FEDERAL COURT OF AUSTRALIA
Helensburgh Coal Pty Ltd v Bartley [2024] FCAFC 45
File number: NSD 996 of 2022 Judgment of: KATZMANN, SNADEN AND RAPER JJ Date of judgment: 5 April 2024 Catchwords: INDUSTRIAL LAW – judicial review of decision of a full bench of the Fair Work Commission (FWC) under s 39B of Judiciary Act 1903 (Cth) – alleged unfair dismissals – dismissals effected for operational reasons – whether dismissals were cases of genuine redundancy – where FWC was not satisfied dismissals were cases of genuine redundancy because employees could be redeployed to perform work undertaken by contractors – where Full Bench dismissed appeal – whether s 389(2) of Fair Work Act 2009 (Cth) authorises consideration of potential redeployment to roles already filled by others – whether Full Bench correctly approached FWC decision on a correct understanding of what would constitute error Legislation: Fair Work Act 2009 (Cth), ss 385, 387, 388, 389, 394, 400, 562, 563, 570, 604, 607, 612, 613, 618
Industrial Relations Act 1988 (Cth), s 170CG
Judiciary Act 1903 (Cth), s 39B
Workplace Relations Amendment (Work Choices) Act 2005 (Cth), schs 1, 5
Cases cited: ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association (2017) 262 CLR 593
Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1
Bartley & Ors v Helensburgh Coal Pty Ltd [2020] FWC 5756
Bartley & Ors v Helensburgh Coal Pty Ltd [2021] FWC 6414
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 209
Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503
Goodman v Windeyer (1980) 144 CLR 490
Helensburgh Coal Pty Ltd v Bartley & Ors (2021) 306 IR 219
Helensburgh Coal Pty Ltd v Bartley & Ors [2022] FWCFB 166
House v The King (1936) 55 CLR 499
Northern Territory v Collins (2008) 235 CLR 619
Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217
Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252
Singer v Berghouse (1994) 181 CLR 201
Toms v Harbour City Ferries Pty Ltd (2015) 229 FCR 537
Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 97 Date of hearing: 10 August 2023 Counsel for the Applicant: Mr J McKenna KC with Mr P Zielinski Solicitor for the Applicant: MinterEllison Counsel for the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth,…
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Details
- Case
- [2024] FCAFC 45
- Decision Date
CaseChat Overview and Summary
In the case of Helensburgh Coal Pty Ltd v Bartley, the applicant, Helensburgh Coal, sought judicial review of decisions made by the Fair Work Commission (FWC) concerning the dismissal of certain employees. The crux of the dispute was whether the dismissals constituted genuine redundancy, particularly in light of the potential for redeploying employees to roles being performed by contractors. The Full Bench of the FWC had dismissed the applicant’s appeal, finding that the dismissals were not cases of genuine redundancy as employees could have been redeployed to perform work undertaken by contractors.
The legal issues before the court involved the interpretation of section 389(2) of the Fair Work Act 2009 (Cth) and whether the Full Bench of the FWC correctly approached the decision on a correct understanding of what would constitute an error. Helensburgh Coal argued that the FWC did not apply the correct test for determining whether the dismissals were cases of genuine redundancy, focusing instead on whether it would have been reasonable to redeploy employees to roles being undertaken by contractors. The applicant contended that the FWC failed to consider all relevant circumstances, including the financial distress of the mine and the strategic decisions made regarding outsourcing work to contractors.
The court examined the reasoning employed by the Full Bench of the FWC and concluded that the Full Bench had indeed approached the decision on a correct understanding of what would constitute an error. The Full Bench had correctly applied the relevant statutory provisions and considered the appropriate factors in determining whether the dismissals were genuine redundancies. The court found no basis to interfere with the Full Bench’s decision, affirming that the FWC had not erred in its assessment.
Consequently, the application for judicial review was dismissed, and the decisions of the Full Bench of the FWC were upheld. The court’s decision underscored the importance of correctly applying statutory tests and considering all relevant circumstances when determining genuine redundancy in employment disputes.
The legal issues before the court involved the interpretation of section 389(2) of the Fair Work Act 2009 (Cth) and whether the Full Bench of the FWC correctly approached the decision on a correct understanding of what would constitute an error. Helensburgh Coal argued that the FWC did not apply the correct test for determining whether the dismissals were cases of genuine redundancy, focusing instead on whether it would have been reasonable to redeploy employees to roles being undertaken by contractors. The applicant contended that the FWC failed to consider all relevant circumstances, including the financial distress of the mine and the strategic decisions made regarding outsourcing work to contractors.
The court examined the reasoning employed by the Full Bench of the FWC and concluded that the Full Bench had indeed approached the decision on a correct understanding of what would constitute an error. The Full Bench had correctly applied the relevant statutory provisions and considered the appropriate factors in determining whether the dismissals were genuine redundancies. The court found no basis to interfere with the Full Bench’s decision, affirming that the FWC had not erred in its assessment.
Consequently, the application for judicial review was dismissed, and the decisions of the Full Bench of the FWC were upheld. The court’s decision underscored the importance of correctly applying statutory tests and considering all relevant circumstances when determining genuine redundancy in employment disputes.
Orders
Orders of the court
1. The originating application of 18 November 2022 be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
For the reasons that follow, relief should be refused and the application dismissed.BACKGROUND The relevant factual background emerges from the affidavit material that was read into evidence without objection. As might be expected, that material consisted of the statements and written submissions provided to, the originating processes filed in, the transcripts of hearings before, and the decisions of the FWC. What follows is a summary of that material insofar as it is relevant to the present application. The Helensburgh Mine is operated by various companies associated with the American mining group known as Peabody Energy. One of them is the applicant, which is the entity that employs the bulk of the workers who work there. Although the applicant is not charged exclusively with managing the affairs of the mine, there is no issue in this matter (nor was there in the proceedings before the FWC) about corporate identity. On 1 August 2018, Nexus Mining Pty Ltd (“Nexus”) was engaged pursuant to a two‑year “Major Services Agreement” to provide various services at the Helensburgh Mine. In early 2019—apparently as a consequence of a fire that occurred at an underground conveyor system at the Helensburgh Mine—another company, Mentser Pty Ltd (“Mentser”), was engaged to undertake an inspection of the mine’s conveyor systems. Later that year (presumably, following completion of that inspection), it was resolved that work involving the servicing, inspection, auditing and rectification of the mine’s underground conveyor systems would be outsourced to Mentser. That resolution came to life in March 2020 with the execution of written terms; and Mentser commenced providing those services from April 2020. At around that same time, the covid‑19 pandemic took hold. World‑wide demand for the kind of coking coal that is processed at the Helensburgh Mine fell significantly; and, in May 2020, the applicant gave notice to its employees (and their unions, or at least one of them) that it had resolved to move the Helensburgh Mine from a five‑crew, seven‑day‑per‑week operation to a four‑crew, six‑day‑per‑week model. The introduction of that model would impact upon various aspects of the Helensburgh Mine’s operations; but, in short, would result in the requirement of fewer workers. During consultations with workforce representatives (including officials of the employee respondents’ union), the applicant was asked to mitigate the impact of its decision upon employees by reducing its reliance on contractors such as Nexus and Mentser. It was suggested that the work performed by contractors could, instead, be performed by the applicant’s existing employees, thus minimising any need to reduce their number. Although some “insourcing” was agreed to, there was no agreement to terminate the arrangements (or the bulk of the arrangements) that had been struck with Nexus and Mentser. Ultimately, the restructure that the applicant resolved to implement resulted in workforce reductions. The number of workers engaged via contractors fell by approximately 40%. The number of employees engaged directly by the applicant was reduced by 90. Some of those reductions were effected by agreement. Forty-seven of them were not. The employee respondents were among those whose employment the applicant resolved unilaterally to terminate.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Although the present application takes aim at all four decisions, it is only the second Full Bench appeal decision (the “Full Bench Decision”) that matters as it is the only one of the four decisions that has (or purports to have) operative or legal effect: Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217, 242 at [70] (Gageler, Keane and Nettle JJ), 246‑247 at [92] (Edelman J); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Ors (2016) 247 FCR 138, 147 at [39] (Barker, Rangiah and Wigney JJ). The Full Bench Decision stemmed from an application made by the applicant under s 604 of the FW Act to appeal the second of Commissioner Riordan’s decisions. It is to be recalled that, by that decision, the Commissioner accepted a submission advanced on behalf of the employee respondents—and, thus, was relevantly satisfied for the purposes of s 385(d) of the FW Act (as engaged by s 396(d))—that the dismissals were not “case[s] of genuine redundancy”. That was so, the Commissioner reasoned, because in the circumstances that prevailed when the dismissals occurred it would have been reasonable for the applicant to redeploy each of the employees to roles or positions that were then being undertaken within the Helensburgh Mine by employees of Nexus and Mentser. In other words, Commissioner Riordan accepted that it would have been reasonable to reduce the work available to contractors and to redeploy the employee respondents to undertake the work thereby created. The applicant’s appeal proceeded upon five grounds, only three of which remain relevant. Although lengthy, it is convenient to replicate them verbatim:1. Failure to apply the correct test (a) The Commissioner failed to apply the test required under s.389(2) of the Fair Work Act which requires a determination as to whether redeployment into work was reasonable in all of the circumstances.(b) Instead, the Commissioner erroneously applied a test which appears from the reasons to be a combination of the following considerations rather than consideration of whether it would have been reasonable in all of the circumstances for any of the Applicants to be redeployed:(i) Whether the work being carried out by Nexus and Mentser (Contractors) was ‘specialist work’ in accordance with an assessment by one of the Respondent’s witnesses (Reasons at [102] to [105], noting that the conclusion in paragraph [105] appears to contain a typographical error).(ii) Whether terminating the Applicants and keeping the Contractors was reasonable (Reasons at [105]).(iii) Whether it was ‘feasible’ for Peabody to insource some of the work of the Contractors (Reasons at [95] – [96]). [Note: it is accepted that this issue is a relevant consideration as per the reasons of the Full Bench at [70], [86] and [91] however it is not in itself the correct test].(iv) Whether the approach of Peabody to make an antecedent decision to outsource the belt maintenance and improvement work to Mentser, with the subsequent result (as the Commissioner found, although erroneously), that 8 or 9 operators lost their jobs with Peabody, was unreasonable and unfair (Reasons at [103]).2. Having failed to apply the correct test, the Commissioner failed to identify or alternatively failed to appropriately take into account in the application of the correct test the following circumstances:(a) In relation to the work being carried out by Mentser:(i) Peabody’s decision to outsource the belt maintenance and improvement work to Mentser reflected a deliberate strategy which was taken following a serious safety incident, which indicated a reasonable need for a different strategic approach to the issue, and following a deliberative process of considering what approach to the work would deliver optimum operational, efficiency, cost and safety outcomes for the operation.(ii) In the assessment of the responsible manager, a previous strategy which involved Peabody’s employees carrying out the work had failed to manage the risk associated with the work in an effective way, and that the engagement of Mentser had resulted in very positive results in relation to their work at the Mine.(iii) The responsible manager, who held a statutory responsibility in relation to the safe operation of the Mine, was genuinely concerned that a return to the previous strategy in relation to the work was inconsistent with optimum safety compliance.(iv) Critical aspects of the service provided by Mentser for conveyor management had never been performed by Peabody and could not practically be done by a ‘crew’ of Peabody employees.(v) The engagement of Mentser to perform the belt improvement and management work had resulted in a saving of approximately $600,000 to Peabody in accordance with the unchallenged assessment of one of Peabody’s witnesses.(vi) Mentser owned and deployed proprietary software in the work which was advantageous in the efficient and effective disposition of the work which was not available to Peabody.(vii) Mentser had developed a specialist training programme for its employees deployed to the work which was advantageous in the efficient and effective disposition of the work which was not available to Peabody in relation to the training of its own employees.(viii) None of the Applicants had completed the Mentser training or any comparable training, in particular training in polymer processing which was specialist training directed to specialist belt technicians.(ix) Removal of work from Mentser would have had a significant adverse impact on its business and its employees engaged at the Mine in circumstance where they had committed to and invested in the delivery of the services for an extended period and there was no change proposal which affected the work they were contracted for and employed to carry out.(b) In relation to the work being carried out by Nexus:(i) As part of the change process, and in response to issues discussed during consultation, Peabody had already given detailed consideration to the creation of redeployment opportunities within its enterprise, and had agreed to remove a number of contractor employees Including employed by Nexus) from the operation in order to create redeployment opportunities.(ii) The Nexus work which was retained represented project work which had never been carried out by Peabody’s employees, which had finite duration, which had been budgeted and approved as such, and which in the reasonable assessment of Peabody was most efficiently carried out by and under the supervision of a contractor.(iii) Pursuant to the contract between Peabody and Nexus in relation to the work, Peabody enjoyed considerable advantages in terms of flexibility, risk assumption and accountability for quality which would not be available if the work was insourced in order to create redeployment opportunities.(iv) Insourcing the work would have required the work to be supervised by Peabody, which would have required the recruitment of additional supervisors or the diversion of supervisory resources away from core work.(v) Accepting (as Peabody did) that many of the individual tasks being carried out by the Nexus employees could have been carried out by the Applicants (or some of them), the allocation of that work to Applicants was reasonably assessed by Peabody’s witnesses as requiring a level of retraining, coordination and supervision which was not reasonable in the circumstances which prevailed, which included the above as well as the financially distressed status of the Mine.(vi) Removal of work from Nexus would have had a significant adverse impact on its business and its employees engaged at the Mine in circumstances where they had committed to and invested in the delivery of the services and there was no change proposal which affected the work they were contracted for and employed to carry out.(c) Generally, that the Mine was in a distressed and loss‑making situation, and it was imperative that production was reduced, costs were reduced, and the operation of the Mine was as cost‑effective and efficient as possible.3. In relation to the work being carried out by both Contractors, the Commissioner erred in finding:(a) That the impact of an insourcing decision in order to create a redeployment opportunity would have an adverse impact on the relevant contractor was beyond the purview of the Commissioner’s consideration (implicit in the Reasons at [68(d)]).(b) That the fact that Peabody had obligations to its employees and not to those of contractors had the consequence that the effect of a redeployment decision on contractor employees was an irrelevant, or, alternatively, an immaterial or subordinate consideration (implicit in the Reasons at [68(f)]). …
Ratio Decidendi
Legal Principle Established
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