Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2)

[2015] FCA 1088

FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2015] FCA 1088

Citation:	Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2015] FCA 1088
Parties:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, ADAM JOHN GIDDINGS, JASON ROSEWARN and JENNIFER ARBER v PORT KEMBLA COAL TERMINAL LTD and PETER GREEN
File number:	NSD 1360 of 2014
Judge:	MURPHY J
Date of judgment:	8 October 2015
Catchwords:	INDUSTRIAL LAW – Breach of industrial agreement – Principles regarding construction of industrial agreement – Meaning of consultation in industrial agreements ‑ Breach of consultation obligation in industrial agreement – When obligation to consult arises ‑ Whether consultation was genuine – Whether consultation was timely – Whether employees given meaningful opportunity to affect a decision – Whether relevant information to enable consultation was required to be provided ‑ Breach of obligation to use redeployment and voluntary redundancy before implementing compulsory redundancy – Breach of obligation to investigate all avenues to avoid compulsory redundancy – Breach of obligation to investigate reducing contractors ‑ Employment ‑ Whether employer took adverse action against employee for a prohibited reason – Sections 340 and 346 of the Fair Work Act 2009 (Cth) –Onus of proof upon an employer in a claim of adverse action – Evidence necessary to discharge the onus under s 361 of the Fair Work Act 2009 (Cth) – Accessorial liability in a claim of adverse action
Legislation:	Fair Work Act 2009 (Cth) Rail Safety Act 2008 (NSW)
Cases cited:	Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council (2000) 101 IR 143 Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101 Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 Bowler v Hilda Pty Ltd [2000] FCA 899 City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Optus Administration Pty Ltd AW791910 Print L4596) Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Vodafone Network Pty Ltd (C2001/5770 PR911257) Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (2010) 268 ALR 514 Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; 164 IR 299 Construction, Forestry, Mining and Energy Union v Newcastle Wallsend Coal Company Ltd (C2758 Dec 1533/98 S Print R0234) Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No. 3) [2012] FCA 697 Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463 Fitzgerald v Masters (1956) 95 CLR 420 General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 Giorgianni v The Queen (1985) 156 CLR 473 Independent Education Union v Geelong Grammar School [2000] FCA 557 Kucks v CSR Limited (1996) 66 IR 182 Livingstones Australia v ICF (Australia) Pty Ltd T/A IC Frith & Associates [2014] FWCFB 1276 Nine Films & Television Pty Ltd v Ninox Television Ltd (2005) 65 IPR 442 Osland v Secretary, Department of Justice (2008) 234 CLR 275 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Secretary, Department of Justice v Osland (2007) 95 ALD 380 Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 Short v FW Hercus Pty Ltd (1993) 40 FCR 511 Termination, Change and Redundancy Case (1984) 294 CAR 175 Termination, Change and Redundancy Case (No 2) (1984) 295 CAR 673 United Voice v Valspar (WPC) Pty Ltd (2014) 218 FCR 521 Yorke v Lucas (1985) 158 CLR 661
Date of hearing:	24-25, 30-31 March, 1, 7, 9 and 29 April 2015
Place:	Melbourne
Division:	FAIR WORK
Category:	Catchwords
Number of paragraphs:	477
Counsel for the Applicants:	Ms C Howell and Ms L Doust
Solicitor for the Applicants:	Slater & Gordon
Counsel for the Respondents:	Mr S E J Prince
Solicitor for the Respondents:	Ashurst Australia

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
FAIR WORK DIVISION	NSD 1360 of 2014

BETWEEN:

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Applicant

ADAM JOHN GIDDINGS
Second Applicant

JASON ROSEWARN
Third Applicant

JENNIFER ARBER
Fourth Applicant

AND:

PORT KEMBLA COAL TERMINAL LTD
First Respondent

PETER GREEN
Second Respondent

JUDGE:	MURPHY J
DATE:	8 OCTOBER 2015
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

1. In this proceeding the first applicant, the Construction, Forestry, Mining and Energy Union (“the Union”), in its Mining and Energy Division, alleged that the first respondent, Port Kembla Coal Terminal Limited (“PKCT”) breached the Port Kembla Coal Terminal Limited Enterprise Agreement 2012-2015 (“the Agreement”) relating to its employees at the coal terminal.  The alleged breaches concerned PKCT’s decisions to:

   (a)abolish the positions of the second, third and fourth applicants, Adam Giddings, Jason Rosewarn and Jennifer Arber, that is, make them redundant; and

   (b)make those employees compulsorily redundant rather than redeploy them into other positions within PKCT or into work usually undertaken by contractors engaged at the terminal.

2. The applicants alleged that PKCT breached the following provisions of the Agreement:

   (a)clause 7 which relates to PKCT’s obligation to consult with employees and the Union about major changes;

   (b)clause 13.5 which relates to steps to be taken before compulsory redundancies are to be imposed; and

   (c)Appendix 1, cl. 4(k) which provides that the number of Appointed positions cannot be added to or deleted without agreement of the Union. 

3. The applicants also alleged that PKCT’s termination of Mr Giddings’ employment, with the knowing involvement of the second respondent, PKCT’s General Manager Peter Green, constituted adverse action for a prohibited reason, namely his Union role and/or his industrial activities, in contravention of ss 340 and 346 of the Fair Work Act 2009 (Cth) (“the Act”).

4. For the reasons I set out I consider the applicants made out their case, except in relation to the alleged breach of Appendix 1, cl. 4(k).

   The alleged breaches of the Agreement

5. Unless it is necessary to differentiate between the two respondents or between the four applicants, I refer to the applicants as “the Union” and the respondents as “PKCT”.

6. I commence with a broad summary of the decision.

7. In my view PKCT breached its obligation to consult pursuant to cl. 7 of the Agreement in relation to the decisions to abolish the positions of Mr Giddings, Mr Rosewarn and Ms Arber and to terminate their employment.  In summary, I say this because:

   (a)the proposal to abolish positions and terminate employment involved a major workplace change which, if implemented, was likely to have a detrimental or significant effect on employees.  The approach PKCT took to its obligations under the Agreement meant that the proposal had that effect on conditions of employment well beyond the three employees immediately affected; and

   (b)PKCT’s obligation to consult arose when it was considering introducing a major change and was not restricted to circumstances where it had decided to make such a change.  Nor was its obligation limited to consultation about the implementation of a decision finally made.

8. Contrary to the Agreement PKCT:

   (a)did not consult when it was considering the proposed abolition of positions;

   (b)did not begin consulting with the Union until its view regarding the abolition of positions and redundancies was well entrenched.  The consultation it provided was too late and the Union was not given a meaningful opportunity to affect the proposal;

   (c)did not consult until four months after it made the relevant decisions;

   (d)merely gave the appearance that it was engaging in consultation when, in fact, it did not genuinely consult;

   (e)did not provide relevant information to the Union in a timely way so as to allow proper consultation to occur; and

   (f)did not allow sufficient time for proper consultation to occur.

9. In my view PKCT breached its obligation under cl. 13.5 of the Agreement to:

   (a)make use of redeployment and voluntary redundancy prior to implementing “forced redundancies” (which is the term used in the Agreement for compulsory redundancies) as required under cl. 13.5.1; and

   (b)investigate all avenues to avoid the forced redundancies of the affected employees including by the reduction of contractors, as required under cl 13.5.3.

   In summary, I say this because PKCT did not give proper consideration to redeploying Mr Giddings and Mr Rosewarn into any suitable vacancy which might have arisen through offers of voluntary redundancy or any suitable role which might have arisen by PKCT reducing its use of contractors.

10. PKCT refused to seek expressions of interest in voluntary redundancy in relation to Mr Giddings’ and Mr Rosewarn’s positions, and as a result they were denied the possibility of redeployment within PKCT.  PKCT sought expressions of interest in voluntary redundancy in relation to Ms Arber’s position from her and the other two Administration Assistants.  PKCT refused to consider reducing contractors, unless the contractors were engaged on a full time and permanent basis (when none were so engaged).  That approach to the construction of the Agreement meant that no contractors fell to be considered by PKCT in its investigation of reducing contractors.

11. Because PKCT breached cll 7 and 13.5 of the Agreement it contravened s 50 of the Act.

12. The effect of PKCT’s refusal to offer voluntary redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions and to restrict the consideration of reducing contractors was that there was no real prospect that they could be redeployed into other work and it was inevitable that their employment would be terminated (if their positions were abolished as proposed).

13. I do not consider PKCT breached Appendix 1, cl. 4(k) of the Agreement.  In my view that provision is directed to the grading of different classifications under the Agreement rather than to redundancy, and it does not require PKCT to obtain the Union’s consent before making an employee in an Appointed position redundant.

    The claim of adverse action for a prohibited reason

14. The Union alleged that PKCT, with Mr Green’s knowing involvement, terminated Mr Giddings’ employment because of his Union role and/or his industrial activities at the terminal.  The thrust of the Union’s case was that, as the Lodge President and as employee representative under the Agreement, Mr Giddings had played a lead role in a number of industrial disputes, and particularly a large dispute in 2012 which led to three weeks of stoppages.  The Union said that Mr Giddings was a particularly effective Union official and invited the Court to infer that Mr Green developed an adverse view of Mr Giddings as a result of his Union roles and/or industrial activities and that he terminated Mr Giddings’ employment for that reason.

15. It is uncontentious that Mr Green made the decision to abolish Mr Giddings’ position and terminate his employment.  His evidence, corroborated by two senior managers, was that in March 2014 he requested a detailed review of PKCT’s operations be undertaken because of deteriorating conditions in the coal industry.  As a result of that review, on 1 August 2014 three senior managers recommended to Mr Green that Mr Giddings’, Mr Rosewarn’s and either one or two Administration Assistant positions be abolished.  Mr Green said that he reflected on the recommendations of his senior managers over the months after the 1 August meeting, but did not decide to advance the proposal that Mr Giddings’ position (and the other two positions) be abolished until October.  On his account he then embarked on a genuine process of consultation with the Union commencing on 2 December 2014 and did not decide to abolish Mr Giddings’ position until after the consultation process was complete on 10 December.

16. Mr Green consistently maintained that no part of the substantial and operative reasons for terminating Mr Giddings’ employment included his Union role and/or his industrial activities.  However, I found Mr Green’s evidence, and that of the senior managers, quite unreliable. They each failed to disclose important documents and parts of the decision-making process in their evidence in chief, and their evidence was implausible in light of the contemporaneous documents, other evidence which I prefer, and the surrounding circumstances.  I give their evidence little or no weight. 

17. The unreliability of their evidence meant that PKCT failed to discharge its onus under s 361 of the Act to establish that the substantial and operative reasons for its termination of Mr Giddings’ employment did not include his Union role and/or his industrial activities. I found that PKCT took adverse action against Mr Giddings for a prohibited reason in contravention of ss 340 and 346 of the Act.

18. In relation to the claim of accessorial liability against Mr Green pursuant to s 550 of the Act, in my view the evidence shows that Mr Green’s substantial and operative reasons for his decision to terminate Mr Giddings’ employment included his Union role and/or industrial activities. He was central in PKCT’s contravention and knowingly concerned in and a party to it.

    Relief

19. By agreement, the issue of relief was deferred except in relation to whether Mr Giddings, Mr Rosewarn and Ms Arber should be reinstated to their employment. 

20. In my view Mr Giddings and Mr Rosewarn should be immediately reinstated to employment with PKCT to the pay and other terms and conditions of their former positions of Long Term Planner and Facilities Maintenance Engineer.  I accept that there may be some difficult issues associated with their reinstatement as their positions have been abolished.  While I am satisfied that reinstatement is appropriate I will hear the parties about any issues that arise.

21. For reasons I explain I am not satisfied on the evidence that reinstatement is appropriate in Ms Arber’s case.

    THE FACTS

22. Many of the facts that I set out below are uncontroversial, but where they are contentious I usually set out my view of the evidence in the course of recounting them. 

    The Union’s witnesses

23. The Union relied on the evidence of Mr Giddings, Mr Rosewarn, Ms Arber, Mr Robert Timbs, Vice President of the South Western District branch of the Union, Mr Murray Dakers, Lodge Vice President, and Lorraine Usher, the National General Vice President of the Union.  Ms Usher’s evidence related to the Union’s structure and rules and she was not required for cross-examination. The other witnesses were cross examined but PKCT made little attack on their credibility.  I was left with no cause to doubt the reliability of their evidence. 

24. While I accept their evidence it is worth noting that it is not central to the decision.  My decision on the breaches of cll. 7 and 13.5 primarily turn on my construction of the Agreement and my rejection of PKCT’s evidence including in relation to important parts of the decision-making process, when Mr Green made the relevant decisions, and whether PKCT genuinely consulted or investigated all avenues to redeploy the affected employees.  The evidence as to what occurred in the consultation meetings in December 2014 is largely uncontentious.

25. My decision on the adverse action claim against PKCT primarily turns on the unreliability of the evidence of Mr Green, Mr Stewardson and Mr Gorman in relation to the decision to terminate Mr Giddings’ employment, which meant PKCT did not discharge its onus.  My decision on the claim of accessorial liability against Mr Green again largely turns on my view of the unreliability of their evidence, and inferences I draw from the evidence regarding the adverse view Mr Green is likely to have held of Mr Giddings as a result of his Union role and his industrial activities.

26. It is generally unnecessary to traverse the evidence of the Union’s witnesses in detail.

    PKCT’s witnesses

27. Four members of PKCT’s management team gave evidence, the General Manager, Mr Green, the Operations Manager, John Gorman, the Engineering Manager, Roger Stewardson and the Business Services Manager, Flavio Tonini. 

28. Mr Gorman, Mr Stewardson and another senior manager, the Human Resources Manager Ms Briony Ragen, made recommendations to Mr Green, and Mr Green made the decision to abolish the positions and terminate the employment of Mr Giddings, Mr Rosewarn and Ms Arber.  Mr Tonini’s evidence was largely confined to Ms Arber’s case and it is not material to my decision in relation to Mr Giddings and Mr Rosewarn.  While I concluded that Mr Stewardson’s, Mr Gorman’s and Mr Green’s evidence was unreliable,  I am satisfied as to the reliability of Mr Tonini’s evidence. 

    Port Kembla coal terminal

29. Port Kembla coal terminal is a large bulk handling facility located in Wollongong, New South Wales that handles coking and steaming coal, coke, iron ore, and a range of other bulk commodities.  It operates 24 hours per day, 7 days per week and has an annual throughput capacity of approximately 18 million tonnes (“mt”) of materials per annum. 

30. PKCT is owned by a consortium of six equal shareholders who are all coal producers on the Southern and Western coalfields and who collectively lease the terminal from NSW Ports.  Illawara Coal (a subsidiary of one of the shareholders, BHP Billiton) currently holds a management agreement with PKCT. Some of PKCT’s management team, including Mr Green, Mr Gorman, Mr Stewardson, and Mr Tonini are employees of Illawara Coal and they manage the terminal on behalf of the shareholders. 

31. As at February 2015 PKCT had approximately 98 full time equivalent employees, comprising four shift teams who worked on a rotating roster, as well as operations, engineering and management teams who typically undertook day work from Monday to Friday (“Daywork”).  Employees are required to work flexibly across the terminal and undertake various tasks.  This can require operational employees to operate different machinery and work in different areas of the site from shift to shift or during a shift.

32. From 11 April 2012 the terms and conditions of employment of PKCT’s employees at the terminal have been governed by the Agreement.  Prior to that they were governed by an earlier iteration of the Agreement.

    The Union

33. The Union is an organisation of employees registered under the Act and the Mining and Energy Division is made up of Union members who are employed in the mining, energy and associated industries. The rules of the Mining and Energy Division provide for the establishment of “lodges” at mines and workplaces by grouping its members at particular sites. The Port Kembla Coal Terminal Lodge (“the Lodge”) covers the Union’s members at the coal terminal, and it has a Lodge executive which includes the office of Lodge President.

34. Almost all of PKCT’s employees are members of the Union. 

    Mr Giddings

35. Mr Giddings was employed in various roles at the terminal from 1980, starting as a Fitter and Turner.  He successfully undertook a great deal of further education and became highly qualified.  Over the years he enjoyed promotions into various senior positions with PKCT and was employed in the position of Long Term Planner from May 2013 until that position was abolished and his employment was terminated on 11 December 2014.  The Long Term Planner role was a senior position created as a result of a restructure in around 2013 which reorganised the manner in which PKCT planned and executed its maintenance work. 

1. At all material times he was a member of the Union.  From April 2000 he was Lodge President, the most senior Union office at the terminal.  In that capacity and as employee representative under the Agreement Mr Giddings played a lead role in the Union’s industrial activities, including in a large strike in early 2012.

   Mr Rosewarn

2. Mr Rosewarn was employed in various roles at the terminal from 1987, starting as a Licenced Plumber and Gasfitter.  He too successfully undertook a great deal of further education and became highly qualified.  He was particularly successful in his further studies and for a period he was engaged as lecturer in Operational Facilities Management at the University of Sydney.  Over the years he also enjoyed promotions into various senior positions with PKCT and he was employed in the position of Facilities Maintenance Engineer when his employment was terminated on 11 December 2014.  At all material times he was a member of the Union, but he held no Union office.

   Ms Arber

3. Ms Arber was employed as an Administration Assistant from 13 September 2010 until her employment was terminated on 11 December 2014.  Her role involved performing general administrative tasks, accounts payable and managing the accruals journal for the end of month accounts.  At all material times she was a member of the Union, but she held no Union office.

   The Upgrade Project

4. In May 2011, having regard to a projected significant increase in demand over the next decade, PKCT announced that it would upgrade the infrastructure and facilities at the terminal (“the Upgrade Project”).  This was to be implemented through two stages:

   (a)Stage 1, an intermediate capacity target increase from 17.5 mt to 22.5 mt per annum, at an estimated cost in the vicinity of $250 million; and

   (b)Stage 2, a more extensive scope of work intended to create an ultimate capacity of about 28.5 mt per annum at an estimated cost in the vicinity of $500 million.

   Over time the Upgrade Project was expected to create many jobs at the terminal, both for employees of PKCT and for contractors it engaged at the terminal.

   The deteriorating market conditions in the coal industry

5. Unfortunately, conditions in the Australian coal industry began to deteriorate because of a range of factors, including a decline in the price of coal by about 50% from 2011 to 2014.  As a result of the poor market conditions by 2014 many Australian coal operations were operating at a loss.  This led to a significant decline in employment in the NSW mining supply chain, a decline in the number of employees in NSW coal exploration and mining companies, and there were redundancies in Wollongong Coal’s Wongawilli mine, Glencore’s Tahmoor mine and at Illawarra Coal in 2014.

6. Between 2011 and 2014:

   (a)the throughput of coal at PKCT decreased from 14 mt to approximately 12.4 mt;

   (b)loading charges increased from $3.80 to $4.75 per tonne; and

   (c)PKCT experienced a drop in revenue of $5.25 million.

   In the same time period the number of permanent employees directly employed by PKCT increased from 93 to 106.

   Cancellation of the Upgrade Project / Announcement of the R&C Project

7. As a result of the significant deterioration in market conditions, in February 2013 the PKCT Board (“the Board”) decided not to proceed with the Upgrade Project. 

8. However, earlier reports on the condition of plant and equipment at the terminal had highlighted the extent of the backlog of maintenance and restoration work that was required.  The scale and complexity of this work was beyond routine repair and maintenance activities and PKCT decided to tackle the necessary work as a program to be completed by a dedicated project team in parallel with terminal operations and regular repairs and maintenance.  In February 2013 the Board approved a Restoration and Compliance Program (“R&C Project”) to be undertaken over the next five years at an estimated cost of $218–$294 million.

   Contractors engaged at the terminal

9. Mr Stewardson said, and I accept, that at all material times there were about 50 contractors engaged through the R&C Project.  There were also between five and 15 additional contractors working at the site.

   Announcement of the Operational Review

10. In March 2014, Mr Green announced an operational review of PKCT’s business (“the Operational Review”) and in April he assigned Mr Gorman to concentrate on the review.  Its essential purpose was to identify ways in which PKCT could achieve efficiencies and savings in order to reduce costs, including by determining whether there were any activities that could be done differently and whether there were any positions within PKCT that were no longer needed.

11. To my mind, there is no real question that in conducting the Operational Review, and in considering a reduction in manning levels through the abolition of positions, PKCT was engaged in a bona fide attempt to reduce its costs.

12. Prior to Mr Gorman’s appointment, work had already been undertaken on initiatives to achieve savings at PKCT.  For example, PKCT’s Business Improvement Specialist, Krishna Panyam, had earlier developed a restructuring proposal which involved the abolition of eight positions.  Between mid-April and early July 2014, Mr Gorman reviewed these initiatives and informed Mr Green which initiatives should be progressed as part of the review. 

    Phase 1 of the Operational Review

13. The initiatives in Phase 1 of the Operational Review included taking up an existing proposal to reduce shift team members (which involved the transfer of two employees from each shift team back to Daywork groups), a proposed freeze on employees’ wage increases under the Agreement, and a proposed 12 month suspension of the annual increases to employees’ grades under the Agreement.  Mr Green accepted Mr Gorman’s recommendations regarding those matters.  The shift team members were reduced by two.  In July 2014 Mr Green sought the employees’ agreement to a wage freeze and a 12 month suspension of regrading of positions.

    Phase 2 of the Operational Review

14. Phase 2 of the Operational Review involved a review of Daywork support and functional roles in order to identify cost reductions and efficiencies, including considering whether there were any positions which were surplus or could be re-distributed amongst the current workforce.  In this part of the review Mr Gorman spoke to relevant managers, including Mr Stewardson, Mr Tonini and Ms Ragen, in an effort to determine whether reducing the number of positions in their teams was feasible. 

    PKCT’s historical approach to manning level reductions

15. Mr Giddings said, and I accept, that at various points in his 34 years at the terminal the employer had required a reduction in manning levels because of the operational needs of the business.  He said that until the present events any such reductions were achieved by seeking expressions of interest in voluntary redundancy across the terminal.  Those who expressed interest were generally accepted for redundancy, and if the duties of that position still needed to be performed then another person would be swapped into the vacant position.  Mr Tonini accepted that voluntary redundancies and “job swaps” were previously used at the terminal, as did Mr Green.  Before the termination of Mr Giddings’, Mr Rosewarn’s and Ms Arber’s employment, there had never been a forced redundancy at the terminal in the past 34 years.

    The development of the proposal to abolish positions as part of Phase 2

16. Mr Gorman testified that his consideration of the cost savings which had the potential to result in the abolition of positions started in May.  While other evidence suggests that Phase 2 of the review had commenced by early April nothing turns on that.

17. At an early date Mr Stewardson identified some opportunities to consolidate roles in the Engineering team and on 16 April 2014 he emailed Ms Ragen some preliminary ideas in that regard.  He attached two documents he had prepared titled “PKCT Organisational Chart 12.5M” and “Organisational Redesign Stage 2”.  In these documents he proposed the abolition of seven engineering positions, including the Long Term Planner and Facilities Maintenance Engineer positions occupied by Mr Giddings and Mr Rosewarn respectively.  He described this proposal as a “work in progress” and probably a “stretch target”, but said that it could be passed on to Mr Gorman.

18. On 2 May Mr Gorman met with Mr Stewardson and Ms Ragen to discuss, amongst other things, the possibility of abolishing some positions to reduce costs.  During this meeting he said that the Engineering and Administration teams would be reviewed in order to determine whether there were any roles that could be consolidated or which were no longer required.  Following this meeting, Mr Stewardson said that he thought that it might be possible for the Engineering team to work without the Technical Officers (three positions), Project Officers (two positions), and the Facilities Maintenance Engineer and Long Term Planner positions. 

19. On 23 May Mr Gorman again met with Ms Ragen and Ms Stewardson and they considered a detailed PowerPoint presentation prepared by Ms Ragen titled “Operational Review – May 2014”.  In it she proposed the abolition of a larger number of positions including the Long Term Planner, Facilities Maintenance Engineer and one Administration Assistant position.  Importantly, the presentation tends to show that Ms Ragen thought that affected employees could be redeployed into work undertaken by contractors engaged by PKCT, including that Mr Giddings could be redeployed to the “MTEC position”.

20. On 3 June Mr Gorman and Ms Ragen met with Mr Tonini to discuss, amongst other things, whether cost savings could be found in the Finance/Administration team.  In this meeting Mr Tonini said that there was scope to reduce positions in his team.

21. On the same day Mr Gorman prepared a document titled “PKCT Operational Review summary paper” in which he outlined his preliminary thoughts on cost savings associated with PKCT’s labour costs and identified the possibility of abolishing seven positions.  Importantly, Mr Gorman approached the proposed abolition of positions on the basis that the Agreement required that offers of voluntary redundancy be made to other employees before forced redundancies were implemented.  Under a heading “Process/EA Compliance” the summary paper stated:

    ·     Can we focus on a subset of the PKCT Employee group?

    ·     Who must VR’s be offered to? Can it just be a subset of the PKCT Employee group?

    ·     On what grounds can we rejected [sic] a VR request? Cost savings? Retirement likelihood?

    The summary paper tends to show that Mr Gorman understood the Agreement to require PKCT to offer voluntary redundancies before implementing forced redundancies, but that he considered that requirement to be inefficient and costly.

22. In May or June 2014 Mr Gorman prepared a document titled “Review of the obligations regarding workforce reductions”.  In it he summarised PKCT’s obligations under the Agreement in the context of the proposed abolition of positions and commented on how PKCT could adhere to its obligations.  It tends to show that Mr Gorman understood the Agreement to require PKCT to offer redeployment and voluntary redundancies before implementing forced redundancies and to investigate all avenues to avoid forced redundancies, including by reducing contractors.  Importantly, it tends to show that he thought that there were avenues potentially available to avoid the forced redundancies of Mr Giddings and Mr Rosewarn.

23. In June Mr Gorman prepared a detailed spreadsheet titled “Scenario Planner”.  In it he set out the positions proposed to be abolished under various scenarios and identified the affected employees by name.  The spreadsheet set out the age, length of service, cost of redundancy, and job swap and redeployment options in respect of 15 positions, including those of Mr Giddings, Mr Rosewarn and two Administration Assistants.  It tends to show that he understood the Agreement to require PKCT to offer voluntary redundancies and to redeploy affected employees into contractors’ work before forced redundancies could be implemented.  The Scenario Planner tends to show that Mr Gorman thought that Mr Giddings could potentially be redeployed into a number of positions within PKCT (if they became vacant through offers of voluntary redundancy) or into a number of contractor roles, and that Mr Rosewarn could potentially be redeployed into the position of Services Planner within PKCT (if that became vacant through voluntary redundancy) or into the Project Supervisor contractor role.  It tends to show that he only thought that an affected Administration Assistant could potentially be redeployed into a contractor role of Secretary/Personal Assistant within the “Project / Non-EA” area.

24. On 30 June, Mr Gorman prepared an organisational chart which proposed the abolition of five engineering positions (including Mr Giddings’ and Mr Rosewarn’s positions) and three other positions (including two Administration Assistant positions).  He provided this chart to Mr Green before he sought the employees’ agreement to a wage freeze at the Lodge Annual General Meeting (“AGM”) on 4 July.  Mr Green did not inform employees or the Union about the proposal at the AGM.

25. Mr Stewardson said that between June and October 2014 he prepared a PowerPoint presentation titled “Operations Review: Indicative Engineering Team Organisation Charts”.  The presentation included various organisational charts and the chart headed “Current” proposed the abolition of five positions in the Engineering team including Mr Giddings and Mr Rosewarn’s positions.  In the final chart he prepared, headed “Nirvana”, Mr Giddings no longer had a job in the Engineering team. 

26. Mr Gorman said (and I accept) that by late June 2014 he had arrived at the view that, outside of the Administration Assistants, PKCT should not offer voluntary redundancies to affected employees. He advised Mr Green that offering voluntary redundancies in relation to positions abolished in the Engineering team would reduce the cost savings that PKCT could achieve.  Mr Green accepted that he was told this but said that this discussion occurred around October 2014.  I prefer Mr Gorman’s evidence in this regard.

27. The evidence is that, on 10 July, Mr Tonini told Mr Gorman that it was impractical to reduce the number of Administrative Assistants in his team by more than one position.  It is unclear whether Mr Gorman accepted this advice at the time, but he ultimately did so.

28. Mr Gorman met with Mr Stewardson to discuss the potential for cost savings in the Engineering team on several occasions between May and July 2014.  The evidence indicates that Mr Stewardson, Mr Gorman and Ms Ragen reached essentially the same views about the proposal to abolish positions and about PKCT’s obligations in that regard. They made joint recommendations to Mr Green at a meeting on 1 August. 

29. The 1 August meeting was not, however, the first that Mr Green heard of the proposal. Mr Gorman said that through April, May, June and July 2014 he kept Mr Green informed about how the Operational Review was progressing, in part through regular fortnightly meetings.  Mr Green said that by 7 July he understood that Mr Gorman proposed that, amongst others, Mr Giddings’ position of Long Term Planner and Mr Rosewarn’s position of Facilities Maintenance Engineer be abolished.

30. In around mid-July, in preparation for a meeting with Mr Green, Mr Stewardson reviewed the various positions within the Engineering team and prepared a summary of his views as to whether each position was necessary for PKCT to operate effectively.  On 17 July he set up a meeting between them on 21 July and emailed the summary to Mr Green and Ms Ragen under the subject heading Phase 2 Background to Tomorrow’s Discussion (“the Phase 2 Background Summary”).  It proposed the abolition of positions, again including the Long Term Planner and Facilities Maintenance Engineer positions.  The summary included a passage in which Mr Stewardson said that the necessary organisational changes at PKCT could not be achieved in a timely way through consultation, and that PKCT should “just do it”.

31. Mr Gorman said that at some point in July he told Mr Green that the proposal to abolish positions could be announced in August.  I infer from this and other evidence that, by then, the proposal was essentially complete.

    The Organisational and Operations Review Report

32. Shortly after 2 July Mr Gorman produced a detailed report titled “PKCT FY15 Organisational and Operations Review”.  He provided the first draft of the report (“the first draft OOR Report”) (Exhibit A5 Tab 1) to Mr Green, Mr Stewardson and Ms Ragen by way of a shared link on PKCT’s computer network. 

33. Although the draft report did not identify the positions to be made redundant it focused on the management and implementation of the planned dismissal of some employees for reasons of redundancy.  It is significant that the report was prepared on the basis that PKCT was required to redeploy affected employees through offers of voluntary redundancies and by reducing contractors, so as to avoid forced redundancies.

34. Mr Gorman and Ms Ragen then made changes to the first draft OOR Report.  By the conclusion of the trial there were four draft OOR Reports in evidence.

35. I will call the next draft report in sequence the second draft OOR Report (Exhibit A5 Tab 2).  It proposed that Mr Giddings’, Mr Rosewarn’s and two Administration Assistants’ positions be abolished. On my view of the evidence it is likely that the second draft OOR Report was produced in July 2014.  I say this for a number of reasons:

    (a)the second draft report represents a further development of the first draft and follows sequentially from it;

    (b)it stated that the abolition of positions was to be announced in August 2014 which indicates that it was created before that date;

    (c)that date of creation is consistent with Mr Gorman’s evidence that he advised Mr Green in late June 2014 that PKCT should not offer voluntary redundancies in relation to any affected positions outside of those in the Finance/Administration team (as the report is prepared on that basis); and

    (d)it precedes the third draft OOR Report which, again, follows sequentially.

    On my view of the evidence it is likely that Mr Gorman or Ms Ragen provided the second draft OOR Report to Mr Stewardson and Mr Green in July, by way of a shared link. 

36. The second draft OOR Report reveals that, in July 2014, there was a significant change in PKCT’s approach to its obligations to make use of redeployment and voluntary redundancy before implementing forced redundancies and to investigate all avenues to avoid forced redundancies including by the reduction of contractors. 

37. The first draft OOR Report, and the earlier proposals to which I have referred, tend to show that Mr Gorman, Mr Stewardson and Ms Ragen understood the Agreement to require that where employees faced forced redundancy PKCT was obliged to redeploy them into suitable vacancies that arose through offers of voluntary redundancy or into suitable contractors’ work.  The contemporaneous documents also tend to show that they recognised that there were potentially available avenues for the redeployment of Mr Giddings and Mr Rosewarn, while the second draft OOR Report stated that there were no redeployment options for them within PKCT. 

38. The second draft OOR Report includes a section headed “Bona Fide Redundancy Checklist” which indicated that Mr Giddings and Mr Rosewarn were not to be redeployed:

    (a)into any suitable vacancy created through offers of voluntary redundancy because they each occupied an “appointed position” which is described as “stand-alone”; or

    (b)into suitable contractors’ work (by reducing contractors) because the contractors were not engaged on a full time and permanent basis; or

39. From this time on the proposal to abolish positions proceeded on the basis that it would occur without voluntary redundancies being offered in relation to Mr Giddings’ and Mr Rosewarn’s positions and without reducing contractors.  Mr Gorman said, and I accept, that the change in PKCT’s approach to its obligation to investigate reducing contractors followed receipt of legal advice authorised by Mr Green in June 2014.  I infer that Mr Green, Mr Gorman and Ms Ragen were informed of that advice in around July 2014.

1. Because there were no vacancies in suitable positions within PKCT, if Mr Giddings’ and Mr Rosewarn’s positions were abolished, the only realistic avenue to avoid their forced redundancies was for PKCT to redeploy them, either into suitable vacancies that arose through offers of voluntary redundancy or into contractors’ work.  The effect of PKCT’s changed approach to its obligations under the Agreement was that the die was cast if Mr Giddings’ and Mr Rosewarn’s positions were abolished. 

2. Ms Ragen and Mr Gorman then created the third draft OOR Report (Exhibit A5 Tab 3).  I infer that it was provided to Mr Stewardson and Mr Green by way of a shared link at the time of its creation.  In the third draft report the proposal to abolish the Long Term Planner, Facilities Maintenance Engineer and two Administration Assistants positions was mature and comprehensive, and in my view essentially complete.  It indicated that offers of voluntary redundancy would not be made other than in relation to the Administration Assistant positions and that contractor positions which were not full-time and permanent would not be considered for reduction.

3. The third draft OOR Report again contained detailed redundancy checklists concerning the individual circumstances of Mr Giddings, Mr Rosewarn and each affected Administration Assistant, together with a detailed implementation plan, including a period of consultation, which culminated in dismissal of four affected employees.

4. In the third draft OOR Report the proposal to abolish positions was to be announced on 21 October followed by three weeks of consultation.  The only difference between the proposal in the third draft report and the proposal announced in December was the reduction in the affected Administration Assistant positions from two down to one.  This reduction was consistent with Mr Tonini’s advice to Mr Gorman on 10 July (and his email to Ms Ragen on 10 October) that it was impractical to abolish more than one Administration Assistant position.

5. On about 16 October 2014 a fourth, updated, version of the OOR Report was produced (“the final draft OOR Report”) (Exhibit A11).

   When was the third draft OOR Report produced?

6. There is a dispute as to the date the third draft OOR Report was produced.  The Union contended that it was created at about the end of July 2014, while PKCT contended that its date is uncertain but that it was likely to have been created much later.  While there is some uncertainty as to the date of the third draft, I consider that it was most likely created by Mr Gorman and Ms Ragen at about the end of July. 

7. I say this, first, because:

   (a)the contents of the first three drafts of the OOR Report in evidence shows that they are sequential.  It is uncontentious that Mr Gorman produced the first draft OOR Report on 2 July 2014.  The second draft OOR Report is later than the first draft, and the third draft OOR Report is later than the second draft.  Mr Gorman accepted this. 

   (b)the second draft OOR Report stated that the proposed redundancies were to be announced in August 2014 which indicates that it was created before that date. 

   (c)in the third draft OOR Report a section titled “Managers Bona Fide Redundancy Checklist” provided for the relevant manager to enquire whether the affected employee was currently on leave or about to commence leave (which was relevant to scheduling consultation meetings with them following announcement of the proposal). It is significant that the information was provided “as at 25 July 2014”.  The entry for Ms Arber stated: “As at 25 July 14 [Annual Leave] planned for 18 September – 24 September” (emphasis added). The entry for Mr Rosewarn stated: “As at 25 July 14 preliminary leave booked from 22 September 14 – 17 October 14” (emphasis added), and the entry for Mr Giddings stated that he would be absent on Union business on 4 – 5 August 2014.  These entries tend to show that the third draft OOR Report was produced before 25 July 2014.   

8. Second, in cross-examination Mr Gorman accepted that he saw a draft OOR report in the form of the third draft sometime in July 2014.  While it can be accepted that it would have been hard for him to tell which draft he was looking at, and that there was some confusion in that regard, based upon its contents he accepted that the third draft OOR Report was prepared on or before 25 July 2014.

9. Third, while not identifying the document he saw as exactly the same as the third draft report, Mr Green accepted that he saw a document similar to that draft in July.  Mr Green also accepted that in his meeting with senior management on 1 August he discussed recommendations which were consistent with the contents of the third draft.

10. Fourth, while PKCT argued that the date of creation of the third draft OOR Report was uncertain, it should be kept in mind that all drafts of the report were kept on its computer system, and I infer remain so.  It would have been straightforward for PKCT to adduce evidence proving when the different drafts were created, including by calling Ms Ragen as a witness.  However, it did not do so.  In their evidence in chief Mr Stewardson, Mr Gorman and Mr Green did not even disclose the existence of the OOR Report.

11. Fifth, PKCT sought to rely on the use of the past tense in the third draft OOR Report which stated that the development of the proposal “commenced” in August – October 2014.  However, each draft of the report used the word “commenced” in this context and it could just as easily have remained unchanged between drafts. 

12. PKCT also argued that the fact that the third draft OOR Report provided for the announcement of the proposal to on 21 October 2014 indicates that it was created in that month.  I accept that it points in that direction but it is far from conclusive.  It may be that the announcement date was set for 21 October 2014 because, as the evidence shows, Mr Rosewarn was away on annual leave from 22 September until 17 October 2014.

13. For completeness I note that, after both parties had closed their cases and without seeking leave to do so, PKCT sought to file three computer screenshots as Attachments A, B and C to its reply submissions dated 5 May 2015.  Although PKCT put on no evidence as to the provenance or meaning of the screenshots it submitted that they showed the dates that the three draft report were produced.  The Union objected to the admission of further evidence on the basis that it had closed its case and that doing so would deny the Union a proper opportunity to test the provenance and understand the meaning of the screenshots.  I have upheld that objection and I have not admitted Attachments A, B and C into evidence. 

    The meeting on 1 August 2014

14. Mr Gorman said that on 24 July he met with Mr Green for their regular fortnightly review.  By that date Mr Gorman had returned to the role of Operations Manager and his role conducting the Operational Review had substantially concluded.  However, he said that he continued to provide back up support and operational input across Phase 2 of the review including assisting other managers in their consideration of any proposed redundancies within their teams.

15. In his affidavit Mr Gorman described the meeting on 24 July as his regular fortnightly meeting with Mr Green and he said that, together with Mr Stewardson and Ms Ragen, he then met with Mr Green on 1 August to discuss their recommendations to abolish positions.  Mr Green also testified that the senior managers made their recommendations on 1 August 2014.  There was some confusion in Mr Gorman’s evidence about whether the senior managers made their recommendations on 24 July or on 1 August but nothing turns on that. I conclude that Mr Gorman and the other senior managers made their recommendations to Mr Green on 1 August 2014 and in my view the suggestion in Mr Gorman’s evidence that he did so a week earlier, on 24 July, was just a mistake.

16. On 1 August 2014 Mr Green met with Mr Gorman, Mr Stewardson and Ms Ragen and he considered their recommendation to abolish Mr Giddings’ and Mr Rosewarn’s positions, along with either one or two Administration Assistant positions.  I note that by that date Mr Tonini had informed Mr Gorman that it was only practicable to abolish one Administration Assistant position, and whether at that time one or two Administration Assistants were proposed to be abolished is somewhat unclear.  However, little turns on the question.

17. The senior managers recommended to Mr Green that PKCT:

    (a)should not offer voluntary redundancies to avoid forced redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions. If accepted, this recommendation would have the effect that no vacancies in suitable positions could arise within PKCT into which they might have been redeployed; and

    (b)should only consider reducing contractors to avoid forced redundancies if the contractors were engaged on a full time and permanent basis (when, in fact, there were no such contractor roles). If accepted, this recommendation would have the effect that no vacancies in suitable contractors’ work could be found into which they might have been redeployed. 

18. The senior managers provided Mr Green with an organisational chart which reflected the proposed changes.  Mr Green said that, at the time, he explored the business case and rationale for each proposal, the extent of the cost savings or efficiencies which they could achieve, as well as the practicality of implementing each proposal.  On his evidence (essentially corroborated by Mr Gorman and Mr Stewardson) he did not accept the recommendations at that time and he said that he gave the proposal intermittent consideration over the next two and a half months until mid or late October.  As I will explain, I do not accept his evidence in this regard.  In my view it is likely that Mr Green followed the recommendation of his senior managers and made the decision to abolish Mr Giddings’, Mr Rosewarn’s and at least one Administration Assistant position at or shortly after the 1 August 2014 meeting.

19. While I accept that Mr Green may have given some further thought to the issue after 1 August, in my view nothing occurred thereafter which was anything more than fine tuning a decision already made. There were no material changes to the proposal to abolish positions from late July 2014 until the proposal was announced on 2 December.  It is probable that the delay in the implementation of the decision he made on or about 1 August was a result of his attention to other business issues rather than because he was still deciding about whether to move ahead with the proposal.

    The meetings between 1 August and November 2014

20. The evidence is that Mr Green met with Mr Gorman, Ms Ragen and Mr Stewardson on five occasions between 1 August and 18 November 2014 to discuss the progression of the Operational Review, and that the meetings covered matters including status updates in relation to the proposed abolition of positions, final recommendations from relevant managers, timeline planning and review of the implementation schedule.  PKCT’s evidence that these meetings involved “final recommendations” is implausible, at least insofar as Mr Giddings’ and Mr Rosewarn’s positions are concerned, and I do not accept it.  There is no cogent evidence of any significant further or “final” recommendations, and there was no material change in the senior managers’ recommendations from 1 August. 

21. In these meetings Mr Stewardson said he reaffirmed his recommendation that the positions of Long Term Planner and Facilities Maintenance Engineer be abolished.  In October, he prepared a summary document which set out the reasons underpinning his view that the Long Term Planner and Facilities Maintenance Engineer positions need not be maintained.

22. Mr Gorman gave evidence that through August and September he developed a Consultation Plan to ensure that PKCT met its consultation obligations under the Agreement.  As I explain, I do not accept his evidence in that regard, as on my view of the evidence he developed the Consultation Plan in July 2014 through the draft OOR Reports.

23. Mr Gorman said that in September or October he saw a plan titled Organisational Review (Phase 2) – Communications and Engagement Plan (“Communications and Engagement Plan”) prepared by Ms Ragen.  The Communications and Engagement Plan stated that three to five positions (or alternatively nine positions) might be abolished.  Ms Ragen did not give evidence and there is no cogent evidence as to when this document was created.  Ms Ragen circulated the plan under cover of an email on 29 October and by that date it is uncontentious that Mr Green had decided that only the Long Term Planner, Facilities Maintenance Engineer and one Administration Assistant positions faced abolition.  That shows that, at that time, the Communications and Engagement Plan was not current. On my view of the evidence it is likely to have been created before the third draft OOR Report, but because its date of creation is unknown it is of little assistance in relation to the development of the proposal.

24. In cross-examination Mr Green said that between July and October his senior managers recommended to him that the Long Term Planner and Facilities Maintenance Engineer positions be abolished with the duties performed within those roles being distributed amongst other positions.  He also said that he was informed that the administrative Payroll, Accounts Payable and Accounts Receivable and Reception roles could be consolidated.  In my view the evidence shows that those recommendations were made to him on 1 August and, as I have said, that he accepted those recommendations around that date.

25. On 10 October 2014 Mr Tonini emailed Ms Ragen and reaffirmed his July advice to Mr Gorman that only one Administration Assistant position should be abolished.

26. Mr Stewardson said that in around October he prepared an untitled summary document identifying the reasons that the Long Term Planner and Facilities Maintenance Engineer positions were no longer necessary.

27. In his affidavit Mr Green said that he did not make the decision to proceed with the proposed abolition of positions until mid-October 2014.  On his account it was not until then that he informed Mr Gorman, Mr Stewardson, Ms Ragen and Ms Tonini that he endorsed the recommendations and that he decided to announce the proposal and commence consultation with the Union.  In cross-examination, Mr Green altered his evidence somewhat and he said that he made that decision around 29 October or in early November.  Importantly, he also testified that he:

    (a)did not make the decision that voluntary redundancies would not be offered in relation to Mr Giddings’ and Mr Rosewarn’s positions until mid-October; and

    (b)did not decide that PKCT’s consideration of reducing contractors would be limited to full time and permanent contractor roles until 10 December.

28. Mr Green said, and I accept, that in October he intended to announce the proposal to abolish positions in mid-November but he delayed that announcement to 2 December, because a farewell dinner for five longstanding employees was scheduled for 21 November.

29. On 23 October Ms Ragen sent an email headed “Legally Privileged - Confidential - Operational Review” to Mr Green, Mr Stewardson, Mr Gorman and Mr Tonini amongst others, together with a meeting invitation for 29 October.  She attached a number of documents that I infer were to be discussed at the meeting, including:

    (a)a Detailed Execution Timeline and Calendar setting out the timing of the process for engaging in consultation;

    (b)a Documentation Checklist and Action List for Impacted Employees;

    (c)template correspondence that was to be provided to each redundant employee;

    (d)a Redundancy Information Booklet dated June 2014;

    (e)a list of Frequently Asked Questions and proposed responses concerning employee redundancy at PKCT;

    (f)the Communication and Engagement Plan;

    (g)a briefing sheet titled PKCT Organisation Review – Impacted Employee Record of Discussions for use by a manager meeting with an affected employee; and

    (h)the final draft OOR Report.

30. Those documents show a highly planned process for compulsory redundancies, even including template correspondence to be given to employees who were to be made redundant.  Managers who were to have initial discussions with affected employees were instructed to:

    Be clear that the role is no longer required - have empathy but leave no doubt.

31. In his affidavit Mr Green described the 29 October meeting as being “to discuss various amendments to and refinements to the initial proposals”.  I do not accept his evidence in that regard. The documents tend to show that the meeting was about execution of pending redundancies rather than refinements to the proposal. 

32. It is significant that, apart from some date changes, the final draft OOR Report was no different in substance from the third draft OOR Report prepared before the 1 August meeting.

    The consultation process - 2 December to 10 December 2014

33. On 28 November 2014 Mr Green, Mr Stewardson and Mr Tonini, amongst others, met to finalise the documents relevant to PKCT’s consultation with the Union.  The proposal to abolish positions was to be announced on 2 December followed by 10 days of consultation.

34. PKCT announced the proposal and commenced the consultation process with military precision.  On 1 December 2014 Mr Green telephoned Mr Timbs to advise that he would be addressing a meeting of employees the following morning.  Notwithstanding that the announcement was to be made the following day, Mr Green refused to inform Mr Timbs about the exact purpose of the meeting as he said that doing so would “compromise the necessity of consultation”.  Mr Green also emailed Mr Giddings and other members of the Lodge executive to invite them to the meeting but, again, he gave them no inkling of what he intended to say. 

35. At 8:04 am on 2 December Mr Green emailed the management and team coordinators to inform them that all employees were required to attend an information meeting at 9:00 am. 

36. At the meeting Mr Green informed the assembled employees that the outcomes of Phase 2 of the operational review would soon be implemented.  He said that this stage might involve redundancies and that potentially affected employees would be spoken to that day.  He was careful to say, however, that PKCT was yet to make a final decision on any redundancies.

37. Immediately after that meeting, at about 9:30 am Mr Green held the first consultation meeting.  In that meeting he and other PKCT managers met with Union representatives including Mr Giddings, Mr Timbs and Mr Dakers. 

38. In this meeting, Mr Green gave a PowerPoint presentation titled “PKCT Operational Review @ 2 December 2014” which referred to the proposed abolition of positions and reiterated that a final decision had yet to be made.  He was questioned on the basis and rationale for the abolition of positions and how any redundancies were proposed to occur but he said he was not prepared to provide further information until the potentially affected employees had been informed that their positions were under threat.  As a result, at the conclusion of that meeting the Union still did not know which positions were affected, whether voluntary redundancies would be offered before forced redundancies were implemented or whether contractors would be reduced so that their work could be taken up by the affected employees. 

39. In separate meetings on the morning of 2 December, Mr Giddings and Mr Rosewarn were informed that their positions were proposed to be abolished.  The same morning the three Administration Assistants, Ms Karen Maxwell, Ms Jennifer Arber and Ms Nicky Ostach, were informed that it was proposed to abolish one Administration Assistant position and that if none of them elected to take a voluntary redundancy PKCT would make one of them compulsorily redundant.  At the end of those meetings the affected employees were handed a letter dated 2 December titled “Business changes impacting your employment” which notified them of the outcome of the Operational Review.  Importantly, the letter noted that there were no vacant positions within PKCT into which they might potentially be redeployed.

1. On the afternoon of 2 December, a second consultation meeting took place between, amongst others, Mr Green, Mr Stewardson and Mr Tonini for PKCT and Mr Giddings, Mr Timbs and Mr Dakers for the Union.  What occurred in this and later consultation meetings is largely uncontentious and it is unnecessary to set it out in great detail. 

2. Amongst other things, in the meeting Mr Timbs explained that the Union considered that cl 13.5.1 and 13.5.3 of the Agreement applied and that PKCT was required to offer voluntary redundancies to other employees, and to consider reducing contractors before it implemented forced redundancies.  Mr Timbs argued that offering voluntary redundancies on a broad basis would mitigate the need for forced redundancies and would open up opportunities for redeployment into technical and/or operational streams.  In response Mr Green said that voluntary redundancies would only be offered in relation to the Administration Assistant position and PKCT was not obliged to offer voluntary redundancies in relation to the Facilities Maintenance Engineer and Long Term Planner positions.  Mr Timbs said that this meant that PKCT was not complying with clauses 7, 9 and 13 of the Agreement and that there had been lack of consultation in relation to those matters.

3. On the morning of 3 December Mr Green met with Mr Gorman, Ms Amy Linton, Mr Stewardson and Mr Tonini.  Mr Gorman said that he recalled discussing the Union’s view that there were some “gates” that PKCT was required go through, which I take to mean some procedures in the Agreement that had to be complied with before forced redundancies could be implemented.  He said they discussed the Union’s concerns about employee classification, use of contractors, and separating the Long Term Planner role from the other planning roles.  He said that Mr Green requested that the senior managers consider each of the issues raised by the Union and prepare responses so that he could be in a position to inform the Union of PKCT’s position.

4. At 5:24 pm that day Ms Linton emailed a document to, amongst others, Mr Gorman and Mr Stewardson in which she summarised the Union’s concerns and set out a range of responses to matters anticipated to be raised by the Union (“the Response Document”).  For example, in relation to redeployment into contractors’ work the Response Document said:

   We will not redeploy people into contract roles which are for a finite duration where it does not make sense to do so having regard to the status of the contract and the skills required. 

   [Insert link matrix to all contractor positions at PKCT and analysis of the skill set of employees to be made redundant to evidence that the positions are not suitable (including because positions are temporary)].

5. The matrix of contractor positions referred to in the Response Document was an assessment of contractor roles that might be performed by affected employees prepared by Geraldine Uren, a contractor who worked in an administrative capacity.  She did not give evidence but the matrix tends to show her view, or the view of the manager who instructed her, that:

   (a)Mr Giddings had suitable skills for the contractor roles of Asset Management Specialist, Contracts Manager, Project Engineer, Project Supervisor, Painting Specialist, Fitter or an R&C Project role but his skills were unsuitable for the roles of Asset Management Specialist and Painting Specialist;

   (b)Mr Rosewarn had suitable skills to work as a plumber or perform some R&C Project roles; and

   (c)Ms Arber had suitable skills to work in an administrative support role within the Human Resources team.

   Although the matrix identified contractors’ work that Mr Giddings, Mr Rosewarn and Ms Arber had the skills to undertake, it also provided that this work was not suitable because the contractor roles identified were not full time and permanent. 

6. On 4 December Mr Tonini met with the three Administration Assistants and asked whether any of them intended to accept the voluntary redundancy offer. 

7. On the same day the Union wrote to PKCT requesting it to provide information about the work undertaken by contractors so that the Union could meaningfully participate in consultation about reducing contractors.  It sought the following information.

   SCHEDULE

   1.A list of all positions (both occupied and vacant) on the PKCT Upgrade Project, including the skills and qualifications required for each position.

   2.A list of all vacant positions with Illawarra Coal, including the skills and qualifications required for each position.

   3.Noting the comments on the letters issued to the 5 employees that some activities in the business will need to be done differently, provide details of those activities and how they will be done differently.

   4.Noting the comments on the letters issued to the 5 employees that some activities in the business may not be done at all, provide details of the activities in the business that are contemplated as not being done at all.

   5.Provide details of how the tasks currently performed by the 5 employees will be reallocated to other employees or otherwise not performed at all.

   6.Noting clause 13.5.3 of the enterprise agreement, provide details of all work currently being performed by contractors, including details of the skills and competencies required and the nature of the work.

   7.Noting clause 13.5.4 of the enterprise agreement, provide details of the steps taken by PKCT, to date, to avoid the redundancies.

   (Emphasis added.)

8. The Union also requested that:

   1.PKCT provide a response to the Schedule by close of business Friday 5 December 2014.

   2.PKCT provide a copy of Phase 2 of the Organisational Review to the 5 employees and the CFMEU by close of business Friday 5 December 2014.

   3.PKCT undertake to further consult the employees and the CFMEU about these matters.

   4.PKCT undertake to not implement any redundancies (forced or otherwise) until the completion of the consultation process.

   5.If redundancies are required, PKCT undertakes to firstly offer voluntary redundancy to all employees within the Daywork Appointed Positions classification and accept any such volunteer for redundancy to which Mr Giddings and/or Mr Rosewarn has the same or equivalent skills.  Unless Mr Giddings and/or Mr Rosewarn were to accept voluntary redundancy, each man would then be redeployed into the position formerly occupied by any such volunteer(s).

   6.On completion of (5) above, PKCT undertakes to consult with the employees and the CFMEU in relation to all avenues to avoid forced redundancies in the Finance/Administration/Stores classification and the Daywork Appointed Positions classification.

   (Emphasis added.)

9. Following its receipt of the Union’s letter of 4 December PKCT rescheduled the consultation meeting planned for 5 December so that it had time to respond.  On 5 December Mr Green met with his senior managers to prepare PKCT’s response.  In extensive email exchanges through that day, Mr Gorman, Mr Stewardson and Ms Linton discussed the precise wording to be used in the response.  Mr Gorman conceded in cross-examination that, in formulating this response, he was simply seeking to justify the company’s position the best way that he could, rather than genuinely considering the Union’s alternative view.

10. By a letter on 8 December PKCT provided a response, which was little more than a reiteration of its position.  PKCT refused to provide the information the Union sought regarding contractors and its letter stated:

    1.I refer to the explanation above, and reiterate that it is not necessary for PKCT to provide a list of all positions on the PKCT Restoration & Compliance (Upgrade) Project.

    …

    6.There are a number of contractors engaged by PKCT who perform sporadic or part-time functions.  There are no contractors engaged by PKCT who perform full-time functions that could be considered full-time and permanent.  The nature of this work is therefore not relevant to the employment of full-time employees of PKCT.

    7.I refer to my comments set out above, and the presentation that was provided to the CFMEU on 2 December 2014.  I further refer to the information provided above regarding:

    a.Voluntary redundancies being offered to the Administration Assistants;

    b.Consideration of redeployment at PKCT and Illawarra Coal; and

    c.Consideration of suitable contract positions at PKCT.

11. In relation to the Union’s request for undertakings Mr Green said:

    1.I do not believe the timeframe of a response by close of business Friday 5 December 2014 was reasonable, but have undertaken to respond as soon as practicable;

    2.PKCT has provided a copy of the slide-pack presented to the CFMEU on 2 December 2014 to the potentially affected employees;

    3.PKCT will continue to consult with the potentially affected employees and the CFMEU until a final decision is made;

    4.PKCT undertakes to continue to discuss each individual’s circumstances with that employee until a final decision is made;

    5.        PKCT does not agree for the reasons set out in this letter;

    6.PKCT will consider all avenues raised in consultation with the employees and the CFMEU in order to avoid forced redundancies having regard to business needs.

12. PKCT’s letter included an explanation of the business rationale for the abolition of the Long Term Planner, Facilities Maintenance Engineer and Administrative Assistant positions.  It is, unnecessary to go to those reasons in detail because the Union’s case did not centre on the argument that PKCT’s business needs did not justify the abolition of the relevant positions.  In any event, I am satisfied that there were good business reasons for the abolition of the three positions.

13. On 9 December the Union provided a response to PKCT’s letter. It maintained that PKCT’s actions were inconsistent with the Agreement and complained that the threatened dismissal of Mr Giddings constituted adverse action under the Act. Although the letter threatened legal proceedings the Union noted that the consultation process was not complete and it said that it remained committed to participating in consultation.

14. Early on 9 December Mr Gorman emailed Mr Green, Ms Linton, Mr Tonini and Mr Stewardson (copying Mr Aicken) and said, amongst other things, that:

    … For the potentially impacted employees that the Company does not take through a voluntary redundancy process (i.e.  LTP and FME roles), the ‘decision’ on Thursday should be the ‘decision’ to make those potentially impacted employees redundant, with any formal letter of redundancy to be issued on Thursday.

    As I explain, I see Mr Gorman’s use of inverted commas around the word “decision” as indicating that he knew that the decisions concerning the Long Term Planner and Facilities Maintenance Engineer positions had already been made. 

15. At about 2.30 pm on the same day, Mr Tonini and Ms Linton met with Ms Ostach, Ms Arber and Ms Maxwell.  He asked whether they had any questions about the process and said that they would be provided with further information after management met with the Union on 10 December.

16. Then, at about 3 pm, Mr Tonini met with Ms Linton to discuss the possibility that none of the Administration Assistants would elect to take a voluntary redundancy.  Mr Tonini said that there were no suitable vacancies in administrative positions within PKCT or in contractor roles and that he and Ms Linton prepared a draft list of criteria to refer to in case they were required to select a person for forced redundancy.  They decided that the selection should be made by reference to length of service, skills relevant to the position, quality of work/accuracy, alignment to PKCT values and potential for development.

17. At 8:11 am on 10 December, before the final consultation meeting with the Union scheduled for 9 am, Mr Green sent an email to, amongst others, Ms Linton, Mr Tonini, Mr Gorman, Mr Stewardson, Ms Uren and Ms Ragen.  In it he approved draft letters to Mr Giddings and Mr Rosewarn which included the following passage:

    We have recently held discussions with you concerning Port Kembla Coal Terminal’s decision to undertake an organisational review.  As discussed, we have carefully considered all the matters you have raised during the consultation.  Regrettably, the outcome of the review and consultation is that your current position is no longer required.

18. The attendees at the final consultation meeting included Mr Green, Mr Stewardson, Mr Tonini and Ms Linton for PKCT and Mr Timbs, Mr Giddings and Mr Dakers for the Union.  There are some minor differences in the accounts of what took place at the 10 December meeting but they are not material.  Without going to all the detail, the notes of the meeting show that the Union argued that PKCT should offer voluntary redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions and that it should consider further avenues to redeploy the affected employees.  Mr Timbs asked why PKCT was not exploring all avenues to avoid the forced redundancies of the three affected employees, and complained that PKCT’s refusal to provide the requested information about contractors meant that the Union was unable to properly engage in consultation.  For his part, Mr Green reiterated his view that PKCT was not obliged to offer voluntary redundancies in relation to positions outside the Finance/Administration team, or to consider reducing contractors’ work unless that work was undertaken by contractors engaged on a full time and permanent basis.  He argued that because contractors’ positions were not permanent and the funding for their work was not guaranteed it was inappropriate to redeploy the affected employees into such positions.  Overall, there was little real engagement between the parties in the meeting and they just reiterated their positions.

19. It is significant Mr Timbs told Mr Green that the Union had canvassed some of its members and that there were some employees who were interested in the option of voluntary redundancy.  Despite this advice Mr Green made it clear that PKCT would not entertain offering voluntary redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions. 

20. It is uncontentious that as the meeting drew to a close Mr Green said words to the following effect:

    … I am not fully au fait with the implications and applications of what has been said.  It is given me food for thought.  I will see that a decision will be made by tomorrow.

    As I will explain, that was not the case.  In cross-examination Mr Green conceded that before that meeting he had already decided to terminate their employment and that he would not alter that position.

21. Following the meeting Mr Green asked Mr Tonini to estimate the comparative severance costs if, instead of Mr Giddings, Mr Rosewarn and Ms Arber being made redundant, three long serving employees took up voluntary redundancy.  Mr Green said that he picked long serving employees as the comparator as they were more likely to take up voluntary redundancy than other employees.

22. On 10 December 2014 Mr Tonini emailed a calculation to Mr Green, Ms Linton and Mr Stewardson in which he estimated the severance cost of Mr Giddings, Mr Rosewarn and Ms Arber at $379,700 and the severance cost of three long serving employees at $482,300.  On the same day Mr Green sent an email to, amongst others, Mr Gorman, Mr Stewardson and Mr Tonini said:

    [t]he data suggests that the bundling of these three potential VRs would be near 100k more in cost than the bundled cost of those roles and current incumbents that might receive redundancies once a decision is taken by the Company.  This short analysis does not take into account a ‘whole of life’ costing across further years, grade levels, etc; however does show at first glance the suggestion is more costly.

23. On 10 December at about 2 pm, Mr Green met with Mr Stewardson, Mr Tonini and Ms Linton.  Mr Stewardson said that they discussed the issues raised by the Union during the meeting earlier that day, including the means by which the forced redundancies of the Long Term Planner and Facilities Maintenance Engineer roles might be avoided.  Mr Stewardson said that at the conclusion of the meeting Mr Green said that he had considered each of the issues raised by the Union and that he had made the decision that the three identified positions were redundant. They then discussed how the affected employees would be informed of the decision and related administrative issues. 

24. I do not accept Mr Green’s or Mr Stewardson’s evidence about this meeting.  In my view Mr Green had made that decision on or about 1 August and there would have been no point in a discussion about the means of avoiding their forced redundancies.  I note also that Mr Green conceded that his mind was made up on the morning of that day.

25. At 2:43 pm on 10 December Mr Green emailed his senior managers stating that PKCT had reached a decision to abolish the three affected positions and to terminate the employment of the affected employees, and that letters to the employees had been readied. 

26. Then, on the morning of 11 December, in separate meetings Mr Green met with Mr Giddings and Mr Rosewarn, together with the Union.  He informed Mr Giddings and Mr Rosewarn that their employment with PKCT had been terminated due to redundancy, effective immediately, and each was given a letter to that effect.

27. Later on 11 December Mr Tonini and Ms Linton met with the three Administration Assistants.  Mr Tonini informed them that the opportunity for expressing an interest in voluntary redundancy was soon to close and that if no one elected to take a voluntary redundancy PKCT would select one Administration Assistant for forced redundancy.  When none of the Administration Assistants expressed an interest in voluntary redundancy, Mr Tonini and Ms Linton decided to commence a selection process using a selection matrix. 

28. Before undertaking the selection process they consulted with Mr Dakers and Mr Owen in relation to the proposed selection criteria of length of service, skills, quality of work/accuracy, alignment to PKCT values and potential for development.  Mr Dakers said that he did not accept that these criteria were appropriate as, in his view, cl. 13.5.4 of the Agreement indicated that length of service was the main criteria.  He also argued that PKCT was not complying with its obligation to redeploy the affected Administration Assistant into contractors’ work.

29. Mr Tonini and Ms Linton made no changes to the selection criteria they proposed.  Mr Tonini said that he considered the criteria in the selection matrix and decided that Ms Arber should be selected for redundancy.  He said that the decision came down to her trainability and accuracy of work.  He recommended to Mr Green that Mr Arber be selected for redundancy and Mr Green accepted the recommendation. The same day Mr Tonini met with Ms Arber and he told her that, based on a selection matrix, she had been selected for redundancy.  He informed her that her employment with PKCT had been terminated as a result, effective immediately, and he gave her a letter to that effect.

    THE RELIABILITY OF PKCT’S WITNESSES AND OTHER EVIDENTIARY ISSUES

30. PKCT relied on the evidence of Mr Green, Mr Stewardson, Mr Gorman and Mr Tonini.  They gave their evidence in chief by affidavit and faced extensive cross-examination.  Although I thought long and hard before reaching this view, I was drawn to conclude that Mr Green’s, Mr Stewardson’s and Mr Gorman’s evidence was quite unreliable.  I am satisfied as to the reliability of Mr Tonini’s evidence but it is of limited significance to my decision.

31. In their affidavits Mr Stewardson, Mr Gorman and Mr Green each purported to present a comprehensive account of the development of the proposal to abolish positions and terminate the employment of the affected employees.  In cross-examination each of them confirmed that this was so.  However, each of their carefully constructed affidavits disguised rather than illuminated the decision-making process. Amongst other things, it became clear in cross-examination that each of them had not disclosed important documents and decisions, omitting matters which were contrary to the thrust of PKCT’s case.  In my view each of them did so deliberately.

1. First, it pointed to Mr Green’s evidence regarding the background to his decision to abolish Mr Giddings’ position which included the deteriorating conditions in the coal industry and the 2013 decision not to proceed with the Upgrade Project.  PKCT said that the Long Term Planner position was created in anticipation of an upgrade of terminal capacity through the Upgrade Project and that since that project was no longer being pursued the duties performed in that position could be performed by other employees with minimal operational disruption. 

2. PKCT also relied on Mr Stewardson’s and Mr Gorman’s evidence that they had reviewed the functions of positions within the Engineering team and had identified scope for the removal of the Long Term Planner and Facilities Maintenance Engineer positions.  In respect of the Long Term Planner position, based on the available information, they decided the position was underutilised and/or there was insufficient work to keep Mr Giddings busy on a full-time basis.

3. PKCT’s contention in this regard boils down to the proposition that there was a substantial business case for Mr Green’s decision to make the Long Term Planner position redundant.  I have no difficulty in accepting that there was a business case for selecting the Long Term Planner position for abolition.  In light of the deteriorating conditions in the coal industry there was a real need for cost savings and PKCT could achieve some cost savings and efficiencies by the abolition of Mr Giddings' position (along with the other positions). 

4. However, that does not answer the allegation that the substantial and operative reasons for Mr Green’s refusal to offer voluntary redundancies in relation to Mr Giddings’ position and to restrict the consideration of reducing contractors included his Union roles and/or his industrial activities. As I have said, those decisions meant that Mr Giddings could not be redeployed and it was inevitable that his employment would be terminated if his position was abolished.

5. Second, PKCT accused the Union of trawling through Mr Giddings’ history of involvement in industrial activities looking to use them as reasons why PKCT had decided to terminate his employment.  It asserted that the various industrial disputes on which the Union relied were in some instances many years ago and in other instances the issues were resolved or were no longer pursued by the Union or by PKCT even where there was a right to do so.  It argued that the list of industrial disputes relied on was selective and incomplete. In broad terms I accept this.  In my view Mr Giddings’ involvement in the 2012 industrial dispute is the most relevant to Mr Green’s adverse view of Mr Giddings because of his Union role and/or his industrial activities. 

6. While PKCT did not deny that Mr Giddings had actively engaged in industrial activities over a number of years it noted that other employee representatives had similarly active roles.  I accept this, but I note that Mr Giddings was the most senior Union official on site and on my view of the evidence the most effective. 

7. Of course, as PKCT argued, Mr Giddings’ mere participation in such industrial activities does not, of itself, provide the basis for a finding that Mr Green took adverse action for reasons which included that participation.

8. Third, PKCT pointed to the fact that, notwithstanding Mr Giddings’ long history of active involvement in industrial activities at the terminal there was no evidence of any adverse action previously having been taken against him.  The only time Mr Giddings alleged that adverse action was taken against him is in the present case.  I accept this.

9. Fourth, PKCT argued that the Union relied on Mr Giddings’ involvement in industrial activities since 2008 when Mr Green commenced as General Manager, yet in the same period Mr Green had provided Mr Giddings with substantial further education through payment support for a Masters of Business Degree, had promoted him to the highest grade under the Agreement, and had treated him as integral and trusted in the job redesign process in 2013 (in which the Long Term Planner position was created).  That PKCT took those steps is clear on the evidence.

10. PKCT also pointed to evidence suggesting that Mr Green treated Mr Giddings with respect including by requesting an apology from the Human Resources Manager for comments made to Mr Giddings during industrial negotiations, by attending the funeral of Mr Giddings’ mother, and by sending advertisements for external job vacancies to Mr Giddings.  I accept that Mr Green took those steps, but they are equally consistent with Mr Green’s recognition of Mr Giddings’ influence at the terminal.  Mr Giddings placed a different characterisation on Mr Green’s provision of external job vacancies.  I do not attribute much significance to them, either way.

11. Fifth, PKCT noted that the Union had continued to have an active role in industrial issues at the terminal since termination of Mr Giddings’ employment, and that PKCT continued to meet with Union representatives in relation to various disputes.  It argued that the continuation of Union activities at the terminal shows that there is no rational basis to assert that the substantial and operative reasons for Mr Green’s decision to terminate Mr Giddings’ employment included his Union roles and/or his industrial activities.  I am not satisfied as to this.  The evidence tends to show that Mr Giddings was a particularly effective Union representative and it is likely that there was some advantage for PKCT in Mr Giddings’ absence from the next round of enterprise agreement negotiations.  However, little turns on that.

12. Sixth, PKCT contended that Mr Green gave clear evidence that there were no vacant positions within PKCT into which Mr Giddings could have been redeployed so as to avoid his forced redundancy.  I accept this.  My decision is not based on the proposition that there were vacant positions within PKCT at the time Mr Giddings’ employment was terminated.

13. Seventh, it contended that Mr Green gave clear and consistent evidence that:

    (a)the Agreement did not require offers of voluntary redundancy in relation to Mr Giddings’ position.  As I have said, I do not agree;

    (b)it was not operationally efficient or reasonable to offer voluntary redundancies in relation to Mr Giddings’ position.  As I have said, I do not accept that evidence; and

    (c)in any event, Mr Giddings did not have suitable skills and competencies to properly perform any other position within PKCT.  As I have said, I do not agree.  The evidence shows that had suitable skills and competencies to perform a number of other positions. 

14. Eighth, it argued that Mr Green gave clear and consistent evidence that:

    (a)there were no contractors that were engaged on a full-time and permanent basis and therefore no contractors’ work into which it was practical to place Mr Giddings. I accept this but it is somewhat beside the point;

    (b)he gave proper consideration to the issue of reducing contractors. As I have said, I do not accept this; and

    (c)in any event, Mr Giddings did not have suitable skills and competencies to properly undertake contractors’ work. As I have said, I do not accept this.

15. Ninth, PKCT argued that the only basis upon which the Union asserted that Mr Green’s evidence should be disbelieved was that the evidence demonstrated that Mr Giddings’ redundancy was a sham.  It argued that the Union mounted a case alleging that PKCT embarked on an elaborate scheme to abolish Mr Giddings’ position and terminate his employment, and that the scheme included the dismissal of Mr Rosewarn and Ms Arber as “collateral damage”. 

16. I do not accept that the Union’s case was so limited.  Its case included the contention that Mr Green was motivated by Mr Giddings’ Union role and his industrial activities when he refused to offer voluntary redundancies in relation to his position and restricted the investigation of reducing contractors, which had the inevitable result that his employment was terminated.

17. Tenth, PKCT noted that the Union’s case involved the proposition that Mr Green made the decision to terminate Mr Giddings’ employment in about July 2014 and it argued that Mr Green’s evidence about the timing of his decision should be accepted.  As I have said, I do not accept Mr Green’s evidence in this regard.

    Consideration regarding the adverse action claim against PKCT

18. I found Mr Green’s evidence unreliable and I need not reiterate my reasons for doing so.  While his evidence was essentially corroborated by Mr Gorman and Mr Stewardson their evidence was similarly unreliable and, even taken together, their evidence carries little weight.

19. My view of the unreliability of Mr Green’s evidence, together with my rejection above of many of PKCT’s contentions, has led me to conclude that PKCT failed to discharge its onus to show that the substantial and operative reasons for its decision to terminate Mr Giddings’ employment did not include Mr Giddings’ Union roles and/or industrial activities. I find that PKCT contravened ss 340 and 346 of the Act.

20. It is unnecessary to go any further than this.  However, I must deal with the claim of accessorial liability against Mr Green, and that claim requires that I decide whether the evidence is sufficient to establish that Mr Green’s reasons for terminating Mr Giddings’ employment (with which PKCT is fixed) included his Union roles and/or his industrial activities.  As I will explain, I am satisfied in that regard. 

    The claim of accessorial liability against Mr Green

21. It is uncontentious that for the Union to make out its claim of accessorial liability under s 550(1) of the Act, it is required to prove that Mr Green was knowingly concerned in PKCT’s contraventions: s 550(2)(c). In relation to this claim the reverse onus in s 361 of the Act does not apply.

22. The Union is required to establish that Mr Green had knowledge of each essential element of the contravention: Yorke v Lucas (1985) 158 CLR 661 at 670. Intention is critical as liability depends upon the accessory associating himself or herself with the contravening conduct, that is, the accessory must be linked in purpose with the perpetrators: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; 164 IR 299 (Tamberlin, Gyles and Gilmour JJ) at [46], citing Gibbs CJ in Giorgianni v The Queen (1985) 156 CLR 473 at 479–480. Actual knowledge of the essential elements of the contravention is required: Bowler v Hilda Pty Ltd [2000] FCA 899 at [78] (Finn J).

23. I have kept in mind that Mr Green (corroborated to an extent by Mr Gorman and Mr Stewardson) consistently denied that he had an adverse view of Mr Giddings, that he thought Mr Giddings and the Union had too much influence at the terminal, and that any part of his reasons for terminating Mr Giddings’ employment included his Union roles and/or industrial activities.  However, as I have said, I give Mr Green’s evidence (and that of Mr Gorman and Mr Stewardson) little or no weight. 

24. In my view there are strong grounds to infer that Mr Green’s reasons for the decision to terminate Mr Giddings’ employment included his Union roles and/or industrial activities.  I say this, first, because on my view of the evidence it is likely that the 2012 industrial dispute about the new enterprise agreement led to a material deterioration in Mr Green’s view of Mr Giddings and it is likely that he came to see Mr Giddings as a serious impediment to the workplace changes which Mr Green thought were necessary.

25. It is uncontentious that the 2012 dispute regarding the new enterprise agreement at the terminal was a significant one.  Negotiations for a new enterprise agreement started in about November 2010 and, despite numerous meetings over the course of 2011, PKCT and Union could not reach agreement.  Mr Giddings was a lead negotiator for the Union in the negotiations and it is likely in my view that Mr Green became frustrated with and resentful of the Union and Mr Giddings. 

26. This frustration, and a developing antipathy, can be seen in the “Confidential - Briefing paper for PKCT directors on PKCT Enterprise Agreement 2011” dated 17 November 2011 (“Briefing Paper”), in which Mr Green reported to PKCT’s shareholders on the progress of negotiations.  He said:

    Approximately one year ago, discussions commenced with employee representatives for an Enterprise Agreement (EA) to replace the current EA.  The current EA expired on 30 June 2011.

    Over 30 meetings have taken place.  Progress on a number of matters has been very slow and employee representatives have conducted their discussions on the basis of conceding nothing, and seeking to add to the regulation contained in the document.  Union and employee representatives see the federal industrial relations framework together with the buoyant nature of the resource sector as their time to recoup matters they feel that have been given up in the past.  A sense of arrogance is conveyed.
    (Emphasis added.)

27. Mr Green’s view that the Union displayed “a sense of arrogance” and the frustration which the report reflects is likely to have been directed at Mr Giddings to a significant extent.  He was a lead negotiator in the vexed negotiations, an experienced and forceful advocate, the most senior Union official at the terminal, and the official with whom Mr Green was required to have most regular contact.  While Mr Green denied any antipathy towards Mr Giddings his evidence in that regard is implausible.

28. In the Briefing Paper Mr Green said that, by November 2011, PKCT had reached its “final position” and it had made a final proposal to the Union which was designed to settle the dispute.  However, the differences between PKCT and the Union dispute did not resolve when PKCT put its final position.

29. In fact, the dispute intensified thereafter and took a turn for the worse from PKCT’s viewpoint.  The Union rejected PKCT’s final position, and in January 2012 Mr Giddings advocated for employees at the terminal to take protected industrial action against PKCT, including by way of consecutive seven-day stoppages.  That proposal received overwhelming support from the employees, as can be seen in the fact that in the “protected action” ballot 89% of employees voted and 95% of them voted in favour of the stoppages proposed.

30. Then Mr Giddings was a leader of the campaign in which the employees took 186 hours of consecutive work stoppages over a three week period in February 2012.  Mr Gorman described this industrial action as “unnecessary and highly disruptive”.  I infer that the lengthy stoppages caused PKCT significant losses, and see it as likely that Mr Green came to feel frustration, resentment, and perhaps anger, in relation to Mr Giddings’ Union role and industrial activities.  Again, I found Mr Green’s testimony that he had no ill feeling towards Mr Giddings to be implausible.

31. PKCT made further concessions to the Union shortly after the stoppages and the dispute resolved.  The parties signed the new Agreement in March 2013, but it was not what PKCT had wanted.  Amongst other things, the evidence shows that PKCT had sought an enterprise agreement which provided increased “flexibility” and a “significant improvement in organisational agility”.  Mr Stewardson said these expressions referred to a need to change the “team system” at the terminal and that PKCT wanted a change to “individual accountability rather than team accountability” so that the performance management process had management involvement rather than team involvement.

32. I infer that Mr Green saw these changes as important but Mr Giddings vigorously opposed them, and in the finish Mr Green did not achieve the changes he wanted.  The Agreement also provided for 4.5% annual wage increases over the term of the Agreement and a payment of four cents per tonne into the Employee Entitlements Fund.

33. Mr Green admitted that PKCT was dissatisfied with the Agreement.  Mr Stewardson described it as “restrictive” and conceded that PKCT saw it as unsatisfactory.  By contrast, in an email on 22 February 2012 Mr Giddings described it as “a significant win”.  I infer that Mr Green felt that PKCT was forced into the unsatisfactory Agreement by the Union’s industrial campaign, in which Mr Giddings played a lead role.

34. Mr Green’s denied that he thought that the Union had too much influence on the site.  I found that denial utterly implausible.  In fact, PKCT’s negotiating protocol for the 2011/12 enterprise agreement negotiations included the “key goal” that employees come to look to PKCT as their future rather than to the Union.  It is likely that Mr Green developed a materially adverse view of Mr Giddings through his lead role in the 2012 campaign and came to see Mr Giddings’ Union roles and/or industrial activities as a serious impediment to achieving necessary changes at the terminal. 

35. Second, the annual 4.5% wage increases were likely to have been particularly galling for Mr Green.  The conditions in the coal industry were seriously deteriorating and in Mr Green’s view significant cost savings were required.  At the same time the annual wage increases were coming into effect, and in circumstances where Mr Green and the senior managers had themselves agreed to a salary freeze, Mr Giddings advocated against the employees accepting a wage freeze and a 12 month suspension of the regrading of positions.  Mr Green accepted that Mr Giddings was influential in persuading employees to reject the wage freeze.  I have little doubt that Mr Green thought that necessary cost savings would be easier to achieve if Mr Giddings was no longer in PKCT’s employ.

36. Third, the issues in contention in the 2012 stoppages were not just matters of history at the time that Mr Green was considering the proposal to abolish Mr Giddings’ position and terminate his employment.  In this period Mr Green was still seeking changes to the “team system” and still wanted to freeze the annual pay increases and suspend the regrading of positions.  That changes to the team system and concern about the annual wage increases were still important to Mr Green and his senior managers can be seen, amongst other things, in the following matters:

    (a)in April 2014 in his “Organisational Redesign Stage 2” proposal sent to Ms Ragen, Mr Stewardson argued for the “current restrictive EA” to be changed to “allow discretionary effort and time at work to be controlled by individuals based on performance management feedback”;

    (b)on 4 July 2014 Mr Green sought to vary the Agreement.  Mr Green accepted that Mr Giddings was influential in the Union’s decision to reject the proposed variations and Mr Green informed the Board that the wage freeze proposal had no chance of success because the Union executive did not recommend it;

    (c)in July 2014 in his “Phase 2 Background to Tomorrow’s Discussion” document Mr Stewardson showed his frustration with the pace of change at the terminal.  He said that the necessary organisational changes at PKCT could not be achieved in a timely way with consultation, and that PKCT should “just do it”.  As I have said, I infer that Mr Green had a similarly dismissive approach to the requirement for consultation; and

    (d)Mr Stewardson said that PKCT was seeking changes to the team system and to performance management in the enterprise agreement negotiations which were scheduled to commence in April 2015. 

    That Mr Giddings was not seen in a positive light can be seen in Mr Stewardson’s June 2014 “Nirvana” chart which revealed his view that, ideally, Mr Giddings would no longer be employed at the terminal.

37. In my view Mr Giddings’ continued resistance to what Mr Green saw as necessary changes was likely to have fuelled Mr Green’s frustration and resentment about his Union roles and/or industrial activities.  Again, I have little doubt that Mr Green thought that the necessary changes would be more easily achieved if Mr Giddings was no longer employed at the terminal.

1. Fourth, Mr Giddings treated Mr Green in ways that were likely to have added fuel to Mr Green’s frustration and resentment.  Amongst other things:

   (a)Mr Green asked Mr Giddings for an opportunity to make a presentation to the Lodge AGM on 4 July 2014 to propose a freeze on the annual wage increase and a 12 month suspension of the regrading of positions.  When given the opportunity he gave a lengthy PowerPoint presentation to the assembled employees.  It was not until he had finished that Mr Giddings told him (in front of the meeting) that the employees had already passed a resolution rejecting his proposals.  The thrust of Mr Green’s evidence is that he expected that result and he was unconcerned, but I found that evidence implausible.  In my view Mr Giddings showed a lack of respect to Mr Green in treating him in that manner and it is likely that Mr Green resented that treatment; and

   (b)Mr Giddings used the nickname “Sneaky Pete” at the terminal to describe Mr Green, and he told Mr Green about that nickname on one occasion.  This is also likely to have caused feelings of resentment and perhaps anger.

2. Fifth, the evidence tends to show that Mr Green was determined not to allow Mr Giddings to be redeployed into other work within PKCT, whether through offers of voluntary redundancy or by reducing contractors.  In my view there was no real difficulty for Mr Green in understanding that cl. 13.5 required PKCT to offer redeployment and voluntary redundancies before implementing forced redundancies but Mr Green was determined not to do so.  Nor was there any real difficulty for Mr Green in understanding that the obligation to investigate all avenues to avoid forced redundancies, including by the reduction of contractors, required PKCT to make a greater effort than it did.  His decision to only consider reducing contractors that were engaged on a full time and permanent basis (when none were) took a somewhat contrived approach to the Agreement.  He must have understood that was not the intent of cl. 13.5.3.

3. The effect of Mr Green’s approach to cl. 13.5 was to effectively guarantee that Mr Giddings’ employment would be terminated upon the abolition of his position.  In my view Mr Green was determined to ensure that the potentially available avenues for Mr Giddings’ redeployment were given no proper consideration or closed off, most likely because he resented the power and influence Mr Giddings wielded through his Union roles and industrial activities and saw his continued employment as an impediment to necessary workplace changes. 

4. I infer that Mr Green’s substantial and operative reasons for terminating Mr Giddings’ employment included his Union roles and/or his industrial activities. The Union made out its claim of accessorial liability under s 550 of the Act.

   RELIEF

5. By agreement, the issue of relief was deferred except in relation to whether Mr Giddings, Mr Rosewarn and Ms Arber should be reinstated to their employment.

6. Pursuant to s 545(1) of the Act the Court has a broad discretion in relation to remedy. If satisfied that a person has contravened a civil remedy provision, it may make any order it considers appropriate.

7. In Independent Education Union v Geelong Grammar School [2000] FCA 557 at [34] Finkelstein J said that where an employee has been dismissed for a prohibited reason, in the ordinary case reinstatement is the appropriate remedy: see also Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No. 3) [2012] FCA 697 at [186] and [190] (Katzmann J). I respectfully agree. I can see nothing in the circumstances to suggest that Mr Giddings’ case should not be treated as an ordinary case.

8. Before making such an order it is appropriate to consider whether a satisfactory working relationship can be achieved.  Mr Green (along with the senior managers) consistently said that he did not have an adverse view of Mr Giddings and he disavowed any difficulties in their working relationship.  PKCT did not argue that that there had been any breakdown in the employer-employee relationship and did not contend that there would be any difficulty in resuming a working relationship if Mr Giddings was reinstated.  There is no evidence that it will be difficult for PKCT and Mr Giddings to re-establish that relationship.  The terminal is a large workplace, Mr Giddings has worked at the terminal for 34 years, and putting to one side the tensions that are likely to arise from his Union role, I expect the employer-employee relationship will satisfactorily resume. 

9. Reinstatement is also appropriate for Mr Giddings because of PKCT’s breaches of the Agreement.  Primarily, I say this because PKCT breached its obligations to make use of voluntary redundancy before imposing forced redundancy and to investigate all avenues to avoid his forced redundancy including by reducing contractors.  In my view it is likely that he would have been redeployed into other work at the terminal had PKCT complied with the Agreement.

10. Reinstatement is also appropriate for Mr Rosewarn because of PKCT’s breaches of the Agreement.  Again, I say this primarily because PKCT breached its obligations to make use of voluntary redundancy before imposing forced redundancy and to investigate all avenues to avoid his forced redundancy including by reducing contractors.  In my view it is likely that he would have been redeployed into other work at the terminal had PKCT complied with the Agreement.  PKCT did not submit that there would be any difficulty in re-establishing the employer-employee relationship if he was reinstated. 

11. Mr Giddings and Mr Rosewarn should be immediately reinstated to employment with PKCT from the date of their termination and to the pay and other terms and conditions of their former positions.  While there may be difficult issues associated with reinstatement of Mr Giddings and Mr Rosewarn to positions which have been abolished I am satisfied that reinstatement is appropriate.  I will hear the parties about any issues that arise.

12. I do not consider that reinstatement is appropriate in Ms Arber’s case. As I have said, I am not satisfied that PKCT breached its obligations under cl. 13.5 in her case.  I am unable to know whether a different result might have ensued had PKCT complied with its obligation to consult, but I do not order reinstatement based upon its breaches in that regard.

    CONCLUSION

13. I direct the parties to confer within seven days, and within 14 days file draft minutes of orders reflecting these reasons.  The matter may be listed on short notice to deal with any issues that arise.

14. The parties are also directed to confer within seven days, and within 14 days file draft minutes of orders proposing a timetable for the filing of any evidence and submissions in relation to the other questions of relief.  The timetable should include an order for the other questions of relief to be the subject of mediation before a Registrar of this Court.

I certify that the preceding four hundred and seventy-seven (477) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy.

Associate: 

Dated:        8 October 2015