FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2016] FCA 1009

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LOGAN J:

1    A partnership known as the BHP Billiton Mitsubishi Alliance (BMA) operates coal mines at Goonyella Riverside, Broadmeadow, Peak Downs, Saraji, Daunia, Caval Ridge and Blackwater (collectively, the BMA Coal Mines). The detailed structure of BMA was given in evidence but it is not necessary to relate that here.

2    This case is concerned with four of the BMA mines, each situated in Central Queensland, the Goonyella Riverside, Peak Downs, Saraji and Blackwater mines (collectively, the CQ Mines). BHP Coal Pty Ltd (BHP Coal), is an employer of labour at the CQ Mines. This case especially concerns certain actions, or perhaps more accurately, alleged inactions, of BHP Coal with respect to some of its employees at the CQ Mines namely, those covered by the BMA Enterprise Agreement 2012 (Enterprise Agreement). I shall term those employees “the EA employees”.

3    In September 2014, BMA’s then “Asset President”, Mr Lucas Dow, decided that there was a need for the restructuring and reduction of the workforce at the BMA Coal Mines. A feature of the restructuring was that new departments known as Mine Services Departments were to be created at certain mines. Mr Dow decided that a reduction across the BMA Coal Mines of about 700 budgeted positions was needed. At the same time, he determined that each of the BMA Coal Mines needed to increase production.

4    Prior to making this decision, Mr Dow received two documents: a memorandum dated 18 September 2014 entitled “Review of Central Queensland Operations” and request for approval”, and a PowerPoint presentation entitled “Project Diamond” (Project Diamond Presentation). The author of that memorandum within BMA was BHP Billiton’s Head of Production (Mining), Mr Brandon Craig. In his covering email, Mr Craig requested Mr Dow to review and approve the proposal in his memorandum. The essence of that proposal was as I have related in the preceding paragraph. The email which records Mr Dow’s consequential decision explicitly refers only to the memorandum.

5     On the evidence, there were two operational reviews being conducted within BMA in 2014, “Project Zinc” and “Project Diamond”. The memorandum (reference to “annual run-rate saving of up to ̴$217 million”) and the Project Diamond Presentation (reference to “Full year benefits of up to ̴$217 million”) do appear to be related. BHP Coal submitted that Mr Dow’s decision related to Project Zinc rather than to Project Diamond. Mr Craig was not called as a witness. There was, nonetheless, some evidence from BHP Coal (from Mr McKenzie, of whom more below) to support this and the memorandum refers to neither project explicitly. But it seems unlikely to be a coincidence that it was the Project Diamond Presentation which was enclosed with that memorandum. And, as I have noted, there is an internal consistency in terms of apprehended savings between the memorandum and the Project Diamond Presentation.

6    As it happens, nothing of substance turns on whether it was “Project Zinc” or “Project Diamond”. That is because, even though the Project Diamond Presentation envisages, “Up to 510-520 EA roles removed (incl. voluntary redundancy)”, it is a planning document and must be read in the context of a memorandum which explicitly highlights and promotes to Mr Dow, a need for “full compliance with our obligations under the Enterprise Agreement … and obligation to consult generally”. For reasons which I develop below, the Enterprise Agreement does not inhibit BHP Coal’s ability to identify a surplus of EA Employees or, as a matter of operational planning, to envisage a related contingency of voluntary redundancies as to how that surplus is likely to be addressed and a related obligation to consult before the reaching of a final decision. Mr Dow’s response of 19 September 2014 to Mr Craig, in which he stated that he had “decided to approve your recommendations” and directed, “Please proceed” was not a direction to proceed with voluntary redundancies. It was a direction to proceed to deal with the execution of a comprehensive operational plan, which included an identified surplus and, just as much, also included compliance with, materially, an explicitly acknowledged obligation to consult before the making of any final decision as to how that surplus was to be addressed. As I explain below, the conclusion which I have reached on the whole of the evidence is that BHP Coal then reacted and behaved accordingly. It would be erroneous to read what was put to Mr Dow either piecemeal or out of context or on the basis of a preconception that BHP Coal was disposed not to observe its obligations under the Enterprise Agreement.

7    There is no doubt that a spectacular fall in the commodity price for the BMA Coal Mines’ coal product was a critical factor in generating a corresponding desire within BMA to reduce production costs by reducing labour costs and increasing production efficiencies. Evident from the information provided to all BMA employees by Mr Dow in announcing his decision and related presentations was the following: as at the end of 2010, the price for coking coal was above $US360 per tonne. After 2010, the price fell and continued to fall. By late 2012, it had fallen to under $US150 per tonne. By 2014, it had fallen to under $US110 per tonne. Each price specified is the FOB price at the Hay Point loading terminal. Another contributing factor to Mr Dow’s decision was the then high level of the Australian dollar relative to other currencies, particularly European currencies. These factors, in Mr Dow’s view, impacted upon the international competitiveness of the product offered by the BMA Coal Mines.

8    Mr Dow’s decision was announced on Tuesday, 23 September 2014. That decision bound BHP Coal, which is a BHP Billiton subsidiary.

9    So far as BHP Coal was concerned, a feature of this decision was that a surplus of 562 EA employees at the CQ Mines was identified.

10    Mr Shaun McKenzie is the Employee Relations Manager for BMA with high level Human Resources responsibility and authority in relation to BMA’s operations, including BHP Coal. He is a subordinate of Mr Dow. He was not the author of the memorandum on the basis of the recommendations in which Mr Dow made his decision. That author was, as noted, Mr Craig. “Project Diamond” was not Mr McKenzie’s plan. Mr McKenzie did have a role in highlighting to a Mr Andrew Fisher of BHP Billiton, after Mr Craig had authored his memorandum and received Mr Dow’s response, a more accurate number (562) of surplus EA positions across the CQ Mines (Mr McKenzie’s email of 20 September 2014 to Mr Fisher refers). On the evidence, Mr Fisher and a Ms Sonia Lewis are key managerial subordinates of, apparently, Mr Craig and Mr Dow respectively. It fell to Mr McKenzie to manage the HR sequel to Mr Dow’s decision. Mr McKenzie’s evidence needs to be understood and I have assessed his credibility in this light. Mr McKenzie related in evidence, and I accept, that it was also a feature of the decision announced on 23 September 2014 that BHP Coal’s policy position was that any reduction of surplus positions and thus the surplus of EA employees that was identified would not be achieved by forced redundancies.

11    As to redundancies, cl 32 of the Enterprise Agreement provides as follows:

32    Redundancy

32.1    Where a surplus of permanent Employees arises at a Mine during the life of the Agreement that cannot be addressed through natural attrition, the Company will consult with Employees and their Employee Representatives, about the possible need for redundancies, and if so:

(a)    the means of minimising the number of redundancies; and

(b)    the means of minimising the effect of the redundancies on Employees.

32.2    Any surplus will be addressed in one or more of the following ways:

(a)    By voluntary redundancy, at the rate specified in clause 32.9; or

(b)    By redeployment to another task within the Mine, which is appropriate to the skills and competencies of the Employees concerned, or through retraining; or

(c)    Transfer of Employees who have the appropriate skills and competencies or who can be retrained within a reasonable period of time to:

(1)    another position or other duties (which may be temporary) at a Mine which is within reasonable distance from the Employee’s residence;

(2)    a vacancy created by an Employee taking voluntary redundancy at a Mine which is within reasonable distance from the Employee’s residence;

(3)    another position or other duties (which may be temporary) at a Mine outside reasonable distance from the Employee’s residence; or

(4)    a vacancy created by an Employee taking voluntary redundancy at a Mine outside reasonable distance from the Employee’s residence.

Where a temporary position or other duties are undertaken under 32.2(c)(1) or 32.2(c)(3), the Company will make its best attempt to advise the Employee of the duration of the temporary period eg 1 month, 3 months, 6 months etc, depending on the circumstances. Should the position or duties cease, the Employee will then be offered redundancy.

32.3    Where the surplus cannot be adequately addressed through 32.2(a), 32.2(b) or 32.2(c), then the Company may consider forced redundancies. In such a case, it shall investigate and consider all reasonable avenues to avoid such forced redundancies. This will include removal of contractors and labour hire, except where:

(a)    There are contractual commitments that prevent this;

(b)    The work performed by contractors or labour hire is considered to be specialist work of a non-permanent nature; or

(c)    Employees are not readily able to perform the work.

32.4    Where voluntary redundancy is offered, the Company will have regard to its requirement to retain an appropriate mix of skills and competencies. Accordingly, not all applicants will necessarily be accepted for voluntary redundancy.

32.5    Where forced redundancies are necessary:

(a)    The Company will determine the number of Employees to be made redundant and the spread of skills required for the efficient and effective operation of the relevant Mine; and

(b)    To ensure that a Mine can be operated in the most productive and efficient manner, all Employees from within the Functional Work Area (as listed at clause 41) where a surplus exists will be interviewed to determine the Employees to be retained or retrenched.

32.6    The selection method for forced redundancies will involve a selection process that will be conducted by a panel trained in behavioural interviewing. The panel will include:

(a)    An independent member agreed between the Company and the Unions; and

(b)    A representative selected by the workforce.

32.7    A merit-based selection process will be undertaken by the panel which will take into consideration the following:

(a)    Necessary skills mix required by the business;

(b)    Individual skills and proficiency in those skills;

(c)    Employment record/length of service;

(d)    Cases where unsatisfactory performance has been identified and is being managed;

(e)    Alignment with BMA Charter Values as identified in the Employee’s IDPR.

32.8    Exemption

The Company is not liable for the payment in clause 32.9 if the Company obtains, or causes to be made available for the Employee, work within 14 days:

(a)    That the Employee is competent to perform;

(b)    In a position that carries the same or a higher classification rate of pay than the Employee’s previous position;

(c)    That can reasonably be regarded as permanent;

(d)    That is another coal mine; and

(e)    Allows the Employee to reside in the same general locality as the Employee’s previous residence i.e. at the same or another township within the Bowen Basin which does not require the Employee to relocate.

32.9    Redundancy Pay

Redundancy payments will be calculated at the rate of 13 weeks’ base salary plus 2½ weeks’ base salary per year of continuous service for the first 26 years of service, plus 3 weeks’ base salary for each subsequent year of continuous service.

For the purpose of this clause:

(a)    One week’s base salary will be equal to $1742 subject to clause 32.9(b) and clause 9 of Schedule 5; or

(b)    In the case of Crinum Employees, one week’s base salary will be as follows:

(1)    Mine worker 7 Day Roster 12 Hour Shifts = $1997

(2)    Section &/or Engineering Co-ordinators, 7 day roster 12 Hour Shifts = $22233.

32.10    Any payment under clause 32.9 is inclusive of any statutory entitlement an Employee may have to severance or redundancy or retrenchment pay.

32.11    Redundancy Relocation Assistance

In order to assist with any relocation expenses incurred by an Employee, an amount of up to $5,000 will be reimbursed to an Employee whose employment is terminated due to redundancy. This payment will be made upon presentation by the former Employee of receipts incurred for relocation expenses, within eight weeks of the termination of their employment.

32.12    Generic Induction and Statutory Health Assessment

The Company will provide the opportunity for all Employees who are made forcibly redundant to attend the generic induction course at no cost to the Employee prior to their leaving the Company.

The Company will cover the cost of a Statutory Health Assessment undertaken by an Employee if their existing assessment is due to expire within six months of them becoming forcibly redundant.

32.13    Competencies (Training Transcript)

Any Employee who is made redundant will be given a copy of his or her competencies (training transcript) upon a request made by the Employee within four weeks of leaving the Company.

32.14    This clause 32 applies only to full time and part time Employees and excludes casual and temporary Employees.

12    Clause 47 of the Enterprise Agreement supplies a number of definitions. Amongst these are the following:

“Consult” or “Consultation”

means providing Employees with a genuine opportunity to influence and inform the decision making process over a significant or important issue.

Consultation does not mean or imply that agreement must be sought or reached.

“Employee”

means a person employed by BHP Coal Pty Ltd who is covered by this Agreement. It does not include a contractor employee or labour hire employee.

The employees covered by the Enterprise Agreement are designated by cl 1.1(b) as:

(b)    The Employees employed by the Company who perform work covered by Schedule A of the Black Coal Mining Industry Award 2010 (“BCMI Award”) and who are members or eligible to be members of any of the Unions and who are engaged at the Mines in the classifications prescribed by this Agreement (“the Employees”).

Clause 7 of the Enterprise Agreement provides:

The Company shall have free and unfettered access to contractors.

13    Section 50 of the Fair Work Act 2009 (Cth) (FWA) provides that, a person must not contravene a term of an enterprise agreement. The application of s 50 is affected by s 51(1) of the FWA, which provides that an enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person. There is no doubt that the Enterprise Agreement applied to BHP Coal.

14    By s 539(1) of the FWA, s 50 is one of those provisions of that Act which is designated as a “civil remedy provision”. In respect of a civil remedy provision and subject to qualifications found in s 540 and s 541 to which it is not necessary to refer, s 539(2) specifies standing, jurisdiction and maximum penalties for a contravention to institute proceedings for the recovery of a penalty for contravention. This Court is one of those upon which jurisdiction is conferred to hear and determine an application for the imposition of a penalty for a contravention.

15    The Construction, Forestry, Mining and Energy Union (CFMEU) has, by s 539(2) of the FWA, the requisite standing to institute an application for the imposition of a penalty for a contravention. In this proceeding, the CFMEU alleges that, before, on and from 23 September 2014 and then continuing until 4 December 2014, and in respect of each of the CQ Mines, BHP Coal contravened s 50 of the FWA, because it contravened the consultation obligation found in cl 32.1 of the Enterprise Agreement. It seeks the imposition of pecuniary penalties and ancillary relief.

16    More particularly and having regard to the statement of claim as amended, the CFMEU alleges that, at each of the CQ Mines, BHP Coal failed to consult about the possible need for redundancies of permanent employees, the means of minimising the number of redundancies and, or alternatively, the means of minimising the effect of the redundancies on such employees in one or the other or each of four ways:

(a)    a failure or refusal to consult or engage in consultation with the permanent employees and their employee representatives for the particular mine about its number of surplus permanent employees covered by the Enterprise Agreement and by its related adoption of the position that the number of such surplus employees for that mine that it had identified was an irrevocable number or one about which it had come to a final conclusion that it would proceed by way of voluntary redundancies, redeployment or forcible transfer;

(b)    a failure adequately or at all to consult or engage in consultation with the permanent employees and their employee representatives for the particular mine about displacing contract employees or labour hire employees, who were expressly excluded from the definition of “Employee” for the purposes of the Enterprise Agreement, as a specific means of minimising the number of permanent employee redundancies or as a specific means of minimising the effect of redundancies on such employees, with such redundancies including voluntary redundancies;

(c)    a failure adequately or at all to consult or engage in consultation with the permanent employees and their employee representatives for the particular mine constituted by a failure adequately or at all to provide details of any changes in the performance of work, or changes in the allocation of work, to permanent employees, contract and labour hire workers, including which roles and the number of roles that were to be performed by each of those categories of workers for work covered by the Enterprise Agreement shown in BHP Coal’s “Future State” organisational charts emailed on Friday, 31 October 2014;

(d)    a failure adequately or at all to consult or engage in consultation with the permanent employees and their employee representatives for the particular mine constituted by a failure adequately or at all to provide, in the format of and all of the information in the “Mining – Fleet Coal” document that was provided by BHP Coal for the Saraji Mine redundancies as at 27 March 2014, in particular by failing or refusing to provide figures for each proposed crew broken up into:

(i)    the equipment required for each remaining or future crew;

(ii)    the number of voluntary redundancy applications for each crew;

(iii)    the number of permanent employees that would remain in the future in each crew after the restructure, including in each of the future Mine Services Department crews;

(iv)    the number of remaining contract or labour hire workers that would remain in the future and each crew after the restructure, including in each of the future Mine Services Department crews.

17    It is for the CFMEU to establish these alleged contraventions in law and in fact. In context, the effect of s 140 of the Evidence Act 1995 (Cth) (Evidence Act) is that, while it is the civil standard of proof on the balance of probabilities which applies to the proof of controversial facts in this proceeding, satisfaction that a fact has been proved to that standard must take into account that this is a penal proceeding with all the attendant gravity of consequence if a contravention is proved. That reminder, derived from s 140(2) of the Evidence Act, is a statutory replication of sentiments long ago voiced by Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 in his observation that satisfaction that grave issues were proved in civil proceedings was not achieved by “inexact proofs, indefinite testimony, or indirect inferences”.

18    BHP Coal submitted that, on analysis, the CFMEU’s case against it entailed seven propositions. These were said to be:

(a)    BHP Coal was obliged to consult about the subject matter of Mr Dow's decision before that decision was made, but did not do so.

(b)    BHP Coal did not consult about the existence and size of the surplus of EA Employees identified by them, or the basis on which the surplus was ascertained.

(c)    Such consultation as occurred was not conducted by a person who had the authority to do so, or the capacity to discharge the company’s obligations under cl 32.1 of the Enterprise Agreement.

(d)    BHP Coal did not consult about the “possible need for redundancies”.

(e)    BHP Coal did not consult about “displacing contractor employees or labour hire employees as a means of minimising the number or effect of redundancies of EA Employees.

(f)    BHP Coal failed to provide information that it is said was required to inform consultation under cl 32.1.

(g)    BHP Coal conducted “combined” consultation meetings for the purposes of cl 15 rather than cl 32 and as such, failed to meet its obligations under cl 32 until, at the earliest, on and from 21 October 2014, the commencement of the “site-based” consultation meetings.

19    This analysis was said to be based not only on the amended statement of claim but also upon the CFMEU’s filed material and its oral submissions. As it did consistently throughout the trial, BHP Coal insisted that the case be conducted in accordance with the pleadings. In venturing beyond the amended statement of claim so as to highlight the apprehended seven issues set out above, BHP Coal did so not as a concession that it had engaged with a wider case but rather as a precursor to submitting where the CFMEU had or had not impermissibly ventured beyond its pleaded case. BHP Coal’s position accorded both with the general practice of this Court and the intimations, in the recollection of that practice, which I made to the parties on several occasions on and from the institution of these proceedings. That practice and those intimations were to this effect: in the ordinary course, a case is to be, and should be, tried on the pleadings.

20    At least on and from enactment in the United Kingdom of the Supreme Court of Judicature Act 1873 (UK) and the Supreme Court of Judicature Act 1875 (UK) (collectively, the Judicature Acts), the related reform of civil procedure rules in that country and the progressive adoption of those reforms in Australia, pleadings are not and never have been an end in themselves. Insistence on the conduct of a trial in accordance with the pleadings is but an insistence that a trial be conducted in a procedurally fair and efficient way by reference to identified material facts sufficient to raise a cause of action known to law. The more recent furtherance here of these now long ago initiated reforms by the amendments which introduced Part VB and particularly s 37M into the Federal Court of Australia Act 1976 (Cth) (FCA Act) did not create, but rather underscored the need for that insistence. It is particularly important in penal proceedings, of which the present offers an example, that a respondent know in advance of closing its evidence, the case put against it. Under the rules of court, that knowledge is furnished via a statement of claim. In turn, regard to subsequent pleadings yields the identification of the material facts which remain in issue. The evidence which parties prepare and lead is consequentially directed to the proving or, as the case may be, the rebutting of the unadmitted material facts of the case as pleaded.

21    There can be circumstances where, notwithstanding a deficiency in the pleadings, a respondent chooses, nonetheless, meaningfully to engage with an applicant’s case which has strayed outside the pleadings. In these circumstances, no denial of procedural fairness is entailed by deciding the case additionally by reference to issues which have emerged in this way. Indeed, in those circumstances, to approach the deciding of the case by reference only to the pleadings would be to elevate form over substance and to subvert the reforms effected by the Judicature Acts and local analogues and furthered by Pt VB of the FCA Act. The applicable position was put by the Full Court in this way in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298 at 311, [64] – [65]:

64    Litigation is not a free for all. The overarching purpose of the civil practice and procedure provisions that apply in this Court is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (Federal Court of Australia Act 1976 (Cth) (“FCA Act”), s 37M). It would not be just to decide a case on a different basis than the way it was conducted. Nor would it be just to permit an applicant to change the nature of its case after the evidence has closed and its weaknesses pointed out, at least not without a formal application and the grant of leave, on terms if necessary.

65    The long and the short of it, then, is that, in a civil proceeding of a penal nature, a statement of claim must allege a contravention known to law and with a sufficient statement of material facts to alert a respondent to the case to be met. Nevertheless, where an applicant’s pleading is ambiguous but a respondent has nonetheless meaningfully engaged with it in its defence, that engagement and the manner in which an applicant’s case is consequentially opened and the trial conducted and defended can and ought to be considered in deciding whether a respondent has suffered any procedural unfairness. That is so even if there has been no formal application to amend the pleading. The obligations imposed on the Court and the parties by Pt VB of the FCA Act do not lead to any different conclusion.

See also, recently and to like effect, with respect to an absence of procedural unfairness where a case as conducted by the parties has departed from the pleadings and is decided accordingly: JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625 at 643, [78] and NRM Corporation Pty Ltd v Australian Competition and Consumer Commission [2016] FCAFC 98 at [26].

22    BHP Coal was entitled to insist on a trial in accordance with the pleadings and thereby to know and meet both in law and evidence and by reference to the statement of claim, as amended, the case the CFMEU brought against it. It never resiled from this position. This is completely orthodox, not sharp or idiosyncratic, practice. The third of the above identified issues, namely, whether any consultation was conducted by a person who had the authority to do so, or the capacity to discharge BHP Coal’s obligations under cl 32.1 of the Enterprise Agreement, was not an issue raised on the pleadings. Subject to these further observations, I therefore consider it no further.

23    A “genuine opportunity to influence and inform the decision making process over a significant or important issue” (cl 47 definition of “consultation”) does not mean that the employer’s decision-maker must be present at a meeting held for the purpose of conducting consultation or even, for that matter, that there must be a face to face meeting with Employees or “Employee Representatives” for that purpose at all. For a corporation, the decision-making “process” may be the resolution of a board of directors. The members of that board could, collectively, if they wished, represent the company in the consultation at a meeting held for that purpose. Equally, the corporation could be represented at a meeting held for that purpose by one or more of its officers or employees. To construe the Enterprise Agreement in any other way would be contrary to business common sense. In many, if not most, cases, a meeting may well be an essential feature of consultation. But in the absence of some particular prescription in an industrial instrument, that will be because good industrial relations practice and, as ought not to be any different, ordinary experience of life as to the benefits of the spontaneity and flexibility of communication which a face-to-face meeting offers, make it so. There is no contrary prescription in the Enterprise Agreement. In some cases, perhaps, an exchange of emails might suffice. There is no fixed format for consultation. What is essential is that it is apparent from all of the circumstances that the requisite opportunity genuinely has been extended.

24    Had BHP Coal sent along to a meeting held for the purposes of consultation, a junior officer ignorant of the Enterprise Agreement, corporate structures, Mr Dow’s decision and its apprehended organisational and staffing ramifications, at the very least an interrogative note might have been raised about whether it had set out to afford a genuine opportunity to consult or any opportunity at all. But this it did not do. Its chief representative was Mr McKenzie. He was, hardly surprisingly, given the position which he held, and as contemporary documentation and his own evidence made pellucid, I find, well-informed during the meetings on all of the matters just mentioned and, within and even beyond the limits of his understanding of BHP Coal’s consultation obligations, well-disposed and receptive to being influenced and informed and, to the extent matters lay beyond his remit, to ensuring that any other corporate decision-makers within BHP Coal or BMA were, via him, informed and influenced by what was raised. I thought that the essence of Mr McKenzie’s philosophy and disposition (and thus that of BHP Coal) was summed up in this answer which he gave in the course of his lengthy cross-examination, “We were after ideas, thoughts and proposals.”

25    Inferentially, Mr Dow held delegated authority within BMA to make the decision announced on 23 September 2014. But it was not necessary, in order for BHP Coal to comply with its cl 32 consultation obligation that either Mr Dow or, for that matter, Mr Craig attend any meeting. As it happened, and hardly indicative of indifference to a consultation obligation, Mr Craig was also an attendee for BHP Coal at a key early meeting held on 25 September 2014 for the purposes of consultation.

26    Even though, on the pleadings, want of authority truly is a non-issue, I consider the addition of the foregoing observations desirable in an industrial case. Further, it will, in any event, be necessary to expand on the observations about Mr McKenzie, his evidence and contemporary documentation for the purpose of addressing the issues which do arise on the pleadings.

27    It is as well to commence an examination of the other issues identified by BHP Coal, which do, in my view, nicely distil the issues which arise on the pleadings, with an understanding of the meaning and effect of the Enterprise Agreement and, in particular, of the obligation which fell on BHP Coal by virtue of cl 32.1 if and when particular events transpired. This requires reference to some further clauses in that agreement.

28    Aside from the specific circumstance to which cl 32 is directed, cl 15 of the Enterprise Agreement imposes a separate consultation obligation in other circumstances. It provides:

15    Consultation on major workplace change

15.1    For the purposes of section 205 of the Act, the model consultation clause, as defined in the Fair Work Regulations 2009 (Cth), as amended from time to time, applies to any “major workplace changes that are likely to have a significant effect on Employees”.

15.2    The model consultation clause does not apply to any major workplace changes implemented under this Agreement for which other consultation obligations are prescribed in this Agreement. In all circumstances, only a single consultation process will apply.

MODEL CONSULTATION CLAUSE:

(1)    This term applies if:

(a)    the Company has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its enterprise; and

(b)    the change is likely to have a significant effect on Employees.

(2)    The Company must notify the relevant Employees of the decision to introduce the major change.

(3)    The relevant Employees may appoint a representative for the purposes of the procedures in this term.

(4)    If:

(a)    a relevant Employee appoints, or relevant Employees appoint, a representative for the purposes of consultation; and

(b)    the Employee or Employees advise the Company of the identity of the representative;

the Company must recognise the representative.

(5)    As soon as practicable after making its decision, the Company must:

(a)    discuss with the relevant Employees:

(i)    the introduction of the change; and

(ii)    the effect the change is likely to have on the Employees; and

(iii)    measures the Company is taking to avert or mitigate the adverse effect of the change on the employees; and

(b)    for the purposes of the discussion — provide, in writing, to the relevant Employees:

(i)    all relevant information about the change including the nature of the change proposed; and

(ii)    information about the expected effects of the change on the Employees; and

(iii)    any other matters likely to affect the Employees.

(6)    However, the Company is not required to disclose confidential or commercially sensitive information to the relevant Employees.

(7)    The Company must give prompt and genuine consideration to matters raised about the major change by the relevant Employees.

(8)    If a term in this Agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the Company, the requirements set out in subclauses (2), (3) and (5) are taken not to apply.

(9)    In this term, a major change is likely to have a significant effect on Employees if it results in:

(a)    the termination of the employment of Employees; or

(b)    major change to the composition, operation or size of the Company’s workforce or to the skills required of Employees; or

(c)    the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d)    the alteration of hours of work; or

(e)    the need to retrain Employees; or

(f)    the need to relocate Employees to another workplace; or

(g)    the restructuring of jobs.

(10)    In this term, relevant Employees means the Employees who may be affected by the major change.

29    Clause 31, which is directed to the subject of “Security of Employment”, ought also to be set out, particularly for the context it gives, expressly evident in cl 31.4, to the separate consultation provision found in cl 32:

31    Security of Employment

31.1    The Company is committed to efficiently and effectively utilising the skills and competencies of all of its Employees. Likewise, it is the Parties’ intention that Employees will efficiently and effectively utilise all their skills and competencies to achieve the goals of the business.

31.2    The Parties agree that the optimum means by which security of employment can be achieved is by operating safe, productive and profitable mines of world class standard.

31.3    Despite these commitments, it is acknowledged that because of changing economic circumstances, market downturn/forces or introduction of new technology, there may be occasions during the life of the Agreement which require that a surplus of Employees be addressed.

31.4    The Company must use its best endeavours to avoid the necessity for forced retrenchments, which will include the removal of contractors and labour hire as a first step as provided for in clause 32.3 below.

30    The term, “Employee Representative”, found in cl 32, is specifically defined by cl 38 of the Enterprise Agreement and that office, as there defined, is also the subject of particular provision in cl 38. For the purposes of the Enterprise Agreement, cl 38.1 defines an “Employee Representative” thus:

“Employee Representative” in this Agreement means an Employee who is employed at the same Mine as the Employee.

The capitalised term, “Mine”, found in this definition, as well as in numerous other places in the Enterprise Agreement is also the subject of deliberate definition. That definition is found in the Enterprise Agreement’s application clause, cl 1.1, and is expressed in this way as part of the designation of BHP Coal as a party bound by that agreement:

(a)    BHP Coal Pty Ltd (“the Company”) with respect to the Employees employed at the following mines currently managed by BHP Billiton Mitsubishi Alliance (“BMA”):

(1)    Goonyella Riverside Mine;

(2)    Peak Downs Mine;

(3)    Saraji Mine;

(4)    Norwich Park Mine;

(5)    Gregory Mine;

(6)    Crinum Mine; and

(7)    Blackwater Mine

(each, a “Mine” and collectively, the “Mines”)

Each of the CQ Mines is thus a “Mine” as defined by the Enterprise Agreement.

31    Clause 32 of the Enterprise Agreement, the summary which I have offered above of the CFMEU’s pleaded case and the remaining six issues as identified by BHP Coal each need to be understood with the very particular definitions of “Consult”, “Employee”, “Employee Representative” and “Mine” in mind. It is an important feature of the CFMEU’s case that, to the extent that BHP Coal consulted in the sense defined and as required at all, that consultation did not, at all necessary times, engage with an “Employee Representative” at a “Mine”.

32    There was no dispute between the parties as to the general principles applicable to the construction of industrial awards and agreements. In Transport Workers’ Union of Australia v Linfox Australia Pty Ltd (2014) 318 ALR 54 (TWU v Linfox) at 58 – 61, [29] - [41] Tracey J offered a comprehensive summary of those principles. I respectfully adopt that summary without separately reproducing it. It is a feature of the authorities discussed in that summary that it has been acknowledged that guidance as to the construction of industrial instruments may also be obtained by reference to principles which courts apply to the construction of commercial contracts.

33    One such principle, and it is highlighted in the summary in TWU v Linfox, is that an interpretation which accords with business common sense will be preferred to one which does not: see Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437. I have already employed that principle in the observations which I have made above about a non-issue in this case. The applicability of that principle to the construction of commercial contracts was recently emphasised by French CJ, Kiefel, Bell and Nettle JJ in Moreton Bay Regional Council v Mekpine Pty Ltd (2016) 90 ALJR 420 at 427, [54] and 428, [57] (Moreton Bay Regional Council v Mekpine Pty Ltd). In Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCAFC 149 at [56], the Full Court employed principles derived from the construction of commercial contracts so as to uphold the rejection, for the purpose of construing an enterprise agreement, of evidence which rose no higher than highlighting the subjective intentions of a party to that agreement. Even so, the Full Court in that case, at [54], considered that the nature and quality of a director’s duties under the Corporations Act 2001 (Cth) (Corporations Act), which had attracted me as primary judge in that case as a consideration relevant to the construction of an enterprise agreement, was “too remote” to be of any real value. Fortunately and with respect, it is not necessary in this case to embark on what may be a venture into the realm of the metaphysical in seeking to delineate a difference between considerations derived from the duties which fall on a director under the Corporations Act and the recent emphasis in Moreton Bay Regional Council v Mekpine Pty Ltd on business common sense as a relevant aid to construction.

34    Approaching the construction of cl 32 of the Enterprise Agreement in this way and recalling the issues for determination, the meaning to afford to the opening clause of cl 32.1 commands priority of attention. For it is that opening clause which provides the premise upon which the obligation to consult found in cl 32 arises. Put another way, the obligation to consult created by cl 32 is governed by that opening clause, not the reverse.

35    What follows from this is that such consultation obligation, if any, as fell on BHP Coal with respect to the subject of that opening clause in cl 32.1, (“a surplus of permanent Employees arises at a Mine” “that cannot be addressed through natural attrition”), must, necessarily, be found in cl 15, not in cl 32. Further, subject to the fulfilment of any consultation obligation derived from cl 15, the determination that “a surplus of permanent Employees arises at a Mine” “that cannot be addressed through natural attrition” is wholly a matter for the exercise of BHP Coal’s managerial discretion. Clause 32 is not to be construed in a way which would be subversive of that position.

36    Reading cl 15 and cl 32 together discloses that the consultation obligation which cl 15 imposes is, by cl 15.2, rendered inapplicable in those circumstances where a cl 32 derived consultation obligation arises. The cl 15 consultation obligation is based on a modification, by cl 15.1, of the model consultation clause. The modification means that the cl 15 consultation obligation arises whenever BHP Coal has made a definite decision to introduce any “major workplace changes that are likely to have a significant effect on Employees”, not just “a major change to production, program, organisation, structure, or technology in relation to its enterprise” that is “likely to have a significant effect on Employees”.

37    Even so modified, cl 15 consigns to the managerial discretion of BHP Coal the making of a definite decision about the introduction of any “major workplace changes that are likely to have a significant effect on Employees”. Neither cl 15 nor cl 32 is to be construed in a way which is subversive of this consignment.

38    On the evidence, Mr Dow’s authority as BMA’s “Asset President” extended to making decisions binding on BHP Coal, as a subordinated supplier of labour at, materially, the CQ Mines. The decision he announced on 23 September 2014, bound BHP Coal. BHP Coal’s settled policy position, evident from the “Speaking Notes/Key Messages” which were prepared for use in conjunction with Mr Dow’s announcement and which clearly informed the statements Mr McKenzie made that day was, “We will consult with EA employees and their representatives about these changes in accordance with the BMA EA2012”, i.e. the Enterprise Agreement.

39    Understood as I have highlighted, cl 15 of the Enterprise Agreement neither inhibited Mr Dow in the exercise of his authority nor any manager within BMA or BHP Coal itself from making, without any prior consultation with any employee, the CFMEU or any other representative of any employee, a definite decision to introduce any “major workplace changes that are likely to have a significant effect on Employees”. In relation to any such decision, consultation was a necessary sequel, not a condition precedent. Such a definite decision having been made, cl 15 of the Enterprise Agreement then obliged BHP Coal to engage in the consultation for which that clause provided. If that “definite decision” itself comprised a decision that “a surplus of permanent Employees” “that cannot be addressed through natural attrition” had arisen “at a Mine”, the consultation obligation would, by cl 15.2, be found not in cl 15 but cl 32. And that cl 32 consultation obligation would follow, not precede, the making of that definite decision.

40    If, instead, a definite decision to introduce any “major workplace changes that are likely to have a significant effect on Employees” was initially made at a general level of abstraction with consideration of Mine specific “surplus of permanent Employees” reserved for later consideration, the initial consultation obligation would fall on BHP Coal under cl 15 but might well, in the course of that consultation, evolve into the making of a decision about a Mine specific “surplus of permanent Employees” by BHP Coal, in which case the cl 15 consultation obligation would, as to that subject, cease and the cl 32 consultation obligation would commence. Once again, though it would be subject to its cl 15 consultation obligation, BHP Coal (or BMA by Mr Dow in the exercise of an over-arching authority) would not be obliged by cl 32 of the Enterprise Agreement first to engage in any of the consultation for which cl 32 provides before deciding that a “surplus of permanent Employees” “that cannot be addressed through natural attrition” had arisen “at a Mine”.

41    It follows from this preferred construction of cl 32 that I reject the CFMEU’s submission that that clause obliged BHP Coal to afford it an opportunity to be heard about the existence or composition of a surplus of EA Employees, be that before the project team (Mr Craig especially but also on the evidence a Mr Harris) furnished to the senior management of BMA, notably Mr Dow, the memorandum concerning the BMA Mines, or before, after the receipt of that report, Mr Dow made his decision.

42    Another feature of cl 32 is that the surplus with which it is concerned is solely a “surplus of permanent Employees”. Clause 32 imposes no consultation obligation at all in relation to the identification of a surplus of employees who are not, “Employees” as defined in the Enterprise Agreement and are not permanent.

43    For like reasons to those recently given by Jessup J in Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99 at [161] (Port Kembla Coal Terminal v CFMEU), by reference to observations made by Tracey J in National Tertiary Education Union v La Trobe University [2014] FCA 1330 at [27]-[28] (which were unaffected by the subsequent fate of that case on appeal), the “forced redundancies” to which cl 32.3 refers are non-consensual terminations of the employment of employees. Those non-consensual terminations are one and the same as the “forced retrenchments” referred to in cl 31.4 of the Enterprise Agreement. Further, for like reasons to those given by Jessup J in Port Kembla Coal Terminal v CFMEU at [162] - [163], the reference in cl 32.2 to “voluntary redundancy” is a reference to the termination, with the agreement of the employee concerned, of the employment of an employee whose job has become redundant (and see also to like effect, as to the meaning of each of these expressions, Port Kembla Coal Terminal v CFMEU at [349] per Rangiah J).

44    Reading cl 31 and cl 32 together, it is obvious that the avoidance, if possible, of making EA employees forcibly redundant is one purpose of the Enterprise Agreement. But that avoidance is to be achieved in accordance with the terms of that agreement. The reference in cl 31.4 to “the removal of contractors and labour hire as a first step as provided for in clause 32.3 below” (emphasis added) does not mean that the removal of contractors and labour hire must first be undertaken before BHP Coal may determine that there is, in terms of cl 32.1, “a surplus of permanent Employees [which has arisen] at a Mine during the life of the Agreement that cannot be addressed through natural attrition”. Rather, what it means is that, such a surplus having been identified and thus the obligation to consult having arisen, if the methods specified in cl 32.2 have proved insufficient to address the surplus, the removal of contractors and labour hire will, subject to the conditions for which cl 32.3 provides, be a “first step” before any forced redundancies.

45    The foregoing observations about cl 32 are derived just from considering the text of the Enterprise Agreement.

46    Understanding the application of and interplay between cl 15 and cl 32 in relation to consultation and what the Enterprise Agreement has left to BHP Coal’s managerial discretion is critical to the determination of such liability, if any, in respect of the alleged contraventions of cl 32 and thus s 50 of the FWA.

47    On the morning of the announcement of Mr Dow’s decision, and not coincidentally, Mr McKenzie held a meeting at BMA’s office in Brisbane with officials of unions, including the CFMEU, and with members at the BMA Mines. Notably in relation to the CFMEU, Mr Chris Brodsky, a District Vice President, was present at this meeting. Presented at the meeting on behalf of BMA and thus BHP Coal was a PowerPoint presentation, “Review of Operations “Accelerate 2020”. That presentation enlarged on the reasons behind Mr Dow’s decision and gave details as to the resultant apprehended effects.

48    On the afternoon of 23 September 2014, following the conclusion of that meeting, Mr McKenzie sent by email to attendees a copy of that presentation, the press release containing Mr Dow’s announcement and minutes of the meeting. Those minutes were prepared that day by Ms Kristen Wall, a member of Mr McKenzie’s BMA HR staff at his direction. Ms Wall was present with Mr McKenzie at the Brisbane meeting on 23 September 2014. I accept that the minutes are an accurate record of that meeting.

49    It is apparent from the PowerPoint presentation (and I find) that, as at 23 September 2014, BMA and thus BHP Coal had, even at that stage, identified that there were 562 surplus EA employee positions at the CQ Coal Mines. A table in a slide, “EA Employee Changes” broke that overall total down into mine specific, total numbers of surplus positions as follows:

    Goonyella Riverside: 138

    Peak Downs: 132

    Saraji: 61

    Blackwater: 231

In terms of the opening clause of cl 32.1 of the Enterprise Agreement, each of these mine specific totals constituted “a surplus of permanent Employees” which had “[arisen] at a Mine during the life of the Agreement” which “[could not] be addressed through natural attrition”.

50    It necessarily follows from the analysis of cl 32 offered above that BHP Coal was under no obligation, derived from that clause, to consult with an “Employee Representative” or anyone else for that matter before reaching a decision about the existence of each of these mine specific surpluses of EA Employees. More particularly on behalf of BHP Coal, neither Mr Dow, Mr Craig, Mr Harris, Mr McKenzie, nor anyone else on behalf of that company was obliged by cl 32 to consult about the existence of these surpluses. To the extent that the CFMEU alleges that it was under such an obligation its case is misconceived and must be dismissed.

51    Consideration of what remains of the CFMEU’s case first requires some further examination of the meaning of cl 32 of the Enterprise Agreement. As it happens, that meaning is not free from authority, albeit an authority which is not binding.

52    At an interlocutory stage in this proceeding, qv Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] FCA 1431, I was attracted to an analysis of cl 32 which Deputy President Asbury of the Federal Conciliation and Arbitration Commission presently known as the Fair Work Commission (the industrial commission) had offered in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] FWC 2062 at [10] - [13]. That case was decided on 24 March 2014 (with reasons for the decision being published thereafter) against the background of an earlier dispute between the CFMEU and BHP Coal in relation to the implementation of redundancies at one of the CQ Mines, the Saraji Mine, which was taken to the industrial commission. The industrial commission’s reasons for decision were published on 28 March 2014. I remain in agreement with the Deputy President’s analysis. It accords with the textually based observations which I have made about cl 32 above.

53    It is desirable to set out that analysis not just for that reason. On the evidence, the approach between September and December 2014 of both BHP Coal and the CFMEU to the consultation obligation found in cl 32 was informed by their respective understandings as to what was entailed in the Deputy President’s analysis offered and by the orders which the industrial commission, as constituted by her, made.

54    The very existence of the present proceeding is proof enough that BHP Coal and the CFMEU derived different understandings. Mr McKenzie and various CFMEU officials and other representatives who were engaged on and from 23 September 2014 until 4 December 2014 in what, at the very least, purported to be compliant consultation, as a sequel to the announcement of Mr Dow’s decision, gave evidence, which included cross-examination. On the whole of that evidence, which includes my observations made during their oral evidence, I have no doubt that, on behalf of BHP Coal, Mr McKenzie (and his staff) and, for the CFMEU, Mr Brodsky and the various officials and other representatives, were attempting in good faith to comply or, as the case may be, secure compliance, with cl 32 and, for that matter, cl 15, according to their respective understandings as to what the Enterprise Agreement entailed. As it happens, most of those events were the subject of contemporary documentation but it is necessary to record that I consider that each witness did his honest best accurately to recall the course of events. In particular in this regard, and as I have mentioned above, I have taken into account in my favourable assessment of Mr McKenzie’s credibility, that it was Mr Craig, not Mr McKenzie, who formulated the proposals found in the Project Diamond memorandum which went to Mr Dow.

55    Further, so far as BHP Coal and, for that matter, BMA are concerned, that understanding of the industrial commission decision and orders preceded the announcement of Mr Dow’s decision. He made this announcement by a generally circulated email. The announcement was accompanied by elaborate presentations (based on pre-prepared speaking notes with related correspondence to staff based on a template letter and the already mentioned PowerPoint presentation). These were not created overnight. It is clear enough from them that BMA and thus BHP Coal and Mr McKenzie in particular gave careful, advance attention to the subject of the consultation obligations found in the Enterprise Agreement and anticipated and accepted that the announcement would give rise to consultation obligations.

56    What Deputy President Asbury had to say about cl 32 of the Enterprise Agreement was this:

[10]    The disputed clause 32 must be read in the context of the terms of the Agreement as a whole. The focus of the redundancy provisions is on protecting the position of permanent employees of BHP including those who are to be made redundant and those who are to remain in employment. This is apparent from clauses 31 and 32 of the Agreement, which are directed at ensuring that where there is a surplus of employees, forced redundancies are the last option.

[11]    The obligation to consult in clause 32.1 of the Agreement is triggered where a surplus of permanent employees arises at the mine during the life of the Agreement, and that surplus cannot be addressed through natural attrition. There is no requirement for BHP to consult with Employees and their Employee Representatives before forming the view that there is a surplus of employees and that the surplus cannot be addressed by natural attrition. I accept the submission of BHP that those matters are within the prerogative of the Company and are not matters that it is required to consult about or reach agreement in relation to.

[12]    The ordinary meaning of the term “surplus” is the amount left over when requirements have been met. Thus, when BHP identifies a surplus and the possibility of the need to reduce that surplus by way of redundancies, the obligation to consult employees is triggered. The term “surplus” relates to permanent Employees as defined in clause 47.1 and means persons employed by BHP who are covered by the Agreement. The term specifically excludes contractor or labour hire employees. The term “surplus” is relevant to both employees who are in the group that is in excess of requirements, and those within the group who are still required to be employed.

[13]    Consultation must be about the possible need for redundancies and the means of minimising their effect. Clause 32.1 does not distinguish between voluntary and forced redundancies. The possible need for redundancies and their effect relates to both the circumstances of employees who may volunteer for redundancy and those who will remain in employment. In particular, I accept that the composition of the workforce which will remain after the redundancies are implemented and the units which comprise that workforce is of vital concern to persons who will remain in employment.

[Emphasis added]

57    The Deputy President concluded that BHP Coal had not met its obligations to consult in relation to redundancies. On 24 March 2014, the industrial commission made the following orders in respect of the Saraji Mine dispute:

1.    BHP Coal Pty Ltd refrain from terminating the employment of any employees covered by the BMA Enterprise Agreement 2012 engaged to work at the Saraji Mine on the basis of redundancy, voluntary or otherwise, until 5.45 pm on 28 March 2014.

2.    BHP Coal Pty Ltd provide to the Construction, Forestry, Mining and Energy Union (CFMEU); the Employee Representatives identified in the transcript of proceeds in C2014/3084; and Mr Chris Brodsky with the following information:

(a)    The number of surplus employees;

(b)    The roles, including the departments and where relevant, crews, in which those surplus employees are engaged;

(c)    The number of contractor and labour hire employees performing work in the affected departments and crews;

(d)    Details of reorganisation of work in the affected areas following the proposed voluntary redundancies; and

(e)    Details of any changes in the performance of work, or changes in the allocation of work, to employees, contractors, and labour hire workers, including which roles will be performed by each of those categories of workers following the proposed voluntary redundancies.

3.    That representatives of BHP Coal Pty Ltd make themselves available to meet with representatives of the CFMEU; the Employee Representatives; and Mr Brodsky at reasonable times, on three occasions from the date of this Order until 5.45 pm on 28 March 2014.

4.    That during the meetings in (3) BHP Coal Pty Ltd will provide to the CFMEU; the Employee Representatives; and Mr Brodsky, an opportunity to make suggestions on the number of redundancies and the effect that they will have on Employees.

58    Both before and after Mr Dow’s announcement of 23 September 2014, the terms of this order, in particular Order 2, as well as the industrial commission’s reasons, informed the understanding of the CFMEU and representatives of Employees at Mines as to what was entailed in respect of any required consultation for the purposes of cl 32.

59    While cl 47 of the Enterprise Agreement, set out above, gives “Consult” or “Consultation” a particular meaning for the purposes of that agreement, that meaning is not, in my view, at variance with a meaning which one might have given those words in any event, having regard to prior authority. I had occasion to consider that meaning in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (2010) 198 IR 382 in which, at 395, [44] - [45], I observed:

44    … A key element of that content is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.

45    To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation”. …

An appeal from this judgment was subsequently dismissed by the Full Court.

60    In the present case, it is necessary not just to remind oneself that a person’s right to be consulted does not confer any right of veto. It is also necessary to understand that the cl 47 definition affirms what an ordinary understanding of the word, “consult” would in any event suggest, which is that the obligation to consult does not carry with it any obligation either to seek or to reach agreement on the subject for consultation. Consultation is not an exercise in collaborative decision-making. All that is necessary is that a genuine opportunity to be heard about the nominated subjects be extended to those required to be consulted before any final decision is made. And it bears repeating in this case that that final decision is not the existence of the particular surplus. That genuine opportunity entails furnishing such information about the occasion for consultation as is reasonably necessary for the making of suggestions in respect of the subject for consultation and being receptive to any resultant suggestions. It does not mean that one cannot approach consultation with a particular outcome in mind, only that one’s mind not be unduly fixed.

61    In this case, Mr McKenzie gave evidence, which I accept, that he approached consultation “with the view that it was very likely that there would be redundancies”. He (and thus BHP Coal) was entitled to approach the mandated process of consultation with this view. Indeed, it would have struck me as odd if a person of his seniority and with his responsibilities had not given much studied forethought indeed to the likely ramifications of an approval decision by Mr Dow. I do not regard it as a necessary corollary of these conclusions about Mr McKenzie that the CFMEU has thereby proved each or any of the alleged contraventions by BHP Coal.

62    An assertion by or on behalf of the person subject to an obligation to consult as to an absence of an unduly fixed mind is relevant but hardly conclusive as to the existence of a genuine opportunity. Whether a genuine opportunity has been extended is to be determined objectively in the circumstances of a particular case, of which such an assertion is but one. In this case, that requires an assessment of a continuum which commenced on 23 September 2014 but did not conclude until December 2014. It would be quite wrong to determine whether consultation had occurred by a piecemeal examination of events.

63    The express subject for consultation, supplied by cl 32.1, is, “about the possible need for redundancies, and, if so:

(a)    the means of minimising the number of redundancies; and

(b)    the means of minimising the effect of the redundancies on Employees”.

The existence of the surplus, per se, is not a specified subject for consultation. Rather, as I have already stated, it is a condition precedent to any obligation arising from cl 32.1 to consult. The primary subject for consultation is the possibility of a need for redundancies as a result of the identification of the surplus. Contingent upon such a possibility, the two means mentioned in cl 32.1 are also subjects for consultation.

64    I accept, as did Deputy President Asbury, that the “possible need for redundancies” in cl 32.1 does, read in context and as a matter of ordinary language, embrace both voluntary and forced redundancies. But it does not follow from this that, in the application of cl 32 to particular circumstances, there will, in each and every case, be inadequate consultation if that consultation does not embrace the specified alternative to forced or involuntary redundancies. In this case, and from the very outset, BHP Coal had, as it was entitled so to do, unilaterally foreclosed as an option of which it might avail, forced redundancies. Hardly surprisingly, the evidence is that neither the CFMEU nor any Employee Representative requested BHP Coal, at any stage on or after 23 September 2014, to consider forced redundancies of EA Employees. It necessarily follows that, in the application of cl 32 to the facts of the present case, there was no need for consultation to embrace the possibility of forced redundancies or the related “first step” alternative of removal of contractors and labour hire or to entail a related provision of information.

65    In cl 32.2 are to be found two specified means of minimising the number of redundancies resulting from the surplus namely, redeployment (cl 32.2(b)) and transfer (cl 32.2(c)). Also specified in cl 32.2, by cl 32.2(a), is the type of redundancy (voluntary) to which resort must first be had in order to address any surplus if the other two specified means of minimising are inapplicable or insufficient to address the entire surplus. Contingently, each of these, too, is therefore a subject for consultation. Removal of contractors and labour hire is not posited as an alternative to voluntary redundancies.

66    Clause 32.3 makes removal of contractors and labour hire an alternative to be considered in lieu of forced, not voluntary, redundancies. The Enterprise Agreement, by cl 32.3, only posits forced redundancies if the options specified in cl 32.2 are insufficient to address the surplus. And cl 32.3 does no more than posit that forced redundancies “may be considered”. Here, as already noted, BHP Coal had, as a matter of policy, eschewed the contingency of resort to forced redundancies in the event that the options offered by cl 32.2 proved insufficient to address the identified surplus. There was thus no work for the cl 32.3 specified removal of contractors and labour hire as a preferred alternative to forced redundancies to do.

67    It does not follow that removal of contractors and labour hire could not, to start with, be raised voluntarily as an alternative “means of minimising the number of redundancies” but BHP Coal would not be obliged by the Enterprise Agreement first to consult about that means as a way of addressing the identified surplus or then to use that means. That cl 32.3 makes removal of contractors and labour hire a preferred alternative to, or “first step” before, forced redundancies does mean that, when the Enterprise Agreement is read as a whole, BHP Coal’s use of contractors is not completely free of fetter but that fetter only becomes relevant if resort to the means mentioned in cl 32.2 has proved insufficient and forced redundancies are then being considered. More particularly, and this entails a rejection of a construction of cl 32 promoted by the CFMEU, “the possible need for redundancies” is not a gateway via which a managerial determination that a relevant surplus exists is itself a subject about which BHP Coal is obliged by cl 32 to consult. The “possible need for redundancies” is a sequel to a managerially determined surplus.

68    The orders which the industrial commission made in the earlier Saraji Mine case were necessarily considered to be sufficient unto the day to resolve the dispute with which Deputy President Asbury was then confronted. It does not follow that they were of a universal charter, uncritically to be adopted in the circumstances of a case where forced redundancies were never an option or which was in a different stage of workplace progression after the identification of a surplus.

69    This said, on the evidence, and as I have stated above, those earlier industrial commission orders informed the thinking of the CFMEU officials as to the information which BHP Coal ought to furnish for the purpose of cl 32 consultation. As so informed, the CFMEU was mistaken as to the aptness of those orders as a guide in the circumstances of the present case but it was, unquestionably, acting in good faith. It is to be remembered that what governed the rights and obligations of the parties to the Enterprise Agreement was not those orders but the terms of that agreement. The industrial commission’s orders do not carry with them the consequence that, in the circumstances of this case, any rebuffing of a suggestion that minimising redundancies occur first by removal of contractors and labour hire is to be equated with a contravention by BHP Coal of its cl 32 consultation obligation.

70    In his affidavit evidence, Mr McKenzie qualified the overall surplus of budgeted positions and each CQ Mine specific surplus figure with the adjective, “approximately”. At the same time, he stated that the minutes of the meeting on 23 September 2014 were accurate. These do not contain such a qualification and neither do the slides in the PowerPoint presentation, “Review of Operations “Accelerate 2020”. It is this presentation and those minutes which are contemporaneous with events. For that reason, I prefer them. I do not accept that they were presented as “approximate”, whatever may have been in Mr McKenzie’s mind, based on his HR knowledge, as to their being an approximation. In my view, the public identification of a surplus of EA Employees on 23 September 2014 meant that BHP Coal became, that day, subject to an obligation to consult in the way described about these several subjects.

71    That was not the only consultation obligation to which BHP Coal became subject that day. The creation of Mine Services Departments was, for the purposes of cl 15 of the Enterprise Agreement, a “major workplace change”. This change was pervasive, rather than confined to a single mine. Further, the class of persons with whom cl 15 mandated consultation was, correspondingly, wider than just the permanent Employees and Employee Representatives at a single mine as mandated by cl 32.1.

72    It is plain from Mr McKenzie’s evidence that he was aware that the content of the 23 September 2014 decision meant that BHP Coal had become subject to these different consultation obligations. The minutes of the meeting in Brisbane that day show as much. He determined upon a resultant meetings strategy whereby, apart from the State-wide meeting held that day, a combined consultation group would be formed and meet at BMA’s Central Queensland office. Apart from employer representatives, this consultation group was to consist of an Employee Representative who was to be nominated by employees at each of the CQ Mines or who were at a particular such mine and a union officer or delegate who had provided written notification to the Human Resources Manager for that mine that they were the Employee Representative for that mine. In addition, one State-level official from each of the affected unions, including the CFMEU, was to be an attendee at this central consultation group. Mr McKenzie outlined this meeting strategy on 23 September 2014 at the Brisbane meeting. He specified “this coming Thursday” (25 September 2014) as the date for the first such central consultation group meeting. In the email (earlier referred to) which he sent later that day, Mr McKenzie also confirmed that the first such meeting would be held that day.

73    While the obligation cast on BHP Coal by cl 32.1 of the Enterprise Agreement arose as soon as it identified on 23 September 2014 that a surplus of permanent Employees had arisen at each of the CQ Mines that could not be addressed through natural attrition, that did not mean that it was required immediately to consult with Employee Representatives at each Mine on the nominated subjects, only that such consultation occur prior to the reaching of any settled decisions by BHP Coal as to the fate of EA Employees. Further, BHP Coal was entitled to adopt a consultation compliance strategy which sought to ensure that it complied both with its cl 32.1 consultation obligation as well as its separate, although not unrelated, cl 15 consultation obligation. This, I find, was the strategy which underpinned the provision that Mr McKenzie made for a central, combined consultation group and site-specific consultations with Employee Representatives. He envisaged that the former would evolve naturally into the latter. There was nothing in the Enterprise Agreement which prevented the adoption of such a strategy.

74    I turn then to a consideration of the continuum which commenced on 23 September 2014 and concluded in December 2014.

75    I have already referred to the meeting held in Brisbane on 23 September 2014. That same day, each of the General Managers at, materially, each of the CQ Mines held a meeting with employees rostered to work at those mines on that day so as to brief them on Mr Dow’s decision. The PowerPoint presentation, “Review of Operations “Accelerate 2020” (adapted so as to be site specific) was used by them for this purpose (and there was a rolling programme of such briefings to reach those not then rostered). At the same time, an “Information Pack” comprising a letter in template form, signed by the relevant General Manager and a document containing apprehended questions and related answers was provided to attendees. This template letter and the Information Pack also formed part of what Mr McKenzie sent to the attending unions after the Brisbane meeting that day. For the purpose of addressing each such meeting, each General Manager was supplied with speaking notes about the decision. Mr McKenzie used such notes that day for the purpose of the Brisbane meeting. These were settled in advance of the announcement of Mr Dow’s decision. It is inherently likely that each mine General Manager used them for the purpose of addressing each meeting.

76    In the week following the 23 September 2014 meetings in Brisbane and at the CQ Mines, BHP Coal sent to each of the employees who had not attended the mine site meetings a copy of the “Information Packs”.

77    As planned, a combined meeting with Employee Representatives from each of the CQ Mines and State level union representatives was held at BMA’s Central Queensland office on 25 September 2014 (First Combined Consultation Meeting). Mr McKenzie, Ms Wall and Mr Brandon Craig, BMA’s Head of Production (Mining) represented BHP Coal. For the CFMEU, Mr Brodsky was the State level representative in attendance. The Employee Representatives in attendance were:

(a)    Saraji Mine – Mr Ken Ingrey;

(b)    Goonyella Riverside Mine – Mr Russell Robertson (one and the same as the Russell Robinson referred to in Mr McKenzie’s affidavit of 4 December 2014, filed on 16 December 2014);

(c)    Peak Downs Mine – Mr Scott Leggett;

(d)    Blackwater Mine – Mr Greg Donohue.

78    As well as from Mr Brodsky, I had the benefit of evidence from each of these gentlemen. I have not found it necessary in dealing with the submissions of the parties, to refer in detail to the evidence from these gentlemen, though I have taken it into account. I have made such particular reference to it as I consider necessary.

79    For example, I accept Mr Donohue’s evidence that, in the course of a consultation meeting, he posed this question, “Will any contractors be removed?” and that a Mr Greg Hamilton made this response on behalf of BHP Coal, “No. We will deal with the contractors later with the contracting companies; the voluntary redundancies will be employees.” This evidence must not be considered piecemeal or out of context. Considered in the context of all of BHP Coal’s corporate behaviour on and from 23 September 2014 until 4 December 2014, I regard the response as consistent with a settled policy position which had foreclosed forced redundancies and the related “first step” of considering removal or contractors or labour hire and doing nothing more than highlighting that any redundancies would be voluntary.

80    Subsequent such meetings were held at that location on the following date:

(a)    1 October 2014 (Second Combined Consultation Meeting);

(b)    8 October 2014 (Third Combined Consultation Meeting);

(c)    15 October 2014 (Fourth Combined Consultation Meeting).

81    Apart from these meetings, BHP Coal conducted site-specific meetings with Employee Representatives on the following dates:

(a)    21 October 2014 - Goonyella Riverside Mine and Peak Downs Mine (First Site-Specific Meetings);

(b)    22 October 2014 - Saraji Mine and Blackwater Mine (First Site-Specific Meetings);

(c)    3 November 2014 - Goonyella Riverside Mine and Peak Downs Mine (Second Site-Specific Meetings);

(d)    4 November 2014 - Saraji Mine and Blackwater Mine (Second Site-Specific Meetings);

(e)    4 December 2014 – each of the CQ Mines – with CFMEU Employee Representatives (separate meetings were held on 2 December 2014 with AMWU and CEPU Employee Representatives for the Goonyella Riverside Mine and the Peak Downs Mine and on 3 December 2014 AMWU and CEPU Employee Representatives for the Saraji Mine and the Blackwater Mine) (each, Third Site-Specific Meetings).

82    Mr Simon West, a CFMEU member, attended the 21 October and 3 November 2014 site specific meetings at the Goonyella Riverside Mine as an Employee Representative. I also had the benefit of evidence from Mr West.

83    Arising from and in relation to each of these meetings, there was a considerable and frequent exchange of email correspondence as between BHP Coal and attendees or their unions. This correspondence was tendered in evidence. Also tendered in evidence were the presentations made at these meetings, transcripts of the meetings and documents furnished by BHP Coal for the purpose of a particular meeting summarising issues raised at a previous meeting and its response to those issues. At each combined or site-specific meeting following the First Combined Consultation Meeting on 25 September, BHP Coal also furnished to attendees a breakdown of expressions of interest in voluntary redundancy received and later applications for voluntary redundancy, broken down by each Department at each Mine.

84    To describe all of this in detail would add great length but not ready comprehensibility to this judgment. Having considered this material, a fair summary of the particular additional materials furnished by BHP Coal at particular later meetings or, on occasion, directly to EA Employees was, in my view, offered by BHP Coal in its submissions. The following is, with some adaptation, adopted from those submissions:

85    Following the First Combined Consultation Meeting and at the request of the CFMEU, Mr McKenzie sent to the CFMEU copies of organisational charts as at 26 September 2014 for relevant departments at the CQ Mines from BHP Coal’s “lSAP system”.

86    At the Third Combined Consultation Meeting on 8 October 2014, the attendees were provided with the following in a printout of a presentation entitled “Consultation Meeting - 8th October 2014”:

(a)    information “broken down by department and by functional work area”;

(b)    information “as to the current number of budgeted positions in each functional work area”;

(c)    information “as to the number of employees covered by the Enterprise Agreement as at that time” in each functional work area at each of the mines;

(d)    information “as to the number of contractor and labour hire workers who were engaged in [each] functional work area” at each of the mines;

(e)    information “as to the number of budgeted positions there would be in each functional work area at the end of the restructure” ; and

(f)    information “as to the difference between the current and the future number of budgeted positions in each functional work area” at each of the mines.

87    Also provided to attendees at the Third Combined Consultation Meeting was a handout confirming the numbers of ‘core contractors’ (being contractors engaged to perform work that is part of BMA’s defined organisational structure). This included labour hire employees in each crew for each Department at each of the Mines as at 25 September 2014. This information was “exactly the information” that Mr West stated was needed for the purposes of the consultation.

88    At the Fourth Combined Consultation Meeting on 15 October 2014, BHP Coal provided attendees with a copy of a document entitled “Listing of Service Contractors - Current as at l0th October 2014 – With Site Accreditations”.

89    In response to assertions that “vacancies” existed at the Mines at each of the First Site-Based Consultation Meetings, BHP Coal provided Employee Representatives with details of current “vacancies” in budgeted positions in each functional work area in each Department at each of the Mines. Some minor errors were subsequently detected by BHP Coal in this information. These errors were corrected by BHP Coal in a presentation entitled “Consultation Meeting - 15th October 2014”, which was provided by it to attendees at the Fourth Combined Consultation Meeting on 15 October 2014.

90    On and from about 11 November 2014 and in accordance with the usual communications practices at each of the CQ Mines, copies of the following documents were distributed to EA Employees at each of those Mines:

(a)    a consultation brief entitled “Employee Preference - Redeployment & Transfer”, which attached a copy of the Employee Preference Form for Redeployment and Transfer; and

(b)    a questions and answer document entitled “Employee Preference - Redeployment & Transfer”.

91    At the Third Site-Based Consultation Meetings on each of 2 and 3 December 2014, BHP Coal provided attendees with copies of a presentation entitled “Consultation Meeting - 2nd & 3rd December 2014”, specially tailored so as to be mine-specific (“2 and 3 December Presentation”). The 2 and 3 December Presentation contained:

(a)    an update on voluntary redundancies, redeployments and transfers as at 28 November 2014;

(b)    the final number of applications for voluntary redundancies (subject to any late applications); and

(c)    the final number of redeployments and transfers, for each of the CQ Mines, including on a departmental and functional work area level. [No-one at the meetings on 2 and 3 December 2014, or afterwards, asked for that information to be further broken down to a crew level.]

(d)    BHP Coal’s response to the proposals, thoughts and ideas raised by Employee Representatives during the Second Site-Based Consultation Meetings, including the reasons for those response; and

(e)    next steps in the process.

92    Each 2 and 3 December Presentation contained: “similar information” for each of the CQ Mines. Each respectively addressed “how many applications for voluntary redundancy had been made in each functional work area in each department” at the particular mine and identified “how many workers had been transferred into and out of and redeployed into and out of each functional work area in each department” at that particular mine. For each Mine, the presentation identified “the number of workers engaged through contractors or labour hire who would remain at the end of the process in each functional work area in each department” and also “the variance or difference between the position at the end of the process in each functional work area and the starting position before the process began”.

93    At the Third CFMEU Site-Based Consultation Meeting on 4 December 2014, BHP Coal provided attendees with a presentation titled “Consultation Meeting – 4 December 2014”. This detailed an overall position in respect of each of the CQ Mines (4 December Presentation). In addition, the respective Employee Representatives were provided at this meeting with a hard copy of the relevant pages of the 2 and 3 December Presentation relating to their particular mine.

94    Between 23 September 2014 and 4 December 2014, BHP Coal canvassed the workforce of EA employees at the CQ Mines for interest in the acceptance of voluntary redundancy. That it did this over the period when the above-mentioned meetings were held does not lead to a conclusion that it was not engaged in a process of compliant consultation during that period. Voluntary redundancy was one of the alternatives offered by cl 32.2. Unless and until the level of interest and related skills mix of those interested in voluntary redundancy was known, the extent to which this alternative was viable, as opposed to the others offered by cl 32.2, could only ever be the subject of consultative discussion in the abstract. And the same applies in relation to the composition of the “Future Work Area Mix” or “Future State” as it was sometimes termed of the crews at the CQ Mines.

95    BHP Coal submitted and, based on Mr McKenzie’s evidence I find, that, over the course of the various consultation meetings which occurred between 23 September 2014 and 4 December 2014, it accepted and implemented suggestions that it should: (a) review the number of the surplus in the Maintenance Department at Goonyella Riverside, make alterations to the variance and provide further particulars of the surplus in the Maintenance Departments crews at each of the Mines; (b) implement an expression of interest process for redeployment and transfer, including a process for providing an ability for employees to express interest in a voluntary transfer to another Mine; and (c) allow late applications for voluntary redundancy, including providing for a further opportunity to apply for voluntary redundancy once EA Employees were informed of their transfer or redeployment.

96    These instances exemplify Mr McKenzie’s close engagement with and earnest endeavours to ensure BHP Coal complied with its consultation obligation. As occasion required, he took up suggestions made during the course of the various consultation meetings, engaged his superiors and other relevant personnel within BMA and BHP Coal in the analysis of those suggestions and ensured that the requisite feedback was provided. The evidence discloses that, over the course of the consultation meetings mentioned above and in related exchanges of correspondence, both he and other representatives of BMA or BHP Coal were receptive to suggestions. They were receptive beyond topics listed as meeting agenda items. Such extended discussion was foreclosed only where a topic had already been raised and considered or where, on any view, it was just irrelevant.

97    On a number of occasions over the consultation meetings between 23 September and 4 December 2014, BHP Coal did, via Mr McKenzie, decline to provide information to other meeting participants on the basis of commercial confidentiality. The subjects in respect of which such confidentiality was claimed were accurately summarised by BHP Coal in its submissions as follows:

(a)    a copy of the BMA “5 year plan”;

(b)    identification of the areas of the operations that are subject to ongoing review and “what the ‘target’ operational costs and increased productivity levels are”;

(c)    the “comparison over the last 12 months in respect to revenue received for coal and that being received currently”;

(d)    the “overall mine cash costs for the respective mines and what they have to be reduced to for the operations to remain viable”;

(e)    the “‘high fixed costs’ ... that are referred to on slide 6 of the initial presentation ‘Central Queensland Operational Review’” and the information relied on by the respondent in stating that the mines will be more efficiently and effectively operated;

(f)    the “comparison between the inputs costs over the last 12 months and what is being projected going forward”;

(g)    the “current tonnes per man output annually for the mine”;

(h)    the “current maintenance costs in the mine and what do they need to be reduced to”;

(i)    the “current production costs in the mine and what do they need to be reduced to”;

(j)    the costs savings in using labour hire or contractors instead of EA Employees;

(k)    a detailed explanation of “the current financial situation of the mine”, “the operating costs needed to be achieved to maintain the viability of the mine based on the current exchange rate, coal prices and forecast saleable tonnes including the number of permanent employees ... and equipment numbers and configuration” and “the approved operational parameters for the mine going forward based on the current exchange rate, coal prices and forecast saleable tonnes including the numbers of permanent employees ... and equipment numbers and configuration”; and

(I)    “At least one alternative operating model for the mine” based on “changes in the exchange rates or further falls in the coal price” and “the current exchange rate, coal prices and increased forecast saleable tonnes” including the number of “permanent employees ... and equipment numbers and configuration”.

98    It is to be remembered that the meetings and related consultation strategy upon which Mr McKenzie settled was designed to discharge the consultation obligations to which BHP Coal had become subject under both cl 15, as well as cl 32. And cl 15 of the Enterprise Agreement, insofar as it adopts the model consultation clause, contains an express reservation in respect of the provision of “confidential or commercially sensitive information” (para (6) of the Model Clause). Just to recite the above subjects is to understand how each might, without artifice or pretence, include information which was confidential or commercially sensitive (or both). Clause 32 does not contain a corresponding reservation in respect of the disclosure of confidential or commercially sensitive information. It is not necessary in this instance to decide whether, as well it might, business common sense would dictate that such a reservation is necessarily to be implied. That is because a contravention of a consultation obligation is not proved by a failure to provide each and every item of information requested. What is necessary is an examination of the whole of the circumstances, including the nature and extent of information provided and not provided, so as to determine, objectively, whether the requisite genuine opportunity has been extended. BHP Coal in this case provided ample information over the course of the period from 23 September 2014 to 4 December 2014, at the above meetings and otherwise to serve the end of extending a genuine opportunity. I can well see that the CFMEU had an interest in obtaining the requested information but it does not follow that the frustration of that interest for reasons of confidentiality or commercial sensitivity entailed a breach of the cl 32 consultation obligation by BHP Coal.

99    Another feature which underpinned each of the meetings which occurred between 23 September 2014 and 4 December 2014 was that BHP Coal and the CFMEU, or members of that union who were attending Employee Representatives, approached those meetings with very different positions as to the operation of cl 32 of the Enterprise Agreement in the prevailing circumstances. BHP Coal’s approach, manifested by Mr McKenzie, was that it was its managerial prerogative to determine the existence of the surplus and that it was not obliged, given that it had, as a matter of policy, foreclosed forced redundancies, to give preference to termination of contract or labour hire workers over the voluntary redundancy of EA Employees. The CFMEU, on the other hand, especially exemplified by Mr Brodsky but also Mr Ingrey, had a deep and genuinely held antipathy to “casualisation” or a reduction of permanent positions and use of contractors or labour hire as alternatives. It was further the CFMEU’s position that a surplus fell for determination only after a reduction of contractor or labour hire. This difference is nicely illustrated by the following passage from Mr Brodsky’s evidence:

Q:    So far as the argument was that the respondent had a legal obligation to remove contractors or labour hire workers before offering or giving voluntary redundancy to any employees covered by the Enterprise Agreement, what was involved in that argument was the proposition that the Enterprise Agreement required that; is that right?---That's correct.

And that was an argument that was advanced on more than one occasion in the course of combined consultation meetings. Do you agree?---Agree.

And it was an argument that was advanced on more than one occasion so far as you're aware from reports that you received by employee representatives during site based consultation meetings?---Agree.

Do you agree?---Agree.

Yes. And so far as the combined consultation meetings were concerned, the respondent made it perfectly plain, did it not, that it did not agree with that argument?--- It did.

The respondent explained to you in detail how it considered the Enterprise Agreement worked in that regard; do you agree?---Agree .

Yes. You weren't persuaded by the respondent's arguments as to the way the Enterprise Agreement worked; do you agree with that?---Agree.

Yes. And still so far as the combined consultation meetings are concerned, you and your union's representatives in those meetings were given every opportunity to advance your arguments as to the way the Enterprise Agreement worked on this point. Do you agree?--­ Agree.

What you ended up with at the end of the discussion on this question in the combined consultation meetings was a disagreement about the way in which the Enterprise Agreement operated. Do you agree?---Agree.

A disagreement that persisted although both sides of the argument had ventilated their arguments fully. Do you agree?---Ventilated for sure. Not fully, but ventilated.

Well, no one shut you off, did they, on this point?---No.

No one ever said to you or, so far as you're aware, any of your union's representatives during the combined consultation meetings, “Well, you can't say anything more in support of that proposition”?---No, there were occasions where it was shut down.

And we will find those in the transcript, will we?---I'm sure you will.

Yes. All right. If they occurred. Tell me, did you conclude your participation - your personal participation in the combined consultation meetings feeling that you had not ventilated any argument that you could think of in support of the proposal or the proposition that the respondent had a legal obligation to first remove contractor or labour hire workers?---No. No, I hadn't.

You had said everything you could think of; do you agree?---To- to- to- to the best of my ability at that point, yes.

100    This exchange also illustrates BHP Coal’s general approach to its perceived consultation obligation. It is true that Mr McKenzie was unaccepting of the notion that BHP Coal was obliged to consider “rosters, reduced hours etc” before determining that there was the requisite surplus. An example of this was offered in Mr Ingrey’s evidence as to the First Site-Specific Meeting at the Saraji Mine on 22 October 2014, which I accept in this regard. However, on the construction of cl 32 which I favour, he was entitled to be unaccepting. Further, notwithstanding his view as to the absence of corporate obligation in that regard, I accept Mr McKenzie’s evidence that he kept an open mind about and did give careful consideration to the CFMEU-promoted proposition that the surplus ought first to be addressed by the removal of contractors and labour hire before voluntary redundancies were offered. It is just that he did not find that particular proposition persuasive. Acceptance of a proffered proposition is no part of a consultation obligation. BHP Coal was not rigidly dismissive of any displacement of contractors or labour hire. It did come to displace “core contractors” (being contractors and labour hire engaged to perform work that is part of the defined organisational structures at the CQ Mines) so as to address the balance of the surplus after the process of voluntary redundancy, redeployment and transfer of EA Employees had occurred. BHP Coal did consult about “displacing contractor employees or labour hire employees as a means of minimising the number or effect of redundancies of EA Employees”.

101    I have already held that, in the absence of some more specific prescription, discharging a consultation obligation entails the furnishing of such information about the occasion for consultation as is necessary for the making of suggestions in respect of the subject for consultation and being receptive to any resultant suggestions. Clause 32 contains no specific prescription. It most emphatically does not mandate that BHP Coal must provide information in the same format as the “Saraji Zero Based Build Presentation” and/or the “Mining - Fleet Coal” document. To the extent that the CFMEU’s case proceeded on the footing that it entailed such an obligation it is misconceived and must be rejected.

102    The origins of an expectation of an obligation to furnish information in the form of the “Mining - Fleet Coal” document lie in the industrial commission proceedings in March 2014. At the time when information in that format came to be ordered in relation to that earlier dispute, there was a certainty as to how many and which employees would be made voluntarily redundant, and from which departments and crews they would come. It was only in December 2014 that BHP Coal was approaching this level of certainty and it was by this stage that the CFMEU had formed the view that the company was in breach of its cl 32 consultation obligation. That is not to say that BHP Coal’s approach to the provision of information after 23 September 2014 was uninformed by its experience in the industrial commission earlier that year or that the approach of the CFMEU and its member attendees was similarly uniformed (Mr Leggett’s requests for crew specific information were, I find, made at meetings he attended, for example on 3 November 2014, and exemplify this earlier experience). The information provided in the Future Work Area Mix Presentations for “each functional work area in each department at each mine that was affected by the proposal which was the subject of this consultation”, provided to the Employee Representatives and State-level representatives by Mr McKenzie at the First Combined Consultation Meeting on 25 September 2014, was the direct result of BHP Coal’s experience of those earlier industrial commission proceedings. That is why one finds in these presentations information about the identification of each crew in each functional work area in each Department at each of the CQ Mines, the current number of budgeted positions in each crew in each functional work area in each Department in each of the CQ Mines, the number of budgeted positions that would be required in each crew in each functional work area in each Department in each of the CQ Mines in the future, the variance between the current number of budgeted positions and the future number of budgeted positions in each crew in each functional work area in each Department in each of the CQ Mines and the future skills mix required for each functional work area at each of the CQ Mines (including a breakdown of the equipment and the number of crews required to operate that equipment in the future for each mine site process, adjusted to reflect the fact that employees may be required to have more than one skill).

103    On the subject of voluntary redundancies, BHP Coal progressively updated meeting attendees as to the number of expressions of interest for voluntary redundancies that had been received and the number of applications that had been received from EA Employees for voluntary redundancies (as applicable). These were broken down into each Department at each of the CQ Mines. At what proved to be the final Site-Based Consultation Meetings on 2, 3 and 4 December 2014, BHP Coal’s presentations included a breakdown of the number of voluntary redundancies, redeployments and transfers that it proposed to implement, including a breakdown for each Department at each of the CQ Mines. BHP Coal’s information did not then descend to crew-specific numbers because of an apprehension on the part of Mr McKenzie that this might occasion intimidation of individual employees. This was an industrial relations value judgment which he made. He was not called upon to reconsider this value judgment, because no request by the CFMEU or Employee Representatives for crew-specific numbers was then made. By that stage, the CFMEU had formed a view about breaches of the cl 32 consultation obligation and had chosen to institute the present proceedings instead of it and its member employees furthering a process of consultation in which BHP Coal was disposed to continue to engage.

104    There were two items of information that BHP Coal could not furnish with precision until the end of the voluntary redundancy process – the number of voluntary redundancies which would occur and, related to that, the number of contractors or labour hire employees who would be in each crew for each Department at each of the CQ Mines in the Future State. The number in the latter class was, on the evidence, inherently one which fluctuated over time but what the number might be, per Department in the proposed Future State at the CQ Mines, was dependent upon how many expressions of interest for voluntary redundancy were maintained and then accepted. Mr McKenzie’s statements about the impossibility of giving any earlier precision were not just honest; they stated a truth, inconvenient though that may have been for the CFMEU both during 2014 meetings and in the course of his cross-examination at the trial. More particularly, I consider it more likely than not, in light of that truth, that Mr McKenzie did voice that impossibility to Mr Donohue at some stage during the course of the meetings each attended. In making that finding, I have expressly taken into account the various meeting minutes and transcripts tendered in evidence. The minutes offer a summary and, though not mentioned in the transcripts, this does not negate the possibility of such an exchange having occurred before or after recording.

105    As to voluntary redundancies, Mr McKenzie was taxed in cross-examination about a letter dated 23 September 2014 which BHP Coal had sent to Centrelink. This letter was sent so as to ensure that BHP Coal complied with an obligation imposed by s 530 of the FWA, which provides, materially:

Employer to notify Centrelink of certain proposed dismissals

(1)    If an employer decides to dismiss 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons, the employer must give a written notice about the proposed dismissals to the Chief Executive Officer of the Commonwealth Services Delivery Agency (Centrelink).

(2)    The notice must be in the form (if any) prescribed by the regulations and set out:

(a)    the reasons for the dismissals; and

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

(c)    the time when, or the period over which, the employer intends to carry out the dismissals.

(3)    The notice must be given:

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

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

…

In that letter it was stated, “The reduction in EA employees is only intended to be effected through a process of voluntary redundancies.” This statement is consistent with an explanation which Mr McKenzie gave about the letter in the course of his cross-examination:

So we had made a decision that led to a surplus of 562 EA employees. We intended to consult about that. We had a preference and had openly stated our preference for voluntary redundancies. Out of an abundance of caution, we wrote to the CES, Centrelink, to advise them of potential dismissals, which included our non-EA employees. And it could be by way of - it would only (sic) by way of voluntary redundancy if there were dismissals. But through a consultation process that we intended to implement, that may alter.

The CFMEU invited me to conclude from the letter that BHP Coal had, from the outset, made a definite decision that the only option it would entertain was voluntary redundancies, to the exclusion of other options offered by cl 32. Read in isolation, I accept that this is an available inference about the letter. However, when I read it in the context of the events which evolved from meeting to meeting on and from 23 September 2014, the range of information provided at and between those meetings and consider the same in light of Mr McKenzie’s evidence and the statement quoted from the letter, this is not the conclusion which I reach about BHP Coal’s position as at 23 September 2014. All of these other events were not some form of elaborate charade. The “process of voluntary redundancies” upon which BHP Coal embarked on 23 September 2014 was one which, as it saw its obligations, necessarily entailed consultation about whether the addressing of its identified surplus would include voluntary redundancies. It certainly had a preference for these on that day but its actions thereafter are not consistent with any rigidity of corporate thinking in that regard. And it is also to be remembered that, in prospect on 23 September 2014, was not just the possible termination of EA Employees but other employees of BHP Coal. I accept the explanation which Mr McKenzie gave in cross-examination.

106    I have already referred above to other information provided by BHP Coal after 23 September 2014 but it also notably included: organisational charts current as at 26 September 2014; “Future State” organisational charts; “Skills Mix” documents for each of the CQ Mines (these set out a list of the number and nature of the skills required in each functional work area at each of those mines); a detailed breakdown of EA Employees and core contractors (including labour hire) on each crew in the Departments at each of the CQ Mines; and details of the services contractors at each of the CQ Mines as at 10 October 2014.

107    On 21 and 22 October 2014, at the First Site-Based Consultation Meetings for each of the CQ Mines, and again on 3 and 4 November 2014 at the Second Site-Based Consultation Meetings Employee Representatives read out from a document a large number of questions. At each meeting, Mr McKenzie requested a copy of the document listing the questions. In respect of the First Site-Based Consultation Meetings, this request was satisfied either at or shortly after the meeting concerned. In respect of the Second Site-Based Consultation Meetings, the initial response given to him in respect of this request was a refusal on the basis that the document was protected by legal professional privilege. Insofar as the refusal related to the part read out at the meeting, its author was mistaken as to the continued subsistence of any such privilege in respect of that part. By reading out that part, any privilege had, to that extent, been waived. Be this as it may, on or about 27 November 2014 a document containing these questions was sent to Mr McKenzie. BHP Coal made a comprehensive written response to it on 1 December 2014.

108    It is a notable feature of the questions posed and that response that they traverse subjects already the subject of the provision of information by BHP Coal. In its submissions, BHP Coal invited me to conclude that these particular requests were, in the circumstances described, just an “evidence making tool to set up the present proceedings”. It is unnecessary to reach such a conclusion in order to determine the issues on the pleadings. At the time when the questions were posed and for reasons already canvassed, the CFMEU, its officers and the Employee Representatives who were members of the Union were approaching the subject of what was entailed in the consultation obligation cast on BHP Coal by cl 32 on a particular basis. Instead of that invited by BHP Coal, the conclusion which I reach is that, between 23 September 2014 and 4 December 2014, BHP Coal progressively furnished such information as was reasonably necessary to afford Employee Representatives a genuine opportunity to engage in consultation with it under cl 32 of the Enterprise Agreement.

109    The CFMEU submitted that, if any process of consultation had occurred between 23 September and 4 December 2014, it was conducted pursuant to cl 15, rather than cl 32, of the Enterprise Agreement. That is not so.

110    BHP Coal did honour and observe the cl 32 consultation obligation to which it was subject. It is just that it did that in a staged way on and from 23 September 2014. The employee briefings and the combined consultation meetings which it then initiated and conducted until mid-October 2014 fed into and complemented the series of site-specific meetings which it progressively conducted on and from later that month until early December 2014. I have already described in detail above the various combined and site-specific meetings which were held, the exchanges which occurred and the information which was provided either at or as a sequel to such meetings.

111    Mr McKenzie set the tone so far as the position of BHP Coal was concerned throughout this process. Especially having seen him give evidence, I am not just reasonably satisfied but convinced to the point of demonstration that that tone was that, while the identification of a surplus was (permissibly) considered to be a matter for managerial value judgment and while voluntary redundancies were always considered to be probably likely (which explains why BHP Coal was “focussed” on redundancies), there was also always a receptiveness to alternative suggestions, even if these were beyond the strict letter of cl 32.

112    Clause 32 requires that the consultation be “with Employees and their Employee Representatives”. The mere provision of information to employees is not, of course, consultation, especially if what is conveyed is just descriptive of a fait accompli. But that is not what occurred here. BHP Coal provided information to all of its employees and was receptive to individual feedback but, between 23 September 2014 and 4 December 2014, the practical channels of communication were promoted to be, and I infer generally understood to be, via the meetings process or exchanges in between. Materially, the combined and then site-specific meetings did offer a genuine opportunity for non-managerial attendees to influence and to inform BHP Coal about the possible need for redundancies, voluntary redundancies, redeployments or transfers. And those non-managerial attendees included persons who were Employee Representatives. BHP Coal voluntarily foreclosed forced redundancies and thus all reasonable avenues to avoid those, including removal of contractors and labour hire but it nonetheless, materially via the meetings and in related exchanges, extended a genuine opportunity even to influence and inform it about how removal of contractors and labour hire might otherwise be an alternative.

113    The 4th of December 2014 brought to an end the process of consultation. By that stage, the CFMEU had formed the view that BHP Coal was in breach of its cl 32 consultation obligation in respect of EA Employees at each of the CQ Mines. Thereafter, voluntary redundancies, including of EA Employees, followed at each of the CQ Mines. And so did the present proceedings.

114    In the result and as to issues which emerge on the pleadings:

(a)    BHP Coal always treated the identification of a surplus of EA Employees as one for its determination but it was entitled by the Enterprise Agreement so to do;

(b)    as to that surplus, BHP Coal consulted with EA Employees and Employee Representatives with respect to the possible need for redundancies and the minimising of the same by voluntary redundancies, redeployments or transfers and did so against the background of having foreclosed to itself any ability to reduce the surplus by forced redundancies;

(c)    having excluded the option of forced redundancies, BHP Coal was not obliged to consider or consult about the specified alternative to this type of redundancy namely, displacing or reducing contractors or labour hire but nonetheless, in any event, offered a genuine opportunity to Employees and Employee Representatives to advance suggestions and influence it as to resort to such reduction or displacement to reduce the surplus or to minimise voluntary redundancies;

(d)    BHP Coal did offer a genuine opportunity to the CFMEU, Employee Representatives and Employees to make suggestions or influence it about the “Future State” document, even though cl 32 did not, in terms oblige that;

(e)    BHP Coal was not, by cl 32 and in the circumstances of this case, obliged to furnish information in the form of the “Mining – Fleet Coal” document, furnished as a sequel to the industrial commission proceeding in March 2014 although, as it happened, it did in the present case furnish to the CFMEU and Employee Representatives analogous information.

115    In the events which transpired, BHP Coal did not, for the reasons given, breach its cl 32 obligation as alleged by the CFMEU. The application must be dismissed.

116    For completeness, I should record that the CFMEU also sought in its submissions that I set aside an interlocutory costs order made during the course of the trial on 21 October 2015 in relation a failed application made by the CFMEU with respect to a notice to produce served on BHP Coal. I am not persuaded that I have any power to set aside that order. Assuming though that I do, I am not persuaded that it would be appropriate so to do. The letter from the CFMEU’s solicitors which covered the service of the notice to produce was cast in terms of the existence of an obligation and, when the CFMEU chose to bring on its application, BHP Coal disavowed any reliance on short service. There was no reliance by the CFMEU in the course of the hearing of the application on s 36 of the Evidence Act 1995 (Cth). Neither was there reference at the time by either party to McGrath v HNSW Pty Limited (No 2) [2015] FCA 442, a case which is, in any event, distinguishable on the facts from the present. I remain of the view, for the reasons expressed in the interlocutory judgment, that the effect of bringing on the application had the consequence, unreasonable in the circumstances, not just of interlocutory costs being incurred by BHP Coal, but costs being thrown away in the course of the trial which might otherwise have been directed towards the disposition of the substantive proceeding on the pleadings.

Associate:

Dated:    26 August 2016