Rio Tinto Coal Australia Pty Limited T/A Blair Athol Coal Project

[2013] FWCA 2248

[2013] FWCA 2248

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Rio Tinto Coal Australia Pty Limited T/A Blair Athol Coal Project
(AG2013/817)

BLAIR ATHOL COAL MINEWORKER UNION COLLECTIVE WORKPLACE AGREEMENT 2008

Coal industry
COMMISSIONER SPENCER	BRISBANE, 7 AUGUST 2013

Application for termination of the Blair Athol Coal Mineworker Union Collective Workplace Agreement 2008 - prospective circumstances - illusory rights

[1] Rio Tinto Coal Australia Pty Ltd trading as the Blair Athol Coal Project (Rio Tinto) has made an application pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) and s.225 of the Fair Work Act 2009 (the Act) to terminate the Blair Athol Coal Mineworker Union Collective Workplace Agreement 2008 1 (the Agreement).

[2] The Agreement has a nominal expiry date of 10 March 2012 and is a collective agreement-based transitional instrument as per Item 2(5)(c)(i) of Schedule 3 of the Transitional Act.

[3] Section 226 of the Act provides:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[4] Item 16 of Schedule 3 of the Transitional Act provides, so far as presently relevant, that:

“Collective agreement-based transitional instruments: termination by FWC

(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.”

[5] The application to terminate the Agreement was lodged on 5 April 2013. Rio Tinto provided in support of the application a statutory declaration of Ms Prue Lonergan, the Manager Closure - Blair Athol Mine. Ms Lonergan declared that the Blair Athol mine has now ceased all mining operations. The final day of coal production was 23 November 2012. It was further declared that no employees are currently covered by or performing work under the Agreement.

[6] The Construction, Forestry, Mining and Energy Union (the CFMEU) is an employee organisation covered by the Agreement. Correspondence was sent from Chambers to the CFMEU to seek their views as to the termination. By correspondence dated 17 April 2013 the CFMEU objected to the proposed termination of the Agreement.

[7] Directions were issued by the Commission for the filing of material and evidence in relation to the objection. The Applicant and the CFMEU filed material in accordance with the directions. The application was listed for Hearing on 16 July 2013. The CFMEU sought to bring further evidence at this time. Accordingly a further hearing was listed for 19 July 2013. Permission was granted for the Applicant to be represented by Mr M Procter, Solicitor of DLA Piper. The Respondent was represented by Mr R Anderson, Legal Officer of the CFMEU.

Summary of Respondent’s submissions and evidence

[8] The CFMEU objected to the termination of the Agreement on two grounds; that the termination was contrary to the public interest and/or that taking into account all of the circumstances it would be inappropriate to terminate the agreement.

[9] The CFMEU agreed that there were in fact no employees engaged in work at the site covered by the Agreement, but submitted that this may be a temporary situation. 2

[10] The CFMEU submitted that either the Applicant may recommence production operations at the mine, the mine would be sold and the new operator would recommence production operations or that rehabilitation work at the site would be subject to the coverage of the Agreement.

[11] In relation to the public interest, the CFMEU contended that the public interest weighed against the Agreement being terminated, as the Applicant has a legislative obligation to rehabilitate the site. Further to this the CFMEU submitted that the Applicant would need to engage employees for this purpose and “at least some of those employees” 3 would be performing work that is subject to the Agreement. In this event, the CFMEU submitted that terminating the Agreement, would mean that any future employees engaged in this work would only have the minimum conditions of the relevant modern award.

[12] It followed, in the CFMEU’s submission, that terminating the Agreement with this possibility of engaging employees to undertake rehabilitation work, would undermine the objectives of the Act, specifically in relation to promoting fairness in negotiating Enterprise Agreements, and would be contrary to the public interest.

[13] The CFMEU submitted that given the likelihood of possible future employment for the purposes of rehabilitation work or the possible recommencement of mining operations the Agreement should not be terminated.

[14] The CFMEU submitted that in its view, should the price of coal rise or the value of the Australian dollar fall, it is “likely” that the Applicant would recommence operations at the mine.

[15] The CFMEU also placed some reliance upon a possible transfer of business that will occur and that recommencement of operations is likely in that event.

[16] In support of the objection the CFMEU filed a statement of Mr Glenn Power, District Vice President. Mr Power provided evidence in relation to the discussions that occurred between the parties in relation to the, at the time, prospective closure of the mine. Mr Power’s evidence was that he was not at the time advised of the reason for the closure and is still unaware of the reason for the closure of the mine.

[17] Mr Power also gave some evidence about redeployment options that were discussed between the parties at the time of the closure discussions. Mr Power stated that he was of the view that some employees were temporarily reassigned to other sites but that they were to be offered an option of returning to the Blair Athol mine for rehabilitation work.

[18] Mr Power also referred to what was, in his view, an unusual situation of the Applicant entering into discussions with the CFMEU regarding the impending closure of the mine whilst also undertaking enterprise agreement negotiations and agreeing to a ‘3 year term’ for that proposed Agreement. The CFMEU submission was that this ‘term’ gave weight to the argument that the current agreement should not be terminated.

[19] Mr Power also attached to his statement a letter sent to a local citizen on behalf of the Queensland Minister for Environment and Heritage Protection in relation to the requirements of mine site rehabilitation. This was provided as evidence that the Applicant was required to undertake rehabilitation work and therefore evidence of the likelihood of employees being engaged in the future who would undertake work currently covered by the Agreement.

Summary of Applicant’s submissions and evidence

[20] The Applicant submitted that it was not contrary to the public interest to terminate the Agreement. The Applicant relied upon the application, its further submissions and the statement filed with the originating application

[21] The Applicant submitted that the objection of the CFMEU was based upon speculation as to possible situations which may arise. 4

[22] The Applicant submitted that in considering the application the Commission would be guided by “likely foreseeable consequences as opposed to speculation”. 5

[23] In so far as the rehabilitation work and decommissioning in general are concerned the Applicant submitted that it is working with stakeholders regarding the mine site. The Applicant submitted that the obligation is on the Applicant to rehabilitate the site, but that there is no obligation that requires employees of the Applicant to undertake this work. One of the options that the Applicant submitted was open to them was the use of contract labour providers or specialists in this rehabilitation work.

[24] As to any possible transfer of business that may occur the Applicant submitted that a transfer cannot occur as it has been more than three months since relevant employees were terminated and therefore the requirements of s.311(1) of the Act cannot be satisfied.

Consideration

[25] The Applicant submitted that the Commission should be guided by the authority of Kellogg Brown and Root v Esso Australia. 6 Kellogg Brown was a decision of the Full Bench of the AIRC in relation to an appeal from multiple applications for the termination of various agreements.

[26] The decision in Kellogg Brown was pursuant to the Workplace Relations Act 1996 (Cth) and terminations under that Act. However considerations of public interest were required under that Act and applicable to this matter. It is however necessary to note an important difference in the circumstances. In Kellogg Brown part of the reasoning of the Full Bench rested on the finding that the test required under that Act was only to consider the public interest not the public interest and the views of the parties. 7 The current Act specifically requires that the Commission take into account the views of all parties to the Agreement.8

[27] Relevantly the Full Bench noted as follows:

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.” 9

[28] It is important to note that the Full Bench in Kellogg Brown identified that the public interest, for the purposes of an application for termination of an Agreement, is directed to the consequences of the termination. 10 At its highest, the termination of this Agreement, as at the time of this decision, will have no effect on any employee. The termination will have an effect on the illusory rights and obligations of the Applicant and the CFMEU. Rights which, at the moment, have no content given that there are no employees employed under the Agreement, and no evidence of any “likely foreseeable consequence” that there will be employees employed under the Agreement.

[29] In relation to the prospective employees relied upon by the CFMEU, in objecting to this application, the Respondent argued that an effect of the termination may be that the relevant modern award will cover and apply to their employment. The termination does not affect the ability of a future employee or the Union from initiating bargaining for the purposes of their employment whether that be future production operations, of which there is no evidence that such is even a likelihood with the Respondent, or in the event of rehabilitation commencing, of which there is no definitive evidence as to the final conduct of rehabilitation works, or when they might be.

[30] More than a speculative basis of the effect that the termination will have on the public interest is required; the consideration must be guided by the likely foreseeable consequences.  11

[31] The evidence introduced by the parties does not substantiate the objections of the CFMEU as to likely foreseeable consequences, they are merely, in relation to rehabilitation work, a list of possibilities.

[32] No significant, reliable inferences can be drawn from the reference by the Respondent to the termination of other Agreements of the Respondent. The context of the termination of those Agreements turn on their own specific circumstances in relation to public interest and the view of the relevant parties to those Agreements (as set out in s.226(b)(i) and (ii) of the Act).

Conclusion

[33] The Applicant stated that the circumstances to be considered are that the mine has been de-commissioned, and no longer employs any employees at the mine. The only factual information about the future of the mine site, which was raised between the parties, is the necessary rehabilitation work on the mine site, as required in accordance with relevant environmental legislation.

[34] The Applicant stated that the rehabilitation plan for this future work has not been finalised yet. The Applicant stated that the rehabilitation work was “filling in the hole and planting vegetation”. The CFMEU stated that this work was part of the full cycle of the mine and could be done by ‘Mineworkers’ pursuant to the Agreement. The Applicant did not agree that such work necessarily fell within the ‘Mineworker’ definition and it was yet to be decided if such work would be done by contractors or by the engagement of employees directly. The CFMEU argued that if employees were used, the Agreement would provide a suitable vehicle for their employment. The Respondent argued that the opportunity may be lost for employees to be paid at those rates under the Agreement.

[35] The Applicant argued the Agreement terms and conditions are not appropriate to the proposed rehabilitation work. The Applicant submitted that the Agreement relates to a productive coal mine and it would be inappropriate to apply its terms to rehabilitation work. In the circumstances, the debate is in relation to these ‘illusory’ rights of a potential prospective group of employees, undertaking work (at some future date) that is separate to that work, that has been occurring under the Agreement.

[36] With regard to the Respondent’s reference to the proposed three year replacement Agreement, the agreed term of a possible proposed replacement agreement that does not come to fruition due to the intervening circumstances of the closure of the mine, cannot, in the circumstances, act against the termination of the prior Agreement.

[37] The time has also lapsed for any transmission of business considerations to be taken into account.

[38] On the available material, it is concluded that the termination of the Agreement would not be contrary to the public interest in accordance with s.226(a).

[39] In addition I have taken into account the views of the CFMEU and the Applicant and note that no employees are currently employed or covered by the Agreement. In this regard as the Applicant emphasised:

“The Full Bench relevantly stated in KBR:

....For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences. 12

Here the Commission should be guided by likely foreseeable consequences, not speculation about possible consequences. There are no relevant employees employed. The Applicant has yet to decide the method for performing rehabilitation work. To this end, the CFMEU ask the Commission to speculate about future employees.” 13

[40] Taking into account the views and circumstances, as per ss.226(b)(i) and (ii) (in combination with the public interest considerations) these matters give weight to the termination of the Agreement.

[41] In all the circumstances, I am satisfied that the requirements of s.226 of the Act relevant to this application have been met. The application is approved and, in accordance with s.227 of the Act, the Agreement is terminated with effect from the date of this decision.

[42] I Order accordingly.

COMMISSIONER

 1 AC316946.

 2   CFMEU submissions at paragraph 20.

 3   CFMEU submission at paragraph 11.

 4   Applicant submissions at paragraph 6.

 5   Kellogg Brown and Root Pty Ltd and others v Esso Australia Pty Ltd [2005] AIRC 72.

 6 [2005] AIRC 72.

 7 Ibid at [21].

 8   Fair Work Act 2009 (Cth) s226(b).

 9   Kellogg Brown and Root Pty Ltd and others v Esso Australia Pty Ltd [2005] AIRC 72 at [24].

 10 Ibid at [27].

 11 Ibid at [27].

 12   Kellogg Brown and Root Pty Ltd and others v Esso Australia Pty Ltd [2005] AIRC 72 at [27].

 13   Applicant’s further outline of submissions at 3 and 4.

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<Price code C, AC316946  PR535647>