FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2015] FCA 1088

REASONS FOR JUDGMENT

introduction

1    In this proceeding the first applicant, the Construction, Forestry, Mining and Energy Union (“the Union”), in its Mining and Energy Division, alleged that the first respondent, Port Kembla Coal Terminal Limited (“PKCT”) breached the Port Kembla Coal Terminal Limited Enterprise Agreement 2012-2015 (“the Agreement”) relating to its employees at the coal terminal. The alleged breaches concerned PKCT’s decisions to:

(a)    abolish the positions of the second, third and fourth applicants, Adam Giddings, Jason Rosewarn and Jennifer Arber, that is, make them redundant; and

(b)    make those employees compulsorily redundant rather than redeploy them into other positions within PKCT or into work usually undertaken by contractors engaged at the terminal.

2    The applicants alleged that PKCT breached the following provisions of the Agreement:

(a)    clause 7 which relates to PKCT’s obligation to consult with employees and the Union about major changes;

(b)    clause 13.5 which relates to steps to be taken before compulsory redundancies are to be imposed; and

(c)    Appendix 1, cl. 4(k) which provides that the number of Appointed positions cannot be added to or deleted without agreement of the Union.

3    The applicants also alleged that PKCT’s termination of Mr Giddings’ employment, with the knowing involvement of the second respondent, PKCT’s General Manager Peter Green, constituted adverse action for a prohibited reason, namely his Union role and/or his industrial activities, in contravention of ss 340 and 346 of the Fair Work Act 2009 (Cth) (“the Act”).

4    For the reasons I set out I consider the applicants made out their case, except in relation to the alleged breach of Appendix 1, cl. 4(k).

The alleged breaches of the Agreement

5    Unless it is necessary to differentiate between the two respondents or between the four applicants, I refer to the applicants as “the Union” and the respondents as “PKCT”.

6    I commence with a broad summary of the decision.

7    In my view PKCT breached its obligation to consult pursuant to cl. 7 of the Agreement in relation to the decisions to abolish the positions of Mr Giddings, Mr Rosewarn and Ms Arber and to terminate their employment. In summary, I say this because:

(a)    the proposal to abolish positions and terminate employment involved a major workplace change which, if implemented, was likely to have a detrimental or significant effect on employees. The approach PKCT took to its obligations under the Agreement meant that the proposal had that effect on conditions of employment well beyond the three employees immediately affected; and

(b)    PKCT’s obligation to consult arose when it was considering introducing a major change and was not restricted to circumstances where it had decided to make such a change. Nor was its obligation limited to consultation about the implementation of a decision finally made.

8    Contrary to the Agreement PKCT:

(a)    did not consult when it was considering the proposed abolition of positions;

(b)    did not begin consulting with the Union until its view regarding the abolition of positions and redundancies was well entrenched. The consultation it provided was too late and the Union was not given a meaningful opportunity to affect the proposal;

(c)    did not consult until four months after it made the relevant decisions;

(d)    merely gave the appearance that it was engaging in consultation when, in fact, it did not genuinely consult;

(e)    did not provide relevant information to the Union in a timely way so as to allow proper consultation to occur; and

(f)    did not allow sufficient time for proper consultation to occur.

9    In my view PKCT breached its obligation under cl. 13.5 of the Agreement to:

(a)    make use of redeployment and voluntary redundancy prior to implementing “forced redundancies” (which is the term used in the Agreement for compulsory redundancies) as required under cl. 13.5.1; and

(b)    investigate all avenues to avoid the forced redundancies of the affected employees including by the reduction of contractors, as required under cl 13.5.3.

In summary, I say this because PKCT did not give proper consideration to redeploying Mr Giddings and Mr Rosewarn into any suitable vacancy which might have arisen through offers of voluntary redundancy or any suitable role which might have arisen by PKCT reducing its use of contractors.

10    PKCT refused to seek expressions of interest in voluntary redundancy in relation to Mr Giddings’ and Mr Rosewarn’s positions, and as a result they were denied the possibility of redeployment within PKCT. PKCT sought expressions of interest in voluntary redundancy in relation to Ms Arber’s position from her and the other two Administration Assistants. PKCT refused to consider reducing contractors, unless the contractors were engaged on a full time and permanent basis (when none were so engaged). That approach to the construction of the Agreement meant that no contractors fell to be considered by PKCT in its investigation of reducing contractors.

11    Because PKCT breached cll 7 and 13.5 of the Agreement it contravened s 50 of the Act.

12    The effect of PKCT’s refusal to offer voluntary redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions and to restrict the consideration of reducing contractors was that there was no real prospect that they could be redeployed into other work and it was inevitable that their employment would be terminated (if their positions were abolished as proposed).

13    I do not consider PKCT breached Appendix 1, cl. 4(k) of the Agreement. In my view that provision is directed to the grading of different classifications under the Agreement rather than to redundancy, and it does not require PKCT to obtain the Union’s consent before making an employee in an Appointed position redundant.

The claim of adverse action for a prohibited reason

14    The Union alleged that PKCT, with Mr Green’s knowing involvement, terminated Mr Giddings’ employment because of his Union role and/or his industrial activities at the terminal. The thrust of the Union’s case was that, as the Lodge President and as employee representative under the Agreement, Mr Giddings had played a lead role in a number of industrial disputes, and particularly a large dispute in 2012 which led to three weeks of stoppages. The Union said that Mr Giddings was a particularly effective Union official and invited the Court to infer that Mr Green developed an adverse view of Mr Giddings as a result of his Union roles and/or industrial activities and that he terminated Mr Giddings’ employment for that reason.

15    It is uncontentious that Mr Green made the decision to abolish Mr Giddings’ position and terminate his employment. His evidence, corroborated by two senior managers, was that in March 2014 he requested a detailed review of PKCT’s operations be undertaken because of deteriorating conditions in the coal industry. As a result of that review, on 1 August 2014 three senior managers recommended to Mr Green that Mr Giddings’, Mr Rosewarn’s and either one or two Administration Assistant positions be abolished. Mr Green said that he reflected on the recommendations of his senior managers over the months after the 1 August meeting, but did not decide to advance the proposal that Mr Giddings’ position (and the other two positions) be abolished until October. On his account he then embarked on a genuine process of consultation with the Union commencing on 2 December 2014 and did not decide to abolish Mr Giddings’ position until after the consultation process was complete on 10 December.

16    Mr Green consistently maintained that no part of the substantial and operative reasons for terminating Mr Giddings’ employment included his Union role and/or his industrial activities. However, I found Mr Green’s evidence, and that of the senior managers, quite unreliable. They each failed to disclose important documents and parts of the decision-making process in their evidence in chief, and their evidence was implausible in light of the contemporaneous documents, other evidence which I prefer, and the surrounding circumstances. I give their evidence little or no weight.

17    The unreliability of their evidence meant that PKCT failed to discharge its onus under s 361 of the Act to establish that the substantial and operative reasons for its termination of Mr Giddings’ employment did not include his Union role and/or his industrial activities. I found that PKCT took adverse action against Mr Giddings for a prohibited reason in contravention of ss 340 and 346 of the Act.

18    In relation to the claim of accessorial liability against Mr Green pursuant to s 550 of the Act, in my view the evidence shows that Mr Green’s substantial and operative reasons for his decision to terminate Mr Giddings’ employment included his Union role and/or industrial activities. He was central in PKCT’s contravention and knowingly concerned in and a party to it.

Relief

19    By agreement, the issue of relief was deferred except in relation to whether Mr Giddings, Mr Rosewarn and Ms Arber should be reinstated to their employment.

20    In my view Mr Giddings and Mr Rosewarn should be immediately reinstated to employment with PKCT to the pay and other terms and conditions of their former positions of Long Term Planner and Facilities Maintenance Engineer. I accept that there may be some difficult issues associated with their reinstatement as their positions have been abolished. While I am satisfied that reinstatement is appropriate I will hear the parties about any issues that arise.

21    For reasons I explain I am not satisfied on the evidence that reinstatement is appropriate in Ms Arber’s case.

The facts

22    Many of the facts that I set out below are uncontroversial, but where they are contentious I usually set out my view of the evidence in the course of recounting them.

The Union’s witnesses

23    The Union relied on the evidence of Mr Giddings, Mr Rosewarn, Ms Arber, Mr Robert Timbs, Vice President of the South Western District branch of the Union, Mr Murray Dakers, Lodge Vice President, and Lorraine Usher, the National General Vice President of the Union. Ms Usher’s evidence related to the Union’s structure and rules and she was not required for cross-examination. The other witnesses were cross examined but PKCT made little attack on their credibility. I was left with no cause to doubt the reliability of their evidence.

24    While I accept their evidence it is worth noting that it is not central to the decision. My decision on the breaches of cll. 7 and 13.5 primarily turn on my construction of the Agreement and my rejection of PKCT’s evidence including in relation to important parts of the decision-making process, when Mr Green made the relevant decisions, and whether PKCT genuinely consulted or investigated all avenues to redeploy the affected employees. The evidence as to what occurred in the consultation meetings in December 2014 is largely uncontentious.

25    My decision on the adverse action claim against PKCT primarily turns on the unreliability of the evidence of Mr Green, Mr Stewardson and Mr Gorman in relation to the decision to terminate Mr Giddings’ employment, which meant PKCT did not discharge its onus. My decision on the claim of accessorial liability against Mr Green again largely turns on my view of the unreliability of their evidence, and inferences I draw from the evidence regarding the adverse view Mr Green is likely to have held of Mr Giddings as a result of his Union role and his industrial activities.

26    It is generally unnecessary to traverse the evidence of the Union’s witnesses in detail.

PKCT’s witnesses

27    Four members of PKCT’s management team gave evidence, the General Manager, Mr Green, the Operations Manager, John Gorman, the Engineering Manager, Roger Stewardson and the Business Services Manager, Flavio Tonini.

28    Mr Gorman, Mr Stewardson and another senior manager, the Human Resources Manager Ms Briony Ragen, made recommendations to Mr Green, and Mr Green made the decision to abolish the positions and terminate the employment of Mr Giddings, Mr Rosewarn and Ms Arber. Mr Tonini’s evidence was largely confined to Ms Arber’s case and it is not material to my decision in relation to Mr Giddings and Mr Rosewarn. While I concluded that Mr Stewardson’s, Mr Gorman’s and Mr Green’s evidence was unreliable, I am satisfied as to the reliability of Mr Tonini’s evidence.

Port Kembla coal terminal

29    Port Kembla coal terminal is a large bulk handling facility located in Wollongong, New South Wales that handles coking and steaming coal, coke, iron ore, and a range of other bulk commodities. It operates 24 hours per day, 7 days per week and has an annual throughput capacity of approximately 18 million tonnes (“mt”) of materials per annum.

30    PKCT is owned by a consortium of six equal shareholders who are all coal producers on the Southern and Western coalfields and who collectively lease the terminal from NSW Ports. Illawara Coal (a subsidiary of one of the shareholders, BHP Billiton) currently holds a management agreement with PKCT. Some of PKCT’s management team, including Mr Green, Mr Gorman, Mr Stewardson, and Mr Tonini are employees of Illawara Coal and they manage the terminal on behalf of the shareholders.

31    As at February 2015 PKCT had approximately 98 full time equivalent employees, comprising four shift teams who worked on a rotating roster, as well as operations, engineering and management teams who typically undertook day work from Monday to Friday (“Daywork”). Employees are required to work flexibly across the terminal and undertake various tasks. This can require operational employees to operate different machinery and work in different areas of the site from shift to shift or during a shift.

32    From 11 April 2012 the terms and conditions of employment of PKCT’s employees at the terminal have been governed by the Agreement. Prior to that they were governed by an earlier iteration of the Agreement.

The Union

33    The Union is an organisation of employees registered under the Act and the Mining and Energy Division is made up of Union members who are employed in the mining, energy and associated industries. The rules of the Mining and Energy Division provide for the establishment of “lodges” at mines and workplaces by grouping its members at particular sites. The Port Kembla Coal Terminal Lodge (“the Lodge”) covers the Union’s members at the coal terminal, and it has a Lodge executive which includes the office of Lodge President.

34    Almost all of PKCT’s employees are members of the Union.

Mr Giddings

35    Mr Giddings was employed in various roles at the terminal from 1980, starting as a Fitter and Turner. He successfully undertook a great deal of further education and became highly qualified. Over the years he enjoyed promotions into various senior positions with PKCT and was employed in the position of Long Term Planner from May 2013 until that position was abolished and his employment was terminated on 11 December 2014. The Long Term Planner role was a senior position created as a result of a restructure in around 2013 which reorganised the manner in which PKCT planned and executed its maintenance work.

36    At all material times he was a member of the Union. From April 2000 he was Lodge President, the most senior Union office at the terminal. In that capacity and as employee representative under the Agreement Mr Giddings played a lead role in the Union’s industrial activities, including in a large strike in early 2012.

Mr Rosewarn

37    Mr Rosewarn was employed in various roles at the terminal from 1987, starting as a Licenced Plumber and Gasfitter. He too successfully undertook a great deal of further education and became highly qualified. He was particularly successful in his further studies and for a period he was engaged as lecturer in Operational Facilities Management at the University of Sydney. Over the years he also enjoyed promotions into various senior positions with PKCT and he was employed in the position of Facilities Maintenance Engineer when his employment was terminated on 11 December 2014. At all material times he was a member of the Union, but he held no Union office.

Ms Arber

38    Ms Arber was employed as an Administration Assistant from 13 September 2010 until her employment was terminated on 11 December 2014. Her role involved performing general administrative tasks, accounts payable and managing the accruals journal for the end of month accounts. At all material times she was a member of the Union, but she held no Union office.

The Upgrade Project

39    In May 2011, having regard to a projected significant increase in demand over the next decade, PKCT announced that it would upgrade the infrastructure and facilities at the terminal (“the Upgrade Project”). This was to be implemented through two stages:

(a)    Stage 1, an intermediate capacity target increase from 17.5 mt to 22.5 mt per annum, at an estimated cost in the vicinity of $250 million; and

(b)    Stage 2, a more extensive scope of work intended to create an ultimate capacity of about 28.5 mt per annum at an estimated cost in the vicinity of $500 million.

Over time the Upgrade Project was expected to create many jobs at the terminal, both for employees of PKCT and for contractors it engaged at the terminal.

The deteriorating market conditions in the coal industry

40    Unfortunately, conditions in the Australian coal industry began to deteriorate because of a range of factors, including a decline in the price of coal by about 50% from 2011 to 2014. As a result of the poor market conditions by 2014 many Australian coal operations were operating at a loss. This led to a significant decline in employment in the NSW mining supply chain, a decline in the number of employees in NSW coal exploration and mining companies, and there were redundancies in Wollongong Coal’s Wongawilli mine, Glencore’s Tahmoor mine and at Illawarra Coal in 2014.

41    Between 2011 and 2014:

(a)    the throughput of coal at PKCT decreased from 14 mt to approximately 12.4 mt;

(b)    loading charges increased from $3.80 to $4.75 per tonne; and

(c)    PKCT experienced a drop in revenue of $5.25 million.

In the same time period the number of permanent employees directly employed by PKCT increased from 93 to 106.

Cancellation of the Upgrade Project / Announcement of the R&C Project

42    As a result of the significant deterioration in market conditions, in February 2013 the PKCT Board (“the Board”) decided not to proceed with the Upgrade Project.

43    However, earlier reports on the condition of plant and equipment at the terminal had highlighted the extent of the backlog of maintenance and restoration work that was required. The scale and complexity of this work was beyond routine repair and maintenance activities and PKCT decided to tackle the necessary work as a program to be completed by a dedicated project team in parallel with terminal operations and regular repairs and maintenance. In February 2013 the Board approved a Restoration and Compliance Program (“R&C Project”) to be undertaken over the next five years at an estimated cost of $218–$294 million.

Contractors engaged at the terminal

44    Mr Stewardson said, and I accept, that at all material times there were about 50 contractors engaged through the R&C Project. There were also between five and 15 additional contractors working at the site.

Announcement of the Operational Review

45    In March 2014, Mr Green announced an operational review of PKCT’s business (“the Operational Review”) and in April he assigned Mr Gorman to concentrate on the review. Its essential purpose was to identify ways in which PKCT could achieve efficiencies and savings in order to reduce costs, including by determining whether there were any activities that could be done differently and whether there were any positions within PKCT that were no longer needed.

46    To my mind, there is no real question that in conducting the Operational Review, and in considering a reduction in manning levels through the abolition of positions, PKCT was engaged in a bona fide attempt to reduce its costs.

47    Prior to Mr Gorman’s appointment, work had already been undertaken on initiatives to achieve savings at PKCT. For example, PKCT’s Business Improvement Specialist, Krishna Panyam, had earlier developed a restructuring proposal which involved the abolition of eight positions. Between mid-April and early July 2014, Mr Gorman reviewed these initiatives and informed Mr Green which initiatives should be progressed as part of the review.

Phase 1 of the Operational Review

48    The initiatives in Phase 1 of the Operational Review included taking up an existing proposal to reduce shift team members (which involved the transfer of two employees from each shift team back to Daywork groups), a proposed freeze on employees’ wage increases under the Agreement, and a proposed 12 month suspension of the annual increases to employees’ grades under the Agreement. Mr Green accepted Mr Gorman’s recommendations regarding those matters. The shift team members were reduced by two. In July 2014 Mr Green sought the employees’ agreement to a wage freeze and a 12 month suspension of regrading of positions.

Phase 2 of the Operational Review

49    Phase 2 of the Operational Review involved a review of Daywork support and functional roles in order to identify cost reductions and efficiencies, including considering whether there were any positions which were surplus or could be re-distributed amongst the current workforce. In this part of the review Mr Gorman spoke to relevant managers, including Mr Stewardson, Mr Tonini and Ms Ragen, in an effort to determine whether reducing the number of positions in their teams was feasible.

PKCT’s historical approach to manning level reductions

50    Mr Giddings said, and I accept, that at various points in his 34 years at the terminal the employer had required a reduction in manning levels because of the operational needs of the business. He said that until the present events any such reductions were achieved by seeking expressions of interest in voluntary redundancy across the terminal. Those who expressed interest were generally accepted for redundancy, and if the duties of that position still needed to be performed then another person would be swapped into the vacant position. Mr Tonini accepted that voluntary redundancies and “job swaps” were previously used at the terminal, as did Mr Green. Before the termination of Mr Giddings’, Mr Rosewarn’s and Ms Arber’s employment, there had never been a forced redundancy at the terminal in the past 34 years.

The development of the proposal to abolish positions as part of Phase 2

51    Mr Gorman testified that his consideration of the cost savings which had the potential to result in the abolition of positions started in May. While other evidence suggests that Phase 2 of the review had commenced by early April nothing turns on that.

52    At an early date Mr Stewardson identified some opportunities to consolidate roles in the Engineering team and on 16 April 2014 he emailed Ms Ragen some preliminary ideas in that regard. He attached two documents he had prepared titled “PKCT Organisational Chart 12.5M” and “Organisational Redesign Stage 2”. In these documents he proposed the abolition of seven engineering positions, including the Long Term Planner and Facilities Maintenance Engineer positions occupied by Mr Giddings and Mr Rosewarn respectively. He described this proposal as a “work in progress” and probably a “stretch target”, but said that it could be passed on to Mr Gorman.

53    On 2 May Mr Gorman met with Mr Stewardson and Ms Ragen to discuss, amongst other things, the possibility of abolishing some positions to reduce costs. During this meeting he said that the Engineering and Administration teams would be reviewed in order to determine whether there were any roles that could be consolidated or which were no longer required. Following this meeting, Mr Stewardson said that he thought that it might be possible for the Engineering team to work without the Technical Officers (three positions), Project Officers (two positions), and the Facilities Maintenance Engineer and Long Term Planner positions.

54    On 23 May Mr Gorman again met with Ms Ragen and Ms Stewardson and they considered a detailed PowerPoint presentation prepared by Ms Ragen titled “Operational Review – May 2014”. In it she proposed the abolition of a larger number of positions including the Long Term Planner, Facilities Maintenance Engineer and one Administration Assistant position. Importantly, the presentation tends to show that Ms Ragen thought that affected employees could be redeployed into work undertaken by contractors engaged by PKCT, including that Mr Giddings could be redeployed to the “MTEC position”.

55    On 3 June Mr Gorman and Ms Ragen met with Mr Tonini to discuss, amongst other things, whether cost savings could be found in the Finance/Administration team. In this meeting Mr Tonini said that there was scope to reduce positions in his team.

56    On the same day Mr Gorman prepared a document titled “PKCT Operational Review summary paper” in which he outlined his preliminary thoughts on cost savings associated with PKCT’s labour costs and identified the possibility of abolishing seven positions. Importantly, Mr Gorman approached the proposed abolition of positions on the basis that the Agreement required that offers of voluntary redundancy be made to other employees before forced redundancies were implemented. Under a heading “Process/EA Compliance” the summary paper stated:

•    Can we focus on a subset of the PKCT Employee group?

•    Who must VR’s be offered to? Can it just be a subset of the PKCT Employee group?

•    On what grounds can we rejected [sic] a VR request? Cost savings? Retirement likelihood?

The summary paper tends to show that Mr Gorman understood the Agreement to require PKCT to offer voluntary redundancies before implementing forced redundancies, but that he considered that requirement to be inefficient and costly.

57    In May or June 2014 Mr Gorman prepared a document titled “Review of the obligations regarding workforce reductions”. In it he summarised PKCT’s obligations under the Agreement in the context of the proposed abolition of positions and commented on how PKCT could adhere to its obligations. It tends to show that Mr Gorman understood the Agreement to require PKCT to offer redeployment and voluntary redundancies before implementing forced redundancies and to investigate all avenues to avoid forced redundancies, including by reducing contractors. Importantly, it tends to show that he thought that there were avenues potentially available to avoid the forced redundancies of Mr Giddings and Mr Rosewarn.

58    In June Mr Gorman prepared a detailed spreadsheet titled “Scenario Planner”. In it he set out the positions proposed to be abolished under various scenarios and identified the affected employees by name. The spreadsheet set out the age, length of service, cost of redundancy, and job swap and redeployment options in respect of 15 positions, including those of Mr Giddings, Mr Rosewarn and two Administration Assistants. It tends to show that he understood the Agreement to require PKCT to offer voluntary redundancies and to redeploy affected employees into contractors’ work before forced redundancies could be implemented. The Scenario Planner tends to show that Mr Gorman thought that Mr Giddings could potentially be redeployed into a number of positions within PKCT (if they became vacant through offers of voluntary redundancy) or into a number of contractor roles, and that Mr Rosewarn could potentially be redeployed into the position of Services Planner within PKCT (if that became vacant through voluntary redundancy) or into the Project Supervisor contractor role. It tends to show that he only thought that an affected Administration Assistant could potentially be redeployed into a contractor role of Secretary/Personal Assistant within the “Project / Non-EA” area.

59    On 30 June, Mr Gorman prepared an organisational chart which proposed the abolition of five engineering positions (including Mr Giddings’ and Mr Rosewarn’s positions) and three other positions (including two Administration Assistant positions). He provided this chart to Mr Green before he sought the employees’ agreement to a wage freeze at the Lodge Annual General Meeting (“AGM”) on 4 July. Mr Green did not inform employees or the Union about the proposal at the AGM.

60    Mr Stewardson said that between June and October 2014 he prepared a PowerPoint presentation titled “Operations Review: Indicative Engineering Team Organisation Charts”. The presentation included various organisational charts and the chart headed “Current” proposed the abolition of five positions in the Engineering team including Mr Giddings and Mr Rosewarn’s positions. In the final chart he prepared, headed “Nirvana”, Mr Giddings no longer had a job in the Engineering team.

61    Mr Gorman said (and I accept) that by late June 2014 he had arrived at the view that, outside of the Administration Assistants, PKCT should not offer voluntary redundancies to affected employees. He advised Mr Green that offering voluntary redundancies in relation to positions abolished in the Engineering team would reduce the cost savings that PKCT could achieve. Mr Green accepted that he was told this but said that this discussion occurred around October 2014. I prefer Mr Gorman’s evidence in this regard.

62    The evidence is that, on 10 July, Mr Tonini told Mr Gorman that it was impractical to reduce the number of Administrative Assistants in his team by more than one position. It is unclear whether Mr Gorman accepted this advice at the time, but he ultimately did so.

63    Mr Gorman met with Mr Stewardson to discuss the potential for cost savings in the Engineering team on several occasions between May and July 2014. The evidence indicates that Mr Stewardson, Mr Gorman and Ms Ragen reached essentially the same views about the proposal to abolish positions and about PKCT’s obligations in that regard. They made joint recommendations to Mr Green at a meeting on 1 August.

64    The 1 August meeting was not, however, the first that Mr Green heard of the proposal. Mr Gorman said that through April, May, June and July 2014 he kept Mr Green informed about how the Operational Review was progressing, in part through regular fortnightly meetings. Mr Green said that by 7 July he understood that Mr Gorman proposed that, amongst others, Mr Giddings’ position of Long Term Planner and Mr Rosewarn’s position of Facilities Maintenance Engineer be abolished.

65    In around mid-July, in preparation for a meeting with Mr Green, Mr Stewardson reviewed the various positions within the Engineering team and prepared a summary of his views as to whether each position was necessary for PKCT to operate effectively. On 17 July he set up a meeting between them on 21 July and emailed the summary to Mr Green and Ms Ragen under the subject heading Phase 2 Background to Tomorrow’s Discussion (“the Phase 2 Background Summary”). It proposed the abolition of positions, again including the Long Term Planner and Facilities Maintenance Engineer positions. The summary included a passage in which Mr Stewardson said that the necessary organisational changes at PKCT could not be achieved in a timely way through consultation, and that PKCT should “just do it”.

66    Mr Gorman said that at some point in July he told Mr Green that the proposal to abolish positions could be announced in August. I infer from this and other evidence that, by then, the proposal was essentially complete.

The Organisational and Operations Review Report

67    Shortly after 2 July Mr Gorman produced a detailed report titled “PKCT FY15 Organisational and Operations Review”. He provided the first draft of the report (“the first draft OOR Report”) (Exhibit A5 Tab 1) to Mr Green, Mr Stewardson and Ms Ragen by way of a shared link on PKCT’s computer network.

68    Although the draft report did not identify the positions to be made redundant it focused on the management and implementation of the planned dismissal of some employees for reasons of redundancy. It is significant that the report was prepared on the basis that PKCT was required to redeploy affected employees through offers of voluntary redundancies and by reducing contractors, so as to avoid forced redundancies.

69    Mr Gorman and Ms Ragen then made changes to the first draft OOR Report. By the conclusion of the trial there were four draft OOR Reports in evidence.

70    I will call the next draft report in sequence the second draft OOR Report (Exhibit A5 Tab 2). It proposed that Mr Giddings’, Mr Rosewarn’s and two Administration Assistants’ positions be abolished. On my view of the evidence it is likely that the second draft OOR Report was produced in July 2014. I say this for a number of reasons:

(a)    the second draft report represents a further development of the first draft and follows sequentially from it;

(b)    it stated that the abolition of positions was to be announced in August 2014 which indicates that it was created before that date;

(c)    that date of creation is consistent with Mr Gorman’s evidence that he advised Mr Green in late June 2014 that PKCT should not offer voluntary redundancies in relation to any affected positions outside of those in the Finance/Administration team (as the report is prepared on that basis); and

(d)    it precedes the third draft OOR Report which, again, follows sequentially.

On my view of the evidence it is likely that Mr Gorman or Ms Ragen provided the second draft OOR Report to Mr Stewardson and Mr Green in July, by way of a shared link.

71    The second draft OOR Report reveals that, in July 2014, there was a significant change in PKCT’s approach to its obligations to make use of redeployment and voluntary redundancy before implementing forced redundancies and to investigate all avenues to avoid forced redundancies including by the reduction of contractors.

72    The first draft OOR Report, and the earlier proposals to which I have referred, tend to show that Mr Gorman, Mr Stewardson and Ms Ragen understood the Agreement to require that where employees faced forced redundancy PKCT was obliged to redeploy them into suitable vacancies that arose through offers of voluntary redundancy or into suitable contractors’ work. The contemporaneous documents also tend to show that they recognised that there were potentially available avenues for the redeployment of Mr Giddings and Mr Rosewarn, while the second draft OOR Report stated that there were no redeployment options for them within PKCT.

73    The second draft OOR Report includes a section headed “Bona Fide Redundancy Checklist” which indicated that Mr Giddings and Mr Rosewarn were not to be redeployed:

(a)    into any suitable vacancy created through offers of voluntary redundancy because they each occupied an “appointed position” which is described as “stand-alone”; or

(b)    into suitable contractors’ work (by reducing contractors) because the contractors were not engaged on a full time and permanent basis; or

74    From this time on the proposal to abolish positions proceeded on the basis that it would occur without voluntary redundancies being offered in relation to Mr Giddings’ and Mr Rosewarn’s positions and without reducing contractors. Mr Gorman said, and I accept, that the change in PKCT’s approach to its obligation to investigate reducing contractors followed receipt of legal advice authorised by Mr Green in June 2014. I infer that Mr Green, Mr Gorman and Ms Ragen were informed of that advice in around July 2014.

75    Because there were no vacancies in suitable positions within PKCT, if Mr Giddings’ and Mr Rosewarn’s positions were abolished, the only realistic avenue to avoid their forced redundancies was for PKCT to redeploy them, either into suitable vacancies that arose through offers of voluntary redundancy or into contractors’ work. The effect of PKCT’s changed approach to its obligations under the Agreement was that the die was cast if Mr Giddings’ and Mr Rosewarn’s positions were abolished.

76    Ms Ragen and Mr Gorman then created the third draft OOR Report (Exhibit A5 Tab 3). I infer that it was provided to Mr Stewardson and Mr Green by way of a shared link at the time of its creation. In the third draft report the proposal to abolish the Long Term Planner, Facilities Maintenance Engineer and two Administration Assistants positions was mature and comprehensive, and in my view essentially complete. It indicated that offers of voluntary redundancy would not be made other than in relation to the Administration Assistant positions and that contractor positions which were not full-time and permanent would not be considered for reduction.

77    The third draft OOR Report again contained detailed redundancy checklists concerning the individual circumstances of Mr Giddings, Mr Rosewarn and each affected Administration Assistant, together with a detailed implementation plan, including a period of consultation, which culminated in dismissal of four affected employees.

78    In the third draft OOR Report the proposal to abolish positions was to be announced on 21 October followed by three weeks of consultation. The only difference between the proposal in the third draft report and the proposal announced in December was the reduction in the affected Administration Assistant positions from two down to one. This reduction was consistent with Mr Tonini’s advice to Mr Gorman on 10 July (and his email to Ms Ragen on 10 October) that it was impractical to abolish more than one Administration Assistant position.

79    On about 16 October 2014 a fourth, updated, version of the OOR Report was produced (“the final draft OOR Report”) (Exhibit A11).

When was the third draft OOR Report produced?

80    There is a dispute as to the date the third draft OOR Report was produced. The Union contended that it was created at about the end of July 2014, while PKCT contended that its date is uncertain but that it was likely to have been created much later. While there is some uncertainty as to the date of the third draft, I consider that it was most likely created by Mr Gorman and Ms Ragen at about the end of July.

81    I say this, first, because:

(a)    the contents of the first three drafts of the OOR Report in evidence shows that they are sequential. It is uncontentious that Mr Gorman produced the first draft OOR Report on 2 July 2014. The second draft OOR Report is later than the first draft, and the third draft OOR Report is later than the second draft. Mr Gorman accepted this.

(b)    the second draft OOR Report stated that the proposed redundancies were to be announced in August 2014 which indicates that it was created before that date.

(c)    in the third draft OOR Report a section titled “Managers Bona Fide Redundancy Checklist” provided for the relevant manager to enquire whether the affected employee was currently on leave or about to commence leave (which was relevant to scheduling consultation meetings with them following announcement of the proposal). It is significant that the information was provided “as at 25 July 2014”. The entry for Ms Arber stated: “As at 25 July 14 [Annual Leave] planned for 18 September – 24 September” (emphasis added). The entry for Mr Rosewarn stated: “As at 25 July 14 preliminary leave booked from 22 September 14 – 17 October 14” (emphasis added), and the entry for Mr Giddings stated that he would be absent on Union business on 4 – 5 August 2014. These entries tend to show that the third draft OOR Report was produced before 25 July 2014.

82    Second, in cross-examination Mr Gorman accepted that he saw a draft OOR report in the form of the third draft sometime in July 2014. While it can be accepted that it would have been hard for him to tell which draft he was looking at, and that there was some confusion in that regard, based upon its contents he accepted that the third draft OOR Report was prepared on or before 25 July 2014.

83    Third, while not identifying the document he saw as exactly the same as the third draft report, Mr Green accepted that he saw a document similar to that draft in July. Mr Green also accepted that in his meeting with senior management on 1 August he discussed recommendations which were consistent with the contents of the third draft.

84    Fourth, while PKCT argued that the date of creation of the third draft OOR Report was uncertain, it should be kept in mind that all drafts of the report were kept on its computer system, and I infer remain so. It would have been straightforward for PKCT to adduce evidence proving when the different drafts were created, including by calling Ms Ragen as a witness. However, it did not do so. In their evidence in chief Mr Stewardson, Mr Gorman and Mr Green did not even disclose the existence of the OOR Report.

85    Fifth, PKCT sought to rely on the use of the past tense in the third draft OOR Report which stated that the development of the proposal “commenced” in August – October 2014. However, each draft of the report used the word “commenced” in this context and it could just as easily have remained unchanged between drafts.

86    PKCT also argued that the fact that the third draft OOR Report provided for the announcement of the proposal to on 21 October 2014 indicates that it was created in that month. I accept that it points in that direction but it is far from conclusive. It may be that the announcement date was set for 21 October 2014 because, as the evidence shows, Mr Rosewarn was away on annual leave from 22 September until 17 October 2014.

87    For completeness I note that, after both parties had closed their cases and without seeking leave to do so, PKCT sought to file three computer screenshots as Attachments A, B and C to its reply submissions dated 5 May 2015. Although PKCT put on no evidence as to the provenance or meaning of the screenshots it submitted that they showed the dates that the three draft report were produced. The Union objected to the admission of further evidence on the basis that it had closed its case and that doing so would deny the Union a proper opportunity to test the provenance and understand the meaning of the screenshots. I have upheld that objection and I have not admitted Attachments A, B and C into evidence.

The meeting on 1 August 2014

88    Mr Gorman said that on 24 July he met with Mr Green for their regular fortnightly review. By that date Mr Gorman had returned to the role of Operations Manager and his role conducting the Operational Review had substantially concluded. However, he said that he continued to provide back up support and operational input across Phase 2 of the review including assisting other managers in their consideration of any proposed redundancies within their teams.

89    In his affidavit Mr Gorman described the meeting on 24 July as his regular fortnightly meeting with Mr Green and he said that, together with Mr Stewardson and Ms Ragen, he then met with Mr Green on 1 August to discuss their recommendations to abolish positions. Mr Green also testified that the senior managers made their recommendations on 1 August 2014. There was some confusion in Mr Gorman’s evidence about whether the senior managers made their recommendations on 24 July or on 1 August but nothing turns on that. I conclude that Mr Gorman and the other senior managers made their recommendations to Mr Green on 1 August 2014 and in my view the suggestion in Mr Gorman’s evidence that he did so a week earlier, on 24 July, was just a mistake.

90    On 1 August 2014 Mr Green met with Mr Gorman, Mr Stewardson and Ms Ragen and he considered their recommendation to abolish Mr Giddings’ and Mr Rosewarn’s positions, along with either one or two Administration Assistant positions. I note that by that date Mr Tonini had informed Mr Gorman that it was only practicable to abolish one Administration Assistant position, and whether at that time one or two Administration Assistants were proposed to be abolished is somewhat unclear. However, little turns on the question.

91    The senior managers recommended to Mr Green that PKCT:

(a)    should not offer voluntary redundancies to avoid forced redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions. If accepted, this recommendation would have the effect that no vacancies in suitable positions could arise within PKCT into which they might have been redeployed; and

(b)    should only consider reducing contractors to avoid forced redundancies if the contractors were engaged on a full time and permanent basis (when, in fact, there were no such contractor roles). If accepted, this recommendation would have the effect that no vacancies in suitable contractors’ work could be found into which they might have been redeployed.

92    The senior managers provided Mr Green with an organisational chart which reflected the proposed changes. Mr Green said that, at the time, he explored the business case and rationale for each proposal, the extent of the cost savings or efficiencies which they could achieve, as well as the practicality of implementing each proposal. On his evidence (essentially corroborated by Mr Gorman and Mr Stewardson) he did not accept the recommendations at that time and he said that he gave the proposal intermittent consideration over the next two and a half months until mid or late October. As I will explain, I do not accept his evidence in this regard. In my view it is likely that Mr Green followed the recommendation of his senior managers and made the decision to abolish Mr Giddings’, Mr Rosewarn’s and at least one Administration Assistant position at or shortly after the 1 August 2014 meeting.

93    While I accept that Mr Green may have given some further thought to the issue after 1 August, in my view nothing occurred thereafter which was anything more than fine tuning a decision already made. There were no material changes to the proposal to abolish positions from late July 2014 until the proposal was announced on 2 December. It is probable that the delay in the implementation of the decision he made on or about 1 August was a result of his attention to other business issues rather than because he was still deciding about whether to move ahead with the proposal.

The meetings between 1 August and November 2014

94    The evidence is that Mr Green met with Mr Gorman, Ms Ragen and Mr Stewardson on five occasions between 1 August and 18 November 2014 to discuss the progression of the Operational Review, and that the meetings covered matters including status updates in relation to the proposed abolition of positions, final recommendations from relevant managers, timeline planning and review of the implementation schedule. PKCT’s evidence that these meetings involved “final recommendations” is implausible, at least insofar as Mr Giddings’ and Mr Rosewarn’s positions are concerned, and I do not accept it. There is no cogent evidence of any significant further or “final” recommendations, and there was no material change in the senior managers’ recommendations from 1 August.

95    In these meetings Mr Stewardson said he reaffirmed his recommendation that the positions of Long Term Planner and Facilities Maintenance Engineer be abolished. In October, he prepared a summary document which set out the reasons underpinning his view that the Long Term Planner and Facilities Maintenance Engineer positions need not be maintained.

96    Mr Gorman gave evidence that through August and September he developed a Consultation Plan to ensure that PKCT met its consultation obligations under the Agreement. As I explain, I do not accept his evidence in that regard, as on my view of the evidence he developed the Consultation Plan in July 2014 through the draft OOR Reports.

97    Mr Gorman said that in September or October he saw a plan titled Organisational Review (Phase 2) – Communications and Engagement Plan (“Communications and Engagement Plan”) prepared by Ms Ragen. The Communications and Engagement Plan stated that three to five positions (or alternatively nine positions) might be abolished. Ms Ragen did not give evidence and there is no cogent evidence as to when this document was created. Ms Ragen circulated the plan under cover of an email on 29 October and by that date it is uncontentious that Mr Green had decided that only the Long Term Planner, Facilities Maintenance Engineer and one Administration Assistant positions faced abolition. That shows that, at that time, the Communications and Engagement Plan was not current. On my view of the evidence it is likely to have been created before the third draft OOR Report, but because its date of creation is unknown it is of little assistance in relation to the development of the proposal.

98    In cross-examination Mr Green said that between July and October his senior managers recommended to him that the Long Term Planner and Facilities Maintenance Engineer positions be abolished with the duties performed within those roles being distributed amongst other positions. He also said that he was informed that the administrative Payroll, Accounts Payable and Accounts Receivable and Reception roles could be consolidated. In my view the evidence shows that those recommendations were made to him on 1 August and, as I have said, that he accepted those recommendations around that date.

99    On 10 October 2014 Mr Tonini emailed Ms Ragen and reaffirmed his July advice to Mr Gorman that only one Administration Assistant position should be abolished.

100    Mr Stewardson said that in around October he prepared an untitled summary document identifying the reasons that the Long Term Planner and Facilities Maintenance Engineer positions were no longer necessary.

101    In his affidavit Mr Green said that he did not make the decision to proceed with the proposed abolition of positions until mid-October 2014. On his account it was not until then that he informed Mr Gorman, Mr Stewardson, Ms Ragen and Ms Tonini that he endorsed the recommendations and that he decided to announce the proposal and commence consultation with the Union. In cross-examination, Mr Green altered his evidence somewhat and he said that he made that decision around 29 October or in early November. Importantly, he also testified that he:

(a)    did not make the decision that voluntary redundancies would not be offered in relation to Mr Giddings’ and Mr Rosewarn’s positions until mid-October; and

(b)    did not decide that PKCT’s consideration of reducing contractors would be limited to full time and permanent contractor roles until 10 December.

102    Mr Green said, and I accept, that in October he intended to announce the proposal to abolish positions in mid-November but he delayed that announcement to 2 December, because a farewell dinner for five longstanding employees was scheduled for 21 November.

103    On 23 October Ms Ragen sent an email headed “Legally Privileged - Confidential - Operational Review” to Mr Green, Mr Stewardson, Mr Gorman and Mr Tonini amongst others, together with a meeting invitation for 29 October. She attached a number of documents that I infer were to be discussed at the meeting, including:

(a)    a Detailed Execution Timeline and Calendar setting out the timing of the process for engaging in consultation;

(b)    a Documentation Checklist and Action List for Impacted Employees;

(c)    template correspondence that was to be provided to each redundant employee;

(d)    a Redundancy Information Booklet dated June 2014;

(e)    a list of Frequently Asked Questions and proposed responses concerning employee redundancy at PKCT;

(f)    the Communication and Engagement Plan;

(g)    a briefing sheet titled PKCT Organisation Review – Impacted Employee Record of Discussions for use by a manager meeting with an affected employee; and

(h)    the final draft OOR Report.

104    Those documents show a highly planned process for compulsory redundancies, even including template correspondence to be given to employees who were to be made redundant. Managers who were to have initial discussions with affected employees were instructed to:

Be clear that the role is no longer required - have empathy but leave no doubt.

105    In his affidavit Mr Green described the 29 October meeting as being “to discuss various amendments to and refinements to the initial proposals”. I do not accept his evidence in that regard. The documents tend to show that the meeting was about execution of pending redundancies rather than refinements to the proposal.

106    It is significant that, apart from some date changes, the final draft OOR Report was no different in substance from the third draft OOR Report prepared before the 1 August meeting.

The consultation process - 2 December to 10 December 2014

107    On 28 November 2014 Mr Green, Mr Stewardson and Mr Tonini, amongst others, met to finalise the documents relevant to PKCT’s consultation with the Union. The proposal to abolish positions was to be announced on 2 December followed by 10 days of consultation.

108    PKCT announced the proposal and commenced the consultation process with military precision. On 1 December 2014 Mr Green telephoned Mr Timbs to advise that he would be addressing a meeting of employees the following morning. Notwithstanding that the announcement was to be made the following day, Mr Green refused to inform Mr Timbs about the exact purpose of the meeting as he said that doing so would “compromise the necessity of consultation”. Mr Green also emailed Mr Giddings and other members of the Lodge executive to invite them to the meeting but, again, he gave them no inkling of what he intended to say.

109    At 8:04 am on 2 December Mr Green emailed the management and team coordinators to inform them that all employees were required to attend an information meeting at 9:00 am.

110    At the meeting Mr Green informed the assembled employees that the outcomes of Phase 2 of the operational review would soon be implemented. He said that this stage might involve redundancies and that potentially affected employees would be spoken to that day. He was careful to say, however, that PKCT was yet to make a final decision on any redundancies.

111    Immediately after that meeting, at about 9:30 am Mr Green held the first consultation meeting. In that meeting he and other PKCT managers met with Union representatives including Mr Giddings, Mr Timbs and Mr Dakers.

112    In this meeting, Mr Green gave a PowerPoint presentation titled “PKCT Operational Review @ 2 December 2014” which referred to the proposed abolition of positions and reiterated that a final decision had yet to be made. He was questioned on the basis and rationale for the abolition of positions and how any redundancies were proposed to occur but he said he was not prepared to provide further information until the potentially affected employees had been informed that their positions were under threat. As a result, at the conclusion of that meeting the Union still did not know which positions were affected, whether voluntary redundancies would be offered before forced redundancies were implemented or whether contractors would be reduced so that their work could be taken up by the affected employees.

113    In separate meetings on the morning of 2 December, Mr Giddings and Mr Rosewarn were informed that their positions were proposed to be abolished. The same morning the three Administration Assistants, Ms Karen Maxwell, Ms Jennifer Arber and Ms Nicky Ostach, were informed that it was proposed to abolish one Administration Assistant position and that if none of them elected to take a voluntary redundancy PKCT would make one of them compulsorily redundant. At the end of those meetings the affected employees were handed a letter dated 2 December titled “Business changes impacting your employment” which notified them of the outcome of the Operational Review. Importantly, the letter noted that there were no vacant positions within PKCT into which they might potentially be redeployed.

114    On the afternoon of 2 December, a second consultation meeting took place between, amongst others, Mr Green, Mr Stewardson and Mr Tonini for PKCT and Mr Giddings, Mr Timbs and Mr Dakers for the Union. What occurred in this and later consultation meetings is largely uncontentious and it is unnecessary to set it out in great detail.

115    Amongst other things, in the meeting Mr Timbs explained that the Union considered that cl 13.5.1 and 13.5.3 of the Agreement applied and that PKCT was required to offer voluntary redundancies to other employees, and to consider reducing contractors before it implemented forced redundancies. Mr Timbs argued that offering voluntary redundancies on a broad basis would mitigate the need for forced redundancies and would open up opportunities for redeployment into technical and/or operational streams. In response Mr Green said that voluntary redundancies would only be offered in relation to the Administration Assistant position and PKCT was not obliged to offer voluntary redundancies in relation to the Facilities Maintenance Engineer and Long Term Planner positions. Mr Timbs said that this meant that PKCT was not complying with clauses 7, 9 and 13 of the Agreement and that there had been lack of consultation in relation to those matters.

116    On the morning of 3 December Mr Green met with Mr Gorman, Ms Amy Linton, Mr Stewardson and Mr Tonini. Mr Gorman said that he recalled discussing the Union’s view that there were some “gates” that PKCT was required go through, which I take to mean some procedures in the Agreement that had to be complied with before forced redundancies could be implemented. He said they discussed the Union’s concerns about employee classification, use of contractors, and separating the Long Term Planner role from the other planning roles. He said that Mr Green requested that the senior managers consider each of the issues raised by the Union and prepare responses so that he could be in a position to inform the Union of PKCT’s position.

117    At 5:24 pm that day Ms Linton emailed a document to, amongst others, Mr Gorman and Mr Stewardson in which she summarised the Union’s concerns and set out a range of responses to matters anticipated to be raised by the Union (“the Response Document”). For example, in relation to redeployment into contractors’ work the Response Document said:

We will not redeploy people into contract roles which are for a finite duration where it does not make sense to do so having regard to the status of the contract and the skills required.

[Insert link matrix to all contractor positions at PKCT and analysis of the skill set of employees to be made redundant to evidence that the positions are not suitable (including because positions are temporary)].

118    The matrix of contractor positions referred to in the Response Document was an assessment of contractor roles that might be performed by affected employees prepared by Geraldine Uren, a contractor who worked in an administrative capacity. She did not give evidence but the matrix tends to show her view, or the view of the manager who instructed her, that:

(a)    Mr Giddings had suitable skills for the contractor roles of Asset Management Specialist, Contracts Manager, Project Engineer, Project Supervisor, Painting Specialist, Fitter or an R&C Project role but his skills were unsuitable for the roles of Asset Management Specialist and Painting Specialist;

(b)    Mr Rosewarn had suitable skills to work as a plumber or perform some R&C Project roles; and

(c)    Ms Arber had suitable skills to work in an administrative support role within the Human Resources team.

Although the matrix identified contractors’ work that Mr Giddings, Mr Rosewarn and Ms Arber had the skills to undertake, it also provided that this work was not suitable because the contractor roles identified were not full time and permanent.

119    On 4 December Mr Tonini met with the three Administration Assistants and asked whether any of them intended to accept the voluntary redundancy offer.

120    On the same day the Union wrote to PKCT requesting it to provide information about the work undertaken by contractors so that the Union could meaningfully participate in consultation about reducing contractors. It sought the following information.

SCHEDULE

1.    A list of all positions (both occupied and vacant) on the PKCT Upgrade Project, including the skills and qualifications required for each position.

2.    A list of all vacant positions with Illawarra Coal, including the skills and qualifications required for each position.

3.    Noting the comments on the letters issued to the 5 employees that some activities in the business will need to be done differently, provide details of those activities and how they will be done differently.

4.    Noting the comments on the letters issued to the 5 employees that some activities in the business may not be done at all, provide details of the activities in the business that are contemplated as not being done at all.

5.    Provide details of how the tasks currently performed by the 5 employees will be reallocated to other employees or otherwise not performed at all.

6.    Noting clause 13.5.3 of the enterprise agreement, provide details of all work currently being performed by contractors, including details of the skills and competencies required and the nature of the work.

7.    Noting clause 13.5.4 of the enterprise agreement, provide details of the steps taken by PKCT, to date, to avoid the redundancies.

(Emphasis added.)

121    The Union also requested that:

1.    PKCT provide a response to the Schedule by close of business Friday 5 December 2014.

2.    PKCT provide a copy of Phase 2 of the Organisational Review to the 5 employees and the CFMEU by close of business Friday 5 December 2014.

3.    PKCT undertake to further consult the employees and the CFMEU about these matters.

4.    PKCT undertake to not implement any redundancies (forced or otherwise) until the completion of the consultation process.

5.    If redundancies are required, PKCT undertakes to firstly offer voluntary redundancy to all employees within the Daywork Appointed Positions classification and accept any such volunteer for redundancy to which Mr Giddings and/or Mr Rosewarn has the same or equivalent skills. Unless Mr Giddings and/or Mr Rosewarn were to accept voluntary redundancy, each man would then be redeployed into the position formerly occupied by any such volunteer(s).

6.    On completion of (5) above, PKCT undertakes to consult with the employees and the CFMEU in relation to all avenues to avoid forced redundancies in the Finance/Administration/Stores classification and the Daywork Appointed Positions classification.

(Emphasis added.)

122    Following its receipt of the Union’s letter of 4 December PKCT rescheduled the consultation meeting planned for 5 December so that it had time to respond. On 5 December Mr Green met with his senior managers to prepare PKCT’s response. In extensive email exchanges through that day, Mr Gorman, Mr Stewardson and Ms Linton discussed the precise wording to be used in the response. Mr Gorman conceded in cross-examination that, in formulating this response, he was simply seeking to justify the company’s position the best way that he could, rather than genuinely considering the Union’s alternative view.

123    By a letter on 8 December PKCT provided a response, which was little more than a reiteration of its position. PKCT refused to provide the information the Union sought regarding contractors and its letter stated:

1.    I refer to the explanation above, and reiterate that it is not necessary for PKCT to provide a list of all positions on the PKCT Restoration & Compliance (Upgrade) Project.

…

6.    There are a number of contractors engaged by PKCT who perform sporadic or part-time functions. There are no contractors engaged by PKCT who perform full-time functions that could be considered full-time and permanent. The nature of this work is therefore not relevant to the employment of full-time employees of PKCT.

7.    I refer to my comments set out above, and the presentation that was provided to the CFMEU on 2 December 2014. I further refer to the information provided above regarding:

a.    Voluntary redundancies being offered to the Administration Assistants;

b.    Consideration of redeployment at PKCT and Illawarra Coal; and

c.    Consideration of suitable contract positions at PKCT.

124    In relation to the Union’s request for undertakings Mr Green said:

1.    I do not believe the timeframe of a response by close of business Friday 5 December 2014 was reasonable, but have undertaken to respond as soon as practicable;

2.    PKCT has provided a copy of the slide-pack presented to the CFMEU on 2 December 2014 to the potentially affected employees;

3.    PKCT will continue to consult with the potentially affected employees and the CFMEU until a final decision is made;

4.    PKCT undertakes to continue to discuss each individual’s circumstances with that employee until a final decision is made;

5.    PKCT does not agree for the reasons set out in this letter;

6.    PKCT will consider all avenues raised in consultation with the employees and the CFMEU in order to avoid forced redundancies having regard to business needs.

125    PKCT’s letter included an explanation of the business rationale for the abolition of the Long Term Planner, Facilities Maintenance Engineer and Administrative Assistant positions. It is, unnecessary to go to those reasons in detail because the Union’s case did not centre on the argument that PKCT’s business needs did not justify the abolition of the relevant positions. In any event, I am satisfied that there were good business reasons for the abolition of the three positions.

126    On 9 December the Union provided a response to PKCT’s letter. It maintained that PKCT’s actions were inconsistent with the Agreement and complained that the threatened dismissal of Mr Giddings constituted adverse action under the Act. Although the letter threatened legal proceedings the Union noted that the consultation process was not complete and it said that it remained committed to participating in consultation.

127    Early on 9 December Mr Gorman emailed Mr Green, Ms Linton, Mr Tonini and Mr Stewardson (copying Mr Aicken) and said, amongst other things, that:

… For the potentially impacted employees that the Company does not take through a voluntary redundancy process (i.e. LTP and FME roles), the ‘decision’ on Thursday should be the ‘decision’ to make those potentially impacted employees redundant, with any formal letter of redundancy to be issued on Thursday.

As I explain, I see Mr Gorman’s use of inverted commas around the word “decision” as indicating that he knew that the decisions concerning the Long Term Planner and Facilities Maintenance Engineer positions had already been made.

128    At about 2.30 pm on the same day, Mr Tonini and Ms Linton met with Ms Ostach, Ms Arber and Ms Maxwell. He asked whether they had any questions about the process and said that they would be provided with further information after management met with the Union on 10 December.

129    Then, at about 3 pm, Mr Tonini met with Ms Linton to discuss the possibility that none of the Administration Assistants would elect to take a voluntary redundancy. Mr Tonini said that there were no suitable vacancies in administrative positions within PKCT or in contractor roles and that he and Ms Linton prepared a draft list of criteria to refer to in case they were required to select a person for forced redundancy. They decided that the selection should be made by reference to length of service, skills relevant to the position, quality of work/accuracy, alignment to PKCT values and potential for development.

130    At 8:11 am on 10 December, before the final consultation meeting with the Union scheduled for 9 am, Mr Green sent an email to, amongst others, Ms Linton, Mr Tonini, Mr Gorman, Mr Stewardson, Ms Uren and Ms Ragen. In it he approved draft letters to Mr Giddings and Mr Rosewarn which included the following passage:

We have recently held discussions with you concerning Port Kembla Coal Terminal’s decision to undertake an organisational review. As discussed, we have carefully considered all the matters you have raised during the consultation. Regrettably, the outcome of the review and consultation is that your current position is no longer required.

131    The attendees at the final consultation meeting included Mr Green, Mr Stewardson, Mr Tonini and Ms Linton for PKCT and Mr Timbs, Mr Giddings and Mr Dakers for the Union. There are some minor differences in the accounts of what took place at the 10 December meeting but they are not material. Without going to all the detail, the notes of the meeting show that the Union argued that PKCT should offer voluntary redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions and that it should consider further avenues to redeploy the affected employees. Mr Timbs asked why PKCT was not exploring all avenues to avoid the forced redundancies of the three affected employees, and complained that PKCT’s refusal to provide the requested information about contractors meant that the Union was unable to properly engage in consultation. For his part, Mr Green reiterated his view that PKCT was not obliged to offer voluntary redundancies in relation to positions outside the Finance/Administration team, or to consider reducing contractors’ work unless that work was undertaken by contractors engaged on a full time and permanent basis. He argued that because contractors’ positions were not permanent and the funding for their work was not guaranteed it was inappropriate to redeploy the affected employees into such positions. Overall, there was little real engagement between the parties in the meeting and they just reiterated their positions.

132    It is significant Mr Timbs told Mr Green that the Union had canvassed some of its members and that there were some employees who were interested in the option of voluntary redundancy. Despite this advice Mr Green made it clear that PKCT would not entertain offering voluntary redundancies in relation to Mr Giddings’ and Mr Rosewarn’s positions.

133    It is uncontentious that as the meeting drew to a close Mr Green said words to the following effect:

… I am not fully au fait with the implications and applications of what has been said. It is given me food for thought. I will see that a decision will be made by tomorrow.

As I will explain, that was not the case. In cross-examination Mr Green conceded that before that meeting he had already decided to terminate their employment and that he would not alter that position.

134    Following the meeting Mr Green asked Mr Tonini to estimate the comparative severance costs if, instead of Mr Giddings, Mr Rosewarn and Ms Arber being made redundant, three long serving employees took up voluntary redundancy. Mr Green said that he picked long serving employees as the comparator as they were more likely to take up voluntary redundancy than other employees.

135    On 10 December 2014 Mr Tonini emailed a calculation to Mr Green, Ms Linton and Mr Stewardson in which he estimated the severance cost of Mr Giddings, Mr Rosewarn and Ms Arber at $379,700 and the severance cost of three long serving employees at $482,300. On the same day Mr Green sent an email to, amongst others, Mr Gorman, Mr Stewardson and Mr Tonini said:

[t]he data suggests that the bundling of these three potential VRs would be near 100k more in cost than the bundled cost of those roles and current incumbents that might receive redundancies once a decision is taken by the Company. This short analysis does not take into account a ‘whole of life’ costing across further years, grade levels, etc; however does show at first glance the suggestion is more costly.

136    On 10 December at about 2 pm, Mr Green met with Mr Stewardson, Mr Tonini and Ms Linton. Mr Stewardson said that they discussed the issues raised by the Union during the meeting earlier that day, including the means by which the forced redundancies of the Long Term Planner and Facilities Maintenance Engineer roles might be avoided. Mr Stewardson said that at the conclusion of the meeting Mr Green said that he had considered each of the issues raised by the Union and that he had made the decision that the three identified positions were redundant. They then discussed how the affected employees would be informed of the decision and related administrative issues.

137    I do not accept Mr Green’s or Mr Stewardson’s evidence about this meeting. In my view Mr Green had made that decision on or about 1 August and there would have been no point in a discussion about the means of avoiding their forced redundancies. I note also that Mr Green conceded that his mind was made up on the morning of that day.

138    At 2:43 pm on 10 December Mr Green emailed his senior managers stating that PKCT had reached a decision to abolish the three affected positions and to terminate the employment of the affected employees, and that letters to the employees had been readied.

139    Then, on the morning of 11 December, in separate meetings Mr Green met with Mr Giddings and Mr Rosewarn, together with the Union. He informed Mr Giddings and Mr Rosewarn that their employment with PKCT had been terminated due to redundancy, effective immediately, and each was given a letter to that effect.

140    Later on 11 December Mr Tonini and Ms Linton met with the three Administration Assistants. Mr Tonini informed them that the opportunity for expressing an interest in voluntary redundancy was soon to close and that if no one elected to take a voluntary redundancy PKCT would select one Administration Assistant for forced redundancy. When none of the Administration Assistants expressed an interest in voluntary redundancy, Mr Tonini and Ms Linton decided to commence a selection process using a selection matrix.

141    Before undertaking the selection process they consulted with Mr Dakers and Mr Owen in relation to the proposed selection criteria of length of service, skills, quality of work/accuracy, alignment to PKCT values and potential for development. Mr Dakers said that he did not accept that these criteria were appropriate as, in his view, cl. 13.5.4 of the Agreement indicated that length of service was the main criteria. He also argued that PKCT was not complying with its obligation to redeploy the affected Administration Assistant into contractors’ work.

142    Mr Tonini and Ms Linton made no changes to the selection criteria they proposed. Mr Tonini said that he considered the criteria in the selection matrix and decided that Ms Arber should be selected for redundancy. He said that the decision came down to her trainability and accuracy of work. He recommended to Mr Green that Mr Arber be selected for redundancy and Mr Green accepted the recommendation. The same day Mr Tonini met with Ms Arber and he told her that, based on a selection matrix, she had been selected for redundancy. He informed her that her employment with PKCT had been terminated as a result, effective immediately, and he gave her a letter to that effect.

The reliability OF PKCT’s WITNESSES and other evidentiary issues

143    PKCT relied on the evidence of Mr Green, Mr Stewardson, Mr Gorman and Mr Tonini. They gave their evidence in chief by affidavit and faced extensive cross-examination. Although I thought long and hard before reaching this view, I was drawn to conclude that Mr Green’s, Mr Stewardson’s and Mr Gorman’s evidence was quite unreliable. I am satisfied as to the reliability of Mr Tonini’s evidence but it is of limited significance to my decision.

144    In their affidavits Mr Stewardson, Mr Gorman and Mr Green each purported to present a comprehensive account of the development of the proposal to abolish positions and terminate the employment of the affected employees. In cross-examination each of them confirmed that this was so. However, each of their carefully constructed affidavits disguised rather than illuminated the decision-making process. Amongst other things, it became clear in cross-examination that each of them had not disclosed important documents and decisions, omitting matters which were contrary to the thrust of PKCT’s case. In my view each of them did so deliberately.

145    For example, each of them failed to disclose documents that showed that in April, May and June 2014 (the first three months of the Operational Review) Mr Gorman, Mr Stewardson and Ms Ragen approached the proposal to abolish positions on the understanding that, before implementing forced redundancies, PKCT was obliged to:

(a)    offer voluntary redundancies in relation to Daywork Appointed positions such as Mr Giddings’ and Mr Rosewarn’s positions to see whether suitable vacancies might be created into which they could be swapped; and

(b)    investigate all avenues to avoid forced redundancies including by a reduction of contractors, that is, ascertain whether there was suitable contractors’ work into which the affected employees might be placed. At that time there was no suggestion that PKCT should restrict its consideration to contractors engaged on a full time and permanent basis (of which there were none).

They did not disclose that they initially thought that there were likely to be suitable positions within PKCT or in contractors’ work into which Mr Giddings and Mr Rosewarn might potentially have been redeployed.

146    In my view the evidence tends to show that Mr Green had access to the senior managers’ documents through shared links on PKCT’s computer network and that he was aware of his senior managers’ approach. However, neither he or the senior managers disclosed the relevant documents or decisions in their affidavits. For example none of them disclosed:

(a)    the Scenario Planner prepared by Mr Gorman in May 2014 which tends to show that he thought that within PKCT there were five suitable positions for Mr Giddings and one suitable position for Mr Rosewarn (if such positions became vacant through offers of voluntary redundancy). Nor did any of them disclose that the Scenario Planner indicates that Mr Gorman thought that there were three suitable contractor roles for Mr Giddings and one for Mr Rosewarn (as well as two “Project/Non EA positions”);

(b)    the OOR Report which was the central document in planning and documenting the Operational Review. This was a significant omission because the second and third draft OOR Reports in July 2014 show a critical change in PKCT’s approach to the proposed abolition of positions. They reveal that, from that date, PKCT approached the proposed abolition of positions on the basis that:

(i)    voluntary redundancies would not be offered in relation to Mr Giddings’ and Mr Rosewarn’s positions; and

(ii)    the consideration of reducing contractors would be limited to contractors engaged on a full-time and permanent basis (when there were no such contractors).

None of them disclosed or explained this critical change in their affidavits and Mr Green did not disclose that his decision to abolish the positions and terminate the employment of the affected employees involved this critical change. In my opinion they sought to disguise that fact.

147    None of them disclosed that the final draft OOR Report of 16 October reveals that there was no material change in the proposal from late July. In my view they sought to conceal the fact that by the 1 August meeting Mr Green had been presented with a comprehensive and essentially complete proposal to abolish the relevant positions, and that the proposal did not materially change over the next four months. Revealing this draft report would have seriously weakened PKCT’s contention that it had provided timely consultation. Their failure to disclose the OOR Report significantly reduced the credibility of their testimony in my eyes.

148    Further, when it suited Mr Stewardson, Mr Gorman and Mr Green they were exact in their recollection as to the dates of the relevant events. However, when it did not suit them they only offered a broad range of dates for a particular event or occurrence, such as “between July 2014 and late October 2014”. They took that approach even though the relevant events occurred only about six months before issue of the proceedings. I do not accept that their recollection was so limited and in some instances I consider they were prevaricating.

149    In my view they were not frank in their evidence about the dates upon which Mr Green made the decisions:

(a)    to abolish the positions of Mr Giddings and Mr Rosewarn and at least one Administration Assistant; or

(b)    to terminate the employment of Mr Giddings and Mr Rosewarn rather than redeploy into any suitable vacancies created through offers of voluntary redundancy or by reducing contractors.

Except for some refinements which were not material, I consider that Mr Green made those decisions on or about 1 August.

Mr Stewardson’s evidence

150    In his affidavit Mr Stewardson said that he worked closely with Mr Gorman and Ms Ragen to identify ways in which the company could achieve efficiencies and reduce costs. As I have said, the Union’s case was not centred on the proposition that cost savings at the terminal were unnecessary, and there is no real question in my mind that PKCT truly considered that cost savings were important.

151    The thrust of Mr Stewardson’s evidence was that he carefully examined each position in the Engineering team and identified particular positions that could potentially be consolidated or removed while ensuring that PKCT could meet its operational requirements. He said that as part of that process he proposed the abolition of, amongst others, the Long Term Planner and Facilities Maintenance Engineer positions. I infer that he informed Mr Green of the positions he proposed to be abolished early in the Operational Review. It is uncontentious that, at the 1 August meeting, he joined in the recommendation that Mr Giddings’, Mr Rosewarn’s and at least one of the Administration Assistant positions be abolished.

152    On his evidence he made his recommendation to abolish the relevant positions in good faith and after careful consideration, doing so because they could be abolished while still allowing PKCT to meet its short and long term operational requirements. He said that Mr Green was the decision maker and he corroborated Mr Green’s account that he did not make the decision to proceed with the proposal to abolish positions until October 2014.

153    In relation to Mr Giddings’ position the gist of Mr Stewardson’s evidence was that the recommendation was not actuated in any way by Mr Giddings’ Union roles and/or his industrial activities, and that no part of the reasons for recommending the abolition of his position, or Mr Green’s reasons for deciding to terminate Mr Giddings’ employment, included his Union role and/or his involvement in industrial activities.

154    As I have said, I found Mr Stewardson’s evidence unreliable. Notwithstanding that he said that his affidavit was a full account of the relevant decision making process, he failed to disclose important documents and important parts of that process, in my view deliberately. His evidence was implausible in light of the contemporaneous documents and the surrounding facts and circumstances and I give it little or no weight.

Mr Stewardson’s failure to disclose important documents and matters

155    First, as part of the relevant decision-making process Mr Stewardson said that he prepared the PowerPoint presentation titled “Operations Review - Indicative Engineering Team Organisation Charts” between June and October 2014. In that presentation he proposed that five positions in the Engineering team be made redundant, including Mr Giddings’ and Mr Rosewarn’s positions. On the organisational chart he created, under the heading “Nirvana” he had no position for Mr Giddings. It is significant that:

(a)    he made no mention of the presentation in his affidavit. In cross-examination he said that he prepared it between June to October 2014, but I do not accept that his memory was so poor. On my view of the evidence it is likely that he prepared the presentation in about July 2014;

(b)    he prevaricated when explaining the “Nirvana” chart but when pressed he conceded that it showed his view that, ideally, Mr Giddings would not be employed in his Engineering team. This was contrary to the thrust of his evidence that he did not have an adverse view about Mr Giddings’ work at the terminal or his Union role and industrial activities; and

(c)    he tried to downplay the importance of the presentation by describing it as a “thought proposal document” and by saying that it was for his own consideration. It is improbable that he would prepare a PowerPoint presentation for his own use rather than just preparing a set of notes, and he accepted that Mr Gorman had prepared some of the organisational charts in the presentation. He offered no cogent explanation as to why Mr Gorman’s charts would have been included in his presentation if it was prepared only as a “thought proposal” document for his own use. It is likely that he provided the presentation to Mr Green and the other senior managers through a shared link.

156    In my view he failed to disclose the presentation in an attempt to avoid disclosing his real view about Mr Giddings. I have little doubt that he considered Mr Giddings’ Union roles and/or industrial activities were a real impediment to the better operation of the terminal.

157    Second, Mr Stewardson failed to disclose the Scenario Planner in his affidavit. It was prepared by Mr Gorman in June 2014 and Mr Stewardson said he first saw it between June and October 2014 as part of a presentation regarding cost savings at PKCT. I do not accept that his memory was so poor and in my view he was prevaricating in providing that broad timeframe. It is likely that he saw the Scenario Planner in about July 2014. When he was pressed as to why he failed to mention the Scenario Planner he hedged to an extent. It is likely that he did not disclose it because it shows that Mr Gorman was open to redeploying employees in Daywork Appointed positions into vacancies created through offers of voluntary redundancy and by reducing contractors, and that he had identified some potential avenues to avoid the forced redundancies of Mr Giddings and Mr Rosewarn.

158    Third, Mr Stewardson failed to disclose the OOR Report in his affidavit, even though it was the primary planning document in the Operational Review. The second and third draft OOR Reports show that by late July 2014 Mr Gorman and Ms Ragen (with input from Mr Stewardson) had prepared a comprehensive and essentially complete proposal to abolish the positions of Mr Giddings, Mr Rosewarn and two Administration Assistants, which recommended that PKCT make critical changes in its approach to its obligations under the Agreement. The second and third draft OOR Reports provide that PKCT would not make offers of voluntary redundancy in relation to Mr Giddings’ and Mr Rosewarn’s positions, and that its investigation of reducing contractors would be restricted only to contractors engaged on a full time and permanent basis (when there were no such contractors). Those changes of approach were vital parts of the decision-making process leading to the termination of Mr Giddings’ and Mr Rosewarn’s employment, yet Mr Stewardson did not disclose them.

159    Mr Stewardson sought to downplay his failure to mention the report on the basis that it was produced by Mr Gorman and Ms Ragen and that he had no input into its content. However, when pressed he conceded that he had reviewed the OOR Report at various meetings and that he had some input into it. He failed to disclose the OOR Report in the context that no other PKCT witness had disclosed it either.

160    Fourth, Mr Stewardson did not disclose that until late May 2014 he thought that it might be possible to redeploy Mr Giddings into other positions or that he had discussed that with Mr Gorman. Under cross-examination he conceded this, and also that his consideration of avenues through which Mr Giddings might be redeployed was an important part of the decision-making process. It is likely that he did not disclose this because it was contrary to the thrust of PKCT’s case.

161    Fifth, in his affidavit Mr Stewardson made no mention of the change in his approach to the obligation to offer voluntary redundancies in relation to Daywork Appointed positions before implementing forced redundancies.

162    Sixth, in his affidavit Mr Stewardson made no mention of any assessment undertaken of the nature of the work undertaken by contractors or the necessary skills to perform that work so as to identify any opportunity to redeploy Mr Giddings and Mr Rosewarn into suitable contractors’ work. Then, in cross-examination he said that he and Mr Gorman undertook that analysis. I do not accept that he undertook any proper assessment of the work performed by contractors or a proper comparison of the necessary skills for that work against Mr Giddings’ and Mr Rosewarn’s skill and competencies. It is improbable that he undertook that work when he did not adduce any document to show that he or Mr Gorman did so, and when, from about July, he and Mr Gorman took the view that only contractors engaged on a full time and permanent basis needed to be considered and there were no such contractors.

Other matters going to the credibility of Mr Stewardson’s evidence

163    Seventh, on 16 April 2014 Mr Stewardson emailed the Organisational Redesign Stage 2 proposal to Ms Ragen, which identifies Mr Giddings’ and Mr Rosewarn’s positions amongst the positions in the Engineering team that could be abolished. His proposal included as an assumption that “VRs to be offered and accepted based on the stream as per EA”. I take the reference to “stream” to be a reference to the Agreement which categorised employees at PKCT into three streams, Operator, Technical - Lubrication, and Finance/ Administration/ Stores.

164    In my view the proposal tends to show that, at the time, Mr Stewardson understood the Agreement to require PKCT to offer voluntary redundancies to employees working in the same stream as the employee whose position was abolished. In my view he sought to avoid disclosing this as it is contrary to the thrust of PKCT’s case.

165    Eighth, in his affidavit Mr Stewardson said that following a meeting on 2 May 2014 he agreed to go away and review the Engineering team’s functions with a view to determining if there were any opportunities to consolidate or reduce roles within it. That evidence was implausible when he had already reviewed his team’s functions for that purpose on 16 April 2014 and he set out his view in the Organisational Redesign Stage 2 proposal he sent to Ms Ragen. In cross-examination he tried to defend his evidence by insisting that he did not consider his 16 April 2014 proposal to be a detailed one, but he then conceded that he had not subsequently prepared a more detailed proposal. In my view he tried to paint a picture of the proposal to abolish positions being developed later than it in fact was, probably in an effort to support PKCT’s argument that it had provided timely consultation.

166    Ninth, in his affidavit Mr Stewardson said that in June 2014 Mr Gorman gave him an amended organisational chart and asked him for his comments in relation to the positions to be abolished. However, he had already provided Mr Gorman with his views on the positions to be abolished in his 16 April 2014 proposal and he conceded in cross-examination that the organisational charts that Mr Gorman gave him included those that Mr Stewardson had himself prepared. In my view he sought to leave the impression that the proposal to abolish positions was developed later than it was.

167    Tenth, the “Phase 2 Background Summary” he prepared in mid-July 2014 included the following passage under the heading “Background”:

Our business systems (in particular our [enterprise agreement]) create a culture of role protection first rather than business improvement. A culture so engrained that no consultative change management model will achieve cost reduction across an expedient timeframe. Our change management process must revert to a “just do it” model, which then allows people learn new approaches to “survive” in the new paradigm created.

168    Mr Stewardson initially prevaricated as to what he meant in this passage but then conceded that he thought that the consultation process in the Agreement would not allow PKCT to make necessary workplace changes in a timely way. The passage shows that Mr Stewardson thought that PKCT should “just do it” and make necessary workplace changes without going through the required consultation process. He emailed the Background Summary to Mr Green and Ms Ragen on 17 July 2014 in preparation for a meeting on 21 July and it is likely that they considered that approach. His prevarication was most likely an attempt to avoid disclosing his view, because it was contrary to PKCT’s case that it provided genuine consultation.

169    Eleventh, Mr Stewardson cut and pasted some text from his earlier Organisational Redesign Stage 2 document into the Phase 2 Background Summary, but he left out the assumption that “VRs [are] to be offered and accepted based on the stream as per EA”. In cross-examination he said that he did not include the assumption because he did not think it was relevant to his discussion with Mr Green. I found that explanation implausible. The obligation to offer voluntary redundancies was an important matter, as Mr Stewardson conceded. It must have been clear that the decisions not to offer voluntary redundancies in relation to Mr Giddings and Mr Rosewarn’s positions and to restrict the investigation of reducing contractors meant that it was inevitable that their employment would be terminated (if their positions were abolished). It is more likely that Mr Stewardson did not include his earlier assumption because he knew by then that Mr Green had decided that PKCT would not offer voluntary redundancies in relation to their positions.

Mr Gorman’s evidence

170    Mr Gorman said that at Mr Green’s request, and in response to the deteriorating conditions in the coal industry, he conducted the Operational Review. In the review he said that he considered a range of options to find cost savings. In Phase 2, following discussions with managers in the relevant areas, he said that he identified some positions that could be abolished while still allowing PKCT to meet its operational requirements. He said that after careful consideration he reached the view that the positions of Long Term Planner and Facilities Maintenance Engineer and two Administration Assistants should be abolished.

171    The thrust of his evidence was that he selected those positions for abolition because they were the most appropriate to be abolished, and his recommendation had nothing to do with Mr Giddings’ Union roles and/or his industrial activities. He said the decision to abolish the three positions and terminate the employment of the three affected employees was made by Mr Green. In essence Mr Gorman corroborated Mr Green’s account that he did not decide to proceed with the proposal to abolish positions until October 2014 and that Mr Giddings’ Union role and/or his industrial activities formed no part of Mr Green’s reasons for terminating his employment.

172    However, although he said that his affidavit was a full account of the decision-making process leading up to the abolition of the three positions and the resulting termination of employment, it became clear in cross-examination that he had not disclosed a number of important documents and important parts of the decision-making process. I also found his evidence implausible when considered against contemporaneous documents and in light of the surrounding facts and circumstances. In my view his evidence is unreliable and I generally give it little or no weight.

Mr Gorman’s failure to disclose important documents and matters

173    First, in his affidavit Mr Gorman did not disclose the document he prepared in June 2014 titled “Review of the obligations regarding workforce reductions”. This was an important part of the decision-making process because, amongst other things, it tends to show that at the time he understood the Agreement to require PKCT to offer redeployment and voluntary redundancies before implementing forced redundancies and to require PKCT to investigate all available avenues to avoid forced redundancies including by reducing contractors. It also tends to show that he thought there were potentially available avenues to avoid the forced redundancies of Mr Giddings and Mr Rosewarn. It is likely that Mr Gorman did not disclose this document because it was contrary to PKCT’s case.

174    Second, Mr Gorman did not disclose his preparation of the Scenario Planner in June 2014, which identifies the positions that were being considered for abolition under different scenarios, dealing with the affected employees by name and setting out each employee’s age, length of service, cost of redundancy, and redeployment options. His failure to disclose this document was significant when he was its author and he conceded in cross-examination that his preparation of it was an important step in the Operational Review. It tends to show that, at the time, he understood the Agreement to require PKCT to redeploy employees into any suitable vacancies created through voluntary redundancy or by reducing contractors (without limiting that consideration only to full time and permanent contractors). It also tends to show his view that Mr Giddings and Mr Rosewarn had suitable skills and competencies for redeployment into various positions within PKCT (if they became vacant through offers of voluntary redundancy) or into contractors’ work.

175    Mr Gorman tried to downplay the significance of the Scenario Planner by saying that it dealt with the possibility of redeploying potentially affected employees by reference to what he described as “possible options that the employee felt they might be suitable for redeployment to.” He said that when he was developing it he was anticipating the positions to which people might think they could be redeployed, rather than considering where people might actually be redeployed.

176    That evidence is implausible. I do not accept that Mr Gorman’s detailed work in ascertaining each affected employees’ age, length of service, cost of redundancy, and job swap and redeployment options was undertaken in an effort to anticipate the positions to which people might think they could be redeployed when he had not even spoken to them. I have little doubt that in creating the Scenario Planner he was setting out his own view as to the redeployment options that were potentially available for each of them. It is likely that Mr Gorman did not disclose the Scenario Planner because it was contrary to PKCT’s case.

177    Third, Mr Gorman did not disclose the OOR Report in his affidavit. This failure was particularly important because the OOR Report was the primary planning document in the Operational Review and he was one of its authors. This failure occurred in the context that no other PKCT witness disclosed it either, and in my view his omission was deliberate. His affidavit purported to be a full account of the decision-making process, as he confirmed in cross-examination, but by not disclosing the main report planning and documenting the review his evidence regarding the decision-making process was materially incomplete. The draft OOR Reports throw a quite different light on PKCT’s decisions and the decision-making process.

178    It is likely that he did not disclose the OOR Reports because:

(a)    the first draft OOR Report tends to show that, at the time, he understood the Agreement to require PKCT to redeploy the affected employees into suitable vacancies created through offers of voluntary redundancy (without limiting that only to the Administration Assistant positions) or by reducing contractors (without limiting its consideration only to full-time and permanent contractors). It also tends to show that, at the time, he thought there were likely to be avenues for the redeployment of Mr Giddings and Mr Rosewarn;

(b)    the second and third draft OOR Reports in July 2014 show the critical change in PKCT’s approach to the Agreement to which I have referred. This had the effect that it was inevitable that Mr Giddings and Mr Rosewarn would lose their jobs rather than be redeployed (if their positions were abolished as proposed); and