Eamon Hillen v Helensburgh Coal Pty Ltd

[2016] FWC 5471

[2016] FWC 5471

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Rodney Johnston; John Hills; Ian Van Zyl; Gary Parker; Brad Hansen; Eamon Hillen
v
Helensburgh Coal Pty Ltd
(U2016/268; U2016/269; U2016/270; U2016/271; U2016/273; U2016/290)

COMMISSIONER RIORDAN WOLLONGONG, 1 SEPTEMBER 2016

Application for relief from unfair dismissal

[1] This decision relates to the applications of the six listed Applicants for an unfair dismissal remedy against Helensburgh Coal Pty Ltd (Helensburgh Coal), which is a wholly owned subsidiary of Peabody Energy Australia (Peabody).

[2] The six Applicants are:

• Rodney Johnston



• John Hills



• Ian Van Zyl



• Gary Parker



• Brad Hansen



• Eamon Hillen

[3] The Applicants are all Members of the Construction, Forestry, Mining and Energy Union (CFMEU) and were represented by the Union’s Legal Officer, Mr Adam Walkaden. Leave was granted in accordance with section 596(2) of the Fair Work Act, 2009 (the Act), to allow Mr Dan Williams from Minter Ellison to represent Helensburgh Coal.

[4] Witness statements were attested by:

• The six Applicants



• Andrew Davey – CFMEU Lodge President, Metropolitan Mine



• Andrew Clough – Vice President, Health and Safety, Peabody



• Phillip Wade – Project Manager, Peabody



• Andrew Hyslop, Acting Manager, Metropolitan Mine Peabody

Background

[5] The Applicants all worked for Helensburgh Coal at the Metropolitan Mine (the Mine) at Helensburgh as Underground Operators.

[6] It is common knowledge that the Coal Industry in Australia is currently experiencing a difficult phase. On 26 June 2015, Helensburgh Coal commenced consultation in relation to possible redundancies at the Mine. On 30 July 2015, Helensburgh Coal confirmed this position and notified a significant number of employees (including the six Applicants), that they would be made redundant effective 1 August 2015.

[7] In response to this announcement, the CFMEU notified the Fair Work Commission (FWC) of two separate disputes. Those disputes were heard before Senior Deputy President Hamberger. Relevantly, the F10 Application for one of these disputes contained the following paragraphs:

“6. Clause 36 of the Agreement requires the respondent to consult with the employees and the CFMEU about the impending redundancies.

7. To date, the respondent has failed to satisfy the requirements of clause 36 of the Agreement. This is because the respondent has refused to provide relevant material for the purpose of enabling the discussions contemplated by clause 36.2 of the Agreement to take place. Clause 36.3 of the Agreement expressly provides that all relevant material will be provided for that purpose. The material that has not been provided includes:

a) The scope of works currently performed by all contractors at the Mine; and
b) A skills matrix of all contractors at the Mine.

8. That material is necessary to enable the matters referred to at clause 36.2(e) of the Agreement to be properly discussed.

9. To date, the respondent has failed to satisfy the requirements of clause 38.2 of the Agreement. This is because the respondent has refused to conduct a review (or, in the alternate, a genuine review) of the contractors at the Mine. The CFMEU understands that there about 40 contractors who are not performing specialist work or not under contractual arrangements with the Company. Of these 40 contractors, the respondent has admitted that 13 were due to finish up at the Mine. The respondent proposes to retain about 25 of these contractors to perform work that could otherwise be performed by permanent employees. That means about 2 of these contractors will finish up at the Mine arising from the restructure.

10. This can be contrasted to about 55 permanent mineworkers who will cease employment at the Mine arising from the restructure. About 29 of these mineworkers have accepted voluntary redundancy. This means that there will be about 26 forced retrenchments.

11. During the meeting held on 29 July 2015 and in response to the CFMEU requests for the information referred to at paragraph 7 above, the Mine Manager stated that information would not be provided because those contractors were off the table. This demonstrates that the review that is required was either not done or was not genuine.” 1

[8] The relevant clauses of the Helensburgh Coal Enterprise Agreement 2013 2are;

“36. WORKPLACE CHANGE / CONSULTATION

36.2 As soon as practicable after the notification referred to above, the Company must discuss with the relevant employees and/ or their representatives:

(a) the reasons for seeking to introduce the change;

(b) the commercial / economic basis upon which the proposal is based;

(c) alternatives considered;

(d) the likely effect of the change on employees;

(e) measures the Company is taking or could take to avert or mitigate the adverse effect of the change on the employees; and

(f) the effect the change would be likely to have on other employees under the Agreement, including WHS considerations.

38 REDUNDANCY

38.2 Should the Company decide to reduce the number of employees covered by the Agreement, the parties will consult about the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any terminations on the Employees concerned. During this consultation process, the use of contractors will be reviewed (with the exception of contractors performing specialist tasks or under contractual arrangements with the Company).”

[9] As a result of these proceedings and further discussions between the parties, the employees returned to the Mine on 1 September 2015 to perform capital project work known as the Pipe Work Project. The Applicants’ redundancy date was deferred until 31 December 2015. Each employee was required to sign a letter in the following terms;

“24 August 2015

Dear John,

CFMEU & Helensburgh Coal Pty Ltd – C2015/4950 & C2015/4951

I refer to our letter dated 30 July 2015.

The purpose of this letter is to advise you that as long as you agree, Helensburgh Coal Pty Ltd proposes to defer the effective date of your redundancy to 31 December 2015.

There is a pipe work project being carried out at the mine (Project). The Project is due for completion at the end of 2015. You have been identified as having the requisite skills to be engaged on the Project.

In those circumstances, Helensburgh Coal Pty Ltd is prepared to extend your termination date to 31 December 2015 so that you can be temporarily redeployed into work on the Project.

In order to qualify for redundancy pay on the new effective date of redundancy, you will be required to continue working until the conclusion of the Project on 31 December 2015. If you are terminated for cause or you resign prior to 31 December 2015, you will not be entitled to redundancy pay.

This letter resolves all aspects of the dispute filed by the CFMEU on your behalf with the Fair Work Commission and the dispute you have raised individually with Andrew Clough on 30 July 2015.

Should you have any questions, or wish to discuss, please contact Natalie Banham on 02 4294 7374.

Yours sincerely

Andrew Clough
General Manager – Metropolitan
Peabody Energy Australia Coal Pty Ltd” 3

(My emphasis)

[10] In late November 2015, Peabody came to realisation that the Pipe Work Project would not be completed by 31 December 2015. The Project Manager for Peabody, Mr Phillip Wade, sought a price from a preferred contractor, Delta Group, to complete the work.

[11] Delta completed the work in 8 weeks’ (which was 2 weeks less than the expected timeframe), at a significantly lower cost than the part of the project undertaken by Helensburgh Coal employees.

[12] Delta were retained to undertake the Backfill Project a few weeks after the conclusion of the Pipe Work Project.

Brief Outline of Evidence

[13] None of the Applicants were required for cross examination.

[14] Mr Andrew Davey is the CFMEU Lodge President at the Metropolitan Mine of Helensburgh Coal. Mr Davey was involved in the negotiations in relation to the redundancies at Helensburgh Coal.

[15] Mr Davey advised that the first dispute that was before SDP Hamberger was in relation to Helensburgh Coal allegedly not consulting about these redundancies in accordance with the Enterprise Agreement. Mr Davey claimed the second dispute was in relation to Helensburgh coal allegedly not consulting with the CFMEU in relation to this issue and therefore breaching section 531(2) of the Fair Work Act, 2009 (the Act).

[16] On 20 August 2015, Mr Clough wrote to the CFMEU in the following terms;

“20 August 2015

Dear Bob,

Re: CFMEU & Helensburgh Coal Pty Ltd – C2015/4950 & C2015/4951

This letter confirms, as per the discussion held with the local lodge representatives on Tuesday, 18 August 2015 and Wednesday, 19 August 2015, and the further conversation with you on Wednesday, 19 August 2015, the following:

• John Griffiths; Underground Operator will return to work on the Night Shift Roster (starting 11.00pm Sunday and finishing 7.00am Friday) as of Sunday 23 August 2015, following the Company’s acceptance of an additional VR; and



• Rob Whitefield; Underground Operator will return to work on the Night Shift Roster (starting 11.00pm Sunday and finishing 7.00am Friday) as of Sunday 23 August 2015. As discussed Rob will be reinstated due to an error in the Company’s selection process.

In addition the company proposes the following arrangements on the basis that these will satisfy and settle all current disputes raised by the CFMEU.

1. The return to work of these employees will not result in further forced redundancies in lieu of the error detected in the Company’s selection process. When a future resignation occurs, this role will not be filled in order to return to the original planned headcount.

2. Eight operators will be required for compressed air pipe range starting 1 September 2015 and will be selected from the competency redundancy matrix. The Company agrees to extend the redundancy date of these 8 employees to 31 December 2015. This will be contingent on the following conditions:

• The employees will work out their period of notice and will not be paud in lieu of notice in December; and



• If they resign before 31 December 2015, this will be treated as a resignation, not a redundancy; and



• The employees are selected by the Company based on the competency assessment.

The Company will have discussions with each of the employees selected for the compressed air pipe range project to get their formal written agreement that their current individual disputes are settled by the aforementioned arrangements and confirm that no future disputes will arise about their selection for redundancy effective 31 December 2015.

We look forward to your written confirmation of agreement with these matters so that we can commence the arrangements outlined above.

Yours sincerely
Andrew Clough
General Manager – Metropolitan
Peabody Energy Australia Coal Pty Ltd” 4

(My emphasis)

[17] Later that day, the CFMEU responded by saying;

“From: Adam Walkaden

Date: Thursday, 20 August 2015 12.12pm

To: Andrew Clough

Andrew

Bob is unavailable at the moment and has asked me to respond on his behalf.

We confirm our agreement to resolve the current disputes (ie. C2015/4950 & C2015/4951) based on the arrangements outlined in your letter dated 20 August 2015.

Once those arrangements have been carried out, we will formally discontinue those matters by filing a Notice of Discontinuance, a copy of which will be served on Dan.

Yours sincerely

Adam Walkaden” 5

(My emphasis)

[18] The Applicants all signed the letter (see PN9 above), after receiving advice from the CFMEU.

[19] The Applicants’ returned to work on the Pipe Work Project on 1 September 2015 and worked until the Christmas shut down on 23 December 2015. The Applicants were paid up until 31 December 2015 in accordance with their Agreements.

[20] It is uncontested that the employees had the skills and competencies to perform all of the work associated with this project. It is uncontested that Mr Hyslop commented to the crew in a positive manner in relation to the quality of their work.

[21] It is also uncontested that Mr Hyslop made a comment to the crew that there would be future capital works at the Metropolitan Mine.

Statutory Provisions

[22] The following provisions of the Act are relevant;

381 Object of this Part

(1)  The object of this Part is:

(a)  to establish a framework for dealing with unfair dismissal that balances:


(i)  the needs of business (including small business); and

(ii)  the needs of employees; and

(b)  to establish procedures for dealing with unfair dismissal that:

(i)  are quick, flexible and informal; and

(ii)  address the needs of employers and employees; and

(c)  to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2)  The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned.

382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.

385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

389 Meaning of genuine redundancy

(1) A person's dismissal was a case of genuine redundancy if:

(a) the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person's dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer's enterprise; or

(b) the enterprise of an associated entity of the employer.

(My emphasis)

Submissions

[23] Mr Walkaden submitted that before I consider the merits of the unfair dismissal applications, I need to be satisfied that the terminations were not genuine redundancies. If I find that they were genuine redundancies then such an outcome provides a jurisdictional bar to dealing with the merit arguments and the applications will need to be dismissed. Alternatively, if I find that the terminations were not genuine redundancies then I am required to assess whether the terminations of the 6 Applicants were harsh, unjust or unreasonable.

[24] Mr Walkaden referred me to section 389 of the Act and the Full Bench decision in TAFE Commission v Pykett 6, claiming that Helensburgh Coal had to satisfy the onus of proof that the dismissals were, in fact, genuine redundancies;

“19. A Full Bench of the Commission in Pykett made clear that an employer must call sufficient evidence to discharge that burden:

We acknowledge that the facts relevant to such a finding will usually be peculiarly within the knowledge of the employer respondent, not the dismissed employee. If an employer wishes to rely on the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce evidence as to the following matters:

i. That the employer no longer required the dismissed employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;

ii. Whether there was any obligation in an applicable modern award or enterprise agreement to consult about the redundancy and whether the employer complied with that obligation; and
iii. Whether there was a job or position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee.

The evidence in relation to (iii) would usually include canvassing the steps taken by the employer to identify other work which could be performed by the dismissed employee.”

[25] Mr Walkaden submitted that the six employees could satisfy the criteria identified in Pykett. Further, Mr Walkaden claimed that it was reasonable to redeploy these employees for the entire Pipe Work Project as well as any other routine black coal work that needed to be undertaken at the completion of the Pipe Work Project.

[26] Mr Walkaden referred me to the decision of Daniel Stickley and others v Kestrel Coal Pty Ltd 7 where it was held that work which was currently being performed by contractors can be considered when applying a section 389(2)(a) of the Act.

[27] Mr Walkaden posited that, unsurprisingly, all of these employees have suffered financial hardship, in one form or another, since their termination.

[28] Mr Walkaden submitted that Helensburgh Coal had not satisfied the relevant tests to substantiate the claim that the terminations were genuine redundancies, that the terminations were actually harsh and that the appropriate remedy was reinstatement, backpay and continuity of employment.

[29] Mr Williams argued that Helensburgh Coal had acted fairly and reasonably in this process and, as a result, should not be punished or the subject of corrective action in any way.

[30] Mr Williams posited that the operating model for Peabody, as confirmed by Mr Clough and Mr Wade, is that Peabody use direct labour for its core operation, ie cutting coal and contract labour for its non-core work, such as, capital projects. It is not contested that these projects are managed by Peabody Industry Australia Coal Pty Ltd.

[31] Mr Williams challenged Mr Walkaden’s suggestion that the disputes before SDP Hamberger did not involve the use of contractors at Helensburgh Coal. Mr Williams referred me to the correspondence sent by Mr Clough to Mr Timms which identified the agreed terms to resolve the dispute (see PN16 above).

[32] Mr Williams described this process to resolve the dispute in the following way;

“PN1262
…The second part of that was a temporary redeployment to some work which otherwise would have been, on the evidence, without doubt, done as a capital project under the supervision of the capital projects team, and Mr Wade gave evidence about that.  He gave evidence that he was on the verge of pulling the trigger to contract the work and he was told to stop, so Mr Clough had the cachet within the organisation, and these things, I might say, are not always easy, but he had the cachet within the organisation to get this particular capital project to be procured in a different way.  That was an agreement which was freely reached with the CFMEU.”

“PN1263
…It was a situation where, by agreement between the parties, the effective date for redundancy was extended.  That is a legal conclusion.  We do make a submission which we stand by one hundred per cent that it is not within the spirit of the agreement that was reached that my client would face further challenge to the redundancy of those employees after 31 December 2015.”

“PN1264
… we are not going to criticise the applicants in this room for, with the assistance of their union in whatever circumstances, coming before you today to see if there is some better sort of advantage they can reap.  We understand that.  But, by the same token, my client fairly and squarely did a deal and that deal did not contemplate, and could not have contemplated, that after 31 December 2015 we would still be litigating their situation.  My client went to a lot of effort in Commission proceedings and in negotiations to do a deal which was fair on all sides, and it is against the spirit of that deal for the applicants to bring these proceedings…”

[33] Mr Williams posited that;

“PN1324
By the same token, surely it is not unreasonable for Peabody to take the position that the job was more efficiently and more cost effectively finished by the contractor in the way they would normally procure a job of this kind.  It can't be criticised for that decision because it made perfect operational sense, it was consistent with the obligation which everyone has in this environment to be efficient and cost conscious and it was consistent with the normal strategy the company has for procuring projects of this kind.  Where do you find the unreasonableness in there?  You can't, in my submission.  In relation to this sort of project, which is not the core business, for which the company is, generally speaking, not equipped and which goes on side by side with the core business operations of the company, my client should not be criticised and should never, in those circumstances, be criticised for following its procurement process.”

[34] Mr Williams reminded me of the employee’s evidence in relation to their delayed redundancy date, highlighting that they were all told that they would be engaged and paid up to and including 31 December 2015 and not that they would be engaged for the duration of the project;

“PN1325

The employees were not misled about the effect of the deal, Commissioner.  Nobody was told, nobody thought that they were going to be allocated to the pipe project to the bitter end, even if it was six months away.  They were told that they would have the redundancy date pushed back to 31 December 2015.  Mr Van Zyl says this in paragraph 14:

PN1326

We were told we would continue to be paid as per the agreement and that our redundancy date would be pushed back to 31 December 2015.

PN1327

Mr Hansen says this:

PN1328
Natalie said there would be no change to our conditions but that our redundancy date would be deferred until the end of the year.

PN1329

Mr Hillon says similar:

PN1330
Natalie said we had been chosen to do the work based on our skills and that if we agreed to do the work that our redundancy date would be put back to 31 December 2015.  Natalie said that we would remain employed by Peabody and that our conditions would not change.

PN1331
Mr Johnston said this in paragraph 13:
PN1332
Natalie informed me the company were prepared to offer me work until Christmas doing some work on the pipe project work.  Natalie said I had been selected on the basis of my skills to do the job.” 8

[35] This evidence was supported by Mr Davey who acknowledged that the employees knew what date their employment would now conclude;

“PN246
So your argument would be that these group of employees should have been put off on annual leave for that three-week period between Christmas Eve and 18 January and then been allowed to continue to work to complete the project that they were on?---That would have been nice, Commissioner, but it was actually dated as to what day they would finish up when they did take that period of employment.” 9

(my emphasis)

[36] Mr Williams referred me to the decision of Deputy President Lawrence in Teterin & Ors v Resource Pacific Pty Limited t/a Ravensworth Underground Mine 10 (Teterin)where it was held that when the FWC is looking at the use of contractors for the purposes of section 389(2), an employer is not required to change its whole employment strategy. In this circumstance, Mr Williams argued, such a principle would mean that Helensburgh Coal would not be required to change its employment strategy which is using permanent labour for its core work (ie cutting coal) whilst using non-core labour for its capital project work.

[37] Mr Williams also referred me to Pykett. In Pykett, the Full Bench quoted the decision in Honeysett and the application of section 382(2) of the Act;

“[31] On appeal Ulan submitted that the Commissioner had failed to properly construe the meaning and effect of s.389(2)(b). Ulan submitted that the Commissioner’s decision was wrong because he did not identify the particular positions in a particular enterprise to which each of the six applicants could have been redeployed. In dismissing the appeal the Full Bench made a number of observations about the interpretation of s.389(2) and the meaning of the term ‘redeployed’:

“First, s.389(2) must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.

Secondly, it is implicit in the terms of s 389(2)(b) that it might be reasonable for an employee dismissed by one employer to be redeployed within the establishment of another employer which is an entity associated with the first employer. It follows that an employer cannot succeed in a submission that redeployment would not have been reasonable merely because it would have involved redeployment to an associated entity. Whether such redeployment would have been reasonable will depend on the circumstances. The degree of managerial integration between the different entities is likely to be a relevant consideration.

Thirdly, the question posed by s 389(2), whether redeployment would have been reasonable, is to be applied at the time of the dismissal. If an employee dismissed for redundancy obtains employment within an associated entity of the employer some time after the termination, that fact may be relevant in deciding whether redeployment would have been reasonable. But it is not determinative. The question remains whether redeployment within the employer’s enterprise or the enterprise of an associated entity would have been reasonable at the time of dismissal. In answering that question a number of matters are capable of being relevant. They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered.” 11

[33] The Full Bench went on to make some obiter remarks about the operation of s.389(2):

“It may be appropriate to make some concluding remarks about the operation of s 389(2). It is an essential part of the concept of redeployment under s 389(2)(a) that a redundant employee be placed in another job in the employer’s enterprise as an alternative to termination of employment. Of course the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. Where an employer decides that, rather than fill a vacancy by redeploying an employee into a suitable job in its own enterprise, it will advertise the vacancy and require the employee to compete with other applicants, it might subsequently be found that the resulting dismissal is not a case of genuine redundancy. This is because it would have been reasonable to redeploy the employee into the vacancy. In such a case the exception in s 385(d) would not apply and the dismissed employee would have the opportunity to have their application for a remedy heard. The outcome of that application would depend upon a number of other considerations.

Where an employer is part of a group of associated entities which are all subject to overall managerial control by one member of the group, similar considerations are relevant. This seems to us to be a necessary implication arising from the terms of s 389(2)(b). While each case will depend on what would have been reasonable in the circumstances, subjecting a redundant employee to a competitive process for an advertised vacancy in an associated entity may lead to the conclusion that the employee was not genuinely redundant.”

[34] Honeysett is authority for the proposition that for the purpose of s.389(2)(b) it is
sufficient if the Commission identifies a suitable job or position to which the dismissed employee could be redeployed. The Commission must then determine whether such a redeployment was reasonable in all the circumstances. We note that given the factual context the Full Bench in Honeysett did not need to consider whether s.389(2) may be satisfied if the dismissed employee could be redeployed to perform other work within the employer’s enterprise (or that of an associated entity.) Given its particular factual circumstances Honeysett is not authority for the proposition that it is always necessary to identify a particular job or position to which the dismissed employee could have been redeployed.

[35] As we have mentioned, the use of the past tense in the expression ‘would have been reasonable in all the circumstances for the person to be redeployed ...’ in section 389 (2)(a) directs attention to the circumstances which pertained when the person was dismissed. As noted in Honeysett, [T]’he exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances’.18 The question is whether redeployment within the employer’s enterprise or an associated entity would have been reasonable at the time of dismissal. In answering that question the Full Bench in Honeysett observed that a number of matters are capable of being relevant:

“They include the nature of any available position, the qualifications required to perform the job, the employee’s skills, qualifications and experience, the location of the job in relation to the employee’s residence and the remuneration which is offered”. 12

[36] We have earlier set out the submissions of the appellant and the respondent as to the proper construction of s.389(2) (see paragraphs [15] to [18] above). We accept the
respondent’s submissions. For the purposes of s.389(2) the Commission must find, on the balance of probabilities, that there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employee. There must also be an appropriate evidentiary basis for such a finding. Such an interpretation is consistent with the ordinary and natural meaning of the words in the subsection; the Explanatory Memorandum and Full Bench authority. We acknowledge that the facts relevant to such a finding will usually be peculiarly within the knowledge of the employer respondent, not the dismissed employee. If an employer wishes to rely on the ‘genuine redundancy’ exclusion then it would ordinarily be expected to adduce evidence as to the following matters:

(i) that the employer no longer required the dismissed employee’s job to be
performed by anyone because of changes in the operational requirements of the
employer’s enterprise;
(ii) whether there was any obligation in an applicable modern award or enterprise agreement to consult about the redundancy and whether the employer complied with that obligation; and
(iii) whether there was a job or a position or other work within the employer’s
enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employer.” 13

Consideration

[38] I have taken into account the submission of Mr Walkaden that this case revolves around a very narrow matter in relation to section 389(2) of the Act.

[39] I have taken into account Mr Davey’s evidence that the two disputes that were dealt with via conciliation by SDP Hamberger were resolved.

[40] I have taken into account that there was a four week gap between the original date of the Applicants’ redundancy and the start of the Pipe Work Project.

[41] I have taken into account that there was a shut down at the Mine from 23 December 2015 to 18 January 2016.

[42] I have taken into account that there was a 1 – 2 week delay between the end of the Pipe Work Project and the start of the Backfill Project.

[43] I have taken into account that both of these projects were capable of being performed by the six applicants but that both projects were regarded as being “non-core work”.

[44] I have taken into account that Mr Wade, as Project Manager, is accountable to Peabody to get the best value for Peabody in delivering the various projects.

[45] I have taken into account that Peabody prefer to use contractors for project work in order to obtain the best price, timely delivery and reduce the risks associated with each project.

[46] I have taken into account that one of the reasons Mr Wade prefers to use contractors for project work is that the project workforce is usually raided by the Mine if they are permanent employees to perform core work.

[47] I have taken into account that the pre Christmas stage of the Pipe Work Project was delayed when Helensburgh Coal utilised the applicants for “core work” whilst they were employed on the project.

[48] I have taken into account that Delta took approximately eight weeks’ to finish the project in 2016.

[49] I have taken into account that Mr Wade was of the view that the permanent employees were only available to perform work up until the end of December.

[50] I have taken into account that Mr Wade began the process to outsource the remainder of the Pipe Work Project during November 2015 and that a contract was finalised with Delta in early December 2015.

[51] I have taken into account that Delta were able to complete the project in a shorter timeframe and at a significantly lower cost than what the Helensburgh Coal employees had incurred during the first stage of the Project.

Determination

[52] I have taken into account all of the evidence and submissions that have been provided by the parties.

[53] This case has an unusual set of facts. Under normal circumstances, the question to be determined would have been whether the full time Helensburgh Coal employees, who had been identified for redundancy, could be redeployed to perform work for the Peabody projects team under Mr Wade. This question would have required a detailed analysis of the scope of work, the timing of the project and the overall efficiency and productivity of the full time employees compared to the contractor option as per the obiter in Honeysett and Pykett..

[54] In my view, this consideration is a secondary issue in this proceeding.

[55] The CFMEU notified a dispute to the FWC in relation to a problem with the selection criteria that was used by Helensburgh Coal to select employees for compulsory redundancy. This dispute notification (see PN7 above) included a requirement to provide the scope of works and skills matrix of all contractors at the Mine with a view to mitigating the adverse effects on the employees. The parties agree that this dispute was resolved by Helensburgh Coal providing the Applicants with installation work (the Pipe Work Project) at the Mine until 31 December 2015. All of the Applicants signed an agreement to defer their redundancy until 31 December 2015 and that all aspects of the dispute filed with the FWC were resolved as a result of this agreement.

[56] By reaching this agreement with Helensburgh Coal, the employees accepted that they were genuinely redundant, but that their redundancy would not take effect until 31 December 2015. This provided the employees with an additional 17 weeks of paid employment.

[57] Alternatively, the employees could have rejected this settlement proposal and continued with the applications that were before SDP Hamberger or filed unfair dismissal applications and pursued a remedy not dissimilar to the one proposed by Mr Walkaden in this matter. In my view, that argument would have had its own inherent difficulties.

[58] The Mine was experiencing financial difficulty. Some 61 employees were made redundant. It is not in dispute that Helensburgh Coal had the right and a need to restructure its workforce to try and maintain the Mines viability.

[59] I find that the employees accepted the deal form Helensburgh Coal in good faith and without duress after receiving advice from the CFMEU.

[60] I find that this agreement was the result of the negotiation process associated with the proceedings before SDP Hamberger.

[61] Whilst I accept that this agreement does not prevent an unfair dismissal application, I agree with Mr Walkaden, that a finding that the Applicant’s termination was a genuine redundancy, then the unfair dismissal applications simply fall away.

[62] I find that it would not have been reasonable to redeploy the Applicants in the remainder of the Pipe Work Project or to the Backfill Project. It is not economically viable or logical to have full time employees undertake intermittent project work. Even allowing for the scenario of the employees being able to take leave during the Christmas shut down, a full time employee work crew would have been idle for some six weeks’ during the installation of the two projects. Applying the obiter in Pykett, it would have been unreasonable for Helensburgh Coal to be required to pay the employees whilst they were idle and waiting for the projects to commence.

[63] Peabody altered its normal business practise of outsourcing project work to contractors to overcome a difficult industrial problem associated with the selection criteria in the dispute before Senior Deputy Hamberger. The employees agreed with this arrangement. It would not be appropriate or fair for the FWC to now interfere with that agreement and impose a financial penalty upon Helensburgh Coal.

[64] If Helensburgh Coal were using contractors to supplement their full time workforce undertaking core work, then the principles established in Honeysett and Pykett would have provided a very high hurdle for Helensburgh Coal to clear. However, contractors are only used for non-core work, where Peabody’s legitimate objectives of cost and expediency, are appropriate ambitions.

[65] I find that the termination of the six Applicants were a result of a genuine redundancy. As a result, the applications are dismissed.

COMMISSIONER

 1   Exhibit C10

 2   [2013] FWCA 9711 – Helensburgh Coal Enterprise Agreement 2013

 3   Exhibit H5 Annexure AJC-14

 4   Exhibit C10 – letter dated 20 August 2015

 5   Exhibit C10 – email dated 20 August 2015

 6   [2014] FWCFB 714

 7   [2015] FWCFB 4760

 8   PN1325 - 1332 – Transcript dated 16 June 2016

 9   PN246 – Transcript dated 16 June 2016

 10   [2014] FWC 1578

 11   PN31 [2014] FWCFB 714

 12   Ibid at [28]

 13   PN33-36 [2014] FWCFB714

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