, development and out-bye areas. The Mine is a particularly wet mine, in which management of water and dewatering is critical.

(b) The coal seam acts as an aquifer and provides a conduit for water to enter the workings of the Mine from where it must be collected and removed by pumping infrastructure to allow mining to continue. The areas in which the Mine is being developed are lower and wetter than has been the case in the past. As a result, there is more water to be extracted from the Mine and an increased chance of significant damage to property and infrastructure in the Mine.

(c) The flooding of low-lying areas of the Mine can be caused by these factors over which MCO has no or limited control, other than by undertaking dewatering activities. In that regard, and to address the risk of flooding, MCO operates a system of pumps. These pumps require constant inspections, maintenance and other work to be undertaken to ensure that they can continually operate by employees of the Mine (including cleaning around pump strainers, clearing blocked lines, moving hoses, moving and unblocking pumps or their associated delivery hoses, restoring power to pumps, changing out defective pumps, removing and replacing defective pipework, pulling back pump equipment from the face area where required, repairing the pumps).

(d) Interruptions to the operation, inspection and maintenance of MCO's pump plant and equipment must be avoided to manage the risk of flooding and the inundation of parts of the underground to workers and plant and equipment (which may be damaged or destroyed). This is in the interests of the safety and integrity of vulnerable areas of Mine and the property of MCO.

(e) Failure to maintain a continually operating system of pumps, and to respond quickly and properly to those situations, can have very serious consequences that affect MCO's operations and also the safety of plant and personnel, and the commercial viability of MCO's business.

(f) The effects of COVID-19, the location of the Mine, the impacts of public health orders and the local labour market, means that MCO cannot be confident that it would be able to engage contractors to avoid severely compromising its operations in circumstances where:

(i) the absence of operators (because they are taking protected action such as a stoppage) would mean they would not be available to undertake any critical safety related work for the dewatering of the Mine;

(ii) the employees of the Mine who do not take industrial action and who may be deployed to monitor, maintain and repair water pumps and related infrastructure may, from time to time, be absent from work because the Mine is located in a region in which there are active COVID-19 cases and exposure sites. The prevalence of COVID-19 cases and exposure sites in the region, together with the related need for testing and isolation, has meant that, at its peak, the Mine has had absenteeism of up to about 12% of its workforce;

(iii) MCO cannot be confident that contractors with the relevant expertise will be available in three days (given the lack of available locally skilled workers, and the restrictions on the ability for persons outside of the local region due to public health orders to travel to the region); and

(iv) the ability of contractors to be engaged is dependent upon significant training/induction, and COVID-19 related checks that would have to be gone through, which will take at least one week for induction and training alone (apart from time in sourcing labour, undertaking medical checks, and COVID-19 assessments).

[11] As to whether the alleged exceptional circumstances justify a longer period of notice, MCO submits that:

(a) Protected industrial action is highly likely to adversely affect the inspection, operation and maintenance of pump infrastructure in the Mine and MCO's ability to respond to inundation situations to protect plant and equipment at the Mine, the safety of MCO workers, and the commercial viability of MCO's mining business.

(b) In the event that notice of protected industrial action by its employees is received by MCO, MCO needs as much opportunity as possible (given the limits in section 443(5) of the Act) to assess the potential effects of the notified protected industrial action and determine how those effects can be mitigated in the interests of its workers and business. Three working days' notice is simply insufficient.

(c) Longer notice provides a greater opportunity for MCO to: (i) undertake detailed risk assessments and to plan, organise and implement risk mitigation measures; and (ii) do the best it reasonably can to protect plant and equipment and the Mine from the effects of notified protected industrial action. Such measures may include reallocating labour from different shifts to shifts where coverage is required to monitor, maintain and repair water pumps and related infrastructure, source additional labour (if it can be found), move equipment to higher ground, and install additional pumps.

(d) If protected industrial action is made available by the Commission's protected action ballot order and the result of the ballot is that the Employees have the ability and right to take multiple forms of protected industrial action this will result in a need for MCO to devote substantial time and effort to identifying, organising and implementing such essential steps as it is able to take to mitigate the effects of the protected industrial action.

(e) The CFMMEU has not included in any of the types of industrial action, on which the Employees are to vote, any exceptions or exemptions from industrial action where those actions will impede or delay MCO's ability to respond to and manage emergencies. The absence of such exceptions or exemptions will add to the factors that MCO will need to take into account in its assessment of and planning for emergencies and the steps it can take to mitigate the impacts and risks to employees and contractors arising from the protected industrial action.

(f) In addition, the effects of COVID-19, the location of the Mine, the impacts of public health orders and the local labour market, means that MCO cannot be confident that it would be able to engage contractors to avoid severely compromising its operations.

[12] As to the exercise of discretion, MCO submits that:

(a) The Commission can be satisfied that not less than seven working days' written notice is appropriate given the potential impacts of protected industrial action and that such a period is necessary. That impact will be significant, including the serious potential for the flooding of parts of the Mine and inundation of plant and equipment (and its possible destruction), the concomitant risks posed to personnel and the impact of the commercial viability of MCO's business due to the significant time that will be taken in dewatering, recovering equipment, making areas of the Mine safe and recommencing operations.

(b) Having regard to the effect that bans on and/or stoppages of work proposed in the application would have on MCO's capacity to avoid or minimise the potential risk to personnel and property of MCO, and the fact that this risk cannot be mitigated.

(c) Further, given the nature and extent of MCO's Mine and operations and its significance to the economy in the Mudgee area, a further relevant consideration is that the additional notice of protected industrial action will also provide: (i) MCO with a reasonable opportunity to consider whether to apply to the Commission, in accordance with the Act, for an order to stop or suspend protected industrial action; and (ii) the Commission with a reasonable ability to hear and determine such an application.

(d) The Commission can be satisfied that the exceptional circumstances justify extending to seven working days the period of written notice that the CFMMEU must give of protected industrial action and that this represents a reasonable constraint on the bargaining power of the CFMMEU and its members.

The availability of labour to undertake work monitoring, maintaining, operating and repairing water pumps and related infrastructure

[13] Mr Pegg gave evidence that there would probably not be exceptional circumstances if it were not for the impact of the COVID-19 pandemic. Mr Pegg gave that evidence in circumstances where he had been questioned about, and accepted, the likely availability and suitability of the following 64 employees to undertake work monitoring, maintaining, operating and repairing water pumps and related infrastructure at the Mine during periods of protected industrial action:

(a) 10 non-union operators and tradespersons employed by MCO at the Mine;

(b) 7 labour hire workers from PIMS who currently work at the Mine;

(c) about 14 labour hire workers from Coalroc who currently work at the Mine;

(d) 17 Deputies employed by MCO at the Mine, noting that Deputies have statutory duties which will occupy part of their time even during a stoppage of work by the Employees;

(e) 5 Undermanagers employed by MCO at the Mine, noting that Undermanagers have statutory duties which will occupy part of their time even during a stoppage of work by the Employees;

(f) 8 Shift Engineers employed by MCO at the Mine; and

(g) 3 apprentices who work at the Mine, but are employed by a labour hire company.

[14] Mr Pegg also gave evidence that it would take eight employees per shift to undertake work monitoring, maintaining, operating and repairing water pumps and related infrastructure at the Mine. Mr Dowler gave evidence to the same effect. I accept that evidence.

[15] The Mine operates 24 hours per day. Each week there are five shifts worked at the Mine. Given that the Mine needs eight employees per shift to manage water issues at the Mine, it needs 40 employees in total per week to do this work.

[16] Mr Pegg also gave evidence, which I accept, that in the current areas of the Mine in which development work is being undertaken, if it was not being dewatered, the water in the panel would inundate machinery within 12 hours.

[17] Having regard to the approximately 64 employees identified in paragraph [13] above and the likely need to move some of those employees from one shift to another to ensure eight employees are working on each shift, Mr Pegg’s evidence is that were it not for the impact of COVID-19, the Mine would likely be in a position where it could just manage to have enough employees on each shift to deal with water issues. However, Mr Pegg contends that the impact of COVID-19 on employee absences is likely to mean that there will not be enough employees available to undertake the necessary work in monitoring, maintaining, operating, and repairing water pumps and related infrastructure.

The CFMMEU offers an undertaking

[18] During the hearing on 1 September 2021, the CFMMEU offered the following undertaking to address MCO’s concern about not having sufficient labour available to deal with water issues at the Mine during periods of protected industrial action:

“The Union undertakes that:

1. Should the Union notify of protected industrial action that extends beyond 24 hours in a single occurrence; and

2. The Mine manager notifies District Vice President Craig Carberry that in his opinion, the protected action is likely to compromise the Mine’s pumping systems;

3. An appropriate number of the Union’s members will remain at work to ensure that the Mine’s pumping systems remain operational. 

4. However, Union members will not remain at work performing this relief function if coal is being cut at the Mine while the Union’s members are undertaking protected industrial action.”

Consideration

[19] Assuming (but without deciding) that the combination of facts and circumstances on which MCO relies constitute exceptional circumstances within the meaning of s 443(5), I am not satisfied that these circumstances justify an extension to the period of written notice required to take protected industrial action beyond three working days, nor I am persuaded to exercise my discretion to order a longer period of notice beyond three working days. My reasons for so finding are as follows.

[20] First, as Mr Pegg accepted, the approximately 64 employees identified in paragraph [13] above are suitable to undertake work monitoring, maintaining, operating and repairing water pumps and related infrastructure at the Mine during periods of protected industrial action. Some of these employees, such as Deputies and Undermanagers, will have other duties they will be required to undertake during a period of protected industrial action, including inspections of the Mine, but they will be able to monitor water pumps and infrastructure while they undertake those inspections and will have other time available to assist in monitoring, maintaining, operating and repairing water pumps and related infrastructure. Other employees such as apprentices have limited skills and will not be able to undertake more complex tasks such as repairing particular pumps.

[21] Further, even if the impact of COVID-19 gives rise to another peak of absences from work at the Mine in the order of about 12%, that would likely leave about 56 of the 64 employees available to work. It is, of course, possible that absences may extend beyond 12%, but the Mine also has a not insignificant period of time from now until any protected industrial action is taken to seek out, induct, train, and have medically assessed further supplementary labour. To that end, although MCO has approached its current supplementary labour providers, PIMS and Coalroc, and has been informed that there is a shortage of labour available, MCO has not approached other providers of supplementary labour. I accept Mr Schefe’s evidence that most of the available contract labour for the black coal mining industry is based in the Hunter Valley, which is approximately a two-hour drive from Mudgee. I consider it more likely than not that MCO will be able to find and engage some additional supplementary labour to work at the Mine during periods of protected industrial action if it takes appropriate steps immediately to find such labour and offers a sufficiently attractive rate of pay for the work.

[22] I accept that it is not simply a matter of comparing 64 employees (or some lower number such as 56 employees) against the 40 employees required to undertake the necessary water related work. In addition to the matters to which I have already referred, it will be necessary for eight employees to be available during each of the five shifts per week and a mix of relevant skills will be required for each shift. This will necessarily require some employees to work different shifts than they usually work and for fatigue related issues to be managed. These changes will take some time to plan and implement. MCO has time available now to make such contingency plans, albeit the precise nature and duration of any protected industrial action which may be taken is unknown and unknowable at the present time.

[23] Having regard to all the circumstances, I am satisfied on the balance of probabilities that MCO will have sufficient labour available in the event that protected industrial action of the type(s) described in the ballot of questions proposed by the CFMMEU is taken by the Employees to monitor, maintain, operate and repair water pumps and related infrastructure at the Mine so as to protect MCO’s property and maintain a safe working environment. For the reasons given, I do not accept Mr Pegg’s contention that the impact of COVID-19 on employee absences is likely to mean that there will not be enough employees available to undertake the necessary work in monitoring, maintaining, operating, and repairing water pumps and related infrastructure.

[24] Secondly, in the event that circumstances change, such as a larger than expected spike in COVID-19 cases in the Mudgee or surrounding areas, and a greater number of employees are absent from work at the Mine, I am satisfied that the undertaking given by the CFMMEU will ensure that MCO has sufficiently qualified labour available to undertake the necessary work monitoring, maintaining, operating, and repairing water pumps and related infrastructure at the Mine. I make the following observations in relation to the undertaking:

(a) The undertaking is triggered if the CFMMEU notifies protected industrial action that extends beyond 24 hours in a single occurrence. If protected industrial action is taken for a period of less than 24 hours, MCO will be able to make use of the available labour during the period when industrial action is not being taken to undertake the necessary water related work. Further, although in the current areas of the Mine in which development work is being undertaken, if it was not being dewatered, the water in the panel would inundate machinery within 12 hours, I consider, for the reasons given above, that MCO will have sufficient labour available to undertake the necessary water related work during a period of industrial action which does not extend beyond 24 hours in a single occurrence. Sustained periods of industrial action are likely to cause the greatest water related risks to MCO’s property and the safety of its workforce. I consider that the undertaking will afford MCO reasonable protection against such water related risks.

(b) The undertaking does not differentiate between the different types of industrial action which may be taken, separately or together, as envisaged by the questions for ballot proposed by the protected action ballot order sought by the CFMMEU. It may be accepted that some types of industrial action will cause MCO greater economic harm than others. However, it is the duration of the industrial action which is likely to give rise to the greatest water related risks to MCO’s property and the safety of its operations. I therefore consider it appropriate and reasonable that the trigger for the undertaking be the notification of protected industrial action that extends beyond 24 hours in a single occurrence.

(c) One of the preconditions to the undertaking taking effect is notification by the Mine manager to the CFMMEU’s District Vice President, Craig Carberry, that in the Mine manager’s opinion, the protected action is likely to compromise the Mine’s pumping systems. I reject MCO’s concern that this may give rise to debate or dispute as to whether the protected action is likely to compromise the Mine’s pumping systems. The undertaking is crafted in such a way as to leave it to the Mine manager to form an opinion that the protected action is likely to compromise the Mine’s pumping systems, and to notify Mr Carberry of that opinion. The undertaking does not require the CFMMEU’s consent as to the formation of the requisite opinion.

(d) Nor is there any proper basis for any concern about how many employees will constitute “an appropriate number of the Union’s members” to “remain at work to ensure that the Mine’s pumping systems remain operational”. The evidence given by both Mr Pegg and Mr Dowler is that eight employees per shift are required to monitor, maintain, operate and repair water pumps and related infrastructure.

(e) The undertaking contains a carve out from the obligation on the CFMMEU to ensure sufficient labour is available to deal with water related issues in the event that “coal is being cut at the Mine while the Union’s members are undertaking protected industrial action”. I consider this to be reasonable. If the Mine is producing coal during a period of protected industrial action, the employees who are undertaking the work to produce the coal could be reallocated to deal with water related issues.

[25] I accept that MCO is at risk of significant property damage and safety related issues if water is not extracted from the Mine during periods of protected industrial action. Those risks can be appropriately managed if there are sufficiently qualified and experienced workers available to monitor, maintain, operate and repair water pumps and related infrastructure at the Mine. For the reasons given, I am satisfied on the balance of probabilities that there will be sufficiently qualified and experienced workers available to monitor, maintain, operate, and repair water pumps and related infrastructure at the Mine during periods of protected industrial action.

[26] Having regard to all the facts and circumstances, my evaluative assessment is that the alleged exceptional circumstances do not show or prove that it is reasonable or necessary to require a period of written notice beyond three working days, nor do they warrant or provide good reason to exercise the discretion conferred by s 443(5) to extend the notice period beyond three working days.

Conclusion

[27] In light of my findings set out above, a protected action ballot order must be made pursuant to s 443(1) of the Act. I reject MCO’s application for an order specifying a longer period than three working days for the giving of notice of protected industrial action.

[28] The Order PR733483 will be issued concurrently with this decision.

DEPUTY PRESIDENT

Appearances:

Mr J Patrick on behalf of the Construction, Forestry, Maritime, Mining and Energy Union
Mr T Sebbens of Ashurst Australia on behalf of the Respondent, instructed by Mr G Arnold of the Respondent

Hearing details:

2021.
Newcastle (via Microsoft Teams):
September 1.

Printed by authority of the Commonwealth Government Printer

<PR733482>

 1   [2018] FWCFB 4011.

 2 [2019] FCAFC 99.