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

[2014] FWC 9205

[2014] FWC 9205 [Note: An appeal pursuant to s.604 (C2015/38) was lodged against this decision - refer to Full Bench decision dated 23 April 2015 [[2015] FWCFB 2020] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Mining and Energy Union
v
BHP Coal Pty Ltd
(C2013/5996 and C2013/7725)

Coal industry
DEPUTY PRESIDENT ASBURY	BRISBANE, 17 DECEMBER 2014

Applications to deal with disputes - Stay order application - Whether dispute applications should be stayed pending possible criminal proceedings - Approach to whether stay order should be made - Finding that justice requires stay order to be granted

OVERVIEW

[1] In a Decision issued on 16 October 2014 1, I found that the Commission has the jurisdiction and the power under s. 589(1) of the Fair Work Act 2009 to make a procedural Decision and an Order to stay two applications made by the Construction, Forestry, Mining and Energy Union (CFMEU) under s. 739 of the Fair Work Act 2009 (the Act) seeking that the Fair Work Commission deal with disputes in accordance with a dispute settlement procedure in the BMA Enterprise Agreement 2012, in circumstances where there are possible future criminal proceedings in relation to the same subject matter as that encompassed in the disputes.

[2] The background facts were set out in the initial decision and can be briefly stated. The CFMEU made two applications under s. 739 of the Act seeking that the Commission deal with disputes involving its member Mr Thompson, who is employed as a fitter at the Crinum Mine and also holds the position of Site Safety and Health Representative (SSHR).

[3] Mr Thompson sustained a non-work related injury on 12 June 2013. He was subsequently required to take a period of personal leave and was subjected to disciplinary action. The CFMEU asserts that Mr Thompson was treated in a substantially different way than other employees because he holds the position of SSHR and seeks a recommendation from the Commission that Mr Thompson’s leave be re-credited and a determination that the disciplinary action was unfair and unwarranted and that it be removed from Mr Thompson’s file.

[4] The dispute in relation to personal leave was filed on 12 September 2013 and the dispute in relation to the disciplinary action on 17 December 2013. On 18 October 2013, an Industry Safety and Health Representative (ISHR) issued an inspection report pursuant to s. 118(e) of the CMSH Act, indicating a view that “reprisal has been taken” by Crinum Mine Management against Mr Thompson and that he has been penalised for performing functions as a SSHR, in breach of s. 105(b) of the CMSH Act. The report also states that the ISHR is “giving considerable thought” to recommending a prosecution under s. 256 of the CMHS Act. The Report forms part of the Mine Record pursuant to s. 68 of the CMSH Act.

[5] When the CFMEU sought to progress the disputes before the Commission, BHP sought a stay pending the outcome of the ISHR’s recommendation to prosecute, on the basis that the subject matter of the disputes is inextricable linked to the matters subject of the ISHR’s investigation, with the result that any evidence given by witnesses at arbitration can be used, either directly or derivatively in furthering the ISHR’s prosecution of BHP and its managers for an alleged breach of s 105 of the CMSH Act.

[6] The CFMEU initially objected to the stay application on the basis that the Commission did not have the power or jurisdiction to grant it and sought to make further submissions in relation to whether a stay should be granted in the circumstances of this case, in the event that the jurisdictional objection was not upheld.

[7] BHP put forward its case in relation to both the jurisdiction of the Commission to grant its application for an order staying proceedings and whether that order should be made in the circumstances of this case, and sought only to make further submissions in reply to the CFMEU’s submissions in relation to whether the stay application should be granted. Both parties sought to have this matter determined on the basis of written submissions. This Decision deals with the question of whether a stay should be granted.

SUBMISSIONS

[8] BHP relies on its submissions in the earlier proceedings, as follows. In Stanley v QBE Management Services Pty Ltd 2Commissioner Jones stated the principles to be applied in deciding whether to adjourn civil proceedings pending the determination of criminal proceedings as set out by Justice Wootten in McMahon v Gould.3Those principles (citations omitted) are:

● A plaintiff is entitled to have an action tried in the ordinary course of the procedure and business of the Court;
● It is a grave matter to interfere with this entitlement by a stay of proceedings and justification on proper grounds is required;
● The burden is on the defendant in the civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with;
● An accused is not entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;
● The Court’s task is to balance justice between the parties taking all relevant factors into account;
● Each case must be based on its own merits;
● One factor to take into account where there are pending or possible criminal proceedings is the accused’s “right of silence” and the reasons why a defendant in a criminal proceeding has that right;
● The “right of silence” does not extend to give a defendant the same right in contemporaneous civil proceedings and the plaintiff in a civil action is not debarred from pursing action merely because to do so would result in the defendant having to disclose his defence in the criminal proceeding;
● The Court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings in light of factors such as publicity, proximity of the criminal hearing; the possibility of miscarriage of justice due to fabrication of evidence, the burden on the defendant of preparing for both sets of proceedings concurrently, whether the defendant has disclosed his or her defence and the conduct of the defendant including any prior invocation of civil process;
● The effect on the plaintiff must be considered and weighed against the effect on the defendant; and
● In an appropriate case the proceedings may be allowed to proceed to a certain stage eg. setting down for trial before being stayed.

[9] It is submitted by BHP that the right to silence and the privilege against self incrimination, while not expressly encapsulated in those principles, are still relevant to their application and reference was made to a number of cases where it has been held that it would be anomalous and a denial of a fundamental common law right if an accused could refuse to answer questions in criminal proceedings but be compelled to answer them with respect to the same matter, in a civil proceedings. 4

[10] BHP contends that there is a real risk of prejudice should the present applications proceed, on the basis that a charge for a breach of the CMSH Act will expose the person charged to a criminal sanction, with a resulting significant personal and professional effect. As a matter of procedure, BHP cannot give evidence and in order to defend the present applications, the Company will be required to file witness statements from witnesses and make them available for cross-examination, in circumstances where their evidence will be relevant to any possible future prosecution and may be directly or indirectly incriminating. Given the prejudice that its employee witnesses will be exposed to, BHP must determine whether to direct them to exercise a waiver of their privilege and assuming that such a direction was lawful and reasonable, witnesses could not be compelled to waive their right of privilege against self incrimination. Employees who chose to waive that right would expose themselves to criminal sanction.

[11] As a result, if the disputes were to be heard before the issue of the recommendation to prosecute has been completely disposed of, BHP would suffer injustice by effectively being denied the right to defend the disputes or alternatively, its witnesses would be required to waive their privilege and expose themselves to potential prosecution and criminal sanction.

[12] It is conceded that Mr Thompson has a legitimate interest in having the disputes heard and determined. However, it is submitted that the prejudice which would be suffered by BHP and its witnesses outweighs this interest. In this regard, the Company points to the evidence of its Lead Human Resources Partner Mr Che Mason, that Mr Thompson has a personal leave balance of 160 hours and that the Step 2 disciplinary action taken against Mr Thompson reverted to Step 1 in July 2014. On this basis, it is submitted that the balance of justice favours a stay.

[13] It is further submitted that an undertaking from the ISHR to the effect that he would not recommend a prosecution is not sufficient to protect the legitimate interests of BHP’s witnesses and that the Commission should not be persuaded to make orders that would compel disclosure but seek to prevent the use of information being disclosed beyond the current proceedings. The CMSH Act provides that a proceeding for an offence must start at the latest, three years after the commission of the offence and for that reason the disputes should be stayed until 27 July 2016 - three years after the date of the disciplinary action taken against Mr Thompson.

[14] The CFMEU submits that conflict between the rights of one party to bring their civil case and protecting the other party’s privilege against self-incrimination must be dealt with but contends that this conflict only arises when there are actual pending criminal proceedings. The onus is non BHP to demonstrate a high likelihood of criminal proceedings and that there is a real risk, should a stay not be ordered, that the dispute proceedings will prejudice the criminal prosecution.

[15] Further the CFMEU submits that cases where consideration has been given to protecting a party’s privilege against self-incrimination have involved circumstances where criminal proceedings are on foot. In the present case there is no evidence to suggest that proceedings under the CMSH Act are on foot or are even likely to be commenced. There is no evidence that the ISHR has made or intends to make a recommendation to prosecute and a considerable period has passed since the ISHR indicated that he was considering making such a recommendation. Even if a recommendation is made, there is no evidence to suggest that the Department will commence proceedings or that it has undertaken any investigation.

[16] The CFMEU also submits that there is no evidence of prejudice to BHP even in the unlikely event that criminal proceedings commence, on the basis that a prosecution pursuant to s. 275AA of the CMSH Act will examine the Company’s intention in causing detriment, while the dispute will examine whether the disciplinary action was fair and reasonable, rather than motivation. The CFMEU accepts that there will be overlap in the factual matrix for the dispute and any prosecution under the CMSH Act, but maintains that the evidence required to establish reprisal will be significantly different to the evidence required to demonstrate that BHP’s actions were unfair and harsh in the circumstances. Given the differences in the elements required for a successful prosecution under the CMSHA and the questions to be considered in the dispute proceedings, BHP has failed to demonstrate how its right to silence will be affected.

[17] The CFMEU points to correspondence from BHP to the ISHR responding to the allegations and denying them, and contends that this is a defence to the issues raised by the ISHR and questions whether BHP has waived privilege in relation to this matter. It is also contended that there is no substantial likelihood of prejudice to BHP in circumstances where there is no evidence to suggest a prosecution will commence and the Company has disclosed its defence to any such prosecution.

[18] With respect to what is said to be real and significant prejudice to Mr Thompson should the proceedings be stayed as sought by BHP, the CFMEU contends that:

● Mr Thompson is entitled to have the matters in dispute which relate to his ongoing employment with BHP resolved as promptly and efficiently as possible;
● Mr Thompson has limited options to have the 19 days of personal leave to which the first dispute relates re-credited to him if the proceedings are stayed;
● The step 2 warning which will remain on Mr Thompson’s file will detrimentally impact his ability to challenge the warning and make his employment more precarious; and
● Crinum Mine is due to cease production within a short space of time with redundancies and transfers to commence in the near future and Mr Thompson will be exposed to selection for redundancy on the basis of a disciplinary warning which he contends is based on erroneous findings.

[19] In circumstances where there is no evidence that a prosecution under the CMSHA has been recommended or is likely to commence, BHP has failed to demonstrate a real rather than a notional risk of injustice in the criminal proceedings, and a substantial likelihood of prejudice if the dispute proceeds.

[20] In response to the CFMEU’s submissions in relation to whether the stay application should be granted, BHP submits that the contention that conflict only arises when there are “actual pending criminal proceedings” is incorrect and not consistent with the principles set out in McMahon v Gould and other relevant authorities, which establish that in deciding whether the balance of justice favours a stay the Commission can take into account the prejudice that that may occur as a result of “possible” criminal proceedings. 5 BHP also submitted that the decision in Flegg v Hallett6cited by the CFMEU is not authority for the proposition that the onus is on BHP to demonstrate that there is a “high likelihood” of criminal proceedings, and that term is not found in the decision cited.

[21] BHP maintains that there is direct evidence before the Commission to demonstrate a real risk that the ISHR will make a recommendation to prosecute under s. 256 of the CMSH Act and the risk is not fanciful or hypothetical. In relation to the evidence necessary for a successful prosecution BHP points to the fact that the ISHR alleges breaches of s. 105(b) of the CMSH Act not s. 275AA. Further, BHP contends that the CFMEU is not in a position to assert what will or will not be relevant to a prosecution under the CMSH Act or what questions BHP’s witnesses will be asked in any possible future criminal proceedings. BHP’s witnesses will also be subject to cross examination in any such proceedings and as conceded by the CFMEU, the disputes and any potential prosecution share a similar factual matrix.

[22] In relation to prejudice, BHP repeats and relies on its earlier submissions (summarised above). If the disputes were to be heard before the issue of a recommendation to prosecute has been completely disposed of, BHP will suffer prejudice by being denied the right to defend the disputes, or alternatively BHP’s witnesses will be required to waive their privilege and expose themselves to potential prosecution and criminal sanction. A general reply containing a denial of the allegations made by the ISHR is not a defence and does not alleviate any prejudice that would be suffered by BHP’s witnesses in any event.

[23] In relation to prejudice that it is said would be suffered by Mr Thompson in relation to access to sick leave if the stay application was granted, it is submitted that any such prejudice can be easily remedied by an order that would allow for liberty to apply in the event that Mr Thompson required access to the 19 days personal leave in dispute.

[24] With respect to the possible prejudice as a result of the potential for the disputed warning to be used in any selection process for forced redundancy, BHP indicated its preparedness to give an undertaking that the disciplinary action the subject of this dispute will not form part of any ranking of Mr Thompson for the purpose of selecting employees for forced redundancy.

CONSIDERATION

[25] As both parties have submitted, the approach to deciding whether a stay of proceedings should be granted has been to apply the principles set out by Justice Wootten in McMahon v Gould. I agree with the summary of those principles and that they are relevant to the present proceedings as set out in the submissions for BHP, as follows.

● The Commission’s discretion should not be exercised lightly and the matter needs to be determined on its merits;
● The over-riding principle as established in McMahon v Gould is the balancing of the interests of justice between the parties;
● There must be a real and not merely a notional danger of injustice in the criminal proceedings or a real prospect of substantial injustice if the civil proceeding continues;
● The “real risk of injustice” can relate to either an actual or potential criminal proceeding; and
● A stay (or adjournment) ought to be favoured where there is a real risk of prejudice in criminal proceedings that is constituted by the impact on the right of silence or privilege against self incrimination.

[26] It is also the case that by virtue of s. 577 of the Act the Commission is required to perform its functions in a manner that is fair and just and as provided in s. 578 to take into account equity, good conscience and the substantial merits of the matter, in exercising powers under the Act.

[27] In the present case, I am satisfied that there is a potential criminal proceeding as indicated by a statement from an ISHR to the effect that he is giving “considerable thought” whether to make a recommendation that there be a prosecution under s. 256 of the CMSH Act in respect of action alleged to have been taken against Mr Thompson by “Crinum Mine Management”. Reference is also made in the ISHR’s Report to the operator of the mine - BHP. There is no evidence that the ISHR who made the report has altered his view or indicated that he does not intend to recommend a prosecution. Given the statutory role of ISHR’s it is not appropriate to enquire about this matter and absent evidence to the contrary, I accept that the question of whether to recommend a prosecution remains under consideration by the ISHR.

[28] I am also satisfied that the factual matrix upon which both the dispute and the potential criminal proceeding are based is substantially the same. Further I am of the view that it is implicit in both dispute applications that Mr Thompson’s role as a SSHR is a factor in the treatment about which he complains. In this regard, that Mr Thompson is a SSHR is pleaded in both applications. Further, the dispute in relation to the disciplinary action asserts that Mr Thompson was treated in a substantially different way than other employees and refers to the sick leave dispute by virtue of the fact that failure on the part of BHP to follow its own policies in respect of Mr Thompson’s return to work is alleged. Essentially these matters are virtually identical to the matters identified in the report made by the ISHR and with respect to which he is considering recommending prosecution.

[29] I also accept that there is a real risk of injustice in the potential criminal proceeding if BHP’s managers give evidence in the dispute on the basis that any evidence those persons give may will be relevant to any future criminal prosecution. For those persons to give evidence will also place them in a position where their right of privilege against self-incrimination will be impacted. In relation to the disputes, I accept that BHP will be significantly impacted with respect to its ability to defend the claims made by Mr Thompson. To defend those claims BHP will be required to file witness statements from witnesses and make them available for cross-examination, in circumstances where their evidence will be relevant to any future criminal prosecution, and where they will be exposed to prejudice with respect to the right of privilege against self incrimination.

[30] In my view, the risk of injustice for BHP and its managers if the disputes proceed is greater than the prejudice to Mr Thompson if there is a delay in dealing with them pending the expiration of the period in which a prosecution may be recommended by the ISHR. Mr Thompson has access to personal leave entitlements in addition to the period of personal leave subject of the dispute. Further, any injustice to Mr Thompson in the event he needs to access the disputed period of personal leave can be alleviated by liberty to apply being granted to him so that the stay order could be revisited. BHP has also offered an undertaking to alleviate any prejudice to Mr Thompson with respect to the disciplinary action to the effect that it will not be relied on as a basis for selecting Mr Thompson for any forced redundancies that may be implemented. Further, with effect from July 2014, the Step 2 disciplinary action taken against Mr Thompson reverted to Step 1.

CONCLUSION

[31]
In all of the circumstances, I have concluded that justice requires that the applications in C2013/5996 and C2013/7725 be stayed until 27 July 2016. Liberty to apply will be granted in the event that Mr Thompson requires the personal leave period that is subject of the application in C2013/5996 or there is a substantial change in the circumstances which lead to the stay Order being granted. The Order is also subject to the undertaking offered by BHP in relation to the effect of the disciplinary action subject of the dispute in C2013/7725 being provided to the Commission. An Order will issue on receipt of that undertaking.

DEPUTY PRESIDENT

<Price code C, PR559220>

 1   [2014] FWC 7282

 2   [2012] FWA 8397.

 3 (1982) 7 ACLR 202 at 206-207.

 4   Reid v Howard (1995) 184 CLR 1; Re AWB Limited [2008] VSC 473 at [58]; Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562.

 5   Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562 at [109] - [110], [116]; McMahon v Gould (1982) 7 ACLR 202.

 6 [2014] QSC 220.

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