Construction, Forestry, Mining & Energy Union v BHP Steel

REASONS FOR JUDGMENT 1 WILCOX J: A registered employee organisation, Construction, Forestry, Mining and Energy Union ("CFMEU"), has applied to the Court for orders against BHP Steel (AIS) Pty Ltd ("BHP Steel"), in respect of an alleged contravention of s298K(1)(d) of the Workplace Relations Act 1996. CFMEU claims BHP Steel refused to employ one of its members, Christopher Robert Gaskill, because of his entitlement to the benefit of an industrial instrument, The Coal Mining Industry (Production and Engineering) Consolidated Award 1997 ("the coal mining award"). 2 CFMEU seeks orders under s298U of the Act that: (i) BHP Steel engage Mr Gaskill as a graded electrical trades person - base level at the slab maintenance repairs department, BHP Flat Products, Port Kembla; (ii) BHP Steel compensate Mr Gaskill for lost wages and allowances; (iii) A penalty be imposed on BHP Steel and the penalty be paid to CFMEU. 3 There is no dispute about the power of the Court, in a proper case, to make orders of the type sought by CFMEU. But BHP Steel resists the application, contending it did not contravene s298K.

The facts 4 There are differences between the witnesses in respect of the detail and timing of some events. But nothing turns on those differences; the crucial facts are undisputed. 5 At material times, BHP Steel operated two relevant enterprises: a colliery at Douglas Park, near Camden, known as Tower Colliery, and a steelworks at Port Kembla, near Wollongong. Prior to 19 November 1999, Mr Gaskill was employed at the colliery as an electrical fitter/mechanic. Some years earlier, he had completed a period of apprenticeship with BHP Steel, serving first at its Cordeaux Colliery, Mt Keira, and then at Tower Colliery. 6 Mr Gaskill's employment at Tower Colliery was governed by the terms of the coal mining award. The award made provision for the accumulation of sick leave, and payment for accumulated sick leave, if the employee's employment was terminated for any one of a number of specified reasons, including retrenchment. It also included a redundancy clause, clause 16. Under this clause, redundant employees were entitled to severance pay, calculated on the basis of one ordinary week's pay for each completed year of employment, except where the employer made alternative work available at another mine. In respect of redundancies due (amongst other things) to market forces, terminated employees were also entitled to retrenchment pay, equal to an additional two ordinary weeks' pay for each completed year of employment. This was also subject to exception where the employer arranged alternative work at another coal mine. 7 In early November 1999, there were rumours at Tower Colliery about the possibility of retrenchments. On Monday, 8 November 1999, Trevor Jones, a BHP Steel Human Resources Manager having responsibility for Tower Colliery, issued a notice to Tower Colliery employees that, on the following Monday, 15 November, Mr David Higgins,. Principal Human Resources Consultant at the Port Kembla Steelworks, would conduct an information session "about transfer conditions for ironworker positions at Port Kembla". The notice stated the "information will also be applicable to tradespersons and enquiries about trade positions may be discussed at the conclusion of the information session". Because he was one of the most junior electrical tradesmen at the colliery, Mr Gaskill suspected he would be amongst any electrical tradesmen selected for retrenchment. So he went to the information session. 8 Mr Higgins there outlined what he called the "VR Swap" system. Mr Higgins explained there were people at the steelworks who wished to leave, but BHP Steel wished to retain their positions. However, BHP Steel would be prepared to allow a suitable colliery employee, who would otherwise be retrenched but wished to work at the steelworks, to exchange positions with such an employee. The employee currently working at the steelworks would then take voluntary redundancy and that employee's position would be taken over by the ex-colliery employee, who would go to the steel works with full continuity of service. During the course of his exposition, Mr Higgins said any employee who got a job at the steelworks would have to repay any redundancy or sick leave payment received from Tower Colliery. 9 At the end of the information session, Mr Gaskill took and completed a job application form. He returned it, accompanied by a copy of his resume, to Mr Jones on 17 November. On that day, he was informed that five electrical trade positions were available at the steelworks and he should contact Karl Gewohn, the Plant Maintenance Engineer at the steelworks. Mr Gaskill did so. Mr Gewohn invited him to attend a tour of the steelworks early the following week. 10 In the meantime, on 18 November, Mr Gaskill received a letter dated 16 November from Peter Newman, the Mine Manager of Tower Colliery, informing him of his retrenchment, effective on Friday 19 November 1999. Mr Newman ascribed the retrenchment to worsening global market conditions. He referred to clause 16 of the coal mining award. 11 Mr Gaskill finished up at Tower Colliery on 19 November. He was apparently paid all the monies due to him, including for pro rata annual leave and long service leave, but nothing in respect of his accumulated sick leave or his entitlements under clause 16 of the coal mining award. 12 A further information session was held on Monday 22 November, this being for those Tower Colliery employees who had actually been retrenched. Apparently, the main subjects were assistance in locating other positions and welfare entitlements. However, some reference was made to the VR swap scheme. There is some dispute about what was said. This does not matter. 13 Mr Gaskill attended a tour of the steelworks on either 22 or 23 November. There is a dispute about the date but, once again, it does not matter. During or after the tour, an arrangement was made for Mr Gewohn to conduct a job interview with Mr Gaskill on 2 December 1999. 14 Mr Gaskill attended the job interview on 2 December. There is a dispute as to whether Mr Gewohn told him, during the interview, that he would have to repay any redundancy monies if he obtained the job. In evidence, Mr Gewohn asserted he did; Mr Gaskill denied the assertion. It does not matter who is right; Mr Gaskill conceded that, before the interview, he already knew this was BHP Steel's position. He said he knew the interview was conducted on the basis that a position at the steelworks would be available only if a VR swap could be arranged. He agreed he had made his job application on that basis, knowing he could not both obtain a VR swap position and retain his redundancy entitlements; at the time of the interview, he knew this was still BHP Steel's position. Mr Gaskill also said he realised that, if a VR swap was arranged, it would be with somebody at the steelworks who wished to take voluntary redundancy, and who would leave with redundancy benefits; he (Mr Gaskill) would go to the steelworks with full continuity of employment, in relation to accrued sick leave and any future redundancy entitlements. 15 With assistance from other BHP Steel personnel, Mr Gewohn interviewed five electrician applicants. After the interviews were completed, it was decided to offer a position to each of them, there then being five steelworks electricians who wished to take voluntary redundancy. 16 Before the letters of offer were dispatched, on 3 December, Mr Gaskill had a telephone conversation with Mr Jones in which he asked why the colliery had not paid him his accrued sick leave and redundancy entitlements. Mr Jones said: "Because you have applied for a job at the steelworks, you won't be paid your retrenchment and sick leave entitlement. If you don't get the job, we will pay it". However, Mr Gaskill insisted on payment. He handed the telephone to his father who reinforced his insistence, pointing out that Mr Christopher Gaskill was entitled to these payments under the award. There was further conversation which ended by Mr Jones saying that, if Mr Gaskill was asking for the money, it would be paid into his bank account during the following week. The money was paid into Mr Gaskill's bank account on 8 December. 17 On that same day, Gerry Gal, Manager Maintenance Repairs of BHP Steel, issued letters of offer in connection with jobs at the steelworks. Mr Gewohn telephoned Mr Gaskill and asked him to come in and collect his letter and sign a contract of employment. Mr Gaskill attended Mr Gewohn's office and was handed a four page letter containing a form of contract of employment. The letter concluded with a notice of acceptance intended for his signature. The contract contained the following term: "2. REPAYMENTS TO BHP COLLIERIES It is clearly understood that an amount equal to all severance and retrenchment monies, ie monies paid to you based on years of service according to the formula - three (3) weeks ordinary pay per year of service, as well as all accrued sick pay paid to you at time of retrenchment, must be repaid to BHP Coal prior to commencement at BHP Steel. Annual and long service payments to you are unaffected. You should make arrangements through Laurie Howe, the Collieries Payroll Co-ordinator (02 4272 0213) as to how this money is to be repaid." Mr Gaskill told Mr Gewohn he was concerned about this clause. So Mr Gewohn invited him to take the letter away and get advice, if he wished, and come back when he had made his decision. 18 Mr Gaskill apparently obtained some advice, as a result of which he wrote and signed a note at the foot of the letter. The note read: "I confirm my acceptance of employment with BHP Steel Flat Products commencing 2-1-2000 The terms and conditions of this employment contract I agree to except for clause 2 which interferes with my entitlements under the Mining Industry Award Clause 26 [sic: 16] - Severence [sic] and Retrenchment Pay Provisions." 19 Mr Gaskill returned to Mr Gewohn's office, with the letter, on 13 December. He showed Mr Gewohn the note. After making a telephone call, Mr Gewohn informed Mr Gaskill that BHP Steel would not change the contract. He said: "You have to repay that money if you want that position". Mr Gaskill replied he would think about it. 20 Two days later, CFMEU wrote to Mr Gal stating that BHP Steel's "purported withdrawal of the offer of employment" amounted to a breach of s298K of the Workplace Relations Act and threatening legal action. 21 BHP Steel responded to this letter through its solicitors. The solicitors asserted it was "not open to Mr Gaskill to conditionally accept the offer of employment made to him"; he had rejected the offer made to him and no other offer had been made. The solicitors disputed the suggestion that BHP Steel had breached s298K of the Workplace Relations Act. 22 On 18 February 2000 CFMEU filed an Application commencing the present proceeding. 23 During the course of his evidence, Mr Gaskill acknowledged that, since December 1999, he had earned about as much as he would have earned at the steelworks. I gather Mr Gaskill has been employed in a series of short term positions.