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

[2014] FWC 7282

[2014] FWC 7282

FAIR WORK COMMISSION

DECISION

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

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

DEPUTY PRESIDENT ASBURY BRISBANE, 16 OCTOBER 2014

Application to deal with a dispute.

BACKGROUND

[1] The Construction Forestry Mining and Energy Union, Mining and Energy Division (CFMEU) has made two applications under s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission to deal with disputes in accordance with the Dispute Settlement Procedure in the BMA Enterprise Agreement 2012 (the Agreement). The disputes are about the manner in which a member of the CFMEU - Mr Paul Thompson - was dealt with by BHP Coal Pty Ltd (BHP) after suffering a non-work related injury on 12 June 2013. Mr Thompson is employed by BHP as a fitter and also has the role of Site Safety and Health Representative (SSHR) at Crinum Mine.

[2] The first dispute (C2013/5996) filed on 12 September 2013, relates to a period of 19 days personal leave that Mr Thompson is alleged to have been wrongfully required to take in circumstances where BHP was obliged by the terms of the Agreement to provide suitable duties to Mr Thompson and failed to do so. The leave was taken between 19 June and 22 July 2013. In respect of the first dispute, the CFMEU seeks that Mr Thompson be re-credited with this period of leave.

[3] The second dispute (C2013/7725) filed on 17 December 2013, relates to disciplinary action in the form of a Step 2 warning issued to Mr Thompson on 26 July 2013 for inter alia failing to comply with requirements to obtain a medical clearance before returning to work. In respect of the second dispute the outcome sought by the CFMEU is that the disciplinary action be removed from Mr Thompson’s file and not be relied on for any purpose whatsoever, either by agreement or by determination of the Commission.

[4] In both applications it is asserted that Mr Thompson is an SSHR and that because he holds this position he was treated in a substantially different way than other employees.

[5] On 3 September 2013, in a Mine Record Entry (MRE) addressed to the Site Senior Executive, Crinum Mine, an Industry Safety and Health Representative (ISHR) Mr Hill, raised the potential for prosecution of BHP and some if its employees in relation to its treatment of Mr Thompson, and alleged breaches of the Coal Mine Safety and Health Act (CMSH Act) pursuant to the power given to ISHRs under that Act to recommend that persons be prosecuted for breach.

[6] On 18 October 2013, the ISHR issued an inspection report with respect to an inspection said to have been conducted pursuant to s.118(e) of the CMSH Act. It is asserted that the report is taken to form part of the Mine Record pursuant to s.68 of the CMSH Act. The inspection is said to be a follow-up to a complaint that management of Crinum Mine have “taken reprisal” against an SSHR (Mr Thompson) due to an injury sustained by the SSHR and that he has been denied entry to the mine on the basis of the excuse that “the SSHR is an unacceptable level of risk”. This is said to be despite the fact that several other coal mine workers, including one with similar injuries, are allowed to attend the mine.

[7] The report concludes with a statement to the effect that the ISHR is satisfied that it is more likely than not that Mr Thompson has been penalised for performing his functions as an SSHR and that this is a direct breach of the CMSH Act. It goes on to state that the ISHR is “giving considerable thought” to making a recommendation under s.256 of the CMSH Act.

[8] BHP contends that a reading of the MRE as against the allegations contained in the disputes leads to an inevitable conclusion that the facts in dispute are also the facts under investigation and the subject of a potential prosecution. BHP applies for a procedural decision to stay proceedings in relation to the disputes until or 27 July 2016, on the basis that there is a relationship between the MRE and the two disputes and that in order for BHP to defend the disputes it would be required to lead evidence touching directly on the matters at issue in the MRE, in circumstances where the ISHR has expressly stated that those matters constitute a breach of s.105 of the CMSH Act.

THE STAY APPLICATION

[9] In Stanley v QBE Management Services Pty Ltd 1Commissioner 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.2Those 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.

[10] 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. 3

[11] 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.

[12] 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.

[13] 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.

[14] 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.

[15] Initially BHP Coal Pty Ltd contended that a decision to stay hearing of the applications would be an interim decision under s.589(2) of the Act. BHP subsequently indicated that it did not press the submission that the Order it sought is an interim decision. Rather BHP submits that a decision to make the Order would be a procedural decision under s.589(1) of the Act as to how, when and where a matter is to be dealt with.

[16] BHP Coal Pty Ltd contends that the Commission has jurisdiction and power under s.589 of the Act to make a procedural decision in relation to disputes brought before it for arbitration. The Commission is empowered to deal with the disputes pursuant to clause 37 of the Agreement and s.739 of the Act, and accordingly, s.595(4) of the Act applies so that the Commission may exercise any powers it has under Part 5, Division 3, Subdivision B of the Act, including those under s.589.

[17] It is further submitted that the Commission’s powers under s.589 of the Act are not limited by, nor inconsistent with the terms of the Agreement. In particular, clause 37 of the Agreement does not constrain the Commission from exercising any powers conferred on it under Part 5, Division 3, Subdivision B of the Act. Further, a decision to grant the Order sought by BHP would require the exercise of discretion by the Commission and that pursuant to s.577 the Commission must perform its functions and exercise its powers in a way that is fair and just.

CFMEU OPPOSTION TO THE STAY APPLICATION

[18] The CFMEU opposes the stay application and asserts that:

● The Commission has jurisdiction to deal with the substantive dispute;
● The dispute settlement procedure in the Agreement obligates the Commission to arbitrate where a dispute is unresolved;
● The dispute settlement procedure in the Agreement does not confer discretion on the Commission to refuse to arbitrate or in the alternative, any discretion only relates to the issue of whether conciliation has been exhausted;
● Conciliation has been exhausted and the Commission is therefore required to arbitrate the dispute.

[19] The CFMEU further asserts that for the Commission to refuse to arbitrate the dispute would be a decision that is inconsistent with the dispute settlement procedure and that such a decision cannot be made because of s.739(5) of the Act. The dispute procedure is designed to ensure that disputes are progressed quickly and efficiently and to ensure that they do not “linger”. 4 The disputes procedure in the Agreement does not apply to the exercise of rights under other prevailing legislation where such rights are not founded on terms of the Agreement, by virtue of clause 37.4 of the Agreement. The making of an Order in respect of alleged rights that BHP has in relation to proceedings under the CMSH Act would be inconsistent with clause 37.4 of the Agreement.

[20] The CFMEU accepts that the Commission has the power to make procedural and interim decisions when dealing with a dispute application under s.739 of the Act, however contends that the Order sought by BHP Coal Pty Ltd cannot be characterised in that way in terms of s.589 of the Act. That section is concerned with the manner in which the Commission deals with matters in terms of programming, location, timing and administrative matters and does not provide for the Commission to refuse to deal with matters for a considerable period of time, in conflict with the terms of the Agreement.

[21] Further, a decision staying the applications until 27 July 2016is not an interim decision but rather prevents the CFMEU from exercising its rights under the Agreement and interferes with the primary functions that the Commission is tasked with in terms of conciliating and arbitrating disputes. The Commission has been asked to exercise a function by conducting an arbitration, which it is prima facie obliged to exercise.

[22] The Commission only has jurisdiction in respect of a stay order, and that jurisdiction is explicitly conferred by s.606 of the Act and is exercisable only by a Full Bench or a Presidential member. No such express jurisdiction is conferred by the Act in relation to a stay of arbitration or of proceedings. The Order sought by BHP is in the nature of an injunction to restrain the CFMEU from progressing a lawful right under the Agreement and the Act to have the dispute arbitrated. The Order sought is not an interim decision as contemplated by s.589(2) of the Act as it is not a decision relating to the subject matter of the disputes or in terms of preserving the subject matter. If BHP maintains its position, it has other options available to it to seek an injunction in the Federal Circuit Court.

[23] The CFMEU made an alternative submission that if the Commission found that it had jurisdiction to deal with the substantive merits of any stay, it reserved its position and would seek further directions in relation to whether or not, in the circumstances, the Order should be made.

THE DISPUTE SETTLEMENT PROCEDURE AND RELEVANT LEGISLATIVE PROVISIONS

[24] Clause 37 of the Agreement provides for a dispute settlement procedure. Relevant provisions of the clause are as follows:

37.1 It is the intention of the Parties that any disputes arising in relation to the NES; or pertaining to this Agreement; or in relation to the application of the Accommodation Agreements (as referred to in clause 34 of this greement); or arising in the course of employment shall be dealt with in accordance with this clause.

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

37.16 Subject to clause 37.15, provided that all the above steps have been exhausted FWA may conciliate or where conciliation has been exhausted and the dispute remains unresolved, arbitrate in relation to the matter. Where a matter involving an individual Employee progresses to this stage, the Employee will be permitted to attend FWA proceedings on the same arrangements set out in clauses 38.13 and 38.14. If proceedings are brought on more quickly by FWA, the travel plan must be submitted immediately upon the listing of the matter by FWA and before travel commences.

37.17 In the circumstances set out in clauses 14(e) or 14(g), or by agreement under clause 37.15, FWA may:

(a) Conciliate in relation to the matter; or

(b) Where conciliation has been exhausted and the dispute remains unresolved, arbitrate in relation to the matter.

The parties to the matter are not required to first exhaust the above steps for the purposes of this sub-clause.

37.22 None of the arrangements in this clause otherwise limit the rights of the Parties at common law or under the Act.

[25] By virtue of s.595 of the Act the Commission is empowered to deal with disputes. Section 595 is in the following terms:

“595 FWC’s power to deal with disputes

(1) The FWC may deal with a dispute only if the FWC is expresslyauthorised to do so under or in accordance with another provision of this Act.

(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a) by mediation or conciliation;

(b) by making a recommendation or expressing an opinion.

(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expresslyauthorised to do so under or in accordance with another provision of this Act.

Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).

(4) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

Example: The FWC could direct a person to attend a conference under section 592.

(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.”

[26] The jurisdiction of the Commission to deal with disputes is set out in s. 739 of the Act as follows:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effectas subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

[27] By virtue of s.738(1)(b) of the Act, s.739 applies where an enterprise agreement includes a term that provides for a procedure for dealing with disputes. Clause 37 of the Agreement is such a term.

CONSIDERATION

[28] In Construction Forestry Mining and Energy Union v Australian Industrial Relations Commission 5the High Court held that when parties agree to submit disputes as to their legal rights and liabilities to the Commission for decision, the Commission exercises a power of private arbitration. In the case of private arbitration, the powers of the Commission depend on the agreement of the parties. In the present case, the agreement of the parties with respect to the power of the Commission to arbitrate disputes is found in clause 37 of the Agreement.

[29] The scope of the clause is broad and covers disputes in relation to the National Employment Standards, disputes pertaining to the Agreement or disputes arising in the course of employment. There is no issue that the present dispute is within the scope of the disputes settlement procedure. Clause 37.4 excludes from the scope of the procedure disputes in relation to the exercise of rights or implementation of systems and processes provided for under other relevant prevailing legislation.

[30] The question of whether the arbitration of the disputes in the present case should be stayed, does not result in the characterisation of the dispute as a dispute in relation to the exercise of rights or implementation of systems and processes provided for under other relevant prevailing legislation. The disputes are about the treatment by BHP of Mr Thompson. The fact that the basis of the stay application relates to proceedings under other legislation, does not change the nature of the dispute so that it comes within the exclusion in clause 37.4 of the Agreement.

[31] The procedure set out in clause 37 of the Agreement provides that the Commission may conciliate the dispute and where conciliation has been exhausted and the dispute remains unresolved, the Commission may arbitrate in relation to the matter. As a general rule, the term “may” implies that there is discretion, and I can see no basis for interpreting the Agreement so that whenever conciliation has been exhausted and a dispute remains unresolved, the Commission must arbitrate. The effect of clause 37.16 is that the parties have agreed that the Commission may arbitrate in such circumstances and that neither of them has a right reserved to prevent the Commission from arbitrating by requiring agreement in relation to particular disputes.

[32] This can be contrasted with clause 37.17 which provides that where the preliminary steps to a matter being referred to the Commission have not been followed, the Commission may conciliate and/or arbitrate the dispute only where the parties have agreed to waive those preliminary steps. In cases where there is no agreement to short circuit the procedure, the parties must follow it before the Commission is empowered to arbitrate a dispute.

[33] Clause 37 of the Agreement is a term of an enterprise agreement which allows the Commission to deal with a dispute for the purposes of s.738(1)(b) and s.739. Accordingly, s.595 applies and provides that the Commission may exercise any powers it has under Part 5, Division 3, Subdivision B of the Act, unless those powers are limited by the dispute settlement procedure in the Agreement.

[34] I do not accept the arguments of the CFMEU that the Commission does not have the power or jurisdiction to grant the orders sought by BHP. The effect of the argument advanced by the CFMEU is that where conciliation is exhausted and a dispute remains unresolved, clause 37.16 requires the Commission to arbitrate the dispute and gives it no discretion to decline to do so. Leaving aside the question of whether a clause in an enterprise agreement could have such an effect, I am unable to accept that clause 36.17 does. The power to arbitrate found in Clause 37.16 of the Agreement is prefaced with the term “may”. There is nothing to indicate that it is anything other than a discretionary power.

[35] Even if clause 37.16 does require the Commission to arbitrate, there is nothing in that clause that limits or removes the general powers of the Commission necessary or incidental to arbitration. This is reinforced by the fact that clause 37.22 provides that the rights of the parties under the Act are not limited by the procedure. Those rights include the right to make an application seeking a procedural or interim decision under s.589(1) of the Act.

[36] In exercising powers to conciliate or arbitrate a dispute under a term of an enterprise agreement that provides for settlement of disputes, the Commission has all of the powers under Part 5, Division 3, Subdivision B of the Act necessary for or incidental to conciliation and arbitration, unless there is an indication to the contrary in the agreement term. Those powers include the power to make procedural and interim decisions including decisions as to how, when and where a matter is to be dealt with.

[37] There is a long established principle that the investment of a Court with jurisdiction is intended to include all of the procedure of the Court unless a contrary intention is stated. 6 Extrapolating this principle to the present case, the power of the Commission to arbitrate a dispute in accordance with a term of an enterprise agreement providing for settlement of disputes, must include all of the usual procedures (and the powers that underpin them) incidental to the exercise of the power to arbitrate. The terms conciliation and arbitration have a long history and are well understood. The power to engage in those processes cannot be exercised without incidental powers of the kind found in Part 5, Division 3, Subdivision B of the Act. If the parties to the Agreement had intended to exclude any of those powers then they could have done so.

[38] Section 739(4) of the Act provides that if, in accordance with a term in an enterprise agreement, the parties have agreed that the Commission may arbitrate the dispute the Commission may do so. The use of the term “may” indicates that the exercise of discretion is involved. As Deputy President Sams observed in Australian Municipal, Administrative, Clerical and Services Union v Sydney Water Corporation t/a Sydney Water: 7

“I would stress however, that in considering the evidence and further submissions in this matter, [the Commission] might well decide that, as a matter of discretion, it would decline to arbitrate the dispute; that is, answer the questions posed by the Union, either in the affirmative or otherwise. In my view, the use of the word ‘may’ in s.739(4) of the Act, must be construed as to mean that [the Commission] would not choose to arbitrate a dispute, where the claims in dispute are so obviously untenable as unlikely to succeed or are patently beyond [the Commission’s] jurisdiction, such as the exclusion of a National Employment Standard...”. 8

[39] There is no provision of the Agreement placing a specific time requirement on the Commission in relation to dealing with a dispute. I accept that there are imperatives requiring that disputes be dealt with expeditiously. However, those imperatives must be balanced against other considerations such as where one of the parties contends - as in the present case - that the dispute should not be arbitrated because of an issue of unfairness. In such a case, the Commission has discretion to make a procedural decision that a matter will be adjourned.

[40] A decision to adjourn the arbitration of a dispute would not in my view, conflict with the terms of the Agreement, where the Commission has discretion with respect to the arbitration of a dispute and in particular has available powers including the power to make a procedural or interim decision about when a matter will be heard.

[41] The exercise of discretion to adjourn or refrain from arbitrating a dispute in appropriate circumstances does not interfere with the primary functions of the Commission in conciliating and arbitrating disputes but rather, ensures that the rights of a moving party to have a matter arbitrated are balanced against those of the other party to fairness and the ability to put its case without undue restrictions.

[42] I do not accept that an adjournment pending developments in other proceedings is a stay application and only available under s.606 of the Act. The power in s.589(1) is broad and discretionary and encompasses an adjournment in circumstances such as those applying in the present case.

CONCLUSION

[43] For these reasons, I find that the Commission has the jurisdiction and power to make an Order in the terms sought by BHP. The Company has put forward its case in relation to both the jurisdiction to make the Order and the grounds upon which the discretion to do so should be exercised. The CFMEU has reserved its position in the event that I made a finding that the Commission has jurisdiction to make the Order sought by BHP and has indicated that it seeks further directions in relation to the question of whether or not in the circumstances of this case, the Order should be made. Accordingly, I Direct that:

1. The CFMEU files material in response to this issue by 4.00 pm on 22 October 2014;

2. BHP Coal Pty Ltd files material in reply by 4.00 pm on 29 October 2014; and

3. The parties advise the Commission by 4.00 pm on 30 October 2014 whether a hearing will be required in relation to the merits of any stay.

DEPUTY PRESIDENT

 1   [2012] FWA 8397.

 2 (1982) 7 ACLR 202 at 206-207.

 3   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.

 4   CFMEU v BHP Coal Pty Ltd [2013] FWC 8741 at [41].

 5 (2000) 203 CLR 645.

 6   Electric Light and Power Supply Corporation Limited v Electricity Commission of New South Wales and Another (1955-1956) 94 CLR 554 at 560.

 7   [2011] FWA 1894

 8 Ibid at [51].

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