Construction, Forestry, Mining and Energy Union v Newlands Coal Pty Ltd
[1997] FCA 1194
•6 NOVEMBER 1997
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QG 162 of 1997
BETWEEN:
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
APPLICANTAND:
NEWLANDS COAL PTY LTD
RESPONDENTJUDGE:
COOPER J
DATE OF ORDER:
6 NOVEMBER 1997
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
The order by way of interlocutory injunction made by Justice Spender on 17 October 1997 pending final determination of application QG 162 of 1997 or earlier order be revoked, such revocation to take effect from 4.00 pm 7 November 1997.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QG 162 of 1997
BETWEEN:
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
APPLICANTAND:
NEWLANDS COAL PTY LTD
RESPONDENT
JUDGE:
COOPER J
DATE:
6 NOVEMBER 1997
PLACE:
BRISBANE
REASONS FOR JUDGMENT
On 13 October 1997 the applicant filed proceedings in this Court alleging a contravention of s 170NC of the Workplace Relations Act 1996 (Cth) (“the Act”). The applicant seeks as final relief penalties and injunctive relief against the respondent in consequence of the alleged contravention. The applicant also sought interlocutory relief pending determination of the application restraining the respondent from threatening to retrench certain employees of the respondent who were members of the applicant in contravention of s 170NC of the Act.
After hearing the interlocutory proceedings, Justice Spender declined to make an order in respect of any alleged contravention of s 170NC of the Act. However, his Honour was persuaded that a letter dated 10 October 1997 and one of 14 October 1997 from the respondent to Mr Ray Barker, a Vice-President of the Queensland District of the applicant, raised a serious question to be tried that the respondent had contravened s 170MU of the Act. That section provides :-
“170MU(1) An employer must not :
(a)dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee’s prejudice; or
(b)threaten to dismiss an employee, injure an employee in his or her employment or alter the position of an employee to the employee’s prejudice;
wholly or partly because the employee is proposing to engage, is engaging, or has engaged, in protected action.
(2) Subsection (1) of this section does not apply to any of the following actions taken by the employer:
(a)standing-down the employee;
(b)refusing to pay the employee where, under the common law, the employer is permitted to do so because the employee has not performed work as directed;
(c)action of the employer that is itself protected action.
(3) In proceedings under section 170NF for an alleged contravention of subsection (1) of this section, it is to be presumed, unless the employer proves otherwise, that the alleged conduct of the employer was carried out wholly or partly because the employee was proposing to engage, was engaging, or had engaged, in protected action.”
Accordingly his Honour, on 17 October 1997, made the following order :-
“THE COURT ORDERS THAT:
Upon the usual undertaking as to damages being given by the applicant union by its counsel, pending the final determination of application QG 162 of 1997 or earlier order, the respondent, by itself, its servants or agents, refrain from dismissing or threatening to dismiss any production and engineering employee who is as at today’s date a member of the Construction, Forestry, Mining and Energy Union, wholly or partly because the employee is proposing to engage or is engaging in protected action, other than in relation to the forty-two production and engineering positions the subject of notices of retrenchment on 19 September 1997.
THE COURT GRANTS liberty to apply on forty-eight hours’ notice.”
It is to be noted that the exception in relation to the forty-two production and engineering positions the subject of notices of retrenchment dated 19 September 1997 relates to a program of retrenchment for redundancy implemented by the issue of retrenchment notices to 137 employees with termination dates of 17 October, 24 October and 2 November 1997. As at the date of his Honour’s order, forty-two employees remained to serve out their notice. There is no issue in these proceedings that the notices given on 19 September 1997 were other than lawfully given.
The decision of Justice Spender has not been appealed by the respondent.
On 31 October 1997 directions were given with a view to a trial of the principal application in the week commencing 17 November 1997. In fact the matter has been listed for trial on 20 and 21 November 1997.
On 3 November 1997 the respondent, pursuant to the liberty to apply contained in Justice Spender’s order of 17 October 1997, filed a notice of motion and supporting material seeking the following relief :-
“2. That the Order made by Spender J on 17 October 1997 (and entered on 24 October 1997) be varied by including the following additional words at the end of the order:
‘and those notices of retrenchment to be issued on 5 November 1997’
3. Such further or other orders as the Court considers appropriate.”
It is clear from the material, and conceded by counsel for the respondent, that if the application is granted all remaining employees would be retrenched. In that case there would be no employees the subject of injunctive protection. The fact is that the respondent is seeking revocation of the interlocutory injunction on the ground of a material change in circumstances since the making of the original order and I deal with it on that basis.
The application is opposed.
On 21 October 1997 the respondent wrote to the Australian Manufacturing Workers’ Union (“the AMWU”) and the Communications, Electrical and Plumbing Union (“the CEPU”) advising those unions of the respondent’s decision to contract out the whole of the opencut and surface operations at the Newlands Coal Mine. The letter set out the reasons for the decision, namely that the mine could not be economically operated over the balance of its expected life of eighteen months to two years on any other basis. The letter advised that Thiess Contractors were prepared to take over the opencut and surface operation for the remainder of the mine’s life, and to that end intended to have a substantial workforce on site on 1 December 1997. The letter contained the following :-
“Implementation of the decision to contract out the Newlands opencut and surface operations has the effect that the employment of all current Newlands opencut and surface production and engineering employees will be terminated on the grounds of redundancy.***
In total 152 employees are affected by this decision. Of that number 117 are production employees, and 35 are trades employees.
Notice of retrenchment will be distributed to employees on Friday 24th October. Retrenchments will take effect from 28th November 1997.***
Employees may apply for positions with Thiess Contractors who have commenced recruitment. Newlands will permit any employee who is offered and accepts employment with Thiess to leave the employment of Newlands prior to 28th November. Employees will be provided with paid leave during their notice period for the purpose of attending such interviews.
All employees retrenched as a result of this decision will be paid their full redundancy entitlement in accordance with the Coal Mining Industry (Production & Engineering) Interim Consent Award September 1990 regardless of whether they accept employment with Thiess or any other employer. Exact details of these entitlements will not be available until approximately one week prior to termination. The Company will distribute to all employees, tomorrow 22nd October documents detailing the method of calculation of benefits, arrangements as to housing, relocation, out placement, interview leave, and other forms of assistance.
In addition, should any employee seek a voluntary retrenchment package, it will be provided in the terms indicated above.
Newlands management has already had discussion sessions for all employees at which the decision to contract out, the consequences of contracting out and the measure to assist employees were explained and discussed. Further discussion sessions will be announced shortly.”
The letter bore the following notation :-
“***While the interlocutory injunction imposed by Spender J on Friday 17 October remains in place, implementation of forced retrenchments of employees who were CFMEU members as at 17 October 1997, will not occur for any of the reasons stated in the injunction. Further court proceedings are to take place, but at this stage it is not known when. The Company will continue to provide meaningful employment to persons who remain in our employ and are covered by the injunction until such time as the order ends or otherwise as directed by the court.”
The letter was also sent to the applicant and a copy given to all members of the respondent’s workforce.
On 31 October 1997 the respondent reported in writing to the mine owners the NCA Joint Venture.
The report noted that of the original 290 surface operation and engineering employees employed at 19 September 1997, 212 were either retrenched or under notice of retrenchment. The remaining 78 employees at that date were members of the applicant and subject to the interlocutory injunction. The report indicated that further acceptances of voluntary retrenchment were expected. In fact, as at the date of hearing the number of employees covered by the interlocutory injunction has reduced to forty-one.
The report continued :-
“Since 10 October no attempt has been made by the CFMEU to contact the Company to negotiate in relation to any future industrial agreement, or in relation to any outstanding union claims notified under C No 22841 of 1995. Negotiations have however been conducted intensely between the CFMEU and Thiess as to their industrial and employment arrangements at Newlands open cut, with negotiations occurring on most days since Saturday 11 October. We are advised that 800 applicants have applied to Thiess, including 240 applicants from Newlands.
While the injunction remains Thiess can engage people to undertake the work of those who have left Newlands employ. Thiess would therefore have management of the vast majority of the workforce. There would however be
‘pockets’ of Newlands employees across the operation. These would not be segregated into a discrete area which could be managed by us, rather the employees would be distributed according to their current job. Neither Thiess nor Newlands could sensibly or effectively manage operations on this basis - ie employees on the same crews with different industrial conditions. Newlands can not reallocate its employees to other work as this may amount to constructive dismissal.”
The joint venture committee was given three options :-
To await the outcome of the principal application before proceeding to retrench the remaining employees and allow Thiess Contractors to mobilise for full operation;
To return to the court to seek removal of the injunction on the basis of changed circumstances in order that no possible issue of contempt of court could arise from the giving of notices of retrenchment on the ground of redundancy in terms of the Coal Mining Industry (Production and Engineering) Interim Consent Award September 1990 during the pendency of the interlocutory injunction;
To reconsider the decision to contract out surface operations and to return to the former position.
The report concluded :-
“The relevant facts are :-
· Only 78 employees remain under protection of the injunction.
· Intense negotiations are taking place between Thiess and the CFMEU.
· No contact has been made with us by the union to discuss any log of claims or EBA since 10 October, one week before the injunction issued.
· 240 Newlands people have applied for positions with Thiess.
On the basis of this there appears to be:
1.Defacto acceptance by the CFMEU that the decision to contact [sic] out will not change.
2.Defacto acceptance by the workforce of this also in the form of 240 job applications, and the fact that 75 of the 153 production and engineering employees we had at the time the injunction was issued will have terminated their employment at 28 November 1997.
On 30th October Newlands received a further notice of intention to take industrial action. That notice or any action taken pursuant to it in no way alters the relevant factors and should be excluded from consideration in deciding which option is preferred. The notice is mentioned here only to inform you of recent events.
In light of the increasing operational difficulty and resulting economic harm involved in any delay we recommend adoption of Option 2 which has the best prosect [sic] of an early sensible organisation of the operations.”
On the afternoon of 31 October 1997 the NCA Joint Venture Management Committee directed the respondent to proceed in accordance with option 2.
The decision to contract out the operations to Thiess Contractors has repercussions for other employees of the respondent, in particular approximately eighty supervisory and administrative personnel, some of whom are members of the Australian Collieries Staff Association (“the ACSA”). The respondent has become involved in proceedings in the Australian Industrial Relations Commission with the ACSA as to the failure to consult on redundancies of supervisory and administrative personnel. The respondent contends that it cannot rationally resolve that issue until the question of its contracting out its operations is resolved as between it and the applicant.
The applicant today filed by leave an affidavit of Mr Ray Barker. Other than deposing that negotiations have not broken down between the applicant and the respondent, he does not challenge the substance of the report to the NCA Joint Venture Management Committee. Nor were Mr Michael Menzies and Mr Timothy Ryan, employees of the respondent, cross-examined on their affidavits which depose to the substance of the report and the impact of the structural change of the workforce since 17 October 1997 on the ability of the respondent to operate the mine.
The effect of the material filed by the respondent is that the owners of the mine have confirmed that for economic reasons the operation of the mine was to be contracted out for the balance of its life and therefore the remaining forty-one members of the applicant are redundant to the respondent’s needs to operate the mine. They further depose that it is not possible to operate the mine using both Thiess and the respondent’s labour in mixed gangs or shifts. To delay the date of handover of the site to Thiess Contractors will involve considerable cost and expense to the owners because the remaining forty-one employees have the right to work out their notice of retrenchment. Further, the members of the ACSA are being left in an untenable position because their future cannot be determined.
The CFMEU opposes the application on the following grounds :-
(a)That any difficulty faced by the respondent due to the loss of employees is of the respondent’s own making by offering voluntary redundancies and retrenching non-CFMEU members as redundant;
(b)That the serious question to be tried which Justice Spender found has not altered and the only question is the balance of convenience;
(c)With a trial of the application scheduled for 20 and 21 November 1997, the balance of convenience favours doing nothing;
(d)That the bargaining period under the Act remains open and that the applicant has sought to have negotiations with the respondent;
(e)That protected action has been engaged in by the membership of the applicant since the grant of the injunction, namely that stop work meetings have been held.
In his affidavit Mr Barker refers to communications between the Newlands Open Cut Lodge and Mr Ryan as putting the use of contractors into dispute. A consideration of the correspondence suggests strongly that the use of contractors for ground transport was part of the retrenchment for redundancy program initiated on 19 September 1997 which was non-contentious, in that it falls outside the operation of the interlocutory injunction. In substance the material supports a conclusion that the applicant has since 10 October 1997 seen its members’ interests best served by negotiating with Thiess Contractors. The number of employees generally, and the number of CFMEU members in particular, who have accepted redundancy offers and sought re-employment with Thiess and the decision of the NCA Joint Venture Committee not to abandon the decision to contract out and to proceed with the redundancy program, support an inference that it is highly improbable that the decision to contract out will be abandoned in the future and the mine recapitalised and operated with employees of the respondent for its limited economic life irrespective of the outcome of the principal proceedings.
The finding of Justice Spender made on 17 October 1997 was :-
“However, so far as s 170MU is concerned, it seems to me to be plain, on the material, including the two letters, (that of 10 October 1997 and that of 14 October 1997), that it is at least arguable that the respondent, Newlands, is threatening to dismiss employees partly because those employees are proposing to engage or are engaging in protected action. I say this because of Mr Menzies’ own words. It is, it seems to me, arguable that when he says, ‘for the foregoing’, Newlands proposes to adopt a certain course, ‘the foregoing’ encompasses his noting that the CFMEU had indicated to the Commission its intention to engage in industrial action, as referred to in the letter and the notification of which is exhibited to Mr Menzies’ other affidavit.”
Neither the finding, nor the terms of the interlocutory injunction, prevent the respondent from lawfully retrenching employees who are redundant to the employer’s requirements. The interlocutory injunction only seeks to restrain the respondent from threatening to dismiss any member of the CFMEU because that member is proposing to engage in or is engaging in protected action. If there is no such causal link, the conduct is not caught by the injunction.
In the present case the relevant decision for the purposes of continuing or revoking the interlocutory injunction is the decision of the owners of the mine and their direction to the respondent as mine manager. Employees, other than members of the CFMEU, and those members of the CFMEU, who have accepted redundancy, either voluntarily or by notice of retrenchment, have structurally altered the nature of the respondent’s workforce and its ability to efficiently operate the mine. The notation on the letter of 21 October 1997 does not mean that those employees, then subject of the interim injunction, could and would be gainfully employed pending determination of the proceedings, irrespective of any change in circumstances. Rather, the notation foreshadows the making of such an application. Additionally, the notation does not say that those employees will not be retrenched. It simply affirms that those employees will not be retrenched for any of the reasons stated in the injunction.
The decision of 31 October 1997 affirms the decision to contract out the operation of the mine and seeks revocation of the interlocutory injunction to enable notices of retrenchment on the ground of redundancy to be given without fear of an allegation of contempt of court. On all the material the decision appears to have been driven by economic considerations if the mine is to be operated for the limited period of up to two years until closure. There is nothing in the material to suggest that the decision of the NCA Joint Venture Management Committee to give notice of retrenchment to the remaining forty-one members when free to do so was because of any protected action taken or proposed to be taken by them.
I am not satisfied, and it has not been submitted, that there is a serious question to be tried that to make the decision of 31 October 1997, or to give effect to it, would constitute a contravention of s 170MU. Even if I was of that view, in the changed circumstances, the balance of convenience is in favour of revocation of the interlocutory injunction. A matter of substantial weight in the balance is that events have so changed that there is, in my view, no real likelihood that the respondent will at any stage decide to once more itself, with its own labour, machinery and capital investment, continue to operate the mine. That being so, at some point retrenchment for redundancy is almost inevitable.
To revoke the injunction leaves the respondent exposed to a penalty if it has contravened s 170MU of the Act, and leaves those members who are compulsorily retrenched with the rights given by the Act, if that retrenchment can be demonstrated as unlawful for contravention of s 170MU of the Act, or for any other reason.
I certify that this and the preceding nine(9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Cooper
Associate:
Dated: 6 November 1997
Counsel for the Applicant: R G Atkinson Solicitor for the Applicant: Nall Payne Counsel for the Respondent: J E Murdoch Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 6 November 1997 Date of Judgment: 6 November 1997
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