The Association of Professional Engineers, Scientists and Managers, Australia v Mount Arthur Coal Pty Ltd

[2016] FWC 1744

[2016] FWC 1744 [Note: An appeal pursuant to s.604 (C2016/3294) was lodged against this decision - refer to Full Bench decision dated 1 June 2016 [[2016] FWCFB 3452] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.531 - Application for an order where failure to notify or consult registered employee associations about dismissals

The Association of Professional Engineers, Scientists and Managers, Australia
v
Mount Arthur Coal Pty Ltd
(U2016/5274)

COMMISSIONER SPENCER BRISBANE, 18 MARCH 2016

Mt Arthur Coal Mine - Application for orders under s.532

Introduction

[1] This Application was made under s.531 of the Fair Work Act 2009 (the Act) to the Fair Work Commission (the Commission) on 10 March 2016. The Application relates to an announcement by BHP Billiton on behalf of Mount Arthur Coal Pty Ltd (the Respondent/the Employer), on 8 March 2016 that they would be making employees redundant. The Association of Professional Engineers, Scientists and Managers, Australia (APESMA/the Union/the Applicant) alleged that the Respondent failed to notify or consult the Union about the dismissals.

[2] The matters were listed in Brisbane on 11 March 2016, 17 March 2016 and 18 March 2016. At the hearing of this matter on 10 March, 2016, the parties, by agreement entered into a period of consultation which averted on that day, the need for the hearing. An agreed process was reached which included a further listing of this matter on 17 March 2016, at which time a conciliated outcome to resolve the matters between the parties was endeavoured to be reached. However, this failed, and it was agreed the matter would be listed for hearing in Brisbane, with a video link to Sydney at 9:00am Queensland time (10:00am Sydney time), on Friday, 18 March 2016.

[3] The Applicant was represented by Mr Ingmar Taylor, of counsel, and instructed by Mr Andrew Rich and Ms Kathryn Presdee of Slater and Gordon, and Ms Belinda Giblin, of APESMA. The Respondent was represented by Mr Ian Humphreys and Ms Caitlyn Ryan of Ashurst, instructed by Mr Shaun McKenzie of BHP Billiton.

[4] Further submissions and evidence were provided late into the evening on Thursday 17 March 2016 and there was some pressure on the Commission and the parties in dealing with this matter on an urgent basis, given that employees had been advised that redundancies were to occur and that the Union was seeking urgently to be afforded further consultation. In addition, of importance was that the Employer weas sought by the union (as set out below) to afford a further two week period and an  additional meeting of the type set out in the final order with an exchange of further information. It must be recognised that these orders were sought against the background of the Employer, on the preceding Friday (11 March 2016), agreeing to a week of consultations as below by agreement with Union.

[5] The agreement is extracted from the transcript of Friday, 11 March 2016 as follows:

“(1) Mr Mackenzie and Ms Giblin will meet on Monday 14 March at 9 am Sydney time by telephone conference to continue consultation.

(2) The union will identify any additional information required by them by close of business today.

(3) The union will exercise right of entry powers under the Fair Work Act on Tuesday and Wednesday 15 and 16 March to have discussions with employees. The company will not obstruct the exercise of those powers.

(4) At or after 5.30 pm on Wednesday 16 March or early Thursday 17 March at a time convenient to them, Ms Giblin and Mr Mackenzie will further consult by telephone.

(5) There will be a report back to the Fair Work Commission at Thursday 1 pm Brisbane time, that is Thursday 17 March.

(6) Staff employees who have been offered alternative roles have until noon Friday 18 March to respond to those offers. If any of those staff have already accepted an offer they will be told that they have until that time, that is noon Friday 18 March, to reconsider and confirm or otherwise indicate their position in relation to the offer. If they do not want the alternative role they will have confirmed to them that a VR is an option and they will be given a summary of their entitlements under a VR.

(7) Staff who have received notices of redundancy will have the start date of their notice period altered to next Friday 18 March, absent any agreement to the contrary arising out of the consultation which is to occur next week.

(8) No further notices for redundancy will be issued prior to noon Friday 18 March.

(9) No offer of redeployment will be made which would take effect prior to noon Friday 18 March.” 1

[6] During the course of that week, the Employer had provided additional information and met with the Union representatives. At the commencement of that week, and in this period of consultation, the Employer was uncertain what information the Applicant was seeking. Meetings and exchange of information did occur but this was not to the satisfaction of the Union. However, it was not distinctly apparent what additional information was being sought.

[7] In fact, the orders that were applied for also did not specifically stipulate the nature of the outstanding information, but did seek a meeting that had line managers present to provide further responses to the further issues that may arise in relation to the intended redundancies.

[8] It must be recognised that there was, at the time of the hearing, some outstanding information resulting from this week of consultations. Further information had been sought from Mr Shaun McKenzie only the day prior to the hearing on 17 March 2016.  Mr McKenzie undertook to provide answers to the questions arising on 16 March 2016 but not documented by the union. No criticism is aimed at any of these parties in relation to that exchange, given that these proceedings and involvement in them had consumed their time and prevented them from completing those matters.

[9] The following reasons have been provided to provide an explanation of the orders issued at 2:00pm today at the earliest opportunity. The transcript of the hearing on 18 March 2016 has not been available at this time. Accordingly, I reserve the right to review this document against the transcript and if required, provide additional reasons. Such would be confirmed shortly after the time the transcript is available to me.

Legislation

531 FWC may make orders where failure to notify or consult registered employee associations about dismissals

(1) The FWC may make an order under subsection 532(1) if it is satisfied that:

(a) an employer has decided to dismiss 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons; and

(b) the employer has not complied with subsection (2) (which deals with notifying relevant registered employee associations) or subsection (3) (which deals with consulting relevant registered employee associations); and

(c) the employer could reasonably be expected to have known, when he or she made the decision, that one or more of the employees were members of a registered employee association.

Notifying relevant registered employee associations

(2) An employer complies with this subsection if:

(a) the employer notifies each registered employee association of which any of the employees was a member, and that was entitled to represent the industrial interests of that member, of the following:

(i) the proposed dismissals and the reasons for them;

(ii) the number and categories of employees likely to be affected;

(iii) the time when, or the period over which, the employer intends to carry out the dismissals; and

(b) the notice is given:

(i) as soon as practicable after making the decision; and

(ii) before dismissing an employee in accordance with the decision.

Consulting relevant registered employee associations

(3) An employer complies with this subsection if:

(a) the employer gives each registered employee association of which any of the employees was a member, and that was entitled to represent the industrial interests of that member, an opportunity to consult the employer on:

(i) measures to avert or minimise the proposed dismissals; and

(ii) measures (such as finding alternative employment) to mitigate the adverse effects of the proposed dismissals; and

(b) the opportunity is given:

(i) as soon as practicable after making the decision; and

(ii) before dismissing an employee in accordance with the decision.


532 Orders that the FWC may make

(1) The FWC may make whatever orders it considers appropriate, in the public interest, to put:

(a) the employees; and

(b) each registered employee association referred to in paragraph 531(2)(a) or (3)(a);

in the same position (as nearly as can be done) as if the employer had complied with subsections 531(2) and (3).

(2) The FWC must not, under subsection (1), make orders for any of the following:

(a) reinstatement of an employee;

(b) withdrawal of a notice of dismissal if the notice period has not expired;

(c) payment of an amount in lieu of reinstatement;

(d) payment of severance pay;

(e) disclosure of confidential information or commercially sensitive information relating to the employer, unless the recipient of such information gives an enforceable undertaking not to disclose the information to any other person;

(f) disclosure of personal information relating to a particular employee, unless the employee has given written consent to the disclosure of the information and the disclosure is in accordance with that consent.


533 Application for an FWC order

The FWC may make the order only on application by:

(a) one of the employees; or

(b) a registered employee association referred to in paragraph 531(2)(a) or (3)(a); or

(c) any other registered employee association that is entitled to represent the industrial interests of one of the employees.

The Orders sought by the Applicant

[10] At the hearing on 18 March 2016, the Applicant sought the following orders:

“2. Order or relief sought

Interim Relief (to be sought before 12 noon 18 March 2016)

1. Pursuant to section 532 and 589{2) of the Fair Work Act 2009, the Commission
orders that until this matter is determined or further order of the Commission the
Respondent will not issue Staff employees with notice of redundancy.

Final Relief

Pursuant to section 532 of the Fair Work Act 2009, the Commission orders that:

1. Until 1 April 2016, or earlier order of the Commission, the Respondent will refrain
from:

a. issuing further notices of redundancy.

b. making offers of redeployment that would take effect prior to Monday 4 April 2016.

2. By Thursday 24 March 2016 the Respondent is to hold a meeting with the applicant in respect of each department and at that meeting or meetings:

a. one or more senior managers from the mine will be present;

b. management will identify the nature of the proposed changes to the structure of each department including the number of Staff to be employed, the duties of the positions in the new structure and the number of Staff who are proposed to be made redundant;
c. there can be at least one Staff employee representative from the department present when that department is being discussed.

d. the Respondent's representatives will use their best endeavours to answer questions raised and engage in discussion as to alternative proposals.

3. The applicant is to request any additional information required by it by 4pm on Tuesday 29 March.

4. The Respondent will meet with the applicant on Wednesday 30 March after 2pm Sydney time by telephone conference to continue consultation. Nothing prevents discussions at other additional times.

5. Within the next 7 days the Respondent is to provide all Staff employees with the opportunity to express interest in being made redundant or being deployed to a different mine and will have regard to such expressions of interest when determining who to select for redundancy.

6. Staff who have received notices of redundancy will have the start date of their notice period altered so it does not commence any earlier than Staff not yet given the notice, absent any agreement to the contrary.

7. Staff who receive notices of redundancy will be given the opportunity to apply to be
redeployed to other mines controlled by companies related to the Respondent.” 2

Reasons for the Orders

[11] The orders [PR578159] were issued in accordance with the timeline of 2:00pm Friday, 18 March 2016, provided by the Employer, until which time they would hold off notifications of redundancies or redeployment offers. The Employer had adjusted this time frame to accommodate the further hearing in this matter. The time frame had been necessary, from the Employer’s perspective, to implement the redundancies, as the redundancies were deemed necessary against the Company’s recently released interim results and the challenging conditions in the global coal market. The "changes required for Mount Arthur Coal’s viability" had been set out in a broadcast alert on 8 March 2016, which detailed the nature of the decision that the company had made to deal with these matters. That broadcast document states:

“BroadcastALERT

Important information for employees

8 March 2016

Changes required for Mr Arthur Coal’s viability

As you wold be aware, we continue to face very challenging conditions in the global coal market.

Two weeks ago, BHP Billiton released its Interim Results for the period ending 31 December 2015 and NSW Energy Coal posted a loss of US$9 million.

I know that you will be disappointed that the work done so far to strengthen Mt Arthur Coal’s position has not delivered on our pipeline of production cost savings and productivity improvements. Only when we deliver that pipeline will Mt Arthur Coal be better positioned to compete globally in an expected prolonged period of low prices.

Our objective is to reduce production costs by SU$100 million and improve productivity by 10 per cent in the next six months. We believe these targets, which has been determined by benchmarking against other assets within BHP Billiton and the industry, are both achievable and necessary. If we can do this, then Mt Arthur Coal will be better positioned for the future.

In order to achieve this, a decision has been made to reorganise the mine’s operations which will help us deliver sustainable productivity improvements. This decision will result in the reduction of approximately 290 roles at the time.

This is a necessary path towards transforming the mine to ensure we can leverage the scale of Mt Arthur Coal’s operation, establish leading practice in maintenance and ensure we have efficient support for the operation.

This is not a decision that was taken lightly. It is a decision that will challenge the way we work but it is absolutely necessary. The alternative of not acting to improve the mine’s competitiveness would only weaken the mine’s position further and put the operation in jeopardy.

I know this decision will impact you and your families in different ways and we are committed to ensuring we support you through this difficult time. Affected employees will be provided with support services, and we have an EAP provider on site today located in the meetings rooms adjacent to the Main Administration Building’s reception. I would encourage anyone who is feeling anxious about today’s announcement to make use of the service. Employees’ family members can also utilise the confidential EAP service.

We will ensure that the impacted teams continue to receive support as we work through the implications of this decision with them.

Finally, on a personal note and being new to this role, I want you to know this was a very difficult decision to oversee as one of my first actions, but is it one I firmly believe will position Mt Arthur Coal on a stronger footing. And, while this will challenge all of us in different ways, it is important as always to look after yourself and your colleagues and ensure that we all continue to display our Charter Values in our interactions.

James Palmer

Asset President NSW Energy Coal” 3

[12] In relation to the jurisdictional prerequisites of s.531, it was not in contention that sections 531(1)(a) and (c) have been met. The Union argued that the Employer has not complied with s.531(3) and therefore s.531(1)(b) could not be met.

[13] On the consideration of the facts and the circumstances against the jurisdictional criteria in this matter, it was the notification of dismissal of two employees on 10 March 2016 that prevented satisfaction being drawn in relation to the relevant jurisdictional criteria in s.531(3) being met. In addition, as per the evidence of Mr McKenzie, there remains further information to be provided by the Respondent.

[14] Dealing firstly with the jurisdictional criteria in s.531(2); the Employer had complied with this subsection as it had notified the Union, being the registered employees association representing the industrial interests of these members, of the proposed dismissals and the reasons for them, the number and categories of employees likely to be affected, and the timing for the period over which the employer intended to carry out the dismissals, and I consider that this notice was given as soon as practicable after making the decision and before dismissing employees in accordance with the decision.

[15] In summary terms, the Employer stated that the Respondent’s asset manager had made the decision on Sunday, 6 March 2016 of the requirement for redundancies and Mr McKenzie rang Ms Giblin of the Union on Monday morning, 8 March 2016 and left a telephone message for Ms Giblin to return his call. He then communicated correspondence of this date to her regarding the decision.

[16] Whilst the Union advocated that satisfaction could not be brought in relation to s. 531(2)(i), that the employer had complied with notifying the Union as soon as practicable after making the decision, I do not consider the case in relation to this argument is made out. The Union argued that, given the selection process had been concluded prior to 6 March 206, this indicated that the actual decision (as per s.531(1)) had been made at a much earlier time and therefore an order was warranted given the delay in consulting between such time and the time of notification.

[17] Clearly, being able to meet the requirements of s.531(2) and the details required in the notification of such information as the number of proposed dismissals and categories of employees to be affected and when the dismissals are to be carried out, requires attention to inform the actual decision. There was no evidence, of the standard required, to substantiate that a decision had been made at an earlier time than 6 March 2016.

[18] A redacted copy of a redundancy estimate that had been prepared on a date (earlier than 6 March 2016, the decision day) was provided as part of hearsay evidence in relation to endeavouring to justify that the decision had been made by the Employer at an earlier date. Further, the Union argued that the completion of the selection process must have been connected with an earlier date of the decision than 6 March 2016. Apart from an assumption on the connection between this redundancy reconciliation and the provision of information with the details required by s.531(2), which the Union considered that this supported an earlier date of the decision, there was no evidence to substantiate that.

[19] Particularly, as the evidence of Mr McKenzie was that, at any one time there are a variety of project teams conducting work on reviewing and achieving efficiencies for each mine and these go through a number of steps of reporting prior to any definite decisions being taken, I am satisfied that the Employer had complied with providing the notification with the required information as soon as practicable after making the decision and this was done before any employee was dismissed in accordance with this decision. The date of the first notification of a dismissal was 10 March 2016. This (10 March 2016) was the date on which, by agreement, Mr McKenzie and Ms Giblin met.

[20] With respect to s.531(3), despite entering into a further period of consultation as set out and agreed to on 11 March 2016, the Respondent could not satisfy compliance with the criteria of this section. On the facts of the matter, they could not demonstrate, in accordance with the requirements of this provision, that they had provided an opportunity for the Union to consult the Employer on measures to avert or minimise the proposed dismissals and measures to mitigate the adverse affects of the proposed dismissals, as soon as practicable after making the decision, but before dismissing an employee in accordance with the decision.

[21] The first meeting only occurred with the Union on 10 March 2016, and various questions regarding the elements to be the subject of consultation in sections 531(3)(a)(i) and (ii) arose from this meeting. Satisfaction that the appropriate consultation had occurred at this meeting prior to effecting the dismissals on 10 March 2016 cannot be founded.

[22] Whilst s.531 is framed on a discretionary basis, that is, the Commission may make an order if it is concluded that the employer has not complied with sections 2 or 3, it is clear that some information was still outstanding from the further week of consultation and that providing an additional opportunity for consultation would allow for the direct discussion with line managers regarding the proposed redundancies. This was the outstanding process that had been sought by the Union (in terms of the specific terms of the meeting) and the provision of such and the ability to raise questions falling from that would serve to finalise the consultation exercise that had already been undertaken in the prior week by consent. The Union had conducted meetings on site with their members, met with Mr McKenzie, had raised questions and received responses regarding the information envisaged by s.531(3).

[23] The rights of the Employer to proceed in the current climate facing the coal industry with a plan of redundancies to improve the efficiency of the mine must be recognised. Whilst the order highlights the non-compliance with s.531(3)(b)(i) given the two dismissals that were notified prior to the completion of the steps in s.531(3), it must be noted that the Employer had, after 11 March 2016 (at which time the commencement of the notice period of these two dismissals had been delayed), provided additional information to the Union. This was in terms of the agreed process of consultation from the conference on 11 March 2016 (arising from the conciliated terms of the plan to hold further discussions regarding measures to minimise the proposed dismissals and to mitigate the adverse effects). It must be emphasised that the two employee’s notification of the redundancy was not revoked, but the commencement of the notice period was delayed.

[24] The Employer cannot be held endlessly to account if the Union does not progress satisfactory questions or is not equally satisfied with the Employer’s answers. The loop of consultation must be concluded at some point and simply if the Union is not satisfied with the Employer's responses this does not justify the continual extension of the consultation process. Requests for further consultation without specificity of what is lacking or absent should not give rise to a period where it is not understood why the process is being extended. The case authorities do not require that consultation resembles joint decision making. The chronology detailing the consultation that the Employer has undertaken with the Applicant, as per Exhibit 6, demonstrates the steps taken and the exchanges of information as sought by the Union and responded to by the Employer.

[25] The Union had sought voluntary redundancies and expressions of interest for redeployment. Mr McKenzie’s evidence was that the Employer, in terms of these redundancies, would not agree to such terms, given that they required to retain specific skill and ability.

[26] The further period ordered allows for the employees to gain an additional understanding as per the Union’s request from the line managers as to the intended plan of redundancies. This additional period, in connection with the agreed prior period, affords the Union further opportunity for consultation in a meaningful way. However, effecting notification of the redundancies does not bring to a halt the ability for further consultation during the notice period of potentially affected employees. This is in accordance with the Decision of  CFMEU v Newcastle Wallsend Coal Company Pty   Print R0234, Ross VP, MacBean SDP and Deegan C, 21 December 1998, as follows at [57]-[60]:

“57. The appellant also argued that the approach contended for by the respondent and accepted by Commissioner Harrison in the proceeding below would defeat the purpose of s.170GA. It would negate the right of employees and their unions to have the opportunity for genuine consultation about avoiding or mitigating the effects of redundancies before an irrevocable and legally binding decision had been made. This submission requires a consideration of the legal effect of a valid notice of termination.

58. A valid notice cannot be withdrawn without the consent of the party to whom it is given, even where the period specified in the notice has not expired. As Gray J pointed out in Birrell v Australian National Airlines Commission36 if unilateral withdrawal of notice was allowed, most inconvenient results could follow: for example, an employee given notice might then enter into a fresh contract of employment with another to commence duty on the expiration of the notice from the present employer. If the notice could then be withdrawn by the first employer, the employee would find himself bound by two concurrent contracts of employment. But the fact that notice cannot be unilaterally withdrawn does not mean that the giving of notice is irrevocable. It is clear that such a notice could be withdrawn by the consent of both parties to the contract. In Riordan v War Office Diplock J said:

"The giving of a notice terminating a contractual employment, whether by the employee or employer, is the exercise of the right under the contract of employment to bring the contract to an end, either immediately or in the future. It is a unilateral act, requiring no acceptance by the other party, and, like a notice to quit a tenancy, once given it cannot in my view be withdrawn save by mutual consent."37

59. As a valid notice of termination may be withdrawn by consent it cannot properly be regarded as `legally binding and irrevocable' in the manner contended by the appellant. After consultation parties may agree on measures to avert some or all of the redundancies and as a consequence may agree to the withdrawal of the termination notices. We later discuss the specific circumstances of this case and the appellant's claim that the respondent had made an irrevocable decision on 3 July 1998 to terminate the employee's employment.

60. For the reasons given we have reached the same conclusion as the Commissioner below, namely that the terminations of employment in this case took place when the notice periods expired, that is on either 11 or 18 August 1998 depending on the length of an employee's service.”

(underline added)

[27] Mr Ian Humphreys emphasised that the relevant section (s.351(3)(a)) only requires the Employer to afford the Union an opportunity to consult the Employer. Whilst I am of the view that this will have occurred with the discharge of the orders, the opportunity had not been afforded in terms of s.531(3) before dismissing an employee in accordance with the decision taken.

[28] Further, a review of the opportunity provided and the consultation that has occurred and the further opportunity afforded by the orders, has been considered against the case authorities as included in the submissions of the Applicant. Mr Ingmar Taylor, counsel for the Applicant, summarised the case law in relation to consultation in the Applicant’s submissions, and this has been taken into account, in terms of a consideration of the process.

[29] I do not consider that, as argued by the Union, that the delay between Sunday 6 March and the notification of the decision on 8 March or the further agreed meeting time on 10 March gives rise to a delay that would demonstrate a failure to consult on the Respondent’s part. It is understood that the Union argued this in accordance with the conclusion reached by Commissioner Roe in the Norwich Park Mine cessation of operations Decision 4 and order5 and the CFMEU v Newcastle Wallsend Coal Company Pty Decision6. These cases are distinguishable from the current case as an irrevocable decision had been made, unlike the current circumstances, where no such irrevocable decision has been communication. Apart from a decision to implement a number of redundancies, no communication to particular employees, apart from the two employees mentioned, has been undertaken. The future notification after the completion of further consultation the subject of these orders does not prevent further consultation occurring during the notice period.

Conclusion

[30] Final orders were made in this matter [PR578159] for a range of reasons to remedy the non-compliance as set out above. These include; to afford a further opportunity for consultation as per the relevant sections, in order to provide certainty to the Mine in terms of the decision made and to employees awaiting specific information regarding whether their jobs were redundant and to avoid continuing general rounds of consultation that would prevent the implementation of the redundancies, in circumstances where the Employer had endeavoured, during the additional period, to provide the information sought. 

COMMISSIONER

 1   Transcript, Friday 11 March 2016 at PN3 – PN11

 2   Exhibit 5

 3   Attached to Exhibit 1, Statement of Belinda Giblin

 4   Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd[2012] FWA 3945

 5   PR523558

 6   CFMEU v Newcastle Wallsend Coal Company PtyPrint R0234, Ross VP, MacBean SDP and Deegan C, 21 December 1998

Printed by authority of the Commonwealth Government Printer

<Price code C, PR578165>