FEDERAL COURT OF AUSTRALIA
Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd [2014] FCA 462
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IN THE FEDERAL COURT OF AUSTRALIA |
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CONSTRUCTION, FORESTRY, MINING & ENERGY UNION Applicant | |
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AND: |
RIO TINTO COAL AUSTRALIA PTY LTD (ACN 010 542 140) Respondent |
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DATE OF ORDER: |
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WHERE MADE: |
THE COURT ORDERS THAT:
1. The parties are to file within fourteen days Short Minutes of Orders to give effect to these reasons.
2. The proceeding is stood over to 9.30 am on 23 May 2014 for further directions.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).
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NEW SOUTH WALES DISTRICT REGISTRY |
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FAIR WORK DIVISION |
NSD 2220 of 2012 |
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BETWEEN: |
CONSTRUCTION, FORESTRY, MINING & ENERGY UNION Applicant |
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AND: |
RIO TINTO COAL AUSTRALIA PTY LTD (ACN 010 542 140) Respondent |
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JUDGE: |
FLICK J |
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DATE: |
9 MAY 2014 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
1 On 20 December 2012 the Construction, Forestry, Mining and Energy Union (the “CFMEU”) filed in this Court an Originating Application under s 539 of the Fair Work Act 2009 (Cth) (“Fair Work Act”). The Respondent to that proceeding was Rio Tinto Coal Australia Pty Limited (“Rio Tinto”). Declarations were sought that Rio Tinto had contravened ss 340 and 346(a) of the Fair Work Act. An order was also sought that compensation be paid and an order for the imposition of penalties.
2 The Originating Application was accompanied by a Statement of Claim. An Amended Statement of Claim was filed on 17 April 2013. An Amended Defence was filed on 16 October 2013. An Amended Reply was filed on 7 November 2013. Further amendments to the Amended Statement of Claim were foreshadowed at the outset of the hearing on 12 March 2014. A further Particular was provided to one of the allegations during the course of the hearing. That amendment was incorporated into a Further Amended Statement of Claim filed during the hearing.
3 From the outset of the proceeding Rio Tinto maintained that the claims against it were misconceived.
4 The matter has not progressed as quickly or as smoothly as could have been hoped. To some extent the Court itself must assume some of the responsibility for that being the case. With a view to facilitating meaningful orders for discovery being made, the Court proposed that an officer of Rio Tinto be made available for cross-examination as to the manner in which the company maintained its relevant records and where those records were likely to be kept. An officer of Rio Tinto, Mr Gavin, did file an affidavit. He describes his current position as “General Manager – Human Resources for Rio Tinto Services Pty Ltd”. From May 2011 until May 2013 he occupied the position of “Principal Advisor - Human Resources”. His cross-examination took place on 14 March 2013. Orders were then made for the discovery of categories of documents. Thereafter the proceeding has come back before the Court on no less than 11 occasions with a view to directions being made to resolve continuing claims being made by the CFMEU for further discovery.
5 On 8 October 2013 the CFMEU sought to bring to a head the issues dividing it and Rio Tinto in respect to further discovery. The CFMEU filed an Interlocutory Application seeking an order that categories of documents which it included in a Schedule be discovered.
6 The CFMEU’s Interlocutory Application provoked Rio Tinto into reinvigorating its own long-held contention that the proceeding was misconceived. Rio Tinto filed its own Interlocutory Application on 13 November 2013. The position of Rio Tinto was that it resisted further discovery and that, if there was going to be an interlocutory hearing, that hearing could just as conveniently then deal with its own challenges to the Further Amended Statement of Claim.
7 What was perceived by the Court on 14 March 2013 as a helpful and innovative manner in which to approach discovery has only occasioned, it would seem, more controversy than assistance. Had orders been made for “standard” discovery at the outset, it may well be the case that discovery would by now have been completed – if not the final hearing itself.
8 Now before the Court for resolution is the hearing of those two Interlocutory Applications.
The background facts – as pleaded
9 The allegations made in the Further Amended Statement of Claim, the Amended Defence and the Amended Reply set the background against which both:
the strike-out application; and
the application for further discovery
are to be resolved.
10 The material facts pleaded in the Further Amended Statement of Claim would seem, at least initially, to present a comparatively simple factual background. The facts there pleaded are, in summary form, as follows.
11 Prior to 23 November 2012 Rio Tinto operated a mine known as the Blair Athol coal mine. It was located in the Bowen Basin region in the State of Queensland.
12 On 23 November 2012 the employment of mineworkers at the Blair Athol mine was terminated.
13 The mineworkers who were formerly employed fell into two broadly defined categories – those mineworkers who were members of the CFMEU being employees identified in Schedule A to the Further Amended Statement of Claim and mineworkers who were not members of the CFMEU.
14 The employment of the CFMEU members was governed by an agreement known as the Blair Athol Coal Mineworker Union Collective Workplace Agreement 2008 (the “2008 Agreement”). It is common ground that that agreement constitutes a “workplace instrument” for the purposes of s 341(1)(a) of the Fair Work Act. The remaining employees were employed pursuant to their own “respective workplace instruments”.
15 When the employment of all mineworkers was terminated, payments were made in respect to:
redundancy payments; and
“other entitlements” being payments in respect to accrued annual leave, accrued long service leave, notice or payments in lieu of notice, additional notice and accrued sick leave.
The germ of the dispute is that the quantum of the payments made to the CFMEU members was different to those payments made to non-CFMEU members. The manner in which this difference in the quantum of payments was pleaded initially and as amended in respect to the redundancy payments is as follows:
On termination of their employment, the respondent made redundancy payments to Mineworkers who were not members of the applicant are not listed in Schedule A on a more favourable basis than was applied to the CFMEU members.
The pleading in respect to the “other entitlements” is in like terms. The amendment made during the course of the hearing was to add payments in respect to accrued sick leave as a further particular.
16 It is this difference in the quantum of payments made in respect to both redundancy payments and the “other entitlements” that is relied upon by the CFMEU in support of its allegation that such conduct on the part of Rio Tinto constitutes “adverse action” for the purposes of s 342(1) Item 1(d) of the Fair Work Act. The “less favourable” payments in respect to both the redundancy payments and the “other entitlements” to the CFMEU members is said to have been made by Rio Tinto because:
the CFMEU members “were members of an industrial association for the purposes of s 346(a) of the FW Act”; and/or
the CFMEU members “each had a workplace right in that they were entitled to the benefit of the Agreement for the purposes of s 340(1)(a)(iii) and s 341(1)(a) of the FW Act”.
Reliance upon s 340(1)(a)(iii) was abandoned during the course of the hearing.
17 Placed at the forefront of its defence to these allegations is Rio Tinto’s submission that it has paid all employees their lawful entitlements – the CFMEU members have been paid all payments payable under the 2008 Agreement.
18 CFMEU’s Amended Reply maintains that “the basis of payment described therein constitutes discrimination between employees … for the purposes of s. 342(1), Item 1D…”.
19 One potentially complicating factor is that the Amended Defence filed by Rio Tinto accepts that discretionary payments were made to non-CFMEU employees in excess of their legal entitlements. The potential relevance of such discretionary payments assumes particular relevance to the CFMEU Interlocutory Application seeking further discovery. Payments to non-CFMEU workers in excess of their “respective legal entitlements” are not included in respect to the claims for relief in respect to the discriminatory payment of redundancy payments and the “other entitlements”.
THE FAIR WORK ACT – THE PROHIBITION ON ADVERSE ACTION
20 The provision of the Fair Work Act which assumes principal relevance is s 340. It is that section which provides that a person must not take “adverse action” against another. That section provides as follows:
Protection
(1) A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
(2) A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person's benefit, or for the benefit of a class of persons to which the second person belongs.
21 Section 341(1) provides as follows:
Meaning of workplace right
A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee – in relation to his or her employment.
22 Section 342 sets out the “meaning of adverse action”. The Table set forth in s 342(1) provides in part as follows:
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Meaning of adverse action | ||
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Item |
Column 1 Adverse action is taken by |
Column 2 if … |
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1 |
an employer against an employee |
the employer: (a) dismisses the employee; or (b) injures the employee in his or her employment; or (c) alters the position of the employee to the employee’s prejudice; or (d) discriminates between the employee and other employees of the employer |
The section of the Fair Work Act which assumes central significance to the strike-out application filed on behalf of Rio Tinto is s 342(3). That sub-section provides as follows:
Adverse action does not include action that is authorised by or under:
(a) this Act or any other law of the Commonwealth; or
(b) a law of a State or Territory prescribed by the regulations.
23 Section 346 provides as follows:
Protection
A person must not take adverse action against another person because the other person:
(a) is or is not, or was or was not, an officer or member of an industrial association; or
(b) engages, or has at any time engaged or proposed to engage, in industrial activity within the meaning of paragraph 347(a) or (b); or
(c) does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g).
24 Those provisions of the Fair Work Act relied upon by Rio Tinto in the present proceeding as “authorising” the payments to the employees of their lawful entitlements for the purposes of s 342(3)(a) are sections 50, 51 and 52. Section 50 provides as follows:
Contravening an enterprise agreement
A person must not contravene a term of an enterprise agreement.
Section 51 provides as follows:
The significance of an enterprise agreement applying to a person
(1) An enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person.
(2) An enterprise agreement does not give a person an entitlement unless the agreement applies to the person.
And s 52 provides as follows:
When an enterprise agreement applies to an employer, employee or employee organisation
When an enterprise agreement applies to an employee, employer or organisation
(1) An enterprise agreement applies to an employee, employer or employee organisation if:
(a) the agreement is in operation; and
(b) the agreement covers the employee, employer or organisation; and
(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.
Enterprise agreements apply to employees in relation to particular employment
(2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.
25 Also of importance is the reverse onus of proof provision set forth in s 361 which provides as follows:
Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.
Section 360 provides as follows:
Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
In Rowland v Health [2014] FCA 2 Marshall ACJ has observed in respect to s 361:
[5] Under s 361(1) of the Act, an allegation that adverse action was taken because of the exercise of a workplace right is presumed to be made out unless the person accused of taking that adverse action proves otherwise. More precisely, that person must prove that the prohibited reason was not a substantial and operative factor in its decision to take the adverse action; see Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 290 ALR 647 per French CJ & Crennan J at [62]; per Gummow & Hayne JJ at [103] and [127].
THE RIO TINTO STRIKE-OUT APPLICATION
26 It was common ground between the CFMEU and Rio Tinto that:
the Schedule A workers as identified in the Further Amended Statement of Claim, being the CFMEU employees, were paid the amounts that were required of Rio Tinto by the terms of the 2008 Agreement; and that
all other mine workers who were not Schedule A workers were also paid the amounts that were required of Rio Tinto by the “respective industrial instruments” that applied to the employment of each of the other mine workers.
It was also common ground, at least for the purposes of the hearing of the strike-out application, that:
the payments made to the non-CFMEU employees were in excess of those payments made to the CFMEU employees; and
the non-CFMEU employees had also been paid sums of money in excess of their entitlements payable under the “respective industrial instruments”, albeit sums said to be payable pursuant to “prior commitments”.
27 In seeking an order that the Further Amended Statement of Claim be struck out pursuant to r 26.01 of the Federal Court Rules 2011 (Cth) (“Federal Court Rules 2011”), Rio Tinto’s primary submission was that the facts as pleaded cannot constitute “adverse action” because:
the payments made to the CFMEU employees have been made in accordance with the 2008 Agreement and that, accordingly, its conduct in making such payments is “authorised by or under…this Act” for the purposes of s 342(3)(a) of the Fair Work Act.
If this submission did not prevail, it was further submitted on behalf of Rio Tinto that:
the making of payments to two different classes of employees whose rights and entitlements were necessarily dictated by different employment agreements necessarily meant that there could be no comparison between like employees such that there could be no “discrimination between” the employees for the purposes of Item 1(d) of s 342(1).
28 It is concluded that the former argument advanced on behalf of Rio Tinto should be rejected and that the latter argument should not be resolved on a strike-out application. Rio Tinto’s Interlocutory Application is to be dismissed with costs.
General principles – r 26.01
29 The general principles to be applied to the resolution of the Interlocutory Application filed by Rio Tinto are not in doubt. But they bear some brief attention.
30 Rule 26.01(1) provides as follows:
A party may apply to the Court for an order that judgment be given against another party because:
(a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or
(b) the proceeding is frivolous or vexatious; or
(c) no reasonable cause of action is disclosed; or
(d) the proceeding is an abuse of the process of the Court; or
(e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.
The counter-part provision to the current r 26.01 was formerly to be found in Order 20 of the now-repealed Federal Court Rules 1979 (Cth). Rule 26.01(1) replicates s 31A of the Federal Court of Australia Act 1976 (Cth): Manday Investments Pty Ltd v Commonwealth Bank of Australia (No 3) [2012] FCA 751 at [8] per McKerracher J. The “authorities on s 31A are useful in considering r 26.01”: Leica Geosystems Pty Ltd v Koudstaal [2012] FCA 1337 at [16] per Collier J.
31 Section 31A(1)(b) employs the same language as r 26.01(e), namely “no reasonable prospect of successfully defending the proceeding or part of the proceeding”. Section 31A(3) goes on to provide as follows:
For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
The effect of s 31A is to “soften the test for a successful application for summary judgment”: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117 at [25], (2009) 178 FCR 401 at 408. Spender, Graham and Gilmour JJ there went on to cite with approval the observations of Lindgren J in White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at [50] that s 31A “is concerned with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form”: [2009] FCAFC 117 at [30], (2009) 178 FCR 401 at 409. But the exercise of the power to strike-out an application remains a powers to be exercised with caution: Spencer v Commonwealth of Australia [2010] HCA 28 at [24], (2010) 241 CLR 118 at 131.
32 Counsel on behalf of the CFMEU raised at the outset a question as to whether both the primary submission advanced by Rio Tinto and also its alternative submission could be susceptible to or appropriate for resolution by way of a strike-out application made pursuant to r 26.01. Common ground emerged such that:
Rio Tinto’s submission that s 342(3)(a) was a complete answer to the allegations being made raised only questions of law which were susceptible to a strike-out application
but that:
Rio Tinto’s alternative submission as to the application of Item 1(d) involved a mixed question of fact and law.
Unless Rio Tinto prevailed in respect to its reliance upon s 342(3)(a), the CFMEU maintained that the proceeding should not be struck out but should proceed to hearing.
Authorised by or under this Act – s 342(3)(a)
33 The primary submission advanced on behalf of Rio Tinto was that the payments made to the CFMEU employees were payments made in accordance with the 2008 Agreement and thereby was “action … authorised by or under… this Act” for the purposes of s 342(3)(a).
34 Whatever may have been the quantum of payments to the non-CFMEU employees, be it their legal entitlements or payments made pursuant to “prior commitments”, the payments made to the CFMEU employees were said to be payments “authorised by or under” the Fair Work Act. The written submissions filed on behalf of Rio Tinto maintained that, “the payment to them of their lawful entitlements is authorised (and indeed compelled) by or under the Fair Work Act 2009…”. Those statutory provisions relied upon to support the submissions that the Fair Work Act “compelled” Rio Tinto to pay the employees their lawful entitlements were identified as ss 50, 51 and 52.
35 This primary submission is rejected.
36 It is at the very outset of the argument that it fails. It is concluded that the payment of monies pursuant to the terms of the 2008 Agreement is not action which can properly be characterised as action that is “authorised by or under” the Fair Work Act.
37 Those payments, it is concluded, cannot properly be regarded as payments “authorised” by the Fair Work Act or, alternatively, payments made “by or under” the Fair Work Act. The payments remain as payments made in accordance with and pursuant to the terms of the 2008 Agreement.
38 This conclusion is reached essential for three reasons, namely:
to construe s 342(3)(a) in the manner advocated by Rio Tinto would be to impermissibly intrude into the protection otherwise afforded by s 342(1);
the term “authorise” should be construed, if possible, in the same manner wherever that term is used throughout the Fair Work Act and – as used elsewhere – it is not a term which has the width of the meaning sought to be ascribed to it by Rio Tinto; and
the ordinary and natural meaning of the term “authorise” does not support the position advanced on behalf of Rio Tinto.
The exemption from the prohibition – s 342(3) v s 342(1)
39 The exclusion effected by s 342(3) from the operation of what would otherwise constitute “adverse action” under s 342(1) has to be construed in a manner which relevantly both gives effect to:
the prohibition placed upon an employer discriminating between employees; and
that conduct which the Fair Work Act otherwise authorises.
To construe s 342(3)(a) in the manner advanced by Senior Counsel on behalf of Rio Tinto, it is concluded, would be to give unnecessary and unwarranted pre-eminence to the latter consideration at the expense of the former.
40 In other statutory contexts a “wide construction” has not been placed upon an exemption where to do so would be “inconsistent” with the general scheme of the Act: Waters v Public Transport Corporation (1991) 173 CLR 349 at 369 per Mason CJ and Gaudron J. There in issue was the Equal Opportunity Act 1984 (Vic) (“Equal Opportunity Act”). Section 29(1) of that Act made it unlawful “for a person who provides goods or services … to discriminate against another person”. Section 39(e)(ii) and (iii) provided that the Act did “not render unlawful…an act done by a person if it was necessary for the person to do it in order to comply with a provision of…any other Act, or an instrument made or approved by or under any other Act”. The act of discrimination relied upon was the removal of conductors from some trams and the introduction by the Corporation of “scratch tickets” for use on public transport. Those with disabilities found it impossible or at least extremely difficult to use “scratch tickets”. One of the arguments for the Corporation was that it had acted in accordance with directions of the Minister of Transport given under s 31 of the Transport Act 1983 (Vic) and that it accordingly fell within s 39 of the Equal Opportunity Act. In rejecting that argument, Mason CJ and Gaudron J concluded:
The question involved in this aspect of the case is whether the exemption in s. 39(e)(ii) of anything which it was necessary to do in order to comply with a “provision” of any other Act extends to anything which was necessary in order to comply with a direction given by the Minister in the exercise of the statutory power conferred by s. 31 of the Transport Act. The effect of the construction of s. 39(e)(ii) for which the Corporation contends (“the wide construction”) in supporting an affirmative answer to that question would be that any of the myriad of persons possessing statutory power or authority to give a direction to another person in relation to a subject-matter would be empowered to exempt the conduct of that other person in relation to that subject-matter from unlawfulness under the Act in any case where the provision of the particular Act conferring the power or authority expressly or impliedly required — as it ordinarily would — that such a direction be obeyed by the persons to whom it was given. It is argued for the appellants that s. 39(e)(ii) should be more narrowly construed as referring only to something which is done in order to comply with a specific obligation directly imposed by an actual provision of another Act (“the narrow construction”).
As a matter of language, the words of s. 39(e)(ii) are capable of bearing the meaning attributed to them by either construction. Anything that it is necessary to do in order to comply with an exercise of statutory power can, as a matter of language, be said to be necessary “in order to comply with” the legislative “provision” conferring (and expressly or impliedly requiring obedience to) the statutory power. On the other hand, and depending upon context, a reference to what is necessary to comply with “a provision of ... any other Act” can be construed as referring only to what it is necessary to do in order to comply with a specific requirement directly imposed by the relevant provision as distinct from a requirement imposed by some person in the exercise of some power conferred by the provision …. If the relevant words fell to be construed in isolation, we would favour the wide construction of them. When par. (e)(ii) is construed in its context in the Act, however, it appears to us that the narrow construction is the preferable one.
…..
More importantly, the wide construction seems to us to be inconsistent with the general scheme of the Act. It is one thing to provide that the Act should give way to an express direction contained in an actual provision of another Act or in a statutory instrument. It is a quite different thing to provide, in effect, that the Act shall give way to any subordinate direction, no matter how informal, to which a provision of any other Act requires obedience. …..
As has been said, s. 31 of the Transport Act did not require the Corporation to do any specific thing. It did not directly impose any obligation upon the Corporation to remove conductors from trams or to introduce scratch tickets. If such an obligation was imposed upon the Corporation, it was imposed by the oral directive of the Minister given pursuant to s. 31. It follows from what has been said above that s. 39(e)(ii) of the Act does not exempt from unlawfulness under the Act whatever it was necessary for the Corporation to do in order to comply with that oral directive. That being so, the provisions of s. 39(e)(ii) are inapplicable and it is unnecessary to consider whether the acts of the Corporation of which complaint is made were in fact “necessary ... in order to comply with” the Minister's oral directive: (1991) 173 CLR at 368 – 370.
Brennan J similarly concluded:
An exemption created by s. 39(e) applies when the “provision” with which the putative discriminator is bound to comply is to be found in an order, an Act or an instrument. Unless the “provision” itself makes it necessary to do the relevant discriminatory act, s. 39(e) does not take the act outside the operation of the Equal Opportunity Act. Section 39(e)(ii) should not be construed as relating to a provision in an Act which does not itself require the doing of a discriminatory act but which requires obedience to a direction which is given under an authority conferred by that Act. If sub-par. (ii) so far extended, sub-par. (iii) would be otiose: (1991) 173 CLR at 381.
41 The “authorisation” here relied upon by Rio Tinto, it may be accepted, was said to be sourced in other provisions of the Fair Work Act and not in a “direction” that may have been given by a “myriad of persons”. But there is no provision of the Fair Work Act which imposes a “specific requirement” for it to make payments which were otherwise “discriminatory”. And to make such discriminatory payments would otherwise not promote the “general scheme” set forth in Item 1(d) of s 342(1). Although provisions such as ss 50, 51 and 52 of the Fair Work Act require the payment to employees of their lawful entitlements, no provision authorises the payment of “discriminatory” amounts.
42 Even on the argument of Rio Tinto that it was simply making payments to one class of employees according to their legal entitlements and making payments to another class of employees according to their legal entitlements, no provision of the Fair Work Act required Rio Tinto to make different payments. The difference in the payments being made was the consequence of the different contractual entitlements of the employees – the making of different payments, it is not considered, was done in “obedience” to any requirement imposed by the Fair Work Act to treat different classes of employees differently.
43 A case perhaps closer to the argument sought to be advanced by Rio Tinto arose out of the dispute resolved by Siopis J in Keech v Metropolitan Health Services (WA) [2010] FCA 1332, (2010) 215 FCR 393. Ms Keech had there suffered an injury and was entitled to compensation pursuant to the Workers’ Compensation and Injury Management Act 1981 (WA). Section 56 of that Act provided that where the injury occurred after an employee had turned 64, an entitlement to compensation ceased “on the date one year after the injury occurs”. Ms Keech was 66 years of age at the time of the injury. When the payments of compensation ceased, she claimed that she had been discriminated against pursuant to s 18(2) of the Age Discrimination Act 2004 (Cth). Section 39(4) provided that the relevant Part of the Act “does not make unlawful anything done by a person in direct compliance with…an Act of a State…”. Siopis J concluded that the cessation of payments fell within s 39(4) as that was done in “direct compliance” with s 56 of the Workers Compensation legislation. In reaching this conclusion his Honour referred to the observations of both Mason CJ, Gaudron and Brennan JJ in Waters, supra, and continued:
[44] In my view, these observations inform the meaning that is to be given to the expression “direct compliance” in the Age Discrimination Act. It follows that, in my view, the expression “direct compliance” requires that impugned conduct is conduct which is actuated by an obligation which is directly imposed upon a party by the provisions of a statute or other nominated statutory instrument, rather than by directions made, or given, pursuant to a general power to give directions provided for in a statute.
[45] In this case, the respondent acted in response to the very terms of s 56 of the Compensation Act — a section of the Act which defined the extent and term of Ms Keech’s entitlement to weekly payments by reference to her age at the time that the workplace accident occurred. The Compensation Act, thereby, directly imposed on the respondent an obligation to pay Ms Keech weekly payments for the defined period. By making weekly payments to Ms Keech for the duration of that term, and for no longer than that term, the respondent acted in direct compliance with the statute
Siopis J further concluded:
[46] I do not accept the submission made by Ms Keech that the payments made to Ms Keech were not made in direct compliance with the statute, because the respondent was at liberty to keep making the payments to Ms Keech after the statutory expiry date. That proposition (which, in any event, by reason of the respondent’s public status, is of dubious validity) is irrelevant to the question of whether the respondent acted in direct compliance with the Compensation Act, in making the weekly payments to Ms Keech for no longer than the term stipulated in the Compensation Act
44 The decision in Keech, supra, is closer aligned to the argument relied upon by Rio Tinto in the present proceeding. Just as Siopis J there concluded that the cessation of payments was made in “direct compliance” with the State Act, Senior Counsel for Rio Tinto urges a like conclusion that the different payments made to each of the two classes of employees was also “authorised by or under” the Fair Work Act.
45 But the facts of the present case, it is considered, fall well short of the facts before the Court in Keech, supra. In Keech, supra, it was the Workers Compensation legislation which said when payments ceased. On the facts of the present case, no provision in the Fair Work Act “authorises” the discriminatory conduct in making different payments between employees.
46 If attention is confined to the specific terms of s 342, there emerges a need to approach the interpretation of the term “authorise” with some degree of caution. Section 342(1) is a provision which seeks to protect employees from “adverse action” being taken against them by an employer. There is no readily apparent reason why such a provision should be read in any manner other than beneficially and in a manner which makes meaningful the protections there afforded. One of the protections there provided for is the protection of an employee from an employer “discriminat[ing] between the employee and other employees…”. Section 342(3), in this confined statutory context, provides an exception. Section 342(3) should obviously not be construed in a manner which would render the protections meaningless. That which s 342(3) contemplates, it is concluded, is “action” that is expressly “authorised” by the Fair Work Act or “action” that is sanctioned or approved by a provision (for present purposes) relevantly found elsewhere in the Fair Work Act.
47 The “authority” which is referred to is an “authority” which takes its content from the “adverse action” which is prohibited. In the present context, the “authority” to which s 342(3)(a) is referring to is an “authority” to engage in conduct which otherwise falls within Item 1(d). Section 50, 51 and 52 provide no real “authority”.
48 If attention is confined to the terms employed in s 342 and the legislative objective sought to be achieved by that one provision, Rio Tinto’s submission is rejected as to the “wide construction” sought to be given to s 342(3) and the narrow operation to be given to s 342(1).
The term “authorise” or “discriminate” as used in the Fair Work Act?
49 Nor is the width of meaning sought to be given on behalf of Rio Tinto to the phrase “authorised by or under…this Act” – and the confined meaning sought to be given to the prohibition upon “discriminatory” conduct – supported by the use of those (or like terms) when used elsewhere in the Fair Work Act.
50 Without a sound reason to the contrary, the same or comparable terms should be employed in the same manner whenever they appear in an Act.
51 The term “authorise” is used elsewhere in the Fair Work Act. Thus, for example, when considering what may or may not be included within an award, s 152 provides as follows:
A modern award must not include terms that require or authorise an official of an organisation to enter premises:
(a) to hold discussions with, or interview, an employee; or
(b) to inspect any work, process or object.
And, in a context more comparable to that presently under consideration, s 467(1) provides a prohibition against the disclosure of information about employees on the roll of voters. Section 467(2) provides as follows:
Subsection (1) does not apply if:
(a) the disclosure is made in the course of performing functions or exercising powers for the purposes of the protected action ballot; or
(b) the disclosure is required or authorised by or under a law; or
(c) the employee has consented, in writing, to the disclosure.
52 Other provisions of the Fair Work Act do not employ the term “authorise” but give content to the act or conduct that may be taken by an employer which could otherwise be regarded as a contravention of the Act. Thus, for example, s 524 provides as follows:
Employer may stand down employees in certain circumstances
(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:
(a) industrial action (other than industrial action organised or engaged in by the employer);
(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;
(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.
(2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:
(a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and
(b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.
(3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.
53 The variety of different contexts in which term “authorise” has been employed elsewhere in the Fair Work Act necessarily means that it is a term which must be construed with some degree of flexibility. It is a term employed by the Legislature to cover both situations where it wishes to proscribe what terms may not be included in an award and situations where conduct is prohibited unless it is “authorised” by or under the Fair Work Act or some other “law”. In the former context what is envisaged is not some “legal authority” or “authority” conferred by some statutory provision but, rather, an “authority” sought to be more immediately conferred by agreement. In the latter context, there is no lack of ambiguity. Where the legislature has seen fit to proscribe certain conduct, that standard must be complied with unless a person can point to some “authority by or under law”.
54 Notwithstanding whatever flexibility may be inherent in the term “authorise”, what is common to all contexts is the search for some “authority” to engage in particular conduct. In the case of those provisions which refer to “authorised by law”, the search is for some immediate source of authority to be found in some statutory provision. Section 524 is an example of one such provision.
55 A requirement to pay monies pursuant to a legal obligation to one class of employees, it is considered, is not an “authority” to make different payments to other employees. The search in the present case, if the case for Rio Tinto is to succeed, is to find some statutory authority in the Fair Work Act which authorises discrimination. But one searches in vain for any such provision of relevance to the present proceeding.
56 Although the focus of attention in the present proceeding was on the meaning and content to be given to s 342(3)(a), the width of that “exception” cannot be construed in a manner divorced from the “prohibition” contained within Item 1(d) to s 342(1). It is Item 1(d) which for present purposes sets forth the “general scheme”; it is s 343(3)(a) which relevantly seeks to carve out that conduct which would otherwise fall within the prohibition. The generality with which the prohibition is expressed, it is considered, provides a relevant context in which the “exception” is to be construed. The generality of the prohibition only serves to reinforce the need to identify the “authority” relied upon with some degree of certainty or clarity.
57 The width of the prohibition set forth in Item 1(d) is, with respect, self-evident. It provides that an employer engages in adverse action if it “discriminates between the employee and other employees of the employer…”.
58 The terms of s 342(1) do not suggest that the term “discriminate” should be given anything other than in its normal meaning. Other provisions within the Fair Work Act also support the conclusion that the term “discriminate” should be given its normal and ordinary meaning. And that meaning has a width of application. For the purposes of s 342(1) Item 1(d), the term “discriminate” simply means to treat employees differently. That simple meaning underlies, it is considered, other provisions in the Fair Work Act which use the same term. Those provisions are ss 153, 195 and 354. Section 153 provides as follows:
Terms that are discriminatory
Discriminatory terms must not be included
(1) A modern award must not include terms that discriminate against an employee because of, or for reasons including, the employee's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
Certain terms are not discriminatory
(2) A term of a modern award does not discriminate against an employee:
(a) if the reason for the discrimination is the inherent requirements of the particular position held by the employee; or
(b) merely because it discriminates, in relation to employment of the employee as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed:
(i) in good faith; and
(ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed.
(3) A term of a modern award does not discriminate against an employee merely because it provides for minimum wages for:
(a) all junior employees, or a class of junior employees; or
(b) all employees with a disability, or a class of employees with a disability; or
(c) all employees to whom training arrangements apply, or a class of employees to whom training arrangements apply.
Section 195 provides as follows:
Meaning of discriminatory term
Discriminatory term
(1) A term of an enterprise agreement is a discriminatory term to the extent that it discriminates against an employee covered by the agreement because of, or for reasons including, the employee's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
Certain terms are not discriminatory terms
(2) A term of an enterprise agreement does not discriminate against an employee:
(a) if the reason for the discrimination is the inherent requirements of the particular position concerned; or
(b) merely because it discriminates, in relation to employment of the employee as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed:
(i) in good faith; and
(ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed.
(3) A term of an enterprise agreement does not discriminate against an employee merely because it provides for wages for:
(a) all junior employees, or a class of junior employees; or
(b) all employees with a disability, or a class of employees with a disability; or
(c) all employees to whom training arrangements apply, or a class of employees to whom training arrangements apply.
Section 354 provides as follows:
Coverage by particular instruments
(1) A person must not discriminate against an employer because:
(a) employees of the employer are covered, or not covered, by:
(i) provisions of the National Employment Standards; or
(ii) a particular type of workplace instrument (including a particular kind of workplace instrument within a type of workplace instrument); or
(iii) an enterprise agreement that does, or does not, cover an employee organisation, or a employee organisation; or
(b) it is proposed that employees of the employer be covered, or not be covered, by:
(i) a particular type of workplace instrument (including a particular kind of workplace instrument within a type of workplace instrument); or
(ii) an enterprise agreement that does, or does not, cover an employee organisation, or a particular employee organisation.
(2) Subsection (1) does not apply to protected industrial action.
The natural and ordinary meaning – “authorised by or under…”
59 Separate from any consideration as to the manner in which the phrase “authorised by or under” is to be construed by reference to the specific statutory context of s 342 (or perhaps the Fair Work Act more generally) is the prospect that the natural and ordinary meaning of that phrase may support the approach being pursued by Rio Tinto.
60 But even that prospect leads to no greater success on its part.
61 The meaning and content of the statutory phrase “authorised by”, it may be accepted, is elusive. It is not a phrase defined by the Fair Work Act.
62 The term “authorise”, not surprisingly, has been construed in many different contexts.
63 The variety of meanings that may be given to the term “authorise” in different statutory contexts, and the recourse that may be had to the ordinary and natural meaning of that term, were pursued by Bennett J in Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Limited [2010] FCA 108, (2010) 85 IPR 525 at 569. There in issue was the Patents Act 1990 (Cth) and whether a patent holder has the exclusive right to exclude others from exploiting an invention or authorising others to exploit the invention. The MDS submission in that case was that there could “be no infringement by authorisation unless the authoriser is in such a position or such a relationship with the person being authorised that the authoriser has the formal authority, in a technical sense, to authorise that person to do the infringing act”: [2010] FCA 108 at [201], (2010) 85 IPR 525, 564. In rejecting such a confined meaning, her Honour reviewed the authorities as follows:
Authorising conduct of MDS – s 13(1) of the 1990 Act
[193] The “exclusive rights” of the patentee are the rights to “exclude” others from exploiting the invention or authorising another person to exploit the invention: Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479; 170 ALR 111; 46 IPR 515; [2000] HCA 14 at [83]–[85]. Infringement of the right to authorise exploitation in s 13 looks to whether the product being exploited infringes the claimed invention and not whether the person authorising that conduct intends to authorise infringement or knows that the product will infringe. There is no requirement that the person knows that the authorisation is of an infringement of a patent.
[194] It is an infringement of the patentee’s exclusive rights not only to exploit an invention but also to authorise another person to exploit it: s 13 of the 1990 Act. The word “authorise” in s 13 has the meaning in the comparable context of the Copyright Act: Bristol-Myers Squibb Company v FH Faulding & Co Ltd (2000) 97 FCR 524; 170 ALR 439; 46 IPR 553; [2000] FCA 316 at [97] per Black CJ and Lehane J; see also Rescareat ALR 231 IPR 155 per Gummow J. A person authorises an infringement if he or she “sanctions, approves or countenances” the infringement (University of New South Wales v Moorhouse (1975) 133 CLR 1 at 12; 6 ALR 193 at 200 per Gibbs J, at CLR 20–1; ALR 207–8 per Jacobs J (McTiernan ACJ agreeing); Cooperat [137]–[140] per Kenny J (French J agreeing)). As Burchett J said in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (1998) 42 IPR 111 at 129 (appeal allowed on validity, but not on infringement), s 13 at least embraces the case where a person “made himself a party to the act of infringement” (Walker v Alemite Corp (1933) 49 CLR 643 at 658; [1933] ALR 437 at 452 per Dixon J).
…
[196] In Bristol-Myers Squibb Co v FH Faulding & Co Ltd (1998) 41 IPR 467 at 488 (Bristol-Myers), Heerey J, at first instance, discussed the meaning of “authorise” in s 13 of the 1990 Act. Justice Heerey considered that “authorise” in s 13 does not have the same meaning as “authorise” in the Copyright Act but rather has the meaning:
• “To give authority or legal power to; empower (to do something)” from the Macquarie Dictionary; or
• “To give legal or formal warrant to (a person) to do; to empower, permit authoritatively” from the Shorter Oxford Dictionary.
Although Black CJ and Lehane J expressly disagreed on this point on appeal at [97] in obiter, MDS relies on the reasoning of Heerey J.
[197] The latter aspects of the definitions in the Macquarie and Shorter Oxford Dictionary of “empower (to do something)” and “empower, permit authoritatively” do not support MDS’s submission that “authorise” in s 13 is limited to the giving of legal authority. In any event, it is unlikely that s 13 can have that restricted meaning. The patentee has the right to exclude all others from authorising another to infringe the rights of the patentee. If authorisation required the legal right in the patent, then only the patentee has that right and there could be no infringement by authorisation by any person: (2010) 85 IPR 525 at 568 -569.
…
Her Honour concluded:
[202] I do not accept MDS’ proposition that the position stated in each of Rescare, Kimberly-Clark and by the Full Court in Bristol-Myers should not be followed. I see no reason to construe “authorise” in s 13 in the narrower way contended for by MDS. That is not to say that a director of a company, by reason only of that position, authorises any act of infringement by the company. It is still necessary to show actions that demonstrate that the person did sanction, approve or countenance the act of infringement: (2010) 85 IPR 525 at 570.
64 The differing statutory contexts in which the term “authorise” has been given attention in both the context of patent disputes and copyright disputes, as noted by Bennett J, serves as a caution in too readily transferring the meaning given to the term in either of those two statutory contexts to the Fair Work Act. It is a term which is to be construed and applied both by reference to its ordinary English meaning and in a manner which promotes the objects and purposes of the Fair Work Act.
65 The ordinary meaning of the term “authorise” as now defined in the Macquarie Dictionary (6th ed, 2013) is as follows:
1. to give authority or legal power to; empower (to do something). 2. to give authority for; formally sanction (an act or proceeding). 3. to establish by authority or usage: authorised by custom. 4. to afford a ground for; warrant; justify.
66 If this ordinary meaning of the term is to be applied to s 342(3)(a), the success of Rio Tinto’s primary submission thus depends upon the identification of some provision of the Fair Work Act which gives “authority or legal power” or which “empowers” Rio Tinto to make discriminatory payments.
67 To give to the phrase its normal and ordinary meaning requires the identification of some “authority or legal power” or some provision which “empowers” the making of the different quantum of payments to the CFMEU employees as opposed to the remaining employees.
The primary submission rejected – absence of authority by or under the Fair Work Act
68 There is no “authority” or “approval” to be found in the Fair Work Act for the making of discriminatory payments to employees.
69 Sections 50, 51 and 52 are not the source of any such “authorisation”.
70 Authority to make payments in accordance with the lawful entitlements of employees, it is considered, is not the issue; the issue is whether there is some “authority or legal power” or some provisions which “empowers” Rio Tinto to make payments which “discriminate between employees”. The success of Rio Tinto in its own Interlocutory Application for a strike-out of the CFMEU proceeding thus stands or falls upon its alternative submission – assuming it were to be presently entertained and resolved.
The alternative submission – Discriminates and Item 1(d)
71 Section 342(1) relevantly provides in Item 1(d) that “adverse action is taken by an employer against an employee if the employer … discriminates between the employee and other employees of the employer”.
72 The claim by the CFMEU that Rio Tinto has contravened ss 340 and 346 of the Fair Work Act and has “discriminate[d] between” employees for the purposes of Item 1(d) of s 342(1) is understood to be advanced in one or other of at least three ways, namely:
the payment of monies to employees, albeit monies paid pursuant to either the 2008 Agreement or pursuant to the “respective industrial instruments” may nevertheless constitute a contravention;
the payment of monies to the non-CFMEU employees pursuant to the “respective industrial instruments” may constitute a contravention where “the content of those legal obligations was, or was substantially, determined by [Rio Tinto] at its sole discretion…”; and
the payment of monies pursuant to “prior commitments” were payments “made and adhered to by [Rio Tinto] at its sole discretion.”
73 Irrespective of whether or not the payments by Rio Tinto fell within s 342(3)(a), the alternative submission relied upon by Rio Tinto was that the different quantum of payments to the CFMEU employees and the non-CFMEU employees did not in any event fall within Item 1(d). This alternative submission had itself two different limbs to it, namely:
the payment to the CFMEU employees of their legal entitlements could not be characterised as conduct taken by Rio Tinto “against” them – their rights were not diminished, so it was said; and/or
all employees, being both the CFMEU employees and the non-CFMEU employees were treated the same and without “discrimination” – each class of employee received their legal entitlements.
74 Any discriminatory outcome, so it was submitted on behalf of Rio Tinto, arose by the operation of the law and not as a consequence of any action taken by Rio Tinto. Whether it is an appropriate course to separately focus attention upon the terms “against” and “discriminates” is a matter which can be addressed at a later date: cf. Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396. But for present purposes, such are the submissions now being advanced. Senior Counsel for Rio Tinto perhaps equivocated as to whether he ultimately accepted that the alternative submissions founded upon Item 1(d) of s 342(1) were not susceptible to the strike-out application because they both necessarily involved a mixed question of fact and law.
75 Whatever may have been the ultimate position adopted by Senior Counsel for Rio Tinto, it is considered that the CFMEU proceeding should not be struck out in reliance upon this alternative submission.
76 Both of the constructions of s 342(1) advanced on behalf of Rio Tinto should be resolved against the relevant factual background – including the manner in which all employees were treated when their services were terminated on 23 November 2012. Given the fact that emerged from the Amended Defence, namely the fact that non-CFMEU employees received both their legal entitlements and monies paid pursuant to “prior commitments”, the competing submissions of the parties should be resolved once the facts have been fully explored. This conclusion has been reached primarily because:
that which constitutes “discrimination” is essentially a factual analysis; and
the payment of monies to the non-CFMEU employees in excess of their lawful entitlement, it is presently considered, could well place a considerable impediment in the path of any submission being ultimately accepted that the two classes of employees were not treated differently – the CFMEU employees having received only their legal entitlements and the non-CFMEU employees receiving their legal entitlements in addition to other payments.
To strike-out the CFMEU proceeding in advance of a hearing as to that evidence would be a manifestly inappropriate exercise of the discretion conferred by r 26.01 of the Federal Court Rules 2011.
77 But detailed submissions – albeit submissions confined largely to the proper construction of the Fair Work Act and necessarily in advance of such factual evidence as may later emerge – were nevertheless advanced for consideration. Given the extent of those submissions, it may be prudent to express some tentative views.
Adverse action taken by an employer against an employee
78 If attention is presently focussed on the term “against” and the payment to the CFMEU employees of their legal entitlements, Rio Tinto’s submission of present relevance is that the payment to those employees of only their legal entitlements cannot be said to be conduct taken by Rio Tinto “against” those employees. All that Rio Tinto has done, on this approach, is to pay them all that to which they were lawfully entitled.
79 In seeking to advance its submission that Rio Tinto itself has not taken any adverse action “against” the CFMEU employees, reliance is placed upon Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402, (2012) 208 FCR 178 and Australian Liquor, Hospitality and Miscellaneous Workers Union v Liquorland (Australia) Pty Ltd [2002] FCA 528, (2002) 114 IR 165. The proposition is that the payment to each of the two categories of employees of their legal entitlements is occasioned by the operation of the Act itself and cannot be properly characterised as action taken by Rio Tinto “against” the CFMEU employees.
80 These two decisions, it is presently considered, provides some support for the general proposition sought to be relied upon by Rio Tinto.
81 In Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402, (2012) 208 FCR 178 a question had arisen as to whether the conduct relied upon as constituting the “adverse action” had to be the conduct of the employer. Gordon J considered s 342(1) and the question as to what conduct constituted “adverse action”. In doing so, her Honour observed:
[85] The area of dispute concerned identification of the relevant conduct and, in particular, whether the conduct said to constitute the adverse action had to be the action of the MFESB. The MFESB submitted that the relevant conduct had to be action of the MFESB and that therefore:
1. conduct of the UFU is not conduct which can constitute adverse action by the MFESB;
2. approval of an enterprise agreement by a majority of employees cannot constitute adverse action of the MFESB; and
3. approval of an enterprise agreement by FWA cannot constitute adverse action of the MFESB.
[86] Put another way, the MFESB submitted that the definition of “adverse action” requires that the conduct must be that of an employer directed to an employee. In support of that contention, the MFESB referred to the use of the singular “employee” in s 342(1) of the FW Act (see [82] above). The MFESB’s particular reliance upon the use of the singular “employee” is misplaced: cf s 23 of the Acts Interpretation Act 1901 (Cth). However, as a matter of statutory construction, s 342(1) of the FW Act does require that:
1. the position is to be examined in the light of the circumstances of an individual employee (or group of similarly treated employees):…;
2. an employee’s position is to be taken at the time the conduct occurred and is to be assessed by reference to the employee’s then existing entitlements under the relevant industrial instrument…; and
3. the employee, individually speaking, must be in a worse situation after the relevant conduct than before it and the deterioration must have been caused by the employer’s conduct:…;
4. if the deterioration occurs by operation of the law or an industrial instrument the employer will not have altered the position of the employees individually speaking; the change in the position of the employees individually speaking occurs by operation of the relevant legislation rather than the conduct of the employer in making the enterprise agreement…: (2012) 208 FCR 178 at 200 – 201
82 In Australian Liquor, Hospitality and Miscellaneous Workers Union v Liquorland (Australia) Pty Ltd [2002] FCA 528, (2002) 114 IR 165 Cooper J concluded that seeking to obtain the consent of employees to a change in the existing industrial arrangements by acting in accordance with the relevant provisions of the Workplace Relations Act 1996 (Cth) was not conduct by the employer in contravention of s 298K(1)(b) or s 298K(1)(c) of that Act. Those sections provided as follows:
298K Dismissal etc of members of industrial associations etc
(1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
…
(b) injure an employee in his or her employment;
(c) alter the position of an employee to the employee's prejudice;
…
In so concluding, Cooper J observed:
[30] The injury and prejudice which the applicant's material goes to involves a comparison of the relative position of an employee under the Hotels Award and the 2002 Agreement and expresses the opinion that employees are better off under the Hotels Award than they will be under the 2002 Agreement. If that is the case, and notwithstanding the requirements of the no-disadvantage test, the 2002 Agreement is certified, the change in the circumstances of each employee individually will occur by the operation of the Act, and not the conduct of the employer in making the 2002 Agreement.
[31] For this reason alone the conduct complained of does not fall within s 298K(1)(b) or s 298K(1)(c). However, there is another reason why the conduct complained of is not conduct with which Pt XA of the Act is concerned. That is, the Act offers choices in respect of different modes of industrial regulation under the Act. Those choices are, regulation by Awards of the Commission made under Division 6 of Pt VI; Certified Enterprise Bargaining Agreements under Pt VIB (“EBAs”); Australian Workplace Agreements under Pt VID (“AWAs”).
[32] So far as EBAs are concerned, the object sought to be achieved by the statutory provisions allowing such agreements to be made is contained in s 170L. The section says:
“170L The object of this Part is to facilitate the making, and certifying by the Commission, of certain agreements, particularly at the level of a single business or part of a single business.”
[33] It is clear from the provisions of s 170LT(2) and the no-disadvantage test in Pt VIE of the Act, that it was contemplated by the legislature that EBAs were to be available to employers, subject to compliance with the Act, notwithstanding the existence of presently operable award provisions….
…..
[35] The right of an employer to choose which mode of industrial regulation it will seek to introduce as appropriate to its particular circumstances, without thereby engaging in conduct in contravention of Pt XA of the Act, was recognised in Burnie Port Corp Pty Ltd v Maritime Union of Australia [(2000) 104 FCR 440]. The case concerned the desire of the employer to offer AWAs to new employees. The issue was whether a refusal to employ an employee on other than an AWA constituted conduct in contravention of s 298K(1) of the Act. Their Honours said:
“[27] Each mode of industrial regulation under the Act, whether it be an AWA, an EBA or an award, is operative and binding upon the parties only when the prescribed statutory criteria have been satisfied. Although the statutory criteria vary with each mode of regulation, the protective mechanisms provided under the Act in respect of each of them were intended to ensure that employees are not treated harshly or unreasonably. The legislature has not expressed any preference in the Act in favour of one form of industrial regulation over another. Rather, as is stated in s 3(c), one of the principal objects of the Act is to enable employers and employees to choose the most appropriate form of agreement for their particular circumstances.
[28] In the circumstances we are unable to discern any legislative policy or intent that an employer be prevented from offering to a prospective employee one form of industrial regulation under the Act rather than another. Put another way, we do not discern a legislative policy or intent in respect of the anti-discrimination provisions in s 298K(1)(d) and s 298L(1)(h) that it is the prospective employee, rather than the employer, who is to be entitled to choose the mode of industrial regulation under the Act that is to apply to his or her employment, where more than one form of such regulation is available in the prospective employer's workplace. ...”
[36] The position is no different where the employer wishes to alter the existing form of industrial regulation, where the Act provides for such an alternative and a means to change, provided that certain criteria contained in the Act to facilitate change are complied with. Those criteria include safeguard provisions, as for example, that the proposed agreement is agreed to or approved by vote of a valid majority of the persons employed at the time, whose employment will be subject to the agreement (s 170LE, s 170LJ(2), s 170LK(1)), the no-disadvantage test (s 170LT(2)) and that the agreement does not breach any of the proscribed conditions which require refusal of certification (s 170LO)): (2002) 114 IR 165, 174 – 175.
83 Rio Tinto seeks to place particular reliance upon both the observations of Gordon J in Klein, supra, at [86(4)], namely the proposition that a deterioration which occurs “by operation of the law or an industrial agreement…” and the observations of Cooper J in Australian Liquor, supra.
84 Two potential difficulties in the path of Rio Tinto are that the acceptance of its general proposition as to the construction of s 340(1) and the meaning of the phrase “adverse action against” perhaps leaves unresolved whether or not:
the very manner in which it entered into “respective industrial instruments” with the non-CFMEU employees as opposed to the 2008 Agreement regulating the employment of the CFMEU employees may expose “adverse action against” the CFMEU employees;
and
the making of payments to the non-CFMEU members in excess of their entitlements pursuant to those “respective workplace instruments”, albeit payments in respect to which there is said to be a “prior commitment”, may expose “adverse action against” the CFMEU employees.
The former of these potential difficulties may perhaps be answered by the observations of Cooper J in Australian Liquor, supra. But even the resolution of this issue may depend upon facts not presently before the Court. Other issues may, of course, also emerge at a final hearing.
85 But these observations are nothing more than tentative views which may need to be revisited during a final hearing.
86 In such circumstances it is certainly not appropriate to strike-out the CFMEU proceeding in its entirety. Nor is it considered appropriate to strike-out some – but not all – of the claims being advanced. It is considered best to resolve all arguments as to whether or not Rio Tinto has unlawfully discriminated between its employees – however that discrimination be said to have arisen – at a final hearing.
THE CFMEU’S APPLICATION FOR FURTHER DISCOVERY
87 The Interlocutory Application as filed by the CFMEU on 8 October 2013 sought the discovery of fourteen further categories of documents. Those categories were set forth in Schedule A which was annexed to the Interlocutory Application. The CFMEU’s written submissions abandoned one category, narrowed the scope of other categories and added a further category. Schedule A was further amended during the course of the hearing.
88 The Interlocutory Application is supported by an affidavit of Mr Branko Bukarica, a solicitor employed by the CFMEU. Mr Bukarica refers to eight of those persons who are included in the Amended Schedule A list of persons. Mr Bukarica states that each of these persons continues to be persons “occupying a managerial role” within Rio Tinto.
89 The first order for discovery was made in March 2013. That was at a time, obviously enough, when neither the Statement of Claim nor the Defence as first filed had been amended. The amendments to the Statement of Claim were made in April 2013; the amendments to the Defence were made in October 2013. The March 2013 discovery orders were thus directed to the issues dividing the parties in their pleadings as then filed.
90 In approaching the question as to what – if any – further discovery should be ordered, it is respectfully considered that recognition necessarily has to be given to both the general principles guiding the exercise of the Court’s discretion as to ordering discovery and the legal and factual issues which have emerged by reason of the amendments. Of relevance is the fact that:
the orders for discovery were first made in March 2013, “suspended” in April 2013 and further orders made in May 2013;
thereafter concern had been expressed by the Court as to whether the discovery that had been ordered had exposed the CFMEU to any prejudice;
Rio Tinto amended its Defence in October 2013 and the Amended Defence raised issues which were not in play in either March or May 2013; and
Schedule A in the Amended Interlocutory Application now before the Court in large part seeks discovery by reference to categories of documents and seeks to re-agitate limitations upon discovery that had been under consideration in March 2013 and then rejected.
It is concluded that further discovery should be granted – but not in the terms sought. Far more limited discovery is considered appropriate.
General principles
91 In resolving the discovery dispute, a few general principles were obviously common ground.
92 First, a party to litigation in this Court has “no presumptive right to discovery”: DSM Nutritional Products, LLC v Suntory Holdings Ltd [2013] FCA 675 at [8] per Tracey J. It is the party seeking discovery who bears the onus of satisfying the Court that the documents sought are necessary: Trade Practices Commission v CC (New South Wales) Pty Ltd (No 4) (1995) 58 FCR 426 at 436 per Lindgren J.
93 Second, r 20.11 of the Federal Court Rules 2011 provides that a party must not apply for an order for discovery unless the criteria there set forth are met. That rule provides as follows:
Discovery must be for the just resolution of the proceeding
A party must not apply for an order for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible.
This rule “reflects the overarching purpose referred to in s 37M(1) of the Federal Court of Australia Act 1976 (Cth)”: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396 at [21], (2011) 212 IR 313 at 319 per Collier J. Although discovery facilitates proof of facts and can avoid ambush or surprise, it can also be “extremely expensive” and the discretion to order discovery is thus to be exercised in a way that best promotes the overarching purpose of the civil practice provisions set forth in s 37M: Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd (No 4) [2012] FCA 143 at [14] per Katzmann J. The Court controls the discovery process in part to ensure that the parties “are not crippled with the cost and delay of that process”: Alanco Australia Pty Ltd v Higgins (No 2) [2011] FCA 1063 at [7] per McKerracher J.
94 Third, discovery is “not automatic or even ordered as a matter of course and even if the court is persuaded to make an order, the Court will fashion the order to suit the particular circumstances of the case”: Taylor v Saloniklis [2013] FCA 679 at [7] per Besanko J. The Court will not “order discovery as a matter of course, even where the parties consent, unless it is necessary for the determination of issues in the proceedings”: Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd (No 4) [2013] FCA 1044 at [33] per Mansfield J.
95 Fourth, what is now referred to as “standard discovery” is addressed in r 20.14 of the Federal Court Rules 2011. Rule 20.14(1) provides as follows:
Standard discovery
(1) If the Court orders a party to give standard discovery, the party must give discovery of documents:
(a) that are directly relevant to the issues raised by the pleadings or in the affidavits; and
(b) of which, after a reasonable search, the party is aware; and
(c) that are, or have been, in the party's control.
(2) For paragraph (1)(a), the documents must meet at least one of the following criteria:
(a) the documents are those on which the party intends to rely;
(b) the documents adversely affect the party's own case;
(c) the documents support another party's case;
(d) the documents adversely affect another party's case.
(3) For paragraph (1)(b), in making a reasonable search, a party may take into account the following:
(a) the nature and complexity of the proceeding;
(b) the number of documents involved;
(c) the ease and cost of retrieving a document;
(d) the significance of any document likely to be found;
(e) any other relevant matter.
(4) In this rule, a reference to an affidavit is a reference to:
(a) an affidavit accompanying an originating application; and
(b) an affidavit in response to the affidavit accompanying the originating application.
The phrase used in r 20.14(1)(a), “directly relevant”, assumes importance. It emphasises the considerable shift in attitude and the confined nature of the discovery which is now “standard” from that which was previously ordered, namely the discovery of documents that would lead to a train on inquiry. “Non-standard and more extensive” discovery is addressed in r 20.15. A party seeking such discovery must identify “any criteria mentioned in rules 20.14(1) and (2) that should not apply” (r 20.15(1)(a)) and “any other criteria that should apply” (r 20.15(1)(b)).
96 Fifth, r 20.21 provides for the making of an order for “particular discovery”. That rule provides as follows:
Order for particular discovery
(1) If a party (the first party) claims that a document or category of documents may be or may have been in another party's control (the second party), the first party may apply to the Court for an order that the second party file an affidavit stating:
(a) whether the document or any document of that category is or has been in the second party's control; and
(b) if the document or category of documents has been but is no longer in the second party's control – when it was last in the second party's control and what became of it.
(2) The first party seeking an order under subrule (1) must identify the document or category of documents as precisely as possible.
Rule 20.21 is the counter-part provision to Order 15 r 8 as formerly found in the now-repealed Federal Court Rules 1979 (Cth). Order 15 r 8 provided as follows:
8. Order for particular discovery
Where, at any stage of the proceedings, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of a party, the Court may order that party:
(a) to file any affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it; and
(b) to serve the affidavit or nay other party.
97 There are obvious differences in language between the current r 20.21 and the former O 15 r 8. But such differences of language, it has not been suggested, lead to any presently relevant difference in the principles to be applied. The former O 15 r 8, for example, was “introduced to obviate the hardship of the rule that the affidavit of discovery was conclusive”: Metcash Trading Ltd v Bunn [2010] FCA 8 at [17], (2010) 263 ALR 132 at 136 per Lander J. So, too, should the present r 20.21 be applied in a manner to “obviate the hardship” of the conclusiveness formerly given to affidavits of discovery. Similarly, there is no relevant difference between the circumstances that must be satisfied before an order for “particular discovery” is now made. Formerly, O 15 r 8 required that such an order may be made where “it appear[ed] to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of a party…”. The current r 20.21 simply provides that a party may apply to the Court for an order for “particular discovery” where the party “claims that a document or category of documents may be or may have been in another party’s control…”. Notwithstanding the difference in language, it may well be queried whether the Court would now make an order for “particular discovery” where the “claim” for “particular discovery” was not founded upon any “appearance” that any such further document or category of documents in fact existed. The basis for the making of the order, as was previously found within O 15 r 8, is now required to be addressed in the affidavit required to be filed pursuant to the current r 20.21(1).
98 Whatever significance may be attached to differences of language between the former O 15 r 8 and the current r 20.21 that which has remained constant is the manner in which a deficiency in discovery may be established. A deficiency may emerge (inter alia) from an analysis of the pleadings, from the documents produced on discovery, from the evidence or from the nature or circumstances of an individual case. Thus, for example, in Mulley v Manifold (1959) 103 CLR 341 at 343 Menzies J observed at 343 in the context of the comparable High Court Rules 1952 (Cth):
So far as O. 32, r. 13 is concerned, it cannot be shown by a contentious affidavit that the discovery made is insufficient. Before 1912, it was thought that the insufficiency had to appear from the pleadings, the affidavit of documents itself or the documents therein referred to. However, in British Association of Glass Bottle Manufacturers Ltd v Nettlefold [1912] 1 KB 369, it was established that the insufficiency might appear not only from the documents but also from any other source that constituted an admission of the existence of a discoverable document. Furthermore, it is not necessary to infer the existence of a particular document; it is sufficient if it appears that a party has excluded documents under a misconception of the case. Beyond this, the affidavit of discovery is conclusive. It was in order to relax this rule to some extent that O. 32, r. 18 was introduced; this rule does permit an application for further discovery based upon the filing of an affidavit that there have been particular undiscovered documents in the possession of the other party which relate to a matter in question in the proceeding. Pursuant to this rule, the Court, however, can do no more than order an affidavit in respect of particular documents and there is no doubt that the mere existence of such documents does not provide the basis for ordering a further affidavit in general terms although, if a document discovered pursuant to such a particular order were to indicate the existence of other material documents, that would warrant an order under O. 32, r. 13...
Similarly, Greenwood J in McIlwain v Ramsey Food Packaging Pty Ltd [2005] FCA 1233, (2005) 221 ALR 785 at 799 observed in respect to the former Federal Court Rules:
[25] Order 15, r 8 seems to embody the following process. A party dissatisfied with the completeness of discovery by another party might seek to identify either a document or a class of document as the focus for an application. That document or class of document must relate to a matter in question in the proceeding. The grounds for a belief that some document or class of documents relating to a matter in question exists can be demonstrated to the Court either from evidence adduced by the applicant for an order or from the nature or circumstances of the case (reflected in the pleadings) or from any document filed in the proceedings. The applicant must then demonstrate that such a document or class of document either may be or may have been in the possession, custody or power of a party. Once those matters are demonstrated, the Court may order such a party to file an affidavit stating whether that document or any document of that class is or has been in the possession, custody or power of the party.
See also: Bryer Merchandisers Pty Limited v Nike Australia Pty Limited [2002] FCA 880; Betts Group Pty Ltd v Paul’s Retail Pty Ltd [2007] FCA 1983.
99 Neither the current r 20.21, nor the former O 15 r 8, is a substitute for general discovery but rather a rule for the discovery of a particular document or category of documents to be produced and is an application that may be made following either an order for standard or non-standard discovery: Dennis v Chambers Investment Planners Pty Ltd [2012] FCA 63, (2012) 201 FCR 321. Barker J there explained the manner of operation of this rule as follows:
[37] …It enables a party who claims that a document or category of documents may be or have been in another party’s control, to apply to the Court for an order that the other party file an affidavit stating whether the document or any document of that category is or has been in the other party’s control and if it has been but is no longer, when it was last in their control and what became of it. While r 20.14 and r 20.15 may generally be described as rules that provide for the giving of general discovery (whether under the directly relevant test or a court ordered broader relevance test), r 20.21 is of a different nature in that it permits a party to seek discovery of a particular document or category. This is emphasised by r 20.21(2) which requires the party seeking the order to identify the document or category of documents “as precisely as possible”. The purpose of r 20.21, on its face, is not that it be a substitute for general discovery, but rather to enable a party to ask for discovery of a particular document or category of documents. Seemingly, this request may be made before or after general discovery or, in any event, without general discovery having been given…
[39] I see no reason why a party may not apply under r 20.21 following either standard or non-standard discovery, or even (exceptionally) before general discovery, to seek particular discovery of a document or category of documents that is or are said to be relevant. In such a case it will be incumbent on the party seeking particular discovery to satisfy the Court that the document should be discovered in the circumstances of the case. The document or category of documents must be relevant, directly or indirectly. Additionally, the Court would, I think, need to be satisfied that discovery of the document will facilitate the efficient conduct of the proceedings. If, for example, one can see that the documents are likely to be relied on at trial, and if not provided during the pre-trial period would likely later result in an adjournment of the trial, then it may make good sense for the Court to require particular discovery at the pre-trial stage. That said, each application will depend on its own facts and circumstances and will be affected by the underlying policy of the new Rules to limit the scope of discovery and to advance the overarching purpose of civil procedure in the Court as stated by s 37M of the FCA Act: (2012) 201 FCR 321, 328 – 329.
In Haile-Michael v Konstantinidis (No 3) [2013] FCA 53 at [12] Jessup J declined to order discovery of particular documents which only had a “rather indirect point of anchorage … in the issues relevant in the case…”. His Honour nevertheless there observed that the Court was “at a disadvantage” in forming a discretionary judgment as to the potential for the documents sought to be discovered to assist the applicant’s case or to damage that of the respondents: [2013] FCA 53 at [9].
The March 2013 orders & the aftermath
100 The steps taken by the CFMEU to seek discovery relevantly commenced on 6 March 2013 when a Schedule was first provided to Rio Tinto as to the discovery which was sought. That proposed Schedule sought (inter alia):
4. All documents containing, evidencing or referring to any discussion or consideration of the following matters with respect to payments to be made on termination to production employees of the respondent at the Blair Athol mine whose employment was terminated in or about November 2012:
a. the quantum of such payments;
b. the basis on which such payments could or should be made;
c. the instruments or policies to which could or should applied in calculating such payments; and
d. the respective benefits and disadvantages of the approaches considered to (a) – (c) above.
5. Any policy or proposed policy which has come into existence or operation since 1 January 2006 relating to the payments to be made to employees of the respondent on termination of employment, and any draft versions of such policies.
6. All documents containing, evidencing or referring to any discussion or consideration of the purpose or effect of the policies or proposed policies referred to in paragraph (5) above.
7. All documents containing, evidencing or referring to any discussion or consideration of the manner in which any policies referred to in paragraph (5) were to be applied to its workforce in cases of redundancy and/or the employees to whom the policies would be applied.
101 The form of orders as sought was the subject to consideration during a hearing held on 14 March 2013. Substantial objection was then taken on behalf of Rio Tinto to a form of order requiring discovery of “all documents containing, evidencing or referring to any discussions or consideration of…” matters identified. Those documents which it was then concluded were susceptible to discovery were the more confined category of documents evidencing (for example) a decision taken or reasons for a decision taken by those who had decision-making responsibilities. Other more generally defined “discussions”, it was then concluded cast the net of discovery far too broadly.
102 The form of orders as made on 14 March 2013 relevantly confined discovery to “documents recording any meeting” held on various dates that were specified. Such was also the form of further orders made on 17 May 2013. Some 6,000 documents have been produced pursuant to those orders. That discovery exercise as at April 2013 was said to have incurred costs of $477,400. That sum was not disputed by the CFMEU.
103 The discovery exercise was “suspended” in mid-April 2013. At a directions hearing held on 17 April 2013 concern was expressed by the Court itself as to whether the process of discovery was exposing Rio Tinto to costs far beyond that originally contemplated and beyond that which was necessary for the just resolution of the matters in dispute. In retrospect, it may have been far more prudent to have simply ordered “standard” discovery. An affidavit could then have been filed as to that order having been complied with and the CFMEU potentially thereafter left in the position of seeking such “particular” discovery as was considered appropriate. The course of having an officer of Rio Tinto cross-examined as to the manner in which it maintained its records and the location of such records was intended to be of benefit to both Rio Tinto and the CFMEU. It was anticipated that such evidence could confine the discovery process to be undertaken by Rio Tinto and to facilitate the ability of the CFMEU to focus its discovery application. But the hopes to achieve those objectives have been dashed.
104 The second order for discovery was made on 17 May 2013. That order was preceded by a directions hearing the previous day. Again, the question of discovery was revisited. One substantial concern then raised by Counsel for the CFMEU was an asserted lack of discovery of documents concerning a decision taken in 2006 or 2007 to apply the Rio Tinto Retrenchment Policy to some employees at the mine site. It was to that issue that the further discovery was ordered.
105 Of more immediate significance is the fact that on 16 May 2013 the CFMEU were again told that if there was continuing dissatisfaction with the discovery that had been ordered an interlocutory application should be filed. The parties were told that it was necessary to “draw a line in the sand”. Whatever may have been defects in the order for discovery as first made in March 2013, it was necessary to quell whatever may have been the continuing dissatisfaction on the part of the CFMEU with those orders and to quickly and finally complete the discovery process.
106 The CFMEU ultimately filed its Interlocutory Application on 8 October 2013. Given the background to the discovery dispute, no criticism can be directed at Counsel for the CFMEU for either filing the Interlocutory Application now under consideration or seeking discovery in the form in which the categories set forth in Schedule A to that Application have been drafted. Counsel has done no more and no less than was perceived necessary to bring all outstanding discovery concerns to a head.
107 The filing of the CFMEU Interlocutory Application and its resolution will “draw a line in the sand”. At no stage has Counsel for the CFMEU conceded that the discovery as first ordered in March 2013 was productive of more discovery having been granted than would have been the case had “standard” discovery been ordered. Whether that is so or not, the CFMEU have had the benefit of the questioning of Mr Gavin and the benefit of a large number of documents having been discovered consequent upon the information he then provided.
Further discovery by reference to categories
108 Schedule A to the Interlocutory Application as filed by the CFMEU in October 2013 again, in large part, seeks discovery by reference to categories of documents and in large part seeks to re-agitate issues which were addressed in March 2013.
109 No application is made on behalf of the CFMEU to reinvigorate the discovery process which had been “suspended” in mid-April 2013. Although the filing of its Interlocutory Application seeking discovery by reference to categories may not have been unexpected – especially given the events on 17 April 2013 and 16 May 2013 – what was perhaps curious was that no application was made to reinvigorate the discovery process that had been “suspended”. Although, obviously not the preferred course of the CFMEU, it may have been anticipated that the reinvigoration of the “suspended” discovery process may have been seen by the CFMEU as a “fall-back” position in the event that it met with a lack of success in its current Interlocutory Application. That was a prospect raised with Counsel for the CFMEU. But no such application was made.
110 The further order for discovery which was pressed on behalf of the CFMEU, and the only application before the Court and the one in need of resolution, is the application for discovery in the form of the amended Schedule A filed in Court during the hearing.
111 Further discovery in the form now sought, it is respectfully considered, suffers from a fundamental difficulty at the outset. If considerations relevant to either:
particular discovery; or
issues arising from either evidence filed or the Amended Defence
are presently left to one side to be addressed separately, the fundamental difficulty is that the constraints then imposed upon the discovery which was ordered in March 2013 and later varied in May 2013 are still considered to have been a proper exercise of the discretion. The terms of those orders confined discovery (for example) to those documents:
identifying the purpose and quantum of all payments made on termination of employees;
recording meetings between employees of Rio Tinto with authority to make decisions with respect to payments to be made on termination;
recording any policy or proposed policy which had come into existence since January 2006 relating to the payments to be made to employees; and
recording any meetings between 1 January 2006 and 23 November 2012 with or by any employees of Rio Tinto with authority to make a decision in respect to the content or proposed content of individual employment agreements insofar as that content dealt with payments to be made on termination.
Documents which were not the subject of discovery were those documents (for example):
recording “conversations” with persons other than those responsible for the making of decisions.
The discovery ordered in March 2013 was considered at the time, and is still considered, to be that which would result in the production of potentially relevant documents, including those documents “directly relevant to the issues raised by the pleadings”. That discovery was considered at the time, and is still considered, to be that which struck an appropriate balance between the overarching purpose of civil practice and procedure and that which would best facilitate the ability of the CFMEU to gain access to those documents, of which it was otherwise unaware, and which could assist it to test the decision-making processes of Rio Tinto as to the payments to be made to employees on the termination of their services.
112 Even at the time when discovery was first ordered, the issues dividing the parties were within a relatively confined ambit. The Defence as first filed raised issues which have remained constant. Rio Tinto from the outset was maintaining that no contravention of the Fair Work Act arose where it paid its employees all of the entitlements to which they were contractually entitled. Indeed, given the confined nature of the dispute, some reservation was felt as to whether the discovery which was first ordered was too extensive.
113 Rejected at the outset was discovery by reference to what later came to be described by Senior Counsel for Rio Tinto as discovery by reference to a “stream of consciousness”. Discovery of all documents “containing, evidencing or referring to any discussion or consideration of” various issues thereafter identified was considered in March 2013 to have been far too broad. And that remains the position.
114 Any reservation as to whether the CFMEU had been denied the benefit of (for example) “standard” discovery or denied discovery by reference to categories differently expressed, it was considered, could be adequately and appropriately addressed if or when any short-comings emerged. If there were short-comings, an application could be made either for:
“particular” discovery; or
discovery by reference to further discrete and more narrowly defined categories.
But that is not the course which has been pursued by the CFMEU. The discovery now sought in large part seeks to re-agitate constraints first imposed in March 2013.
115 The course pursued by the CFMEU largely puts to one side the benefit of the discovery that has already taken place. To do so, it is respectfully considered, places too little weight upon the benefits of the existing discovery and gives too little credence to the need for any party to conduct civil litigation “as quickly, inexpensively and efficiently as possible”. Those considerations assume particular relevance when resolving the claim to further discovery of documents by reference to categories that could have been, and to a considerable extent, were sought at the outset.
116 It would be manifestly inappropriate for the CFMEU Interlocutory Application now before the Court to be resolved without taking into account the extent of discovery that has already taken place and the costs incurred by Rio Tinto. The Interlocutory Application is now to be resolved by reference to both the discovery that has to-date taken place and by reference to the discovery sought in Schedule A. Separate considerations, it is respectfully considered, needs to be given to those categories of documents which:
in large part seek to re-visit the categories first considered appropriate in March 2013;
seek discovery of documents by reference to specific issues which have emerged in the evidence filed to-date; and
seek discovery of documents by reference to the issues raised by the Amended Defence filed by Rio Tinto in June 2013.
Schedule A – the reformulated orders by reference to categories
117 In the absence of any reason to revisit the categories of documents ordered to be discovered in March 2013, or the constraints then imposed upon those categories, any attempt on the part of the CFMEU to revisit those existing orders necessarily confronts a not inconsiderable barrier to success.
118 But each category of documents as now sought has been revisited as a means of “checking” the appropriateness of the orders previously made.
119 Categories 1, 2 and 3 in Schedule A were abandoned and, accordingly, need not be further considered.
120 Category 3A, 8, 9, 10, 14 and 15 fall for different consideration.
121 The documents now sought by Category 4 of Schedule A would previously have been caught by orders 6 and 9 as made in March 2013. Even if it were considered appropriate to revisit the orders previously made, the form in which Category 4 is currently expressed remains inappropriately broad. The Category seeking as it does the discovering of “all documents generated or circulated during 2008 evidencing any consideration of” various matters casts the net of discovery far too broadly. The limitation of the discovery to three named officials of Rio Tinto may limit the field of documents but does nothing to appropriately constrain the category of documents for which discovery is sought.
122 The documents in Category 5 again seeks discovery of “all documents generated or circulated during 2012 evidencing any consideration of, or decision in relation to the question of whether to include reference to a Rio Tinto retrenchment policy…in any new collective agreement to replace the Blair Athol Coal Mineworkers Union Collective Workplace Agreement 2008”. Such a category again invites an inquiry into matters that may or may not have found their way into any decision which was later implemented when the employees were terminated in November 2012. For discovery purposes, some limited inquiry into documents evidencing deliberations prior to a decision taking place may have been considered appropriate. But the documents sought in Category 5 would, to some extent, be caught by Orders 5 and 6 as made in March 2013.
123 Category 6 of Schedule A was not pressed and, again, can be left aside.
124 Category 7 is expressed in similarly broad language as that employed for Categories 4 and 5.
125 Categories 11, 12 and 13 in Schedule A:
seek to again canvass the orders first proposed on 6 March 2013 in what were then initially proposed as Orders 10, 13 and 14(i) and (ii); and
were previously covered by orders 8, 9 and 10 as made in March 2013.
The orders previously made were considered appropriate and no reason has emerged to question the discovery then ordered. In support of these paragraphs as now sought in Schedule A, reference is made to parts of Mr Gavin’s affidavit and the affidavit of Mr Bukarica who annexes an online newspaper report from The Australian and a media report stating that Rio Tinto had expressed concern that “increased union activity in the resource sector … could have serious, adverse consequences for the nation’s export performance”. Based upon such material, Counsel for the CFMEU submits that Rio Tinto has a “hostile attitude towards trade union membership” and that Rio Tinto has a “strong preference to engage employees on individual contracts rather than collective agreements”. Assuming that so much may follow from the evidence relied upon, the difficulty confronting the CFMEU is (again) the fact that its present application for further discovery does not seek to relevantly refine or confine Orders 8, 9 and 10 as made in March 2013. Although categories 11, 12 and 13 as now sought do, for example, seek to confine the discovery to documents “authored by or received by” a limited number of named persons, the categories of documents sought remain free of the constraints previously considered appropriate – and which are still considered appropriate. And the categories as now sought raise additional concerns by reason of the documents being described by reference to (for example) documents “evidencing any consideration or discussion” of various matters and documents “regarding” those matters. The reasons for imposing the constraints upon the discovery first ordered remain. Moreover, to now order the further discovery sought would be to compel Rio Tinto to go back and start afresh the discovery process, albeit this time with reference to the reformulated Categories 11, 12 and 13. Such a course is not considered appropriate.
126 All of these categories, however, in one form or another seek to reformulate the orders as made in March 2013. No criticism can be directed at Counsel for the CFMEU in seeking to “draw a line in the sand” by reference to newly formulated categories. But to do so in a manner which neither seeks to address:
the reasons why the initial constraints upon discovery were first imposed;
nor
the benefits of such discovery as has already taken place
is respectfully considered to be inappropriate and unwarranted. The discovery now sought by these categories is, accordingly, refused.
Schedule A – issues emerging from the evidence
127 Categories 8, 9 and 10 of Schedule A seek discovery by reference to factual issues thrown up by evidence that has to-date been filed in the proceeding.
128 Category 8 of Schedule A seeks the discovery of the following documents:
• All minutes or other records of the meetings of the ‘People Working Group’ referred to paragraph in 24(a) of the Affidavit of Katherine Jane McInnes (nee McDermott) sworn on 14 August 2013.
Ms McInnes describes her position at the relevant time as the “Manager of Human Resources – Clermont Region”. Her affidavit part addresses the “accelerated closure” of the Blair Athol Mine. Her affidavit states in part as follows:
Announcement of accelerated closure
23. At this time the closure planning process went up a gear.
24. Once detailed planning for closure got underway, several processes were put in place which were overlapping or running concurrently:
(a) A sub-committee that evolved out of the closure planning to address HR issues. (I called it the Steering Committee, but I know it was called the People Working Group in the business. For the purposes of my affidavit and to avoid confusion with terminology used by others in the business I will refer to it as the People Working Group and the closure planning process as the Steering Committee).
(b) My regular People Team meetings held every Friday on site. (I referred to it as the People Working Group, but to avoid confusion I will call it the People Planning Team in this affidavit).
(c) The MFP process, which took place in two distinct rounds of meetings with employees from July until the Mine was eventually closed in November 2012.
(d) The community consultation/engagement process.
(e) Consultation with unions regarding the Mine closure which ran from July 2012 to November 2012.
(f) The ongoing retrenchment process, (including determining and calculating employees’ redundancy entitlements), which took place up to the closure of the Mine.
(g) The enterprise agreement bargaining process.
25. I was not a member of the Steering Committee.
26. I was a member of the People Working Group. Our task was to gather information for the relevant decision makers and then to implement any decision made. I was able to make decisions within my authority related to the implementation process but only if they were consistent with Stuart’s overall decision.
27. I had a very limited role in the community consultation. My team assisted the community consultation process on issues such as housing, but not to any great detail.
129 Category 9 of Schedule A seeks the discovery of the following documents:
• All documents evidencing the discussions between Michael Robert Gavin and Stuart Hayes referred to in paragraph 24 of the Affidavit of Michael Robert Gavin sworn on 15 August 2013.
The affidavit of Mr Gavin sworn on 15 August 2013 refers (inter alia) to discussions between himself and Mr Stuart Hayes, the General Manager – Human Resources for Rio Tinto. Mr Gavin also refers to the entitlements of “a number of staff contract employees”. His affidavit, in relevant part, provides as follows:
21. The first issue raised related to the retrenchment entitlements for a number of staff contract employees. Cailey had raised an issue with Katie and she in turn raised it with me. There were some staff agreements which pre-dated the Retrenchment Policy and had a lower retrenchment calculation method than the policy. However, these individuals had received a letter from Jeff Farrell in 2007 extending the Retrenchment Policy to them. I asked Katie to send me a copy of this letter.
22. On 3 July 2012 Katie sent me an email attaching a copy of the Jeff Farrell letter. Attached is a copy of the email and the attachment.
23. I formed the view that as the Jeff Farrell letter had given a commitment to these employees that they would be paid in accordance with the Retrenchment Policy, then we had to honour that commitment. I believed that this approach was consistent with Stuart’s overall decision to pay employees in accordance with their instruments because that letter was effectively an addendum to those instruments.
24. I also recall that I discussed my proposed approach with Stuart and he agreed.
The positions occupied by the other persons there referred to assume no present significance.
130 Although a submission was made by Senior Counsel for Rio Tinto during the course of a Directions Hearing in October 2013 that all of the documents sought in respect to these two categories had been discovered, subsequent correspondence may have qualified the submission previously made on instructions. It is appropriate that any outstanding uncertainty by resolved.
131 Paragraph 10 of Schedule A seeks discovery of all “documents created or generated since 1 January 2006 evidencing any practice or procedure which has or had the effect of excluding the operation of any Rio Tinto retrenchment policy in respect of any employees who have entered into, or are bound by, an industrial instrument which deals with retrenchment”. The manner in which this category is expressed attracts criticism. The expressions “evidencing”, “any practice or procedure” and “had the effect…” are unquestionably broad and vague.
132 But the terms of this paragraph of Schedule A are largely derived from the evidence of Mr Gavin who prepared a Supplementary Affidavit on 4 September 2013 in which he stated (inter alia):
32. It is my understanding that in practice the Retrenchment Policy has been applied only as a default position. That is, it is not applied in the specific case of an employee who has entered into, or become bound by, an industrial instrument in which the subject matter of the Policy is dealt with in express terms that are different from the terms of the Policy. If the industrial instrument applying to the employee is silent in relation to the subject matter of the Policy, the Policy has been applied to that employee.
33. In the course of these proceedings, I became aware that this was how the Retrenchment Policy was applied to the retrenchments in 2012.
34. During my employment with the Respondent, I have implemented this application of the Retrenchment Policy on more than one occasion. I believe this application of the policy to be a long standing practice.
133 It is concluded that further discovery should be ordered in respect to these categories but that such discovery should be confined:
in the case of Ms McInnes (and paragraph [8]), to such minutes or other records held or retained by her; and
in the case of Mr Gavin (and paragraphs [9] and [10]), to such documents held or retained by Messrs Gavin or Stuart Hayes.
Both Ms McInnes and Messrs Gavin and Hayes remain employed by Rio Tinto.
Schedule A – Category 14
134 Category 14 is a newly described category. It seeks discovery of all “documents evidencing any consideration by the respondent in 2012 of whether to grant ‘staff contracts’ to” named individuals. The category is further confined by reference to documents “authored or received by” named persons.
135 Whether discovery as sought should be now ordered attracts conflicting considerations.
136 On the one hand, it is a category which could have been first sought – albeit in generic terms – in March 2013. But it was not then sought. To now order discovery of what may be characterised as a category which has previously been “overlooked” may not be inappropriate. But, to do so would involve considerable additional expense being incurred by Rio Tinto. It is one thing to order discovery at the outset and for the party against whom discovery has been ordered to implement a single regime whereby all categories of documents can be searched and retrieved in a single process; it is another thing, however, to impose upon a party an obligation to conduct a second “sweep” of documents already once reviewed for discovery purposes.
137 The impetus for discovery now being sought are those documents identified in Category 14, however, may be more immediately traced to evidence that has been filed by Rio Tinto. The affidavit of Ms McInnes thus refers in part to a meeting of the People Working Party on 5 September 2012. Annexed to her affidavit is what appears to be a presentation that occurred on that date. Included within that presentation was the following:
• Mark Peach
– Application made in November 2011
– Maintenance Supt supported a period where Mark could demonstrate he would operate constructively and leave the AMWU behind, then be offered a staff agreement
– Seen by the business as someone with scars too deep to heal, held the role of President and was always challenging publicly – application not supported by JM/TM
– No written reply to application
– Knew application was rejected because of incident at voting booth for AMWU agreement
– Previous WPR and PIP issue could potentially demonstrate the Company treatment was prejudicial. WPR ratings not supported by Supervisor; PIP covered areas which were not a true reflection of his performance.
– Risk to the Company
Even if it be correct to state that the documents sought in Category 14 could have been sought from the outset, there has been some evidence filed which seeks to canvas the reasons why approval was not given to an employee to move to a staff contract.
138 On balance, including a consideration as to whether such further discovery assumes any relevance to the issues to be resolved, it is concluded that further discovery should be ordered in respect to Category 14. But such discovery should be confined to those documents held or retained by Mr Hayes or Mr Ms McInnes.
Schedule A – the Amended Defence
139 The terms in which the Defence as filed in February 2013 was expressed and the terms of the Amended Defence as filed in October 2013 assume some importance.
140 The Defence first maintained (inter alia) that payments to the non-CFMEU employees “were calculated and made in accordance with the legal obligations of the Respondent towards each of those employees….”. The Reply as filed in June 2013 denied that Rio Tinto had “calculated and made payment to employees (other than those named in Schedule A to the originating application) on the basis of its legal obligations…”.
141 Evidence filed by the CFMEU in July 2013, suggested that non-CFMEU employees had been paid sums of money considerably in excess of their “respective legal entitlements”.
142 The Amended Defence thereafter filed shifted ground – it was then accepted that some non-CFMEU employees had received payments in excess of their legal entitlements. But such payments were said by Rio Tinto to have been made pursuant to non-legally binding “prior commitments”. In respect to redundancy payments, para 7(b) of the Amended Defence pleaded as follows:
As to paragraph 11 of the Statement of Claim, the Respondent:
…
(b) says further for its own part that all payments made to all employees referred to in paragraph 11 of the Statement of Claim were calculated and made in accordance with, or alternatively with the intent of complying with, the legal obligations of the Respondent towards each of those employees, as set out in the terms and conditions of the respective workplace instruments that applied to each of the affected employees at that time, save and except only for:
i. any case in which prior commitments had been made to employees about the calculation of payments upon redundancy; and
ii. any case in which the employment arrangements under which an employee was engaged did not contain an entitlement to redundancy benefits, in which case payments were calculated and made in accordance with, or alternative with the intention of complying with, the existing policy of the Respondent with respect to redundancy benefits.
…
Para 8(b) of the Amended Defence in respect to the payment of “other entitlements” is in the same terms. The Amended Reply pleads that the CFMEU “does not know and does not admit that the respondent calculated payments to employees….as set out in paragraphs 7(b),…, 8(b)…of the amended defence”.
143 The shift in ground from a defence of maintaining that payments had only been made pursuant to legal entitlements to a position of recognising that additional payments had been made assumes relevance to both:
the ability of the CFMEU to test the case being now advanced on behalf of Rio Tinto; and
the discovery to be now ordered.
The discovery ordered in March 2013 was obviously not directed to factual issues which only emerged for the first time in October 2013.
144 The only categories of documents in Schedule A, directed to the issues raised by the Amended Defence are categories 3A and 15.
145 That discovery should be ordered.
CONCLUSIONS
146 It has been concluded that Rio Tinto’s Interlocutory Application seeking the striking out of the CFMEU case should be dismissed. The primary submission advanced on behalf of Rio Tinto, namely that all such payments as have been made were “authorised by or under this Act” for the purposes of s 342(3)(a) of the Fair Work Act is to be rejected. The alternative submission, namely that the payments made were not discriminatory within the meaning of Item 1(d) of s 342(1) should be resolved at a final hearing.
147 It has also been concluded that the CFMEU Interlocutory Application seeking further discovery has met with some limited success.
148 Short Minutes of Orders to give effect to these reasons should be filed within fourteen days.
THE ORDERS OF THE COURT ARE:
1. The parties are to file within fourteen days Short Minutes of Orders to give effect to these reasons.
2. The proceeding is stood over to 9.30 am on 23 May 2014 for further directions.
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I certify that the preceding one hundred and forty-eight (148) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. |
Associate:
