Construction, Forestry, Mining and Energy Union v Anglo Coal

REASONS FOR JUDGMENT 1 Anglo Metallurgical Coal Pty Ltd operates the Callide Mine near Biloela in Central Queensland. The Callide Mine comprises two open cut mining areas. One is called Boundary Hill, the other is called Southern. These two areas are about 20 kilometres apart. The Callide Mine produces thermal coal, primarily for domestic power generation in Queensland. 2 The respondent, Anglo Coal (Callide Management) Pty Ltd (Anglo Coal) (inferentially, a related company) supplies labour to Anglo Metallurgical Coal Pty Ltd for the operation of the Callide Mine. 3 Anglo Coal is a party to the Callide Mine Union Enterprise Agreement 2012 (the Enterprise Agreement). The applicant, the Construction, Forestry, Mining and Energy Union (CFMEU) is covered by that agreement. 4 The Enterprise Agreement was made under the Fair Work Act 2009 (Cth) (FW Act). It was approved, pursuant to the FW Act, by the conciliation and arbitration commission presently known as the Fair Work Commission (industrial commission) on 4 April 2012. It commenced operation on 11 April 2012. The nominal expiry date of the Enterprise Agreement was 31 December 2013. 5 By virtue of the operation of s 59 of the Coal Mining Safety and Health Act 1999 (Qld) and its application to the Callide Mine, it is a feature of the operation of that mine that, at each of its open cut mining areas, a person holding an open cut examiner's certificate of competency must be appointed by the "site senior executive" (see s 25 of that Act) to carry out responsibilities and duties defined in a regulation made under that Act in relation to surface excavations. A person holding such a certificate is known as an "open-cut examiner" (OCE). The regulation concerned is the Coal Mining Safety and Health Regulation 2001 (Qld), reg 105 of which provides: 105 Open-cut examiner's responsibilities and duties - general (1) The site senior executive must ensure - (a) the main responsibility of an open-cut examiner for the mine is the safety and health of persons in or around the surface excavation during mining activities in or around the surface excavation; and (b) the open-cut examiner's main duties relate to the main responsibility. (2) Subsection (1)(b) does not prevent the open-cut examiner having other duties at the mine, including, for example, duties given to the examiner under the mine's safety and health management system. 6 As can be seen from the terms of reg 105, while an OCE has a "main responsibility" for health and safety during mining activities, a person holding that appointment is not prevented from having other duties. The effect of reg 104 of the same regulation is that there must be an OCE on duty whenever mining activities are being carried out in or around a surface excavation at the Callide Mine. 7 The more detailed facts relevant to this case are, in the main, agreed between the parties. Unless stated otherwise, what follows is based on the agreed facts. 8 Under the Enterprise Agreement, the role of an OCE is classified as a "Production Employee Level 3 Position". 9 At some stage prior to 14 March last year, Anglo Coal resolved to recruit employees for new positions at the Callide Mine to be known as "Open Cut Examiner/Supervisor" (OCE/Supervisor). To this end, on or about 14 March 2014, it advertised vacancies for OCE/Supervisor positions at that mine on fixed term contracts. As a result, Anglo Coal came to employ the following persons as OCE/Supervisors: (a) on 14 May 2014 - Mr Ellis Brunker; (b) on 15 May 2014 - Mr Dallas Anthony; and (c) on 13 June 2014 - Mr Keith Hallam. 10 Even though reg 105 permits an OCE to undertake other duties, the practice at the Callide Mine in relation to the holder of an OCE/Supervisor position has been for the holder of that position not to undertake a dual role while on duty. In other words, the holder of an OCE/Supervisor position is not required to perform both OCE and supervisory roles on the same shift. 11 There are also some persons holding supervisor positions at the Callide Mine who happen to hold an open cut examiner's certificate of competency. Thus, in 2013 and 2014, the dragline/drill and dozer superintendent has filled in as the onsite OCE at times when there was otherwise a shortage of persons qualified to act as the OCE during a particular mining shift. In keeping with the practice applied to the holder of the OCE/Supervisor positions, when such a supervisor undertook duty as the OCE, that person did not additionally undertake duty as superintendent on that shift. 12 Mr Richard Hibble is employed by Anglo Coal at the Callide Mine as a Production Operator. As such, he, too, is covered by the Enterprise Agreement. 13 In respect of its representational role in the mining industry, the CFMEU's rules provide for the local grouping of its members in what are, for historical reasons, termed "Lodges". Mr Hibble is the President of the CFMEU's Callide Valley Lodge. Not by coincidence, given that he holds that position, Mr Hibble is also a Workplace Representative for the purposes of the Enterprise Agreement (clause 61.2). By virtue of his holding that position and his office in the Lodge, Mr Hibble is a conduit between fellow workers at the Callide Mine and Anglo Coal in relation to a range of grievances, disputes and a myriad of other issues, collective and individual, that arise from time to time in the course of the operation of that mine. 14 At some stage prior to 19 May 2014 but inferentially on or about 14 May 2014, Mr Hibble became aware that Anglo Coal had: (a) advertised the new OCE/Supervisor positions; (b) employed at least one person in that position; and (c) not involved any person from the relevant workgroup in the recruitment or selection process for that position. He considered that, in these circumstances, Anglo Coal had failed to comply with the Enterprise Agreement and, in particular, a recruitment and selection procedure for which it provides. 15 To understand why Mr Hibble came to this view, his subsequent conduct as Lodge President and Workplace Representative and how it is that the CFMEU has subsequently come to institute the present proceedings, it is necessary to excerpt from that agreement clauses dealing with recruitment and selection, employee classification and the grievance procedure: Clause 9.1: 9. Employee Classification 9.1 Production Classification Levels Unless employed in accordance with clause 10, the Company will classify an Employee as either: • Production Employee Level 1; • Production Employee Level 2; or • Production Employee Level 3 a) Progression from Production Employee Level 1 to Production Employee Level 2 will be on the acquisition of 3 core operating skills chosen by the Company to meet the current operational needs, or after 1 year of employment, whichever occurs first. In addition to these skills an Employee may be required to gain any other skills in accordance with clause 8.3(a). The core operating skills at the time of commencement of this Agreement are OCE, Shotfirer, Truck, Shovel, Excavator, Loader, Dozer, Grader, Dragline, Drill, CHP, Lube/Servicing. b) Progression form Production Employee Level 2 to Production Employee Level 3 will be by appointment at the discretion of the Company. c) The main duties of a Production Employee Level 1 and Production Employee Level 2, include, but are not limited to, the operation and/or maintenance of equipment for mining activities. d) The main duties of a Production Employee Level 3 will be in accordance with the Company's Position Description as varied from time to time for the position of either Shotfirer or Open Cut Examiner, and may include those duties prescribed in 9.1(c) and other duties specified by the Company in accordance with applicable legislation. The Company may at its discretion also appoint other Employees performing existing production skills as a Production Employee Level 3. Clause 8.2: 8.2 Recruitment and Selection Recruitment and selection decisions for new Production or Engineering Employees will be based on merit and undertaken with the involvement of up to two Employees from the relevant workgroup. The final decision rests with Management. Clause 16: 16. Grievance Procedure 16.1 Continuation of Work Any grievance, dispute or claim arising out of the application of this Agreement and the National Employment Standards (NES) shall be dealt with in accordance with clause 16.2. Whilst this procedure is being followed, work will continue in accordance with the reasonable work directions of an authorised Company representative, within the Employee's recognised skills competence and training, and in accordance with safe working practices. The parties will seek speedy resolution to grievances arising out of the application of this Agreement and will not unreasonably hinder genuine endeavours for the speedy resolution of a grievance. 16.2 Procedure a) The matter shall first be discussed between the Employee, the Employee's Workplace Representative and their immediate Supervisor. b) If the matter remains unresolved, it shall be referred in writing by the person raising the grievance for discussion between the Employee, the Employee's Workplace Representative and the relevant Process Coordinator or their Representative. c) If the matter remains unresolved, it shall be referred for discussion between the Employee, the Employee's Workplace Representative and the relevant Department Manager or their representative. d) If the matter remains unresolved, it shall be referred to an official or employee of the Employee's union, and senior company officials for resolution. e) If the matter remains unresolved, it will be referred to Fair Work Australia or court of competent jurisdiction. By agreement between the parties all or any of the steps c) or d) may be bypassed in the interests of speedy resolution. 16 On 19 May 2014 Mr Hibble put his view to Anglo Coal's then Acting Production Supervisor and Production Superintendent, Mr Paul Higgins. This did not result in any resolution of what Mr Hibble saw as a grievance. As a result, Mr Hibble formalised his views and the nature of the grievance in a document entitled, "Anglo Coal (Callide Management) Pty Ltd - Document of Grievance" which he then sent on 20 May 2014 as an enclosure to an email directed to Ms Stephanie Oppermann, Anglo Coal's Human Resources Superintendent at the Callide Mine. 17 By a letter sent to Mr Hibble on 26 May 2014, Ms Oppermann, on behalf of Anglo Coal, replied to this grievance. Materially, she stated in the letter and in relation to the OCE/Supervisor position: This role is not covered by the [Enterprise Agreement]. Therefore, the recruitment of this role is not subject to the [Enterprise Agreement's] Recruitment and Selection clause or the Grievance Procedure. The Company is not therefore required to progress your Grievance under the Grievance Procedure of the [Enterprise Agreement]. 18 On 6 August 2014, Mr Hibble sent correspondence to Ms Oppermann in which he took issue with each of these propositions. There was no reply by or on behalf of Anglo Coal to this correspondence. 19 The present proceedings were consequentially instituted by the CFMEU. In them the CFMEU alleges contraventions of s 50 of the FW Act constituted by a failure by Anglo Coal to comply with the clauses 8.2 and 16 of the Enterprise Agreement respectively. Apart from the declarations to this effect, the CFMEU also seeks the imposition of penalties on Anglo Coal pursuant to s 546 of the FW Act. Whether it becomes necessary to consider the amount, if any, of a penalty is dependent upon whether, in the circumstances, there has been any contravention as alleged. 20 In addition to the agreed statement of facts (and related documents), I had the benefit of affidavit evidence in chief and also oral evidence from Mr Hibble and from Mr David Palmer. Mr Palmer is presently the General Manager of Anglo American Metallurgical Coal Pty Ltd's Dawson Mine, which is located near the town of Moura, also in Central Queensland. From January 2013 until June 2014, and thus throughout the period which is critical for the purposes of the present case, he held the position of General Manager (and, for the purposes of the Coal Mining Safety and Health Act, Site Senior Executive) at the Callide Mine. Mr Palmer has extensive earlier experience, in Australia and in Canada, in the coal industry. 21 Mr Alec Andrews, an OCE at the Callide Mine also gave affidavit evidence in chief. Mr Andrews was not required for cross-examination. 22 I thought that Messrs Hibble and Palmer each gave honest evidence. The factual content of Mr Andrews evidence was not challenged. 23 I do not doubt that the CFMEU and Anglo Coal have genuinely come to disagree about whether the Enterprise Agreement applies in the circumstances of this case. Further, in light of the evidence and the submissions made on behalf of the CFMEU and Anglo Coal, I am well satisfied that neither party is unreasonable in that disagreement. That holders of the OCE/Supervisor positions are expected to and some have performed the role of an OCE at the Callide Mine does give pause for thought about whether the Enterprise Agreement applies to them. 24 Mr Hibble confirmed the agreed facts in relation to his initial raising of the grievance orally and then in writing and his receipt of the reply from Ms Oppermann. He was taxed in cross-examination about whether thereafter he had followed the grievance procedural steps set out in clause 16.2 of the Enterprise Agreement. I thought the relevance of this was moot in that Anglo Coal had plainly put, via Ms Oppermann and, inferentially, by its studied absence of a response to his August correspondence that it did not regard that procedure as applicable at all. Even so, Mr Hibble fairly conceded that this corporate stance did not stop him (and thus the CFMEU) from taking a different view as to the application of the clause 16.2 procedure. As I understood it, the point of this cross-examination was that the CFMEU ought further to have pursued the grievance procedural steps on the basis that a more senior managerial officer might have taken a different view. Yet Anglo Coal had had an opportunity upon its receipt of the August letter authored by Mr Hibble on behalf of the CFMEU to take a different view if, on reflection, that procedure was regarded as applicable. Further, if the CFMEU's view of the application of the clause is the correct one, Anglo Coal's rejection, via Ms Oppermann's letter, of that applicability upon the taking of the first step in the process by the CFMEU was sufficient to constitute a failure on the part of Anglo Coal to comply with clause 16.2. 25 In the circumstances, there was no need for the CFMEU to have pressed its case further with Anglo Coal, whose view was already obvious and immutable. It was entitled to take the question of the applicability of the grievance procedure to the industrial commission or to a court having jurisdiction under the FW Act. The matter in dispute being purely one of the true construction of an enterprise agreement, that the CFMEU opted to test the merits of its grievance before an institution of government constitutionally able to exercise the judicial power of the Commonwealth, rather than to the industrial commission, which is not entitled to exercise that power, is hardly an unreasonable step. 26 The creation of the OCE/Supervisor positions at the Callide Mine was a sequel to a staffing review conducted by Ms Oppermann at Mr Palmer's direction in February 2014. That direction and its sequel reflected Mr Palmer's desire, when General Manager, to return that mine to a "cash neutral" position by 30 June 2014. The introduction of such positions would, in his view, both reduce labour costs at the mine and give flexibility in addressing existing supervisor shortages and in ensuring OCE coverage during mining shifts. Without onsite coverage for each mining shift at each of the Boundary Hill and Southern sites, the Callide Mine would be unable to achieve the goal of "24/7" ie continuous, mining operations. At a time when the mine had been running at a loss for a number of years, the corporate imperative to achieve such change is obvious. 27 Creating employed OCE/Supervisor positions would also allow Anglo Coal to dispense with some exclusive OCE employee positions and also with more expensive contractors who undertook relief OCE work. At the same time, existing shortages of supervisors could be addressed by the role versatility offered by an OCE/supervisor position. It was never Mr Palmer's intention that the holder of an OCE/Supervisor position would undertake OCE and supervisory duty at the same time, rather that the occupant of the position had the qualifications, skill and experience to perform either role as operational needs required. I am quite sure that this intention translated into the job description or "role profile" for the new position. 28 The advice which Mr Palmer received from Ms Oppermann and upon which he and therefore Anglo Coal acted when creating, recruiting for and filling the OCE/Supervisor positions was: (a) The OCE and Production "Technician" roles were covered by the Enterprise Agreement; (b) Production Supervisor and "Production Officer" roles were staff appointments not covered by the Enterprise Agreement; (c) The OCE/Supervisor role ought to be classified in a similar way to that of a Production Supervisor or "Production Officer" so as to recognise the additional supervisory duties that the position holder would be required to fulfil and the related necessary qualifications (including the OCE certificate), skill and experience that the person would have to possess. 29 In formulating the pay for an employee holding the new OCE/Supervisor position, Mr Palmer determined that the pay should be at least equal to that paid for an existing Production Supervisor but slightly higher so as to recognise that the position holder also had OCE qualifications. At the same time, the pay for the position was higher than that of an existing OCE position, thereby recognising the supervisory skills needed by the position holder. 30 These decisions by Mr Palmer informed the advertising and recruitment process undertaken later in 2014 by Anglo Coal for the OCE/Supervisor positions. They likewise informed a related decision to terminate the contractor OCE arrangements. Yet further, they informed the absence of any consultation by Anglo Coal with the CFMEU in relation to the creation, advertising and filling of the new OCE/Supervisor positions. There was no consultation, because Anglo Coal believed that the new positions were not covered by the Enterprise Agreement. For the same reason, Anglo Coal did not involve any employee from the relevant work group in the recruitment and selection decisions concerning the new OCE/Supervisor positions. That further explains why Anglo Coal, via Ms Oppermann, put to the CFMEU, via Mr Hibble, that it did not consider the grievance process in the Enterprise Agreement to be applicable. Anglo Coal has consistently thereafter maintained that view. The CFMEU, for its part, has consistently taken the opposite view. 31 Mr Palmer was adamant in his evidence that the OCE aspect of the OCE/Supervisor position was to be secondary to that of supervisor. Observing him, I did not consider this to be a convenient ex post facto rationalisation. Neither is the OCE/Supervisor position a sham position, in substance nothing more than an OCE by another name. Such a conclusion would be inconsistent both with the pay for the new position and the way in which holders of the new position came to be rostered. The pay for the new position reflected the need to attract persons with skills that had hitherto commanded, in a position the ordinary duties of which were intended only to be supervisory, greater pay than a person without such skills but in possession of an open cut examiner certificate and employed just to perform the duties of an OCE. Hitherto, it had been a happy coincidence for Anglo Coal if one of its supervisors had such a certificate. The thinking behind the new position was that what had hitherto been happy coincidence would become a necessary feature of the holders of this new position. That feature was secondary in the sense that the ability to undertake supervisory duties was a superior skill and commanded the greater pay but ability to act as an OCE as and when required was nonetheless an important feature of the new position. 32 The fact is that there was a supervisor shortage at the Callide Mine in 2014. There was also a need, as Mr Palmer saw the application of the Coal Mining Safety and Health Act and its regulation, to have an OCE on site at each of the two sites at the Callide Mine and all at the same time to reduce labour costs. Anglo Coal had persons employed exclusively as an OCE but sometimes did not have sufficient of them for a particular mining shift. To address this shortfall, it had hitherto had to rely either on the happenstance mentioned or contractors. The creation of the OCE/supervisor positions was an inspired way of meeting these several needs. 33 Consistently with this and on the evidence, roster planning at the Callide Mine in 2014 contemplated that an OCE/Supervisor would regularly undertake OCE duty, sometimes for an extended period, sometimes not at all. However, regard to that planning does not bear out that each of the new OCE/Supervisor position holders was always allocated OCE duty only. For example, regard to one such planning document, Exhibit 5, discloses that, during the June/September 2014 period, Mr Dallas Anthony was not allocated OCE duty whereas Mr Ellis Brunker was extensively allocated to OCE duty. 34 The dilemma presented in terms of whether this new position falls within or without the governing industrial instrument (here, the Enterprise Agreement) is neither unique to this case or these times. The need inherent in any business to adapt to changes in technology, economic conditions or fresh ideas as to how most efficiently to undertake tasks not infrequently yields a type of employment entailing duties the nature or combination of which were not wholly, if at all, in contemplation at the time that particular industrial instrument was made. 35 A statement made by O'Mara J of the former Commonwealth Court of Conciliation and Arbitration in Federated Engine Drivers and Firemen's Association of Australasia v Maffra Co-operative Milk Products Co Ltd (1940) 42 CAR 836 at 837 (FEDFA v Maffra) remains as true today as it did in 1940: The question of the award to be applied to an employee who is partly on work covered by one award and partly on work covered by another has been the subject of discussion in a number of cases … [These] generally are to the effect that if a person's employment involves performing work covered by more than one award he is deemed to be covered by the award which applies to the major and substantial part of his employment. This, however, is a rule of construction only and must give way to the clear language of an award … . In the circumstances of that case, which necessarily included the way in which the award concerned was cast, O'Mara J held that the award applicable to engine drivers and thus the rates of pay it prescribed for engine drivers applied to an employee who only occasionally undertook engine driving work (for which he needed to and did hold a certificate of competency) but otherwise worked as a labourer. Influential in his Honour's conclusion were clauses in the engine drivers award which indicated that it was intended to apply even when persons bound by it were undertaking work other than the usual work of their calling. 36 Clause 8.3 of the Enterprise Agreement has something of the same flavour about it in the sense that it contemplates (clause 8.3b)) that, even though an employee may have a principal function in the Production or Engineering area, that employee may be required to perform other duties as reasonably directed "within their recognised skills, competence and training". That clause provides: 8.3 Duties The Company is committed to the effective and efficient utilisation of all its Employees. The Company recognises that each Employee has developed a particular set of skills over time through relevant workplace training and experiences. These skills are generally aligned to a particular functional area and through the effective application of these skills Employees can make a valuable contribution to the workplace. Priority in training will be given to Employees engaged in accordance with this Agreement. a) An Employee will safely perform work as reasonably directed within their recognised skills, competence and training, and actively participate in or conduct any necessary training that is reasonably required by the Company. Trainers will be required to train others as reasonably directed however where the person they are required to train is not: • covered by this Agreement; • supplementary labour; • an OEM; or • a Maintenance Contractor, such training will be by agreement between the Employee and the Company. b) An Employee will have a principal function in the Production or Engineering area but will be required to safely perform any other duties as reasonably directed within their recognised skills, competence and training. c) An Employee will permit any employee, regardless of their principal function, to perform work within their recognised skills, competence and training that would normally be conducted by Employees as outlined in clause 9 of this Agreement. The Company may withhold payment from an Employee for any period that work is not performed in accordance with clauses 8.3(a), (b) or (c). 37 Here though, unlike in FEDFA v Maffra, a construction of the Enterprise Agreement such that, if an Employee performed any OCE duty, that person should be classified and paid as a Production Employee Level 3, because Open Cut Examiner is one of the example positions in clause 9.2 for that level, would yield an odd outcome. The rate of pay fixed for the OCE/Supervisor position is greater than that of a Production Employee Level 3. This aside, both as a matter of language and read in context, clause 8.3 b) is directed to the additional undertaking of duties which are not the principal function of the position holder. The use of the term "principal function" in both clause 8.3 b) and clause 8.3 c) complements the use of the terms "core operating skills" and "main duties" in clause 9.1 and "main duties" in clause 9.2. Evident in the Enterprise Agreement is an intention to classify Employees as either Production or Engineering Employees according to their principal function. None of the exemplified operating skills for either a Production Employee or an Engineering Employee include "supervision" of other Employees. 38 More recently, in Logan v Otis Elevator Company Pty Ltd [1997] IRCA 200 at 68-73 (Logan v Otis Elevator) Moore J collected and discussed many of the plethora of cases in which courts or the industrial commission have had to confront the phenomenon of an employee whose position required the undertaking of multiple duties only some of which were mentioned in a particular classification in an industrial instrument or, as the case may be, were disparately stated in different industrial instruments. Like Moore J in that case, I consider that a judgement given by Sheldon J in Ware v O'Donnell Griffin (Television Services) Pty Ltd [1971] AR (NSW) 18 offers assistance. Also like Moore J, I do not consider that the observations made by Sheldon J are to be confined just to a case where it is necessary to choose as between which of two industrial instruments applies to particular employment. That circumstance merely provided the context in which observations of pervasive relevance came to be made by Sheldon J. What Sheldon J observed was this (as set out in Logan v Otis Elevator at 68): The finding of the Chief Industrial Magistrate raises two questions: Firstly, whether this is a case to be determined on the principle of major and substantial employment; and, secondly, if it is, whether the evidence justified his finding as to what the major and substantial employment of the complainant was. It seems to me that this is clearly a case to which this principle is applicable. This principle is almost as old as industrial arbitration and it makes a practical approach to determining the application of awards where duties are of a mixed character and contain elements which have taken alone would be covered by more than one award. This is not an appropriate occasion on which to discuss the method by which this test should be applied except to say that it is not merely a matter of quantifying the time spent on the various elements of work performed by a complainant; the quality of the different types of work done is also a relevant consideration. 39 A pithy way of putting the same proposition is that both quality and quantity are relevant when it comes to employee classification, subject always to the language employed in the particular industrial instrument. 40 A quality which a person holding an OCE/Supervisor position had to have in order to be appointed to that position was supervisory skills. Just to have an open cut examiner's certificate was necessary but not sufficient. The quality which dictated that the holder of an OCE/Supervisor position had to have to be paid at least as much as persons already employed in positions where the duties were supervisory (and perhaps occasionally coincidentally that of OCE) was possession of supervisory skills. That the position holder would also perform as occasion required the duties of an OCE dictated that the new position attracted yet slightly higher pay. Even so, the quality which lifted the new position beyond the pay rate applicable to an OCE and thus beyond a Production Level 3 Employee was the skills necessary to undertake and the undertaking of supervisory duties. 41 Once it is concluded, as in my view it has to be on the evidence, that the new position is not a sham substitute for a pre-existing OCE position filled either by a contractor or an employed OCE, the result must be that the Enterprise Agreement does not apply to a person employed in the new position. It is a supervisory position the occupant of which must be able to undertake, as required, the duties of an OCE. The latter is not through the principal quality of the position. The "principal function", "main duties" or "core operating skills" are supervisory. 42 It follows that the application must be dismissed. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.