Mining and Energy Union v Illawarra Coal Holdings Pty Ltd Trading AS GM-3
[2025] FWCFB 127
•26 JUNE 2025
| [2025] FWCFB 127 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Mining and Energy Union
v
Illawarra Coal Holdings Pty Ltd Trading AS GM-3
(C2025/40)
| VICE PRESIDENT GIBIAN | SYDNEY, 26 JUNE 2025 |
Appeal against decision [2024] FWC 3491 of Deputy President Easton at Sydney on 13 December 2024 in matter number C2023/4721 – Application under s 739 of the Fair Work Act 2009 (Cth) in relation to dispute about any matters arising under the enterprise agreement and the NES – Stand down during stoppage of work because of industrial action – Selection of employees for stand down – Some employees of contractors not stood down – Whether employees could have been usefully employed –Appeal dismissed.
Introduction
The Mining and Energy Union (the MEU) seeks permission to appeal and to appeal from a decision of Deputy President Easton made on 13 December 2024.[1] The Deputy President’s decision arose from an application made by the MEU under s 739 of the Fair Work Act 2009 (Cth) (the Act) for the Commission to deal with a dispute under an enterprise agreement.
The dispute concerned the application of clause 6.5.1 of the Appin Colliery & West Cliff CPP Enterprise Agreement 2022 (the Agreement) to stand down certain employees as a result of the impact of industrial action on the operation of the mine. In August and September 2023, Illawarra Coal Holdings Pty Ltd T/A South32 (South32) stood down a number of operational employees because of industrial action undertaken by Deputies at the Appin Coal Mine. The MEU contended that the employees who had been stood down could have been usefully employed notwithstanding the disruption caused by the industrial action being engaged in by the Deputies.
The Deputy President did not accept the submissions of the MEU. The Deputy President found that South32 was able to stand down employees without pay in the relevant periods by operation of clause 5.6.1 of the Agreement. The MEU appeals the decision and contends that the decision of the Deputy President was wrong and involved a misapplication of the facts and of clause 5.6.1 of the Agreement.
Permission to appeal
Although the MEU’s written submissions addressed the question of whether permission to appeal should be granted, South32 submits that the entitlement of a party to appeal from a decision made in exercise of the Commission’s private arbitral power under s 739 of the Act is governed by the terms of the Agreement. South32 submits that clause 28.7 of the Agreement confers a “right of appeal” so as to abrogate the need for permission to be granted as is ordinarily required in case of an appeal under s 604(1) the Act. The MEU agreed with South32’s submission at the hearing of the appeal.
It is well established that a dispute resolution procedure contained in an enterprise agreement can modify the requirement for permission to appeal in s 604 of the Act.[2] Whether an agreement has removed the need for permission to appeal to be granted depends on the construction of the dispute resolution clause of the relevant enterprise agreement. Clause 28.7 of the Agreement is as follows:
Where the FWC issues a decision in writing under this clause, it shall be binding on the parties and persons bound by this Agreement in accordance with its terms, subject to either party exercising a right of appeal to a Full Bench of the FWC.
South32 submits that clause 28.7 of the Agreement is virtually identical to clauses which previous Full Benches have determined create a right of appeal for which permission is not required.[3] That submission is correct. The final clause of the dispute resolution procedure in the Agreement provides that either party may exercise “a right of appeal”. The wording is unequivocal and differs from clauses which provide that a decision will be final “subject to any rights of appeal or review”[4] or “subject to any appeal rights”,[5] which have been found not to modify the requirement for permission. Permission to appeal is not required.
The Agreement
Clause 5.6.1 of the Agreement provides as follows:
5.6.1The Company may stand down an Employee for part or all of a day for: refusal or neglect of duty; misconduct; or if the Employee cannot be usefully employed in the Employee’s usual classification because of industrial action impacting the operation.
The question raised on appeal is whether the Deputy President was correct to find that clause 5.6.1 of the Agreement was engaged and South32 was able to stand down employees without pay in the relevant periods.
Background
At first instance, the parties filed an agreed statement of facts (ASOF) which states that there are approximately 450 employees covered by the Agreement, and South32 engages contract companies to perform work of the kind performed by employees under the Agreement. The ASOF indicates that there were “approximately 500 contract employees” engaged at the time of the dispute. The ASOF also set out that there were 85 South32 employees in the role of Deputy who have statutory functions under the Work Health and Safety (Mines and Petroleum Sites) Regulation 2022 (NSW) relating to supervision and inspection of work areas underground.
The Appin Colliery has different work areas. The production areas included the longwall and four development panels, being Simpson, 710 Tailgate, 710A and 710B. In the first three weeks of the protected industrial action only the longwall and the 710B Panel continued operating. Some employees and contractors were transferred from the other panels to work on the 710B Panel. Otherwise South32 decided to keep together the work units that ordinarily worked on that panel to make it easier for the relieving Deputies.
On 26 May 2023, the Commission approved applications for protected industrial action ballot orders made by the MEU and the Association of Professional Engineers, Scientists and Managers Australia (APESMA). On 3 July 2023, the Australian Electoral Commission issued a declaration stating that the majority of the voters in both the MEU ballot and APESMA ballot voted in favour of taking all forms of protected industrial action set out in the questions in the ballot. The forms of protected industrial action authorised by the ballots included stoppages of work.
Earlier, on 26 June 2023, South32 had conducted a risk assessment to identify hazards or risks in the event that Deputies engaged in protected industrial action. The risk assessment specifically considered the risks associated with reduced supervision and inspections underground at the mine, given the reduced number of available statutory ticket holders within the staff employees.
On 4 August 2023, both the MEU and the APESMA notified South32 on behalf of Deputies employed at Appin, who are their members, of an intention to engage in protected industrial action in the form of stoppages of work from 10 August to 17 August 2023 inclusive. On the same day, the Trades and Operator employees received a notice from South32 which advised that some employees may be stood down if protected industrial action were taken by Deputies. The notice was in the following terms:
Today we received notification from the Appin Deputies advising they are taking Protected Industrial Action (PIA) in the form of stoppages commencing from 9:15pm on Thursday 10 August 2023. As a result of this notice, we will have to implement business continuity plans.
As you know, Deputies are required under Work Health and Safety laws to provide supervision arrangements and inspections to ensure a safe workplace for the workforce and the mine.
The PIA they have planned creates an unacceptable level of uncertainty for us and, as a result, we have to stand down our workforce in some areas of the mine to ensure the ongoing safe operation of Appin.
We wanted to message you as soon we could so that you had early notice of this stand down. We will be formally notifying those individuals who will be impacted in the coming days.
South32 employees may be able to access annual leave entitlements during this period. Contract employees will need to speak with their employer regarding their entitlements under their relevant enterprise agreement.
This is a difficult decision and one we wish we did not have to make considering the company’s offer included a salary increase of at least 6.3%, which follows a 5% increase last year. In the meantime, I know this industrial action and uncertainty can be a distraction so please take extra care and look after each other. Remember, our EAP services are also available on 1300 360 364.
If you have any questions, please email [email protected] or speak with your leader.
A further notice was sent to the Trades and Operator employees on 8 August 2023 in the following terms:
The purpose of this letter is to advise that, as per clause 5.6.1 of the Appin Colliery and West Cliff Coal Preparation Plant Enterprise Agreement 2022, if the protected industrial action proceeds as currently notified, the Company will be required to stand you down as you will not be able to be usefully employed due to industrial action impacting the operation.
If the protected industrial action goes ahead as currently notified, the stand down will commence from Weekday Night shifts commencing at 10:00pm Thursday 10 August and continue until the end of Weekday Afternoon shift at 12.00am on Friday 18 August 2023. During this time, you will not be paid whilst stood down but have access to annual leave entitlements if you wish to take leave in order to continue to be paid during the period of the stand down.
If you would like to take annual leave for the period of any stand down, please advise your Department Superintendent as soon as possible so that we can make arrangements for that leave to be processed, if and when the stand down takes effect.
Please note that we are sending you this letter so you can prepare for the likelihood of a period of standdown, however this letter is not formal notification that a stand down has commenced.
In this regard it may be that the Deputies decide not to take protected industrial action, or to end the period of their protected industrial action early and return to work. If that occurs, you will need to be available to return to work and attend for your normal rostered shifts.
If the industrial action does not proceed, or ends early, we will let you know as soon as we can of the requirement for you to attend work for your normal shift.
We will also advise formally of the commencement of the stand down as soon as the industrial action commences and will also keep you advised of any further developments which might affect the situation.
From 10 August to 17 August 2023 inclusive, Deputies engaged in protected industrial action in the form of stoppages of work on all shifts (except for Deputies rostered on the day shift on Friday 11 August 2023 who did not engage in PIA). In the period from 10 August to 17 August 2023 inclusive, South32 stood down 91 Trades and Operator employees at the Appin colliery. In that period, employees of contractors performed some trades and operator work at Appin. A number of contractor employees were also stood down in this period.
In the period from 18 August to 24 August 2023 inclusive, Deputies engaged in stoppages of work on all shifts. South32 stood down 45 Trades and Operator employees. Again, some employees of contractors performed trades and operator work at Appin, while some were also stood down. From 25 August to 31 August 2023 inclusive, Deputies engaged in stoppages of work on all shifts, and South32 stood down 45 Trades and Operator employees. Some employees of contractors again performed trades and operator work at Appin, while others were stood down in this period.
From 1 September 2023 to 7 September 2023 inclusive, Deputies engaged in stoppages of work. Further, in the period from 8 September 2023 to 29 September 2023, the MEU and APESMA continued to notify their intention to take protected industrial action in the form of stoppages. From 8 September 2023 to 20 September 2023, Deputies who are members of APESMA employed at Appin engaged in stoppages of work, and from 8 September 2023 to 29 September 2023, Deputies who are members of the MEU employed at Appin engaged in stoppages of work. In the period from 1 September to 29 September 2023, no Trades and Operator employees employed by South32 were stood down. Throughout the period from 10 August 2023 to 29 September 2023, South32 utilised approximately 20 staff employees across various shifts to perform statutory Deputy functions.
The dispute
On 8 August 2023, representatives of South32 met with MEU representatives to discuss the stand down notices. Also on 8 August 2023, the MEU sent a letter to South32 notifying a dispute pursuant to clause 28 of the Agreement. On 9 August 2023, the MEU filed a dispute in the Commission under s 739 of the Act requesting the Commission deal with the dispute. Prior to the filing of the dispute, a number of MEU members raised individual disputes in relation to their stand down under step 1 of the dispute resolution process set out in clause 28 of the Agreement. The parties agreed that the steps required by clause 28 of the 2022 Agreement had been followed.
Decision of the Deputy President
The Deputy President set out a number of principles in relation to stand down provisions. The Deputy President then considered three questions. First, whether there was a stoppage of work. The MEU submitted that because some employees continued to work there was no stoppage of work. The Deputy President set out that, whilst a “stoppage of work” entails a cessation of work, where useful employment is not available for all employees because of industrial action, then it can be said that the stood down employees cannot be usefully employed.[6] The Deputy President was satisfied there was a stoppage of work.
The Deputy President went on to consider whether the stoppage of work was caused by the industrial action. The MEU submitted that the stoppage was the result of “South32’s inadequate preparation and inadequate steps to mitigate the damage caused by striking…”. The MEU’s argument was that, given the full operation in the third week of the stoppage, South32 could have better prepared so as to limit the need for stand downs in the first place by bringing the relieving Deputies up to speed in advance of the industrial action.[7] The Deputy President considered that the relevant test is whether South32 can reasonably be held responsible for the stoppage of work or “whether it could reasonably have prevented the stoppage/stand downs”.[8] The Deputy President was not satisfied that South32 could reasonably have prevented the stand downs, but rather that South32 “took the steps that a reasonable employer might be expected to take in the same circumstances”.[9]
Finally, the Deputy President dealt with the question of whether any of the employees could have been usefully employed. The MEU argued that some employees who were stood down should have been deployed to work on the 710B panel over other employees who continued to work. The Deputy President found that such an “fine-tooth comb” approach was “not realistic or available”.[10] The MEU submitted that employees should not have been stood down in circumstances where employees of contractors were not stood down in substance because it said that employees who are directly employed by South32 are more experienced than employees of contractors and should have been deployed ahead of contractors.[11] The Deputy President did not accept this argument. In short, the Deputy President recorded that South32 had prioritised familiarity with the particular panel and machinery used over other factors and accepted that, in adopting that approach, South32 had acted reasonably.[12]
Further, the MEU submitted that there was useful work available underground on idle machinery or performing other support/maintenance work and other work available on the surface. The Deputy President accepted South32’s argument that such work would have required diversion of Deputy resources to supervise work for which there was no capacity.[13] Finally, the MEU submitted that employees who were stood down could have undertaken training and that Deputies were not required to supervise training. The Deputy President did not consider this to be useful work during a period of protected industrial action in circumstances which, at most, it was contended that employees should have undertaken accreditation training earlier that it was required.[14]
The Deputy President expressed his conclusion in the following terms:
[57] I am satisfied in this regard that South32 took the steps that a reasonable employer might be expected to take in the same circumstances to avoid or minimise the stand down. As is already clear the role of the Commission is not to pour over the minutiae of each decision made by an employer in the heat of protected industrial action to see if the employer could have done things differently. If an employer acts reasonably and with bona fides, it is not for the Commission to stand in the shoes of the employer, using 20:20 hindsight, to decide whether a different decision or course of action might have delivered a different or better result for employees who had been stood down.
[58] I am satisfied that South32 acted reasonably and with bona fides. South32 communicated clearly with its employees and with the MEU, South32 engaged with the Commission’s dispute resolution process and made necessary concessions when appropriate and provided important information voluntarily and upon request.
[59] I am therefore satisfied that clause 5.6.1 of the Agreement was engaged and South32 was able to stand down employees without pay in the relevant periods.
It is apparent that the Deputy President did not regard the reference to an employee being “usefully employed” in clause 5.6.1 of the Agreement as authorising the Commission to second-guess bona fide and reasonable decisions made by an employer when deploying staff in circumstances of disruptions caused by industrial action. Having adopted that approach, the Deputy President found that the employees who had been stood down could not be usefully employed for the purpose of clause 5.6.1 of the Agreement.
Grounds of appeal
The MEU ultimately submitted that the Deputy President erred in finding that South32 was able to stand down employees pursuant to clause 5.6.1 of the Agreement on three grounds. First, it contended that the Deputy President misapplied the facts or acted on wrong principle when considering the application of the clause (Ground 1). Second, the MEU submitted that the Deputy President erred by finding that South32 was able to stand down employees in circumstances where employees of contractors who were engaged by South32 to perform the same work were not stood down (Ground 2). Third, it contended that the Deputy President failed to take into account or give sufficient weight to the evidence with respect to the length of service, qualifications, and competencies of employees of South32 who were stood down in contrast to the employees of contractors who continued working (Ground 3).
Ground 1 – Misapplication of the facts/acting on a wrong principle
The genesis of the criticism advanced by the MEU in relation to ground 1, and ground 3, arises from the consideration by the Deputy President of the evidence MEU members gave in relation to their work at the Appin Colliery, how they came to be stood down in August 2023, and alternative work they say they could have been deployed to do.[15]
That evidence was summarised by the Deputy President as follows:[16]
[14] Mr Matthew Craig has worked for South32 since 2011. At the time of the stand down Mr Craig was rostered to work on the 710A Panel. Mr Craig worked in a crew of nine operators, four of whom were transferred to 710B panel during the protected industrial action and were not stood down. Mr Craig said he was qualified to operate the equipment used in the 710B Panel.
[15] Mr Paul Entwhistle said he was a very experienced operator and he believed he was more experienced than most of the contractor workers that worked during the stand down period. Mr Entwistle suggested that did not need to be closely as supervised to do his work as was claimed by South32. Mr Entwistle worked on the 710A Panel prior to the stand down.
[16] Mr Mark Thompson was stood down for four days and then had scheduled shoulder surgery on 25 August 2023. Mr Thompson said that when he was told of the protected industrial action and the stand down he took the opportunity to get some things done at home before he was incapacitated by the surgery. He also said that during an earlier stoppage underground Mr Thompson performed duties on the surface that required very limited supervision by a Deputy.
[17] Ms Olivia McAlary worked on the Simpson Panel at the time of the stand down. She was stood down for one week/weekend although she was paid one of the shifts she missed because of an error and she took annual leave for two shifts. Ms McAlary said “There was plenty of work I could have been doing underground or on the surface when I was stood down. Underground I could have been doing Outbye work operating the coal tram such moving as supplies into the mine, taking empty pods, bins, and equipment out of the mine. I could have done belt cleaning, and shovelling under the belt heads making sure under the belt structure was clean. The Outbye work does not need supervision of the Deputy.”
[18] Mr Ben Patten was stood down for four days and took annual leave for each of those days. Mr Patten thought he could have done training instead of being stood down, specifically his certification on transport rules and coal trains. He said he also could have worked on other equipment in the 710B Panel.
Against that evidence was principally the evidence of Mr Andrew Hyslop, South32’s General Manager at Appin Colliery, where he explained the rationale for operating only the longwall and the 710B Panels and the basis upon which employees were selected to continue to perform work and which employees were to be stood down. Mr Hyslop’s evidence included the following:[17]
Through those discussions, we determined that work could occur in the Longwall and that it would typically be resourced by the same personnel who ordinarily carried out work in that area. This was to ensure as much as possible the continuity of operations in the Longwall with workers who normally worked in that area and were familiar with the work which was being carried out. It was through maintaining this continuity would assist to ensure the safety of operations in that area under the supervision of relief Deputies who may not have had the same level of familiarity with the area as the Deputies who were engaged in the stoppage of work, and who normally supervised that area.
We determined that work could not proceed in the Simpson, 710 Tailgate and 710A Development panels at that time because of the insufficient level of supervision which could be provided to cover those areas with the relief Deputy cohort.
However, we determined that work could occur in the 710B Development panel and that two continuous miners would be operating in that panel (which had been occurring prior to the protected industrial action, with a mixture of South32 and contractor employees operating the units), meaning that a larger number of personnel could be retained to perform work in that panel than would have typically been deployed if only one continuous miner was operational.
As with the Longwall, we determined that the 710B Development panel would typically be resourced by the same personnel who ordinarily carried out work in that area. This was to ensure as much as possible the continuity of operations in that panel with workers who normally worked in that area and were familiar with the work which was being carried out. Again, this continuity was done to ensure safety in the panel.
As we would be operating two continuous miners in the panel, we also sought to ensure the workers deployed to the work on those mines had appropriate experience, skills, competencies and tickets to operate the equipment to be utilised in the panel. In some cases this meant that particular underground workers who would normally have worked in different development panels were utilised in the 710B Development panel because those workers were more likely to have worked with a particular piece of equipment being used in the 710B Development panel than other workers. Maintaining this continuity would assist to ensure the safety of operations in that area under the supervision of relief Deputies who may not have had the same level of familiarity with the area as the Deputies who were engaged in the stoppage of work.
To consider the submission of the MEU that the Deputy President should have found the employees who had been stood down could have been usefully employed, it is useful to consider the purpose and function of stand down provisions.
Provisions conferring an entitlement on an employer to stand down employees who cannot usefully be employed as a result of industrial action or breakdown in machinery or equipment were a common feature of industrial awards made by the predecessors of the Commission. If an enterprise agreement or contract of employment does not make provision with respect to the stand down of employees, s 524(1) of the Act now permits an employer to stand down an employee “during a period in which the employee cannot usefully be employed” because of industrial action, breakdown of machinery or equipment or a stoppage of work for any cause for which the employer cannot reasonably be held responsible. The rationale for the introduction of stand down provisions in awards, and now in s 524 of the Act, was explained by Bromberg J in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Others v Qantas Airways Ltd [2020] FCAFC 285; (2020) 282 IR 130 in the following terms:[18]
The mischief to which s 524 is directed is apparent from the very rationale for a stand down provision. As Gaudron J recounted in Food Preservers Union of Australia v All States Ready Foods (1976) 182 CAR 391 (Food Preservers) at 391, stand down provisions were “introduced into awards of the Conciliation and Arbitration Commission in the 1920’s to temper the effect of the change from daily to weekly hiring”. In circumstances where an employee who “stands and waits” is entitled to be paid irrespective of whether that employee can be usefully employed (Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466 (Dixon J)), the weekly hire of employees was more prone to impose upon employers the burden of paying the cost of employing an employee during a period in which that employee could not be usefully employed. Stand down provisions enabled employers to be relieved of that burden in certain circumstances. However, such provisions have never been open-ended because to do that would effectively have given to the employer the capacity unilaterally to convert ongoing (even if only weekly) employments into casual employments. Accordingly, limitations upon an employer’s capacity to stand down an employee who could not be usefully employed were typically included in stand down provisions. Those limitations commonly took the form of those now found in s 524(1).
Stand down provisions frequently required an examination of whether employees could be “usefully employed”. Before the Deputy President, and in this appeal, both parties referred to Townsend v General Motors-Holden’s Ltd (1983) 4 IR 358 (Townsend). In Townsend, a dispute had arisen in relation to the application of clause 6(g)(i) of the relevant award which provided that “[t]he Company shall have the right to deduct payment for any day an employee cannot be usefully employed because of a strike or through a breakdown in machinery or a stoppage of work by any cause for which the Company cannot reasonably be held responsible”. The dispute arose in circumstances in which the operations of the General Motors-Holden assembly plant in Elizabeth in South Australia were interrupted as a result of a strike at a company which supplied heater boxes for the cars manufactured by Holden. General Motors-Holden stood down some of its employees. Mr Townsend, the secretary of the Vehicle Builders Employees Federation of Australia, brought proceedings contending that the stand downs were not justified either because General Motors-Holden should have taken additional steps to avert the interruptions in production caused by the industrial action or that there was, in any event, other useful work the employees could have been deployed to perform.
Morling J did not accept the criticisms of the actions taken by General Motors-Holden in response to the industrial action. Having reviewed various authorities, his Honour summarised the approach to be adopted when assessing whether the employees could have been “usefully employed” as follows:[19]
In my opinion the question whether an employee cannot be usefully employed because of a strike is largely a question of fact. No doubt, as a matter of law, some considerations will be irrelevant in determining the question of fact. But I reject the argument that the economic consequences to the employer are to be ignored in deciding whether employees can be usefully employed. I accept that it is a material matter that work has been scheduled to be done by an employee on a day when, in fact, he is stood down. In many cases that will be a powerful indication that the work which was scheduled to be done was work which would have been useful to the employer. If the employee is stood down in those circumstances the employer will necessarily have to establish that because of circumstances that arose after the work was first scheduled to be done, the employee could not be usefully employed.
What I have so far said does not mean that c.6(g)(i) of the Award gives G.M.H. the right to unilaterally stand-down its employees whenever there is a strike and it is convenient for it to do so. An employee may be able to be usefully employed although, as a matter of convenience, G.M.H. would prefer him not to be at work. Questions of fact and degree will always be involved in determining whether, on the one hand, an employee cannot be usefully employed or whether, on the other hand, he can be usefully employed but it is not convenient to G.M.H. to employ him. Whether a particular set of facts falls on one side of the line or the other will itself be a question of fact. In deciding that question I think it is proper to take the approach which Sheppard J. thought appropriate in a somewhat similar context - see In re Dispute - Australian Iron & Steel Pty. Limited re Stand-down of Bricklayers (No. 1) (1972) A.R. 285 at 296. That is to say, if it is shown that an employer has acted upon proper principles and in good faith, “the evidence . . . will not . . . be gone through with a tooth-comb in order to apply to its actions a standard of perfection which in cases such as this will always be impossible to achieve”.
A number of relevant observations can be derived from this passage in Townsend. The onus is on the employer to demonstrate that relevant employees could not be usefully employed if it seeks to justify the employees being stood down.[20] The question of whether employees can be usefully employed is to be assessed from the perspective of the employer.[21] Although it is not sufficient that it might be more convenient to the employer to stand down the employees, the economic consequences to the employer are not irrelevant. Furthermore, if the employer can be shown to have acted upon proper principles and in good faith in reacting to the interruption to its operations caused by industrial action, machinery breakdown or other stoppage of work, it will not be held to a standard of perfection applied with the benefit of hindsight as to how it might have reorganised its operations to avoid or limit the necessity for employees to be stood down.
The circumstance that some, but not all employees, are unable to be usefully employed as a consequence of industrial action is also not novel. In Re Carpenters and Joiners Award (1971) 17 FLR 330, to which reference was made in Townsend, the Commonwealth Industrial Court explained:[22]
(b) (i) Where useful employment is not available for all the employees normally engaged in a class of work performed in some aspect of production but is available for one or more of such employees it cannot on that ground be said with respect to any particular employee that he cannot be usefully employed.
(ii) When in the circumstances referred to in the last preceding sub-paragraph some employee or employees are engaged to perform the available useful work then it can be said with respect to the others that they cannot be usefully employed.
(iii) Where in the circumstances referred to in sub-par. (b) (i) a selection of particular employees out of the number normally employed on the class of work which is available to perform such work as is available would cause an industrial dispute calculated to cause material disruption of the conduct of the employer’s business, then it can be said of each and all the employees concerned that they cannot be usefully employed. The expression “usefully employed” necessarily connotes that by the employment in contemplation there will be a net benefit to the employer's business by reason of the performance of the particular work done. If the performance of the work done will prejudice the conduct of the employer's business then it is not useful to him although the work in itself would probably, to some extent, contribute to production.
In our opinion, this represents an appropriate way to approach clause 6.5.1 of the Agreement in this matter. Where useful employment is available for some, but not all, employees engaged in a class of work as a result of industrial action, the employer must inevitably choose which employees are to be deployed to undertake the available work and which are to be stood down. Once the employer has engaged particular employees to perform the available useful work, it can be said with respect to the remaining employees that they cannot be usefully employed. If useful work has been assigned to one employee, a consequence may be that there is no useful work for another employee.[23]
Adopting the approach in Townsend, so long as the employer acted bona fide and in good faith in determining that it was necessary to stand down particular employees, a court or the Commission will not generally second-guess operational decisions of the employer made in the heated circumstances of responding to operational disruptions in assessing whether employees could have been usefully employed in adjudicating the application of a stand down provision. We hasten to add that, depending on the terms of the dispute resolution provision of an enterprise agreement, it is possible that a different kind of dispute could be brought before the Commission in relation to the stand down of employees. If the dispute is differently framed, the Commission might be authorised to examine the appropriateness of decisions made by an employer which have resulted in employees being stood down. If employees are selected to be stood down for prohibited reasons, a contravention of Part 3-1 of the Act may arise. In this matter, however, the dispute before the Commission concerned whether South32 was entitled to stand down the relevant employees under clause 5.6.1 of the Agreement because they could not be usefully employed because of industrial action.
The submission of the MEU on appeal was that the Deputy President misapplied Townsend, when he found:[24]
In part the MEU’s case was that some employees should have been deployed to the 710B Panel over other employees who continued to work on the 710B panel and over other employees who were deployed to supplement staffing in the 710B Panel. This fine-tooth comb approach is not realistic or available.
The MEU relied before the Full Bench on the evidence referred to above of Mr Craig, Mr Entwhistle, Mr Thompson and Ms McAlary, that had been considered by the Deputy President, and in particular noted that the Appin Colliery has different work areas, of which the Longwall and the 710B Panel were the only work areas underground operating during the Stand Down Period. It was correct for the Deputy President to characterise the MEU’s case as, in part, involving the contention that some employees should have been deployed to the 710B Panel over other employees who continued to work on the 710B panel and over other employees who were deployed to supplement staffing in the 710B panel.
In its submissions on appeal, for example, the MEU emphasised the circumstances of Mr Craig who was an operator working in the 710A panel on the weekend roster. At the commencement of the protected industrial action, Mr Craig together with three other employees working that roster were stood down whereas four employees working the same roster were transferred to the 710B panel which continued to operate. The MEU also referred to the evidence of Mr Entwhistle who had been working on the 710B panel for the two previous weekend shifts prior to the commencement of the protected industrial action by Deputies. He was stood down whilst other employees were transferred from the 710A panel and performed work on the 710B panel during the period of protected industrial action.
The MEU submitted that, unlike the factual circumstance in Townsend, the actions of South32 of transferring some Trades and Operator employees from the 710A panel to perform work in the 710B panel during the period of protected industrial action and stand down other employees did not involve a complex process. The MEU submitted that this case did not require the Commission to pour over the minutiae of each decision made by South32 in the heat of protected industrial action to see if it could have done things differently.
The Deputy President’s observation that a “…fine-tooth comb approach is not realistic or available” is to be understood as a reference to the decision in Townsend. There was no error in the Deputy President adopting that approach. The submissions of the MEU invited the Commission to determine that South32 should not have stood down particular employees such as Mr Craig, Mr Entwhistle, Mr Thompson and Ms McAlary and should instead have stood down other employees it had decided to deploy to work in the 710B panel or the longwall. That is, the MEU invited the Commission to second-guess the operational decisions as to which employees should have been stood down. That is an approach deprecated in Townsend at least so long as the operational decisions of the employer were reasonable and made in good faith.
The witnesses called by South32 explained the basis upon which it had determined which employees were to be retained and which stood down. For example, Mr Hyslop said the primary factor used to assess which employees should be deployed to undertake the available work on the longwall and in the 710B panel was safety. He said that South32 sought to ensure continuity of operations and that the workers deployed to the work on the longwall and in the 710B panel had appropriate experience, skills, competencies and tickets to operate the equipment to be utilised. South32 also explained why some employees were transferred from other parts of the mine to work in the 710B panel during the protected industrial action. Mr Caswell, Production Manager, for example, said that preference was given to operators from outside the 710B crew who were more familiar with the Komatsu miner being used there because within the crews who normally worked on 710B there was a lot more personnel that had skills using the Sandvik miner rather than the Komatsu miner.
It is apparent that the Deputy President accepted the evidence given by the witnesses called by South32. The Deputy President accepted that South32 took the steps that a reasonable employer might be expected to take in the circumstances and that the decisions it made were reasonable and made in good faith.[25] In those circumstances, there was no error in the Deputy President concluding that it was not for the Commission to stand in the shoes of the employer, with the benefit of hindsight, to decide whether a different decision or course of action could have been taken which might have delivered a better outcome to employees. The Deputy President’s approach was consistent with Townsend and the other decisions to which we have referred. There was no misapplication of fact or principle by the Deputy President. Ground 1 must be rejected.
Ground 2 – Contractors not stood down
With respect to ground 2, the MEU submitted that the Deputy President erred by finding that South32 was entitled to stand down its directly employed employees in circumstances in which employees of contractors engaged by South32 to perform the same work were not stood down.
The MEU submitted that on proper interpretation and application of clause 5.6.1 of the Agreement, Trades and Operator employees could have been usefully employed to perform work in the 710B in the place of employees of contractors who were working in the 710B panel during the period of protected industrial action. It submitted that the obligation in clause 5.6.1 of the Agreement in relation to “useful work” only applies with respect to Trades and Operator employees covered by the Agreement and not with respect to employees of contractors engaged by South32.
South32, on the other hand, submitted that clause 5.6.1 does not refer to the use of contract workers at all, and it does not contain any pre-condition with respect to South32’s ability to stand down employees, or that to be able to exercise its right to stand down an employee who cannot be usefully employed because of the impact of industrial action, it must first have stood down or removed its contractor workforce. It submitted that there was no error in the decision of the Deputy President that it had acted reasonably in selecting the employees it was necessary to stand down, including by continuing to engage employees of contractors to some extent.
The Deputy President referred to Australian Municipal, Administrative, Clerical and Services Union v Helloworld Travel Limited, Viva Holidays II Limited[2021] FWC 6535. That matter concerned whether the stand down of certain employees by Helloworld met the requirements of s 524(1) of the Act. One issue that arose was whether the employees who had been stood down could have been usefully employed in circumstances in which Helloworld continued to engage contractors during the period of the stoppage. Deputy President Colman made the following observation regarding the use of contractors:[26]
[52] Depending on the circumstances, the continued use of contractors during a period when employees have been stood down could call into question an employer’s contention that those employees cannot be usefully employed, but I do not consider that to be the case in respect of the companies’ continued engagement of Tourism Technology. This was an existing specialist provider that undertook a small of amount of available enhancing and programming work. Where there is a stoppage of work it may be uneconomical, and of no net benefit to the business, to retain employees to perform small volumes of ad hoc duties. The fact that a contractor absorbed a small amount of work that was previously undertaken by employees does not mean that that work could usefully have been undertaken by those employees
It is conceivable that the continued engagement of contractors or labour hire workers during a period in which directly hired employees are stood down might raise questions as to whether the employees could have been usefully employed to perform the work undertaken by the contractors or labour hire staff. However, clause 5.6.1 of the Agreement is not directly concerned with the engagement of contractors rather than directly hired employees. Clause 5.6.1 simply asks whether employees covered by the Agreement cannot be usefully employed in their usual classification because of industrial action impacting the operation. If, in circumstances of a disruption to its operations, an employer has made a reasonable and good faith decision that it is necessary to continue to engage some contractors or labour hire workers, the proper conclusion may nonetheless be that directly hired employees cannot be usefully employed.
The MEU simply asserts that the work performed by employees of contractors could have been performed by Trades and Operator employees who were stood down. Even if that is correct, it is not sufficient to demonstrate error in the decision of the Deputy President. The Deputy President accepted that South32 had made reasonable operational decisions in relation to which employees should be stood down and which employees were appropriate to be deployed in the areas of the mine which continued to operate. That included choosing to retain some employees of contractors in preference to directly employed workers.[27] The MEU has not established any basis upon which the Full Bench could disturb those findings. In circumstances in which South32 made a reasonable and good faith decision that it is necessary to retain some contractor employees during the period of protected industrial action, there was, as a consequence, no further useful work for the stood down employees to perform.
For those reasons, ground 2 must be rejected.
Ground 3 – Weight afforded to employee evidence
With respect to ground 3, the MEU submitted that the Deputy President failed to take into account or give sufficient weight to, the evidence with respect to the length of service, qualifications, and competencies of employees who were stood down instead of employees of contractors. The MEU referred in detail to the evidence concerning the experience, skills and qualifications of some employees for the purpose of demonstrating that the employees should not have been stood down and, rather, should have been deployed to perform the remaining useful work in preference to employees of contractors. For example, the MEU submitted on appeal that:
In a direct comparison with contract employees in the 710B panel, a Trades and Operator employee with 14 years experience, 10 years operating a miner, who can bolt and do the exact same work of a contract employee, the Trades and Operator employee should not have been stood down.
As noted above in relation to ground 1, the Deputy President considered the evidence of Mr Craig, Mr Entwhistle, Mr Thompson and Ms McAlary (and Mr Patten in relation to a now abandoned ground of appeal), and in particular noted that the Appin Colliery has different work areas, of which the Longwall and the 710B Panel were the only work areas underground operating during the period of protected industrial action. The Deputy President also had regard to the evidence of the witnesses called by South32, particularly Mr Hyslop, as to the basis upon which it decided which employees should be deployed to undertake the available work and which would need to be stood down.
The submissions of the MEU in relation to ground 3 do no more than invite the Full Bench to find that the Deputy President erred by not concluding that South32 should have made different decisions as to which directly hired and contractor employees should have been retained and which stood down during the period of protected industrial action. There will inevitably be room for differing views as to how employees could or should have been best deployed during a work stoppage. As we have endeavoured to explain, however, it was not the role of the Deputy President in arbitrating a dispute as to the application of clause 5.6.1 of the Agreement to second-guess operational decisions of that nature so long as the decisions as to the deployment of staff during a period of operational disruption were reasonable and made in good faith.
The Deputy President accepted that there was a reasonable basis for South32 to decide to retain some employees of contractors during the period of protected industrial action. The MEU does not demonstrate that the Deputy President’s finding in that respect was in error by simply asserting that Mr Craig, Mr Entwhistle, Mr Thompson and Ms McAlary were experienced employees who could have performed the work undertaken by employees of contractors. As we have discussed, the evidence of South32 was that it undertook a more complex assessment as to the composition of the work teams that were, in its view, appropriate to ensure safety, continuity of operations and coverage of necessary experience, skills, competencies and tickets. In accepting that evidence, the Deputy President did not fail to take into account or give sufficient weight to the evidence of employees called by the MEU. The Deputy President simply accepted that South32 made reasonable and good faith decisions in relation to the deployment of directly employed and contractor employees. As is the case with ground 2, no basis has been established upon which the Full Bench should disturb the finding of the Deputy President in that respect.
Ground 3 must also be rejected.
Conclusion
For these reasons, permission to appeal is not required. However, no error has been established in the decision of the Deputy President. The consequence of the findings of the Deputy President is that the employees who were stood down could not be usefully employed in their usual classifications because of industrial action impacting the operation. The Deputy President was correct in finding that South32 was entitled to stand down the employees under clause 5.6.1 of the Agreement.
The Full Bench orders that the appeal is dismissed.
VICE PRESIDENT
Appearances:
A Jacka of the Mining and Energy Union for the appellant.
J Darams SC, of counsel, instructed by L Dixon of MinterEllison for the respondent.
Hearing details:
12 March 2024
Sydney (in person).
[1] [2024] FWC 3491.
[2] Australian Manufacturing Workers’ Union v Silcar Pty Ltd (2011) 208 IR 33; [2011] FWAFB 258 at [17]; Shop, Distributive and Allied Employees Association (Qld Branch) Union of Employees v Woolworths Ltd (2013) 232 IR 255; [2013] FWCFB 2814 at [22].
[3] See also University of Western Sydney v Fletcher [2009] AIRCFB368; (2009) 183 IR 256 at [8]; Vendrig v Ausgrid Pty Ltd[2021] FWCFB 370 at [24]; Ricegrowers Ltd (t/as SunRice, CopRice Feeds and Australian Grain Storage Pty Ltd) v United Workers’ Union [2022] FWCFB 205 at [46]-[47]; PHI (International) Australia Pty Ltd T/A HNZ Australia Pty Ltd v Nash[2024] FWCFB 396 at [19]; SC Hydro Pty Ltd v Construction, Forestry and Maritime Employees Union[2025] FWCFB 110 at [26].
[4] Metcash Trading Limited T/A Metcash v United Workers’ Union [2024] FWCFB 410 at [22].
[5] DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557; (2013) 237 IR 180 at [24].
[6] [2024] FWC 3491 at [26]-[27].
[7] [2024] FWC 3491 at [35].
[8] [2024] FWC 3491 at [36].
[9] [2024] FWC 3491 at [39].
[10] [2024] FWC 3491 at [44].
[11] [2024] FWC 3491 at [45].
[12] [2024] FWC 3491 at [49].
[13] [2024] FWC 3491 at [51]-[54].
[14] [2024] FWC 3491 at [56].
[15] [2024] FWC 3491 at [13].
[16] [2024] FWC 3491 at [14]-[18].
[17] Set out at [2024] FWC 3491 at [11].
[18] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Others v Qantas Airways Ltd [2020] FCAFC 285; (2020) 282 IR 130 at [130] (Bromberg J).
[19] Townsend v General Motors-Holden’s Ltd (1983) 4 IR 358 at 370 (Morling J).
[20] Townsend at 365 and also Kidd v Savage River Mines (1984) 6 FCR 398 at 403 (Gray J).
[21] See also Construction, Forestry, Maritime, Mining and Energy Union v Ta Ann Tasmania Pty Ltd[2019] FWCFB 5300 at [18].
[22] Re Carpenters and Joiners Award (1971) 17 FLR 330 at 333-334 (
[23] Australian Municipal, Administrative, Clerical and Services Union v Helloworld Travel Limited, Viva Holidays II Limited[2021] FWC 6535 at [50].
[24] [2024] FWC 3491 at [44].
[25] See, for example, [2024] FWC 3491 at [49] and [57].
[26] Australian Municipal, Administrative, Clerical and Services Union v Helloworld Travel Limited, Viva Holidays II Limited[2021] FWC 6535 at [52].
[27] [2024] FWC 3491 at [49].
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