Federal Court of Australia

Construction, Forestry, Maritime, Mining and Energy Union v OS MCAP Pty Ltd (No 2) [2022] FCA 132

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding is dismissed.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    In this proceeding, the applicant (the Union) alleges that the respondent, OS MCAP Pty Ltd, (OS):

(1)    contravened s 44 of the Fair Work Act 2009 (Cth) (the FWA), by contravening s 114 by requiring employees to work on the public holidays of 25 and 26 December 2019 (Christmas Day and Boxing Day respectively); and

(2)    contravened s 45 of the FWA, by contravening cl 27.4 of the Black Coal Mining Industry Award 2010 (the Award) by failing to pay the employees penalty rates for work performed on the two public holidays.

2    OS denies that it contravened s 114 of the FWA on the basis that the requirement that its employees work on Christmas Day and Boxing Day was reasonable. OS denies that it contravened cl 27.4 of the Award on the basis that it paid annualised salaries to the employees which adequately compensated them for working on the two public holidays.

3    I propose to proceed by:

(1)    describing the facts admitted and the issues in dispute on the pleadings;

(2)    describing and assessing the evidence;

(3)    setting out the relevant provisions of the FWA and the Award; and

(4)    considering the parties’ submissions.

The pleadings

4    OS provides production services to mining companies which are part of the “BHP Group”. The services involve OS’ employees operating mobile mining machinery to excavate and move earth.

5    OS provides its services to BM Alliance Coal Operations Pty Ltd (BMA) at the Daunia Mine, near Moranbah in central Queensland. OS’ employees at Daunia Mine are divided between “B Crew” and “D Crew” (also known as “B roster panel” and “D roster panel” respectively).

6    Between 21 and 27 August 2019, OS informed B Crew and D Crew that all but six employees from each crew would be required to work on Christmas Day and Boxing Day. They were informed that no additional monetary benefits would be paid.

7    Ultimately, OS authorised 25 employees to take leave on Christmas Day and Boxing Day. A number of other employees failed to attend work on those days without authorisation.

8    OS admits that approximately 85 of its employees worked at the Daunia Mine on Christmas Day and Boxing Day. Those employees are identified in a Notice to Admit. I will refer to the 85 employees who worked on Christmas Day and Boxing Day as the “employees”.

9    The Union’s Statement of Claim alleges that:

(1)    OS required the employees to work on Christmas Day and Boxing Day.

(2)    OS did not make any “reasonable request” that they work on those public holidays and thereby contravened s 114 of the FWA.

(3)    The employment of OS’s employees was covered by the Award. Clause 27.4 provides that an employee required to work on a public holiday is to be paid at double time for work performed during ordinary hours, and at treble time for work performed in excess of ordinary hours.

(4)    OS contravened s 45 of the FWA by failing to pay the employees for working on Christmas Day and Boxing Day at the rates prescribed under cl 27.4 of the Award.

10    OS’ Further Amended Defence alleges that the request or requirement that the relevant employees work on Christmas Day and Boxing Day was reasonable. In that respect OS relies upon the following claims:

(1)    OS’s business model and operational requirements at the Daunia Mine required its production workforce to operate 24 hours per day, 365 days per year.

(2)    The employees were aware, including before accepting their employment, of the requirement to work roster patterns which would include working on public holidays.

(3)    The employees were on “standing notice” of the requirement for them to work on public holidays falling within their normal roster.

(4)    The employees (other than those on leave) were rostered to work, and had worked, on other public holidays in 2019.

(5)    The employees had extensive advance notice in which to organise their personal circumstances, including family responsibilities.

(6)    The employees could reasonably expect that they may be required to work according to their normal roster pattern, which may include work on public holidays, including Christmas Day and Boxing Day.

(7)    The employees received compensation for, and a level of remuneration which reflected, the expectation that they may be required to work on public holidays.

(8)    OS took into account the particular personal circumstances of employees when considering whether to grant requests made by employees to not work on Christmas Day and Boxing Day.

11    In respect of the allegation of breach of s 45 of the FWA and cl 27.4 of the Award, the Further Amended Defence pleads that the employees were paid an annualised salary which satisfied all entitlements for work on public holidays.

12    The Amended Reply alleges that OS’ “business model” and the “operational requirements for work at the mine” did not require that the employees work on Christmas Day and Boxing Day; or, alternatively, the “business model” operated in an unreasonable manner. It is alleged more specifically that:

(1)    Prior to 2019, production operators at the Daunia Mine were not required to work on Christmas Day and Boxing Day;

(2)    There was no operational matter or circumstance which required that OS’ employees at the Daunia Mine be compelled to work on Christmas Day and Boxing Day;

(3)    OS advanced production targets to BMA based upon an assumption that the employees would work on Christmas Day and Boxing Day when there was no operational reason to adopt this assumption; and the production targets then set by BMA did not constitute a valid operational reason for requiring employees to work on those days.

(4)    The respondent failed to consider reasonable alternatives to requiring the employees to work on Christmas Day and Boxing Day, including seeking volunteers from the employees; offering incentives to encourage volunteers; utilising external labour hire companies; and making up any loss in production prior to or after Christmas Day and Boxing Day.

13    The Rejoinder asserts that OS did consider other reasonable alternatives to requesting the employees to work on Christmas Day and Boxing Day, but these were determined to be commercially unviable and/or practically unfeasible.

The evidence

14    OS employs production employees to operate mobile machinery, such as shovels, excavators, loaders and trucks. OS supplies its employees to a number of BHP operations in Australia, including BMA’s operation at the Daunia Mine. OS commenced at the Daunia Mine in April 2019.

15    There are four “crews” or “roster panels” at the Daunia Mine – known as A, B, C and D Crews. OS’ employees work on B Crew or D Crew. The employees on A Crew and C Crew are a mixture of employees of BMA and labour hire companies.

16    In December 2019, OS had about 168 production employees at the Daunia Mine, with 84 on each of B Crew and D Crew. The employees were rostered to work on a seven days on/seven days off roster, with rotating day and night shifts. Those on day shift would work from 6.00 am to 6.30 pm and those on night shift would work from 6.00 pm to 6.30 am. A Crew and C Crew would work on those weeks when B Crew and D Crew were off roster.

17    Since much of the parties’ submissions was concerned with the relationship between OS and BHP, it is necessary to consider the structure of the business known as “BHP” or “BHP Group”. That business consists of two “top level” entities – BHP Group Ltd in Australia and BHP Group Plc in the United Kingdom. The two entities share one Board of Directors and senior management team, and are managed as a single business.

18    OS was registered on 17 May 2018. BHP Group Ltd is the ultimate holding company of OS. BHP Group Ltd is also the sole shareholder in BHP Metcoal Holdings Pty Ltd.

19    BM Alliance Coal Operations Pty Ltd (BMA) operates the Daunia Mine. BMA is a vehicle for a joint venture between BHP Metcoal Holdings Pty Ltd and Mitsubishi Development Pty Ltd, which each own half of BMA’s shares.

20    OS contracted with BMA to provide production services to BMA pursuant to an agreement entitled “Framework Production Services Contract” (the Contract) dated 30 November 2018.

21    The Contract, in brief summary, contains clauses to the following effect:

(1)    Cl 3.3 provides that BMA may request services by giving OS a Site Work Package and that OS must perform its obligations under a Site Work Package issued by BMA.

(2)    Cl 3.3 also provides that, prior to issuing any Site Work Package, BMA must invite OS to submit a proposal. The proposal may be accepted or rejected by BMA.

(3)    Cl 5.1 provides that OS must perform the services described in the Site Work Package in accordance with the Contract and achieve the applicable Performance Requirement, which is defined to mean “Target Utilisation and Target Production Rate”, for a piece of equipment as set out in the Monthly Mine Plan.

(4)    Cl 8.1 provides that BMA will provide OS with a Monthly Mine Plan, which will specify the Performance Requirement, including the Target Utilisation Rate and the Target Production Rate for each piece of equipment.

(5)    Cl 10.1 provides that if OS’s performance of the services is such that the overall weighted average Target Utilisation Rate or Target Production Rate is not met, there may be consequences. The consequences depend on the extent of the shortfall, but may include OS having to submit and comply with a recovery plan, or mobilise additional equipment and personnel at OS’s cost; or BMA engaging other contractors, or ending the contract immediately.

22    BMA issued a Site Work Package on 30 November 2018 for OS to provide production services. Under the Site Work Package:

(1)    OS is required to operate specified mining equipment at the Daunia Mine.

(2)    Appendix A specifies 72 units of mobile mining equipment including shovels, excavators, loaders and trucks.

(3)    Appendix C states that OS will provide a specified number of appropriately skilled production personnel to safely and productively operate each piece of equipment.

(4)    Appendix G sets out the amounts to be paid to OS for the services.

(5)    Appendix I sets out the Performance Requirements, namely Target Utilisation and Target Production Rates, and the Performance Cap. OS cannot be required to exceed the Performance Cap.

(6)    The Target Utilisation Rates are expressed as a certain percentage use per month for each piece of equipment, and the Target Production Rates are expressed as Bank Cubic Metres (BCM) per hour, representing the amount of earth to be moved per hour.

23    On 29 November 2018, the day before the Contract was entered and the Site Work Package was issued, OS had put forward a business case called the “Engagement Approval Request” to BMA. I infer that the business case was the “proposal” referred to in cl 3.3 of the Contract. Stephen Cole, who is a director of OS and employed in the role of “General Manager Production”, was responsible for checking that the Target Utilisation and Target Production Rates proposed by OS were achievable.

24    Mr Cole’s evidence principally focuses upon the reasons why the utilisation and production targets put forward in the Engagement Approval Request were calculated on the basis of OS providing services 24 hours a day, 365 days a year; and why it was necessary for OS to require its employees to work on public holidays, including Christmas Day and Boxing Day.

25    Mr Cole deposes that in the Engagement Approval Request, the utilisation targets for each piece of equipment were calculated by starting with 8,760 calendar hours (24 hours per day x 365 days per year) as the total period of time within which OS was able to operate the equipment; deducting a number of hours based on assumptions of events that would prevent the operation of the equipment (taking into account previous average performance at the Daunia Mine, particularly weather delays); and then setting performance caps for each piece of equipment.

26    Mr Cole deposes that each month BMA prepares a Monthly Mine Plan (also known as a Short Range Forecast) which sets out the Target Utilisation and Target Production rates for the upcoming month. BMA determines the targets based upon OS’ annual Performance Cap, adjusted for key variables such as weather, crew communications and available equipment. OS provides some input into the process, but that input is not always accepted, and it is ultimately up to BMA to set the monthly Target Utilisation and Target Production Rates.

27    Mr Cole deposes that OS provided a commitment to BMA that it would provide production services at the Daunia Mine 24 hours a day, 365 days a year. As a result of that commitment, OS expected employees to work on Christmas Day and Boxing Day unless authorised to be absent from work. If the employees rostered did not work on Christmas Day and Boxing Day, the total calendar hours in which OS was able to operate machinery would be reduced by 48 hours. Mr Cole deposes that this would place OS at risk of not meeting its Target Utilisation and Target Production Rates if OS failed to recover this lost utilisation and production in the following months, and at risk of BMA exercising its contractual rights, including to terminate the contract.

28    OS provides mine site production services to the BHP Group across both coal and iron ore assets. Mr Cole’s evidence is that OS competes against third party providers and if it is not a more commercially attractive choice, it will not be awarded contracts. He deposes that there have been instances where OS has not been engaged as the service provider for a site or asset because it was not the most competitive option in the market.

29    Mr Cole’s evidence is that the more days OS is able to operate on a site, the higher the efficiency rate and the higher the production volume. He deposes that OS’ operational requirement to work 24 hours/365 days is necessary to make OS more competitive, as it contributes to OS’ BCM costs being lower than those of external third-party service providers. If OS is not operating on a particular day, it does not move the volumes of materials necessary to expose coal. However, OS’ operating costs continue to accrue regardless of whether or not its employees are present on the site. OS’ cost per BCM increases unless it is operating every day. Mr Cole also deposes that not operating 365 days a year carries opportunity costs because the client is not receiving the production volume that leads to revenue generation. Further, the client may be unable to capitalise on a sudden uplift in commodity prices because of lower production volumes on a particular day.

30    Mr Cole states that there are ancillary costs associated with logistics, travel and accommodation if OS does not operate 365 days a year. For example, if the employees do not work on Christmas Day and Boxing Day and those days fall mid-roster cycle, OS would need to organise extra buses to transport employees between the mine site and Mackay and subsidise more charter flights in and out of Mackay.

31    Mr Cole deposes that there are two possible alternatives to OS operating 365 days a year, which would achieve the same movement of production volume. The first would be to add more fleet and equipment by purchase or hire to “make up” for the lost days of work. However, this would add significant capital costs to the scope of the work. The alternative is to budget for and run a higher performance base throughout the year. However, there is no guarantee that a higher performance target is achievable and, based on assumptions already factored in (such as wet weather or maintenance of equipment), there is a risk to the viability to OS if it proposes unrealistic targets and does not deliver those targets. Mr Cole considers that the most viable and certain option is to operate the existing fleet and equipment for 365 days a year.

32    Mr Cole deposes that, in his view, an increased BCM cost due to not operating 365 days a year would have at least significantly undermined OS’ viability to be chosen for the scope of work at Daunia Mine. He makes this assessment, in part, because other third party service operators in the mining sector offer to provide services for 365 days a year.

33    Ana-Lisa Rodrigues Baptista is employed by OS as “Manager Production”. Her evidence is that, as part of the recruitment process, persons seeking employment with OS are required to attend an engagement centre. Ms Baptista attended a number of recruitment processes. She would inform the potential employees that OS would expect them to work on public holidays if they were rostered to work on those days; and that their annual salary built in compensation for working on public holidays. She states that potential employees would occasionally get a bit disgruntled because they would not be receiving separate penalty payments over and above their annual salary for working on public holidays. In response, she would say that OS operated 24 hours a day, 365 days a year, so that its rosters covered public holidays, and that compensation for public holiday work was built into their annual salary.

34    Ms Baptista also states that all new starters are required to attend an induction session prior to commencing work. She ran a number of those sessions after commencing her employment in July 2019. OS has a standard induction PowerPoint presentation which was shown during the induction sessions. The PowerPoint includes the following:

[OS’s] employees are rostered to work 24/7 365 days a year. This includes all public Holidays including Christmas and New Years [sic]. You may find this different than your host site (like many of your conditions).

35    Ms Baptista’s practice was to say words to the same effect at each induction she ran.

36    Ms Baptista deposes that in August 2019 she became aware that a lot of employees were starting to put in leave applications for Christmas Day and Boxing Day. The Site Work Package sets out a total leave allocation, being the maximum number of people which OS considers can be away on one day without having an adverse impact on OS’ ability to achieve its production and other targets. The Site Work Package provides for a maximum of seven employees per roster panel to be absent on planned leave at any one time and a contingency allocation of one employee per roster panel to be on unplanned leave at any one time. However, it is not uncommon to have more than one employee per crew absent on unplanned leave. Accordingly, Ms Baptista applies leave allocation numbers to allow more room for contingencies such that a maximum of six employees per crew may be absent on planned leave and there is a contingency allocation of two employees per crew to be absent on unplanned leave at any one time.

37    In about August 2019, Ms Baptista informed Brad Hyvonen, OS’ “Superintendent Production”, that OS could only approve six employees per crew to be absent from work on Christmas Day and Boxing Day. As more than six employees per roster panel had applied for leave on those dates, they discussed how they could decide who would be permitted to be absent from work.

38    Mr Hyvonen deposes that OS uses a standard form of employment contract which provides that the employees will be required to work on public holidays if rostered to do so. He also states that, upon commencing employment, the employees are sent OS’ Employee Handbook. They are also provided with a laminated roster card which displays a yearly calendar with the days or nights on which they are rostered to work across the year shaded in. For 2019, Christmas Day and Boxing Day were shaded in for all OS’ production employees.

39    Mr Hyvonen deposes that, during 2019, OS’ employees (other than those on leave) worked on 19 April 2019 (Good Friday), 20 April (the day after Good Friday), 21 April (Easter Sunday), 22 April (Easter Monday), and 6 May (Labour Day). Mr Hyvonen does not recall any employees raising any concerns about working on those public holidays.

40    Between 21 and 27 August 2019, Mr Hyvonen attended meetings with B Crew and D Crew. He told the employees that OS could only accommodate six employees from each roster panel being absent from work on Christmas Day and Boxing Day and that otherwise it was expected that the employees rostered to work on those days would attend work. He said that OS would probably draw names out of a hat to decide who would have those days off. He said that if the employees had any concerns, they should raise this with their supervisor. He also said that the employees’ annual salaries included compensation for working on Christmas Day and Boxing Day and that there would be no additional compensation for working on those days.

41    On 4 September 2019, Mr Hyvonen attended a meeting with B Crew. He displayed a PowerPoint presentation which contained the following words, which he read to the employees:

For Christmas and Boxing day this year, 6 people will be allowed to be away per crew.

As some employees already have approval to be absent on Christmas and Boxing day, there are 2 remaining spots left in B crew and 5 remaining spots left in D Crew.

To determine who is allowed to be away per crew, names will be pulled out in front of crew by 24/09/19. We believe this is the fairest approach.

Expressions of interest are to be submitted to your supervisor by 20/09/19.

In future years, people will be chosen by expressions of interest and picked in front of the crew, around July.

People will not be able to have XMAS off again for 2 yrs.

If you have any concerns, please raise these with your supervisor.

42    Later that day, Mr Hyvonen attended a meeting with D Crew and displayed the same PowerPoint presentation and said the same words.

43    Mr Hyvonen states that some employees raised concerns about not receiving separate, extra remuneration for working on the two public holidays.

44    In September 2019, Ms Baptista made a decision, given that more than six employees per roster panel had applied for leave, that OS would not plan for any unplanned leave on Christmas Day and Boxing Day and would instead allow eight employees per crew to be absent on those days.

45    On 10 September 2019, a drawing of names of the employees who would be permitted to take leave on Christmas Day and Boxing Day was conducted for the employees in D Crew. On 24 September 2019, a similar draw was conducted for the employees in B Crew.

46    On about 15 November 2019, BMA released the Monthly Mine Plan for December 2019. The Target Utilisation and Target Production Rates set were lower than usual because wet weather was expected in December 2019. Ms Baptista identified that as an opportunity to increase the leave allocation for 25 and 26 December 2019 by not “hot seating” all of the equipment (that is, not having an employee starting a shift using a piece of equipment that had just been used during the previous shift). She asked Glen Scott, the new “Superintendent Production”, to inform employees that they could raise any special circumstances with their supervisor as OS could accommodate some more employees being absent on those dates.

47    Mr Scott deposes that he prepared a PowerPoint slide to be shown to employees at pre-start meetings on 13 and 14 December 2019. The PowerPoint stated:

Over the upcoming Festive Season, employees are expected to continue to work in accordance with their shift roster (including on the Christmas and Boxing Day public holidays), unless annual or long service leave has been requested and approved.

If you have special circumstances or need to take time off during the Festive Season, we encourage you to raise this with your line leader for consideration by Operations Services.

48    The PowerPoint was read to the employees by William Martin, a “Supervisor Production” who had replaced Mr Hyvonen.

49    Mr Scott received a number of leave requests on the basis of special circumstances. Approximately nine requests were granted. The reasons given for seeking leave were principally concerned with family responsibilities towards sick or elderly relatives. The requests of others who did not provide reasons for their leave requests or simply stated that they wanted to be at home with their families were not granted. Mr Scott is not aware of any employee who raised special personal circumstances and did not have their leave request approved.

50    Ms Baptista deposes that on Christmas Day and Boxing Day, 36 employees did not attend work without prior approval to be absent from work. This was in addition to the 25 employees whose absence from work had been authorised. As a result, the overall performance fell below the performance targets stipulated in the Monthly Mine Plan.

51    Ms Baptista deposes that to address the underperformance, OS recruited 12 additional employees to work at the Daunia Mine and started hot seating eight diggers in January 2020. It took steps to manage absenteeism rates (the steps are not specified). OS’ performance was able to be made up and any further commercial implications were averted.

52    The Union relies upon the evidence of Stephen Toomey, an employee of OS at the Daunia Mine. He deposes that, prior to commencing employment with OS, Christmas Day and Boxing Day were generally non-working days across the industry. Mines would be shut and workers would not be rostered to work on those days.

53    Mr Toomey received a letter of offer from OS for a position as “Operator Production” commencing on 3 April 2019, which he accepted on the same day. The letter enclosed an “Employment Agreement Summary” which contained the terms and conditions that would apply to his employment if he accepted the offer. It also enclosed an “Indicative Total Reward Summary”, which set out elements of the “reward offering”.

54    The Indicative Total Reward Summary specified an Annual Salary and a Nightshift Allowance, which together provided the “Total Fixed Cash Reward”. The document contained a note stating:

Your Annual Salary includes compensation for all hours you are required to work and remunerates you for all requirements of your position.

55    The Employment Agreement Summary stated that the Annual Salary was paid in satisfaction of provisions of the Award including, “any other loadings, penalties or allowances payable under that Award”. The document stated that:

Accordingly, you will not be paid any special rates or allowances for working particular times or under particular conditions unless otherwise agreed in writing.

56    In the Employment Agreement Summary beside the heading “Public Holidays” was the entry:

Please note that in accordance with your roster type, you may be required to work on public holidays and payment for this expectation has been incorporated into your existing remuneration.

57    An email dated 26 March 2019 from OS to Mr Toomey confirmed that OS’ Employee Handbook had been provided to him. The Handbook stated in cl 2.7:

Employees who work a continuous shift roster and/or are FIFO are required to work on a public holiday if it falls on an ordinary rostered day as they are compensated in their salary for working public holidays.

58    Mr Toomey states that he was told at a meeting in September 2019 that the employees would be working on Christmas Day and Boxing Day and that requests for leave over the Christmas period were not being accepted so they should not bother making a request (it may be noted that Mr Hyvonen denies that he used such words). Mr Toomey deposes that they were also told that six people would be able to take time off and who they were would be worked out later. He states that this was the first time he became aware of the requirement to work on Christmas Day and Boxing Day.

59    Mr Toomey states that he wanted to spend Christmas with his mother as she had recently become wheelchair-bound and as this would be her first Christmas without his father. He understood that any request would be rejected and therefore did not put in a request to have Christmas Day and Boxing Day off. Mr Toomey did put his name in for the draw, but was not chosen. He worked on Christmas Day and Boxing Day.

60    Mr Toomey states that for Christmas Day and Boxing Day 2020, things were done differently and employees were told that whoever wanted time off could put in a leave request and that anyone who was available to work would form part of the skeleton crew.

61    Mr Toomey deposes that he does not recall the requirement to work on Christmas Day or Boxing Day being mentioned at the Engagement Centre he attended. He states that he did not initially receive a roster card, but obtained a copy from a friend who was working the same roster. He does not recall seeing the PowerPoint slide referred to by Mr Martin on about 14 December 2019.

62    Marc McDonald is employed at the Daunia Mine as a “Production Operator” in D Crew. In about February 2019, the employees were addressed by the General Manager of Daunia Mine and advised that OS would be a new team within BHP and that it was intended to have labour hire employees changed over to work for BHP in permanent positions. In April 2019, Mr McDonald received a letter of offer of employment with OS, but rejected that offer. On 27 August 2019, he received a further offer of employment and decided to accept the offer. The offer was in relevantly the same terms as that provided to Mr Toomey. Upon commencing work with OS, Mr McDonald attended an induction. He was then required to wear a BHP shirt.

63    Mr McDonald recalls being told in October 2019 that his crew was required to work over Christmas that year, but that six of the employees would have time off. He states that a number of co-workers were disappointed about this. Later, the employees were told that the six people who would be allowed to have Christmas Day and Boxing Day off would be decided by pulling names out of a hat. Mr McDonald did not put his name in the draw. He deposes that at Christmas 2020, the position was different, and the employees were told that OS would consider any requests to have Christmas and Boxing Day off.

64    Mr Adam Hammett is employed by BMA at the Daunia Mine in the position of “Operator/Maintainer”. He states that the production employees are BMA employees, employees of external contractors, or OS employees. Employees of OS wear a BHP shirt.

65    The Union relies upon the affidavits of Stephen Smyth, a Union Branch President and Peter Colly, a research director for the Union, but it is unnecessary to describe the content of their affidavits.

66    I accept the evidence of the witnesses called by OS. In my view, their evidence was reliable and accurate and was not significantly disturbed by cross-examination.

67    Where the evidence of Mr Toomey and Mr McDonald conflicts with the evidence of the witnesses called by OS, I prefer the evidence of the latter. The evidence of Mr Toomey and Mr McDonald concerning what they were told or made aware of about working on Christmas Day and Boxing Day, and when, was generally inconsistent with the contemporary documents produced by OS. In my opinion, the evidence of those who made decisions and presented information concerning the requirement to work on Christmas Day and Boxing Day is more reliable than the recollections of Mr Toomey and Mr McDonald.

68    Mr Toomey and Mr McDonald also gave some evidence concerning production at the Daunia Mine. That evidence seems to be based upon their impressions rather than upon records. I prefer the evidence of the witnesses called by OS to the extent that there is conflict.

The legislative and award provisions

69    Section 44 of the FWA provides relevantly:

(1)    An employer must not contravene a provision of the National Employment Standards.

Note:    This subsection is a civil remedy provision (see Part 4-1).

70    Section 45 of the FWA provides:

A person must not contravene a term of a modern award.

Note 1:    This section is a civil remedy provision (see Part 4-1).

…

71    Section 114 of the FWA provides:

Employee entitled to be absent on public holiday

(1)    An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.

Reasonable requests to work on public holidays

(2)    However, an employer may request an employee to work on a public holiday if the request is reasonable.

(3)    If an employer requests an employee to work on a public holiday, the employee may refuse the request if:

(a)    the request is not reasonable; or

(b)    the refusal is reasonable.

(4)    In determining whether a request, or a refusal of a request, to work on a public holiday is reasonable, the following must be taken into account:

(a)    the nature of the employer’s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee;

(b)    the employee’s personal circumstances, including family responsibilities;

(c)    whether the employee could reasonably expect that the employer might request work on the public holiday;

(d)    whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday;

(e)    the type of employment of the employee (for example, whether full-time, part-time, casual or shiftwork);

(f)    the amount of notice in advance of the public holiday given by the employer when making the request;

(g)    in relation to the refusal of a request-the amount of notice in advance of the public holiday given by the employee when refusing the request;

(h)    any other relevant matter.

72    Section 115 of the FWA provides:

The public holidays

(1)    The following are public holidays:

(a)    each of these days:

(i)    1 January (New Year’s Day);

(ii)    26 January (Australia Day);

(iii)    Good Friday;

(iv)    Easter Monday;

(v)    25 April (Anzac Day);

(vi)    the Queen’s birthday holiday (on the day on which it is celebrated in a State or Territory or a region of a State or Territory);

(vii)    25 December (Christmas Day);

(viii)    26 December (Boxing Day);

(b)    any other day, or part-day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday, other than a day or part-day, or a kind of day or part-day, that is excluded by the regulations from counting as a public holiday.

73    Section 116 of the FWA provides:

If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.

74    Under s 539(2), an employee organisation may apply to the Federal Court for an alleged contravention of ss 44(1) and 45 of the FWA. The maximum penalty for a contravention of each provision is 600 penalty units for a serious contravention, or, otherwise, 60 penalty units.

75    Clause 27.4 of the Award provides:

(a)     An employee who is required to work on a holiday is to be paid at the rate of double time for work performed during ordinary hours, in addition to the payment prescribed.

(b)     Work performed in excess of ordinary hours on a holiday is to be paid at the rate of treble time.

The alleged contraventions of ss 44(1) and 114(2) of the FWA

76    The applicant alleges that OS contravened s 44 of the FWA by requiring its employees to work on Christmas Day and Boxing Day without making a reasonable request in contravention of s 114(2) of the FWA. The issues raised for determination are:

(1)    Whether s 114(2) applies to a requirement that employees work on a public holiday.

(2)    Whether s 114(2) is a provision capable of being “contravened” for the purposes of s 44 of the FWA.

(3)    Whether it is the applicant or the respondent which bears the legal onus and evidential onus of proving a contravention of s 44(1) through a breach of s 114(2).

(4)    Whether the requirement by OS that its employees work on Christmas Day and Boxing Day was reasonable.

Whether s 114(2) applies to a requirement for employees to work on a public holiday

77    The applicant’s allegation is that OS contravened s 44(1) of the FWA by contravening a provision of the National Employment Standards. The provision of the National Employment Standards alleged to have been contravened is s 114(2), which provides that:

…an employer may request an employee to work on a public holiday if the request is reasonable.

78    An issue between the parties concerns the word “request” in s 114(2). The issue arises in the context that OS informed the employees in June 2019 that they had to work on Christmas Day and Boxing Day: there is no suggestion that the employees were asked whether they were willing to work. The Union submits that OS did not “request” the employees to work, but required them to work. The Union argues that a requirement to work on a public holiday can never be a “request [that] is reasonable” within s 114(2). The Union submits that a contravention will occur where an employer requires an employee to work on a public holiday and has made no reasonable request. And there will be no reasonable request where there is no request at all (but only a requirement); or where a request is made that is not reasonable.

79    OS submits that in s 114(2) the word “request” is intended to cover a requirement by the employer that their employees work on a public holiday. It is submitted that such a requirement can be a “request [that] is reasonable” within s 114(2).

80    The word “request” appears twice in s 114(2), first in verb form, and then in noun form. The Macquarie Dictionary defines the verb form of “request”, relevantly, as “to ask or beg”; and the noun form as, “the act of asking for something to be given, or done, especially as a favour or courtesy”.

81    The Union contrasts “request” with “require” and “requirement”. The Macquarie Dictionary defines “require”, relevantly, as, “to ask for authoritatively or imperatively; demand”; and a “requirement” as, “that which is required; a thing demanded or obligatory.”

82    It can sometimes be difficult, to distinguish between a “request” and a “requirement”. There is an area of overlap and an area of difference between the two. The area of overlap is that both a request and a requirement can take the form of a question. The difference is that to “request” that a person do something is to leave the person with a choice as to whether or not to do the thing. On the other hand, to “require” involves asking or demanding that a person do something in a manner that indicates that there is no option but to comply. Whether something is a request or a requirement may be a matter of context, tone and nuance. For example, the question, “Will you work on Christmas Day?”, may be a request if asked by an employer in a tone which implies a genuine enquiry, but a requirement if asked in a tone that implies a demand. It may be very difficult for a court, lacking a full understanding of nuance and tone, to judge whether an employer requested or required that an employee work on a public holiday.

83    Section 114 is part of the National Employment Standards set out in Part 2-2 of the FWA. Section 3(b) provides that one of the main objects of the FWA is, “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders”. Section 61(1) provides that the National Employment Standards are, “minimum standards that apply to the employment of employees which cannot be displaced”. Under s 56, a term of a modern award or enterprise agreement has no effect to the extent that it excludes any provision of the National Employment Standards. Accordingly, the National Employment Standards stand at the pinnacle of the hierarchy of terms and conditions of employment, and have primacy over terms and conditions of employment provided by all other industrial instruments.

84    The National Employment Standards deal with six categories of leave from employment. Division 10 (ss 114 to 116) is concerned with leave on public holidays.

85    Section 114(1) confers an entitlement for employees to be absent from their employment on a public holiday in the relevant place. That entitlement, subject to the remainder of s 114, overrides any right of the employer under an employment contract, enterprise agreement or award to require the employee to work on a public holiday.

86    However, s 114(2) permits an employer to “request” an employee to work on a public holiday, subject to the condition that the request must be reasonable. Section 114(2) appears to be intended to create an exception to the inability of an employer arising under s 114(1) to require an employee to work on a public holiday. However, s 114(2) does not do so clearly since it uses “request”, rather than “require” or “request or require”. Section 114(3) then allows refusal of a “request” to work on a public holiday if the request is not reasonable or the refusal is reasonable.

87    In my opinion, s 114(2) is not intended to apply only to an employer’s “request” in the sense of a question leaving the employee with a choice as to whether or not to work on the public holiday. The provision is also intended to apply a “requirement” by an employer which indicates there is no choice for the employee but to work on a public holiday.

88    The construction of s 114(2) as including a requirement by an employer to work on a public holiday does not strictly accord with the language of the provision. However, support for that construction is found in s 114(3) which allows refusal of a “request” to work on a public holiday if, relevantly, the request is not reasonable. If s 114(2) were intended to apply merely to a request giving the employee a choice whether or not to work, there would be no need for the conferral of a right in an employee to refuse to work on a public holiday. Section 114(3) must be intended to allow an employee to refuse an unreasonable requirement by an employer to work on a public holiday. Section 114(3) is consistent with s 114(2) encompassing a requirement to work.

89    As has been discussed, it may be very difficult for a court to distinguish a request from a requirement since the distinction may depend upon the precise language and tone used. That difficulty tells against any legislative intention that s 114(2) is intended to apply only to a request and not a requirement.

90    Section 15AA of the Acts Interpretation Act 1901 (Cth) provides that the interpretation that would best achieve the purpose or object of an Act is to be preferred to each other interpretation. The purpose of s 114 considered as a whole is to create a prima facie right for employees to take leave on public holidays, but to balance that right with the capacity of employers to require employees to work where that is reasonable. It can readily be understood that there is a societal need for critical services such as police, ambulance and fire services and hospitals to operate every day of the year. In such workplaces, employers must have the capacity to require – not merely request – employees to work on public holidays. There are, in addition, a myriad of other workplaces for which it is desirable, although not critical, to remain open on public holidays. The intention of s 114(2) is that an employer may require employees to work if that requirement is reasonable, subject to the proviso in s 114(3) allowing employees to refuse to work on a public holiday if the refusal is reasonable. A construction of s 114(2) such that it applies to a requirement by an employer that an employee work on a public holiday is consistent with the purpose of the provision.

91    It is unclear why “request” was used in s 114(2), rather than “request or require”. For that matter, it is unclear why the legislature used the word “request” at all, since there would seem to be little or no vice in an employer merely requesting an employee to work. The Explanatory Memorandum for the Fair Work Bill 2008 (Cth) does not touch upon these issues. However, the answer may lie in the transposition of some of the drafting from the predecessor provision, s 612 of the Workplace Relations Act 1996 (Cth). That section provided, relevantly:

Entitlement to public holidays

(1)    An employee is entitled to a day off on a public holiday, subject to subsections (2) and (3).

(2)    An employer may request an employee to work on a particular public holiday.

(3)    The employee may refuse the request (and take the day off) if the employee has reasonable grounds for doing so.

…

92    Although s 612(2) and (3) of the Workplace Relations Act 1996 (Cth) used the word “request”, the context was different. There was no requirement under s 612(2) that the employer’s request be reasonable, and there was no contravention of the provision by the employer making an unreasonable request. The entitlement of an employee to refuse the request under s 612(3) depended on “if” (and only if) the employee had reasonable grounds for doing so. Accordingly, a request by the employer would amount to a requirement because the employee had to work unless he or she had reasonable grounds for refusing. The use of “request” was perhaps a euphemistic, gentler way of saying that an employer could demand or require that an employee work on a public holiday. The balance was swung more towards employees under the FWA since any request or requirement to work on a public holiday has to be reasonable. However, the language of “request” did not change. It may be that the word was simply transposed without adequate consideration of its continuing appropriateness in the new statutory context.

93    The Union argues that s 114(2) should be interpreted such that a requirement to work on a public holiday can never be a “request [that] is reasonable” within s 114(2). Under this construction, the word “request” would be confined to its literal meaning. There would then be two ways the provision might operate. The first is that a requirement, as opposed to a request, would not fall within s 114(2) at all, so that an employer could, without restriction, require an employee to work on a public holiday. Such a construction would be untenable.

94    The second way the provision might operate is that contended for by the Union: that any requirement imposed by an employer must always be in breach of s 114(2). However, that construction cannot be accepted. The provision must be intended to provide a balance between the interests of employers and employees and to operate in a practical way. The Union’s interpretation would skew the balance against employers such that no matter how reasonable a requirement to work on a public holiday may be, the employer will always be in breach of s 114(2). That cannot have been intended given the imperative societal need for critically important work to continue on public holidays.

95    For these reasons, s 114(2) of the FWA applies to a requirement by an employer that an employee work on a public holiday.

96    In this case, it is clear that OS required its production employees at the Daunia Mine to work on Christmas Day and Boxing Day. That requirement was expressly conveyed in August 2019 when Mr Hyvonen told B Crew and D Crew that it was expected that the employees rostered to work on Christmas Day and Boxing Day, other than those granted leave, would attend work.

Whether s 114(2) is capable of being “contravened” for the purposes of s 44(1) of the FWA

97    Section 44(1) of the FWA provides that an employer must not “contravene” a provision of the National Employment Standards. Although OS did not take the point, it is necessary to examine whether s 114(2) of the FWA is a provision capable of being “contravened”.

98    The Union argues that it is a contravention of s 114(2) for an employer to make a request for an employee to work on a public holiday if the request is not reasonable. Against that argument, it may be said that the provision does not directly or expressly state that an employer is prohibited from making a request that is not reasonable. In addition, it may be thought surprising for the legislature to have intended that an employer could contravene ss 114(2) and 44(1), and be liable to a civil penalty, merely by making a polite but unreasonable request that an employee work on a public holiday.

99    In Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182; (2018) 363 ALR 101, the Full Court was concerned with a clause of an enterprise agreement which provided, “HPS may require an employee to work reasonable overtime and the employee shall work such overtime as required”. The Union alleged that by implementing a roster requiring the employees to work unreasonable amounts of overtime, the employer was in contravention of the clause and, consequently, s 50 of the FWA. The primary judge held that the clause was not a provision which could be “contravened” by the employer for the purposes of s 50 because it did not impose any obligation on the employer. Her Honour reasoned that the word “may” merely granted a permission to the employer.

100    The Full Court rejected the primary judge’s construction, holding:

12     With respect to the primary judge, her Honour’s focus on the word “may” as having a permissive and entitling character failed to appreciate that whilst that was so, when read as a whole, the clause also has restrictive and protective elements. Clause 34.1 does not solely provide for an entitlement to HPS, but is also protective of the interests of employees. The limitation in the clause which qualifies its permissive character is provided by the word “reasonable”. That restriction is not beneficial to HPS. It imposes a negative or restrictive stipulation that only reasonable overtime may be required by HPS. A failure by HPS to comply with that stipulation will constitute a contravention of cl 34.1 and, in turn, a contravention of s 50 of the FW Act. We note, in that respect, that the term “contravene” in s 50 includes “fail to comply with”: s 2B, Acts Interpretation Act 1901 (Cth).

13     ... However, the capacity to require additional work by way of overtime is restricted. That is the work of the word “reasonable”. Its purpose is to qualify the capacity of HPS to require employees to perform additional hours of work. It is manifest that the restriction imposed by cl 34.1 operates upon the permission given to HPS to require additional hours of work. The requirement to observe that restriction is the obligation which cl 34.1 imposes upon HPS. A failure to comply with or observe that restriction will constitute a contravention of the clause.

101    The clause considered in Hay Point Services has obvious similarities to s 114(2) of the FWA, and the reasoning of the Full Court is apposite to the present case. Section 114(2) qualifies the capacity of employers to require employees to work on public holidays by imposing a requirement of reasonableness.

102    The National Employment Standards creating entitlements to leave are contained in Division 5 (parental leave), Division 6 (annual leave), Division 7 (personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave), Division 8 (community service leave), Division 9 (long service leave) and Division 10 (public holidays). Division 7 contains Subdivisions A, B, C and CA which deal with paid personal/carer’s leave, unpaid personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave respectively.

103    These Divisions and Subdivisions generally commence with a section stating that employees have an entitlement to a type of leave. Generally, they do not contain any provision that expressly requires the employer to allow employees to take leave to which they are entitled (an exception is s 88(2), which provides that an employer must not unreasonably refuse to agree to a request to take paid annual leave). However, the conferral of an entitlement upon employees implies a corresponding obligation upon employers to allow that leave to be taken.

104    The grant of an entitlement under s 114(1) to employees to be absent from their employment on a public holiday implies that employers cannot require them to work on a public holiday, except in the circumstances described in s 114(2). Similarly, the grant of permission under s 114(2) for employers to request (or require) an employee to work on a public holiday “if the request is reasonable” implies that employers are prohibited from making an unreasonable request or imposing an unreasonable requirement. Accordingly, s 114(2) is capable of being contravened for the purposes of s 44(1).

Who bears the legal onus and evidentiary onus?

105    The Union submits that OS bears both the legal and evidentiary onus of demonstrating that the requirement for the employees to work on Christmas Day and Boxing Day was reasonable. OS accepts that it bears an evidentiary onus, but contends that the legal onus is on the Union to prove that OS contravened s 44(1) of the FWA by contravening s 114(2) by imposing a requirement that was unreasonable.

106    Section 114(1) confers an entitlement upon an employee to be absent from his or her employment on a public holiday and carries an implication that an employer, subject to the remainder of s 114, cannot require an employee to work on a public holiday. Section 114(2) then imposes a qualification upon, or exception to, that prohibition by permitting an employer to require an employee to work on a public holiday. The permission granted to the employer is itself made subject to a qualification, namely that the request or requirement must be reasonable.

107    In Vines v Djordjevitch (1955) 91 CLR 512 at 519-520, the High Court held:

But whether the form is that of a proviso or of an exception, the intrinsic character of the provision that the proviso makes and its real effect cannot be put out of consideration in determining where the burden of proof lies. When an enactment is stating the grounds of some liability that it is imposing or the conditions giving rise to some right that it is creating, it is possible that in defining the elements forming the title to the right or the basis of the liability the provision may rely upon qualifications exceptions or provisos and it may employ negative as well as positive expressions. Yet it may be sufficiently clear that the whole amounts to a statement of the complete factual situation which must be found to exist before anybody obtains a right or incurs a liability under the provision. In other words it may embody the principle which the legislature seeks to apply generally. On the other hand it may be the purpose of the enactment to lay down some principle of liability which it means to apply generally and then to provide for some special grounds of excuse, justification or exculpation depending upon new or additional facts. In the same way where conditions of general application giving rise to a right are laid down, additional facts of a special nature may be made a ground for defeating or excluding the right. For such a purpose the use of a proviso is natural. But in whatever form the enactment is cast, if it expresses an exculpation, justification, excuse, ground of defeasance or exclusion which assumes the existence of the general or primary grounds from which the liability or right arises but denies the right or liability in a particular case by reason of additional or special facts, then it is evident that such an enactment supplies considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter…

108    Section 114(2) allows an employer to depart from the prima facie position under s 114(1) and to require an employee to work on a public holiday. That permission falls into the category described in Vines v Djordjevitch of, “conditions of general application giving rise to a right”. The qualification of that permission, namely that the request or requirement must be reasonable, falls into the category of “additional facts of a special nature …for defeating or excluding the right”. It will be the employer who imposes a requirement that an employee work on a public holiday and the employer who asserts that reasonable grounds exist for that requirement. There are, accordingly, “considerations of substance” for placing the burden on the employer to prove that the request or requirement is reasonable. However, such considerations are not necessarily determinative of the legal onus of proof of a fact, which may be affected by the nature of the relief sought.

109    The Union’s Originating Application seeks:

A declaration that the first respondent contravened s. 44 of the FW Act in respect of each of its production employees who performed work at the Daunia Mine on 25 and/or 26 December 2019 (“Employees”) in that it contravened s. 114 of the FW Act by requiring each of the Employees to work public holidays, being 25 and 26 December 2019.

110    The Union also seeks the imposition of a penalty upon OS in respect of each contravention of s 44 of the FWA.

111    For the Union to obtain the relief it seeks, it is not enough that OS required the employees to work on Christmas Day and Boxing Day. That relief can be granted only if OS’ requirement was unreasonable. Accordingly, it is a necessary element of the relief sought that the requirement was unreasonable.

112    In Warner (in his capacity as joint and several liquidator of Bellpac Pty Ltd) v Hung (No 2) [2011] FCA 1123; (2011) 297 ALR 56, Emmett J observed:

[46]     As a general rule, the burden of proof of a fact that is an essential element in a claimant’s cause of action lies on the claimant. A party who seeks relief has the burden of satisfying the court of facts that, in the absence of proof of other facts, would justify the grant of that relief. What those facts might be will depend on the nature of the relief sought and the operation of any relevant presumptions. In the case of relief by declaratory order, the precise terms of the declaration sought assume particular significance. Thus, the party seeking a declaratory order has the burden of proof of any matter that is a necessary element of the declaration sought, even if, in a proceeding by that party for relief of another kind, or in a proceeding by the other party, that matter would not arise unless raised, and the burden of proof consequently assumed, by that other party (see Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657 at 660).

[47]     Putting it another way, when a person commences a declaratory proceeding, that person bears the legal onus of proof. That is so even though the majority of the facts that are relevant may be in the opposing camp. It is for the claimant to establish the ambit of the rights to be declared, and to prove all the facts necessary to enable the declaration to be made (see Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653 at 655)…

113    In Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657, McClelland CJ in Eq observed at 660:

These decisions illustrate what I consider to be the principles by which the incidence of the onus of proof is to be determined, namely:

(1)    a party who seeks relief has the burden of satisfying the Court of facts which (in the absence of proof of other facts) would justify the grant of that relief;

(2)    what those facts are depends principally upon:

(a)    the nature of the relief sought; and

(b)    the operation of any relevant presumptions;

(3)    in the case of relief by way of declaratory order, the precise terms of the declaration assume particular significance in that (subject to any relevant presumption) the party seeking the declaration has the burden of proof of any matter which is a necessary element of the declaration sought (even if in proceedings by that party for relief of another kind, or in proceedings by the other party, that matter would not arise unless raised (and the burden of proof consequently assumed) by the other party).

114    In this case, the Union can only obtain the declaration it seeks by proving that OS contravened s 44(1) of the FWA by contravening s 114(2) in the manner alleged. The Union bears the legal onus of proving that OS contravened s 44(1). To discharge that onus, the Union must prove that: first, OS is an employer; and, second, that OS contravened a provision of the National Employment Standards, namely s 114(2).

115    OS will have contravened s 114(2) if it required the employees to work on a public holiday in the place where the employees were based for work purposes, and the requirement was not reasonable. The Union carries the legal onus of proving that: first, at the location of the Daunia Mine, Christmas Day and Boxing Day were public holidays; second, OS required persons to work on Christmas Day and Boxing Day; third, that those persons were OS’ employees; and, fourth, the requirement was not reasonable. If, instead, OS had sought a declaration to the effect that it was not contravening s 44(1) by requiring employees to work on the public holidays because the requirement was reasonable, it would have borne the legal onus of proof upon each of these elements.

116    Although the Union has the legal onus of proving that the requirement was not reasonable, that onus would readily be discharged by proving that OS required the employees to work on Christmas Day and Boxing Day in the absence of evidence adduced by OS going to the reasonableness of the requirement. That is because the prima facie position under s 114(1) is that an employee has an entitlement to be absent from work, and an employer is accordingly prohibited from requiring an employee to work, on a public holiday. An employer who requires an employee to work on a public holiday does so on the basis of the employer’s implicit assertion that the requirement is reasonable in the circumstances. In a proceeding asserting the employer has contravened s 44(1) by contravening s 114(2), the employer carries an evidential onus of proving facts that demonstrate the reasonableness of the requirement.

117    However, there may be some facts of which, in practical terms, there is an onus on the employee or employee organisation bringing a proceeding to produce evidence. In Blatch v Archer (1774) 1 Cowp 63 at 65 it was held that, “…all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted”. For example, s 114(4)(b) provides that in determining whether a request to work on a public holiday is reasonable, the employee’s personal circumstances must be taken into account. The employee or an employee organisation can be expected to be in a better position than the employer to adduce evidence of any relevant personal circumstances.

118    In summary, the Union has the legal onus of proving that the employer’s requirement for employees to work on Christmas Day and Boxing Day was not reasonable, but OS carries an evidential onus of proving facts that demonstrate the request was reasonable.

Whether the requirement by OS that its employees work on Christmas Day and Boxing Day was reasonable

119    It is not in dispute that Christmas Day and Boxing Day were public holidays at the Daunia Mine, or that OS imposed a requirement in June 2019 that its employees work on those days. What is in dispute is whether the requirement was reasonable.

120    Whether an employer’s request or requirement that an employee work (or an employee’s refusal to work) on a public holiday is reasonable does not depend upon any single factor, but upon evaluation of the combination of relevant circumstances. Section 114(4) sets out eight matters that must be taken into account, the last of which is, “any other relevant matter”. The provision does not prescribe any hierarchy of considerations. The relative weight to be ascribed to each matter will depend on the particular circumstances of the case. The Court must have regard to all of the relevant matters and assess whether, and to what extent, they tell in favour of the reasonableness of the request or requirement, tell against reasonableness, or are neutral. Ultimately, it is necessary to determine whether the request or requirement to work on a public holiday was reasonable having regard to all the relevant circumstances.

121    The eight matters required be taken into account under s 114(4) are not neatly compartmentalised and tend to blend into one another. Nevertheless, it is convenient to consider the submissions by reference to those matters.

(a)    The nature of the employer’s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee

122    The Further Amended Defence pleads that OS’ requirement for the employees to work on Christmas Day and Boxing Day was imposed in circumstances where OS’ business model and operational requirements at the Daunia Mine required its workforce to operate 24 hours per day, 365 days per year.

123    OS submits that it was contractually bound to deliver the utilisation and production targets set by BMA, and that OS had to operate 24 hours/365 days to achieve those targets. The Contract with BMA provided consequences for failing to meet the targets. OS submits that its operational requirements meant that it had to require its production employees to work on all public holidays.

124    I interpolate to say that although the parties proceeded on the basis that OS’ business model is to operate 24 hours per day, 365 days per year at the Daunia Mine, that is inaccurate. OS’ employees are only on B Crew and D Crew, not A Crew and C Crew. The employees in B Crew and D Crew rotate seven days on, seven days off with A Crew and C Crew. Accordingly, OS only provides production services at the Daunia Mine for half of the year. Nevertheless, it is convenient to adopt the parties’ terminology of a “24 hour/365 day” business model.

125    The evidence establishes that OS contracted with BMA on 30 November 2018 to provide production services at the Daunia Mine. The Contract requires OS to perform the services described in the Site Work Package and to achieve the Target Utilisation Rate and Target Product Rate for each piece of equipment as set out in each Monthly Mine Plan issued by BMA. The Contract provides that if the overall weighted average Target Utilisation Rate or Target Production Rate is not met by OS, the consequences may include OS having to submit and comply with a recovery plan, or mobilising additional equipment and personnel at OS’ cost; or BMA engaging other contractors, or ending the contract immediately.

126    On 30 November 2018, BMA also provided OS with a Site Work Package requiring OS to provide production personnel to operate 72 pieces of equipment. The Site Work Package set an annual performance cap in respect of the Target Utilisation Rate and Target Production Rate.

127    The performance targets were determined by BMA based on the targets OS represented it could achieve in an Engagement Approval Request submitted by OS on 29 November 2018. The targets in the Engagement Approval Request were based on OS providing 24 hour/365 day services.

128    Each month BMA prepares a Monthly Mine Plan (or Short Range Forecast) which sets out the Target Utilisation and Target Production Rates for the upcoming month. Although OS provides some input, it is ultimately up to BMA to decide the Target Utilisation and Target Production Rates.

129    I accept that, at the relevant times, BMA would determine the monthly targets that OS was required to achieve based on OS’ commitment that it would provide production services at the Daunia Mine on a 24 hour/365 day basis. The total hours for which OS was able to operate in December 2019 would be reduced by 48 hours (6.5% for the month) if OS’ employees did not work on Christmas Day and Boxing Day. I accept Mr Cole’s evidence that this would place OS at risk of not meeting its Target Utilisation and Target Production rates for December 2019. I accept that this would place OS at risk of failing to comply with its contractual obligations unless it recovered the lost utilisation in another way; and at risk of BMA exercising its contractual rights.

130    An alternative to OS’ business model of operating 365 days a year would have been be to purchase or hire more fleet and equipment and to engage additional employees to make up for lost production on Christmas Day and Boxing Day. I accept Mr Cole’s evidence that this would add significant costs. Another alternative would have been to budget for and run a higher performance base throughout the year. I accept Mr Cole’s evidence that there was no guarantee a higher performance target was achievable given the assumptions such as wet weather and the need for maintenance of equipment already factored in. I also accept Mr Cole’s evidence that there would be ancillary costs associated with logistics, travel and accommodation if OS did not operate 365 days a year.

131    The Union submits that the essential reason for the requirement to work on Christmas Day and Boxing Day was that BHP Group Ltd made a decision, before OS was registered, that OS employees should be required to work all public holidays within their roster because BHP wanted greater productivity and lower costs across its assets. The Union submits, in summary, that the requirement for the employees to work on Christmas Day and Boxing Day was not reasonable for the following reasons:

a.    commercial advantage is not a factor that would, without more, render any request to work under s.114(2) reasonable;

b.    the inflexible application of a predetermined position that employees would be required to work public holidays was incapable of giving rise to a reasonable request, particularly having regard to s.114(4)(a) of the FW Act, because such an approach would not have regard to the circumstances of the particular workplace;

c.    OS applied the predetermined policy and thereby failed to make any assessment of actual requirements of BHP or BMA at Daunia. OS made no attempt to inform itself as to matters which were relevant to the reasonableness or otherwise of the Work Requirement at Daunia;

d.    because OS applied a predetermined policy that employee should be required to work public holidays, no genuine consideration was given to realistic alternatives to the Work Requirement, including the possibility that the Two Days could be worked on a voluntary basis;

e.    had the circumstances at Daunia been properly considered, it would have been clear that the Work Requirement was unnecessary for production operators working at Daunia, for reasons including:

i.    that Christmas and Boxing Day at Daunia had always been staffed on a voluntary basis prior to 2019 without evident difficulty; and

ii.    that OS was already offering very significant safety, productivity and cost improvements to BMA which would have been only marginally affected if work on the Two Days had been voluntary; and

iii.    that a reduction in use of labour hire was a stated goal of BHP through the OS Model, and that BMA, like OS, was part of BHP;

f.    the decision of BHP that OS employees would work a 365 day per year ‘model’ was inconsistent with the BCMIA, which at clause 27.5(a), provided that:

(a)    On a date agreed, the employer will nominate which public holidays will be worked in the following 12 months by employees (other than employees working shifts of up to 8.5 ordinary hours on weekdays), provided that work will not to be carried out on two of such holidays.

OS did not (on a date agreed) nominate which public holidays would be worked in the following 12 months, nor did it provide that on two such holidays work would not be carried out);

g.    OS made no allowance for the personal circumstances of employees in any ‘request’, but rather directed all relevant employees that they were required to work. Nor did OS advise employees of their rights under s.114(3). Further, the manner in which the ‘request’ was communicated as a requirement would have inhibited the ability of employees to exercise their right under s.114(3) to refuse any request;

h.    the net effect of BHP’s arrangements, including a purported ‘firewall’, was that a long standing and valuable condition of employment for BHP employees was purportedly removed for the BHP “workforce of the future” at no cost to BHP; and

i.    To the extent that other factors listed in s.144(4) have relevance, they reinforce that the requests in the present case were unreasonable.

(Emphasis in the original.)

132    Much of the Union’s argument focuses on the assertion that OS had no operational reason to adopt a requirement that the employees work on Christmas Day and Boxing Day. In particular, the Union submits it was unnecessary and unreasonable for OS to adopt an inflexible business model involving its production workforce working 365 days per year. The Union also submits that BMA is an asset of the “BHP” (in this context, the Union is referring to the companies related to BHP Group Ltd) and that the contract between OS and BMA would not be enforced in the event of any breach.

133    It can readily be accepted that there is a very close relationship between OS and BHP Group Ltd. BHP Group Ltd is OS’ ultimate owner. BHP has a single unified management structure in Australia. In PowerPoints used for induction of OS’ employees, OS is described as an “asset” of BHP. In, BHP Group Ltd’s annual report for 2019, Minerals Australia is described as a business within BHP which operates BHP’s Australian mining assets; and the executives of both OS and BMA ultimately report to the president of Minerals Australia. The evidence indicates that BHP established OS as a vehicle by which to reduce BHP’s reliance on labour hire companies and to directly employ more of its labour force. The closeness of the relationship is emphasised by OS employees wearing BHP shirts.

134    Mr Cole’s evidence indicates that even before OS came into existence, BHP’s management personnel determined that OS would operate on a design of working all year round. From the time it commenced business, OS operated on the basis of the predetermined position that employees would be required to work on all public holidays.

135    In response to the Union’s allegation that OS had no operational reason to adopt a requirement that the employees work on Christmas Day and Boxing Day, Mr Cole deposes that OS’ commercial objective is to provide better performance outcomes for its clients at an improved unit cost (or cost per BCM) compared with competing external third party service providers. I understand Mr Cole’s reference to “clients” to be to BHP assets only. Mr Cole’s evidence was that BHP assets can choose whether or not they approach and use OS, and that OS will not be awarded the work unless it puts forward a more commercially attractive business case than external third party service providers. Mr Cole deposes that there have been instances where OS has not been engaged as the service provider for a BHP asset because it was not the most competitive option in the market.

136    Mr Cole’s evidence was to the effect that OS made its proposal in the Engagement Approval Request, including working 24 hours/365 days, as attractive as possible to maximise its prospects of securing the work. Mr Cole’s opinion is that an increased BCM cost due to not operating on Christmas Day and Boxing Day would have significantly undermined OS’ ability to be chosen for the scope of work at Daunia: in part, because some other service providers operate 365 days a year. Mr Cole’s evidence was that the 24 hours/365 days model also reduces OS’ overall costs per BCM (because OS incurs fixed costs even when there is no production) and allows OS to offer clients a more competitive price. OS prices its services on the basis of costs recovery plus 7.5%.

137    Mr Cole gave oral evidence that Daunia Mine was not a “competitive tender situation” because OS is an internal service provider to BHP. However, he also said that OS was not guaranteed any work within the BHP organisation. I understand the effect of his evidence to be that if OS’ Engagement Approval Request was not sufficiently attractive, there was a risk that BMA would have instead gone to an external third party service provider. Mr Cole’s evidence was also that:

We’re, so our relationship with BMA is a firewall. We have, we don’t know what decisions they make. All we do is apply a position and they make the decision.

138    The Union submits that Mr Cole’s evidence concerning the risk of BMA going elsewhere if a 24 hour/365 day model was not offered was implausible. The Union submits that his evidence does not reflect the nature of the interrelated BHP organisation and that BMA and OS were part of a single management structure. The Union submits that Mr Cole’s evidence is inconsistent with BHP’s stated policy of using OS to reduce BHP’s reliance on labour hire.

139    The Union also submits that the Engagement Approval Request submitted by OS on 29 November 2018 and the Site Work Package issued by BMA the following day were just a formality (or a “done deal”) reflecting an understanding that had already been reached, and that the transaction was not at arm’s length. The Union contends that, therefore, there was no necessity for OS to put forward a 24 hour/365 day model. The Union relies on the absence of a tender process and the close timing between the Engagement Approval Request and the Site Work Package. The Union also points out that the document was entitled “Draft Engagement Approval Request” and contained the notation “For Option Analysis Only - Not for decision or planning purposes.” That notation was retained in the signed Engagement Approval Request, suggesting that there may have been no serious consideration given to the Draft since there was already a “done deal”. The Union submits that the Contract places no limit on the scope of the Site Work Package that may be issued by BMA and is thereby missing critical information necessary to a commercial contract. The Union also submits that the Site Work Package provided that the services would commence on 1 January 2019, whereas OS did not start providing production operators at Daunia until about March 2019, and there followed a lengthy transition during which existing workers were transferred to Daunia.

140    Mr Cole was cross-examined extensively upon this evidence. I consider him to be a reliable and credible witness. I reject the Union’s submission that parts of his evidence were not credible. I accept his evidence.

141    It is clear that OS was given preferential treatment in comparison to “external” suppliers in that it was invited to submit an Engagement Approval Request, which was then accepted by BMA by entering into the Contract and issuing the Site Work Package. There was no competitive tender. I infer that OS was given preferential treatment precisely because it was established as a vehicle for BHP to reduce its reliance on labour hire agencies. Senior executives within BHP were obviously aware that OS utilised a 24 hour/365 day model before OS was invited to submit the Engagement Approval Request.

142    However, I accept Mr Cole’s evidence that it was not certain that BMA would accept the Engagement Approval Request, and may have gone to external suppliers if OS’ proposal was not sufficiently attractive. In that sense, it was not a “done deal” that OS would be awarded the work. I accept that part of the attraction of OS’ proposal was its 24 hour/365 day model and the costs savings that would result. It was practically certain that OS would be awarded the work if the proposal in the Engagement Approval Request was sufficiently attractive, but if production based on a 24 hour/365 day model had not been proposed, then there was a risk that OS may not have been awarded the work. In that sense, there was a commercial imperative for proposing that model.

143    Once OS was contractually bound to achieve production targets based on the 24 hour/365 day model, there was an operational requirement for the employees to work on public holidays which fell within their rosters, including Christmas Day and Boxing Day. The Union submits that there was no risk that BMA would enforce its contractual rights if OS fell short of its targets under the Site Work Package and Monthly Mine Plan. However, it must be remembered that BMA’s shares are owned by both Mitsubishi Development Pty Ltd and BHP Metcoal Holdings Pty Ltd. The directors of BMA owed fiduciary obligations to act in good faith in the best interests of the company. It would not have been open to the directors of BMA to blindly ignore a contractual breach by OS. I find that if OS simply decided that its employees did not have to work on Christmas Day and Boxing Day, it was at risk of breaching its contract with BMA, and at risk of BMA enforcing its contractual rights.

144    The Union submits that commercial advantage is not a factor that would, without more, render any request to work reasonable. It submits that OS’ adoption of a system requiring all employees to work public holidays which fell within their roster necessarily excluded consideration by OS of the particular circumstances which pertained at Daunia Mine. The Union submits that a requirement made without consideration of the nature of the workplace and its particular operational requirements could not constitute a reasonable request, particularly having regard to the industry practice and custom for mines to shut down on Christmas Day and Boxing Day.

145    The Union’s submissions can be partially, but not completely, accepted. It can be accepted that a requirement that employees work on public holidays is not reasonable merely because the employer has designed its business to, or has entered commercial arrangements that require, operations 365 days a year. It can also be accepted that an inflexible requirement that employees must work all public holidays falling within their rosters may suggest that the requirement is unreasonable. However, that is only one of the factors to be considered in determining the reasonableness of the requirement to work on Christmas Day and Boxing Day. Other factors like the commercial necessity or desirability of a 24 hour/365 day system, the level of financial compensation provided to the employees and whether the employees were aware of the requirement before they accepted employment are relevant. In addition, the Union’s submission that the system required “all” employees to work all public holidays is not entirely accurate since 25 employees were ultimately permitted to take leave on Christmas Day and Boxing Day.

146    The Union submits that historical factors demonstrate that there was no operational need for the requirement for employees to work all public holidays falling within their rosters. The Daunia Mine has operated 365 days per year since it opened in 2013. Until OS commenced business, the production operators were employed by another BHP entity, Central Queensland Services Pty Ltd (trading as BHP Billiton Mitsubishi Alliance), or by labour hire companies. Before 2019, production operators at the Daunia Mine had not been required to work on Christmas Day and Boxing Day, but the 365 day operation was managed by BMA through the use of volunteers, which generally involved a reduced level of production for the two days. The Union submits that any requirement for 365 days operation did not compel a requirement that all employees work on Christmas Day and Boxing Day.

147    It is true that an alternative system could have been for voluntary work on Christmas Day and Boxing Day, with reduced production on those days. However, it can be expected that OS would have had very few, if any, volunteers to work on Christmas Day and Boxing Day. That is because the annualised salary paid to the employees meant that they would have been paid for those days at penalty rates even if they chose not to work on those days. OS would have been forced to offer additional payments in circumstances where it had already built into the annualised salary a component for the employees working on public holidays.

148    It may be noted that the Union did not contend that it was unreasonable for OS to pay annualised salaries or require employees to work on other public holidays. The submission is only that the employees should not have been required to work on Christmas Day and Boxing Day despite their salaries including compensation for working on those days. OS aimed to achieve full production on all public holidays, and it can be inferred that if working on Christmas Day and Boxing Day was to be voluntary, the remuneration arrangements would have been differently designed. Again, factors like the level of compensation and whether the employees were aware of the requirement before they commenced employment are relevant to the reasonableness of the requirement to work on Christmas Day and Boxing Day.

149    Assuming that OS had used a system of volunteering and that only a few employees volunteered, OS would have had to make up for lost production after December 2019. That was what in fact had to happen, since 35 employees were absent from work without leave on Christmas Day and Boxing Day. One of the steps OS took to make up for lost production was to engage additional employees. If a voluntary system had been used for Christmas Day and Boxing Day, there would have been additional costs for OS in engaging additional employees to make up for lost production.

150    The Union submits that by OS applying a predetermined policy, it failed to make any assessment of the actual requirements of BHP or BMA at Daunia. I reject that submission. I accept that BMA made its decisions on production services providers independently of OS. It was necessary for OS to provide a competitive tender. OS provided a model offering a 24 hour/365 day system because OS considered that to be the most commercially attractive system for its client, BMA.

151    I reject the Union’s submission that OS made no attempt to inform itself as to matters which were relevant to the reasonableness or otherwise of the requirement to work on Christmas Day and Boxing Day at Daunia. OS clearly considered such matters, including when OS designed its contracts to offer annualised salaries providing compensation for working on public holidays and when it decided upon how many employees would be allowed to take leave.

152    I reject the Union’s submission that OS’ inflexible application of a predetermined position that employees would be required to work public holidays was incapable of giving rise to a reasonable request as such an approach would not have regard to the circumstances of the particular workplace. OS clearly had regard to the circumstances of the workplace when it offered annualised salaries calculated on the basis that employees could be required to work on public holidays falling within their rosters and when it allowed some employees to take leave on Christmas Day and Boxing Day.

153    I reject the Union’s submission that because OS applied a predetermined policy that employees would be required to work public holidays, no genuine consideration was given to realistic alternatives. I am satisfied that neither seeking employees to work on a voluntary basis, nor paying employees from labour hire companies, was a realistic alternative for a commercial enterprise where the employees were paid annualised salaries calculated on the basis that they would work on public holidays falling within their roster periods. I accept that OS considered alternatives but rejected them.

154    The Union submits that OS put forward a proposal to BMA which was, on any view, a compelling business case. The EAR included improved safety performance, reduced turnover of employees from 50% to 10%, substantially reduced costs; substantially increased utilisation of key machines, substantially increased rates of waste removal and a net reduction of 7% in the cost of production measured in BCM. It is submitted that the requirement to work on Christmas Day and Boxing Day was unnecessary for reasons including that: Christmas Day and Boxing Day at Daunia had always been staffed on a voluntary basis prior to 2019 without evident difficulty; that OS was already offering very significant safety, productivity and cost improvements to BMA which would have been only marginally affected by making Christmas Day and Boxing Day voluntary; and that a reduction in use of labour hire was a stated goal of BHP.

155    The Union effectively submits that OS’ offer was so attractive that is was unreasonable for OS to have offered the 24 hour/365 day model because it would have been awarded the work anyway. I reject that submission. I accept Mr Cole’s evidence that there was a risk that OS would not have been offered the work unless it offered the 24 hour/365 day model. I find that it was reasonable for OS to offer that model to secure the work.

156    The Union submits that the decision that OS employees would work on a 365 day model was inconsistent with cl 27.5(a) of the Award, which requires that, on an agreed date, the employer must nominate which public holidays will be worked in the following 12 months, provided that the work is not to be carried out on two public holidays. However, the employees were only required to work on those public holidays which fell within their rosters. Given that OS’ employees worked seven days on and seven days off, it was unlikely that they would be required to work on all public holidays. The 365 day model was not inconsistent, or not necessarily inconsistent, with cl 27.5(a) of the Award.

157    In summary, I reject the Union’s submission that it was unreasonable for OS to offer BMA production targets that required OS to operate on a 24 hour/365 day basis and enter contractual arrangements that required it to meet Performance Requirements calculated on that basis. I reject the Union’s submission that after it became contractually bound to meet its Performance Requirements, it was unreasonable for OS to operate under that model. I also reject the Union’s submission that OS failed to consider alternatives to requiring the employees to work on Christmas Day and Boxing Day.

(b)    The employees’ personal circumstances, including family responsibilities

158    It is apparent that both Mr Toomey and Mr McDonald were inconvenienced and unhappy about having to work on Christmas Day and Boxing Day. They would have preferred not to work on those days.

159    The Union adduced direct evidence from only two of the 85 employees who worked on Christmas Day and Boxing Day. However, it can be inferred that many of them would also have preferred to have had the opportunity to spend Christmas Day and Boxing Day with their families.

160    The Union pleads that the requirement to work on Christmas Day and Boxing Day was imposed in June 2019. That is so, but the requirement evolved over time, with eight employees from each crew plus employees who made out special personal circumstances eventually being permitted to take leave. The events that occurred after June 2019 cannot be ignored when assessing the reasonableness of the requirement.

161    I accept the evidence of Ms Baptista, Mr Scott and Mr Martin that on 13 and 14 December 2019, the employees were told that if they had special circumstances, they could raise them for consideration. That is a matter relevant to the reasonableness of the requirement, although I accept that it would have been preferable to give the employees the opportunity to raise special circumstances from about June 2019 instead of suggesting at that time that the only avenue of taking leave was through the drawing of names.

162    Mr Scott’s evidence was that about nine requests for leave on the basis of special circumstances were granted. Mr Scott’ evidence was to the effect that all the employees who provided special circumstances had their leave requests approved. I accept that evidence.

163    However, OS rejected applications for leave for those employees who said only that they wanted to have Christmas Day and Boxing Day off to spend that time with their families. It can be inferred that the employees who worked on those days did not raise any other specific personal circumstances with OS.

164    I find that OS was ultimately prepared to allow employees who established special circumstances leave on Christmas Day and Boxing Day. That is a factor of some significance in assessing the reasonableness of the requirement to work on Christmas Day and Boxing Day.

(c)    Whether the employee could reasonably expect that the employer might request work on the public holiday

165    In the standard form letter offering employment with OS, the employees were expressly informed that they, “are required to work on a public holiday if it falls on an ordinary rostered day”, and that payment for that expectation had been incorporated into their remuneration. I accept Ms Baptista’s evidence that employees were required to attend an engagement centre when seeking employment with OS, and that the potential employees would be informed that they would be expected to work on public holidays falling within their rosters. Accordingly, the employees were, or should have been, aware that if they accepted employment with OS, they could be required to work on public holidays falling within their roster periods, including on Christmas Day and Boxing Day.

166    Mr Toomey asserts that he was unaware until September 2019 that he was required to work on Christmas Day and Boxing Day, and Mr McDonald asserts that he was unaware of that matter until October 2019. However, the responsibility to properly read their letters of offer lay with them, and they should have been aware that they could be required to work on any public holiday falling within their roster periods.

167    I find that the OS Employee Handbook was provided to the employees when they commenced their employment. That Handbook indicated that employees would be required to work on a public holiday if it fell on an ordinary rostered day, as they were compensated in their salary for working on public holidays.

168    The first production employees commenced with OS in April 2019. I find that when the employees commenced their employment, they were provided with a roster for 2019 showing that B Crew and D Crew were rostered to work on Christmas Day and Boxing Day. Mr Toomey was an exception as he did not initially receive a copy of his roster, but was able to obtain one from a colleague within a month or so. There is no evidence of any other employee not receiving the roster. The rosters were also made available to employees through their placement on noticeboards at the Daunia Mine.

169    OS’ employees (other than those on leave) had worked on public holidays falling within their rosters, including Good Friday, Easter Monday and Labour Day 2019. Accordingly, the employees must have expected that they would be required to work on public holidays falling within their rosters in the future, including Christmas Day and Boxing Day.

170    I accept that the employees were shown a standard PowerPoint presentation during the induction sessions which indicated that employees could be rostered on all public holidays, including Christmas Day, and were verbally provided with the same information. To the extent that Mr Toomey and Mr McDonald assert that they cannot recall seeing the PowerPoint in their inductions, I consider that their recollections must be flawed.

171    In June 2019 the B Crew and D Crew were specifically told by Mr Hyvonen that, apart from six persons in each crew, the employees would be required to work on Christmas Day and Boxing Day. That was reiterated in September 2019 by the drawing of names of employees who would be permitted leave on those days.

172    I find that the employees could reasonably expect, both before and at all times after they commenced employment, that OS might require that they work on Christmas Day and Boxing Day.

(d)    Whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday

173    OS’ standard form letter of offer attached a relevantly standard contract of employment which expressly stated that the Annual Salary included compensation for all hours required to be worked and remunerated the employee for all the requirements of their position. The contract stated that the Annual Salary was paid in satisfaction of the Award provisions, including any loadings and penalties payable. It stated that the employees would not be paid any special rates or allowances for working particular times. The contract expressly stated that, “[y]ou may be required to work on the public holidays and payment for this expectation has been incorporated into your existing remuneration”.

174    The contract did not specify what portion of the Annual Salary was for working on public holidays. After the hearing, the parties provided an agreed document indicating that the total amount payable under the Award (exclusive of superannuation) for a “Mineworker-Training” is in the vicinity of $98,000 and for a “Mineworker” is in the vicinity of $105,000. The parties agree that OS’ employees were paid an Annual Salary which exceeded the amount payable under the Award for their roster, even assuming work on 10 public holidays in the year (I find it to be unlikely that the employees would work as many as 10 public holidays given that they worked seven days on, seven days off). The Union withdrew its submission that, “the annualised salary is [not] sufficient to cover all the entitlements under [the Award] including Christmas Day and Boxing Day 2019”.

175    I find that the employees received a level of remuneration that reflected an expectation that they would work on public holidays which fell within their rosters, including Christmas Day and Boxing Day.

(e)    The type of employment of the employee (for example, whether full-time, part-time, casual or shift work)

176    The nature of the employees’ rosters, namely seven days on, seven days off, and the remote location of the Daunia Mine, are consistent with an expectation that employees would work on public holidays falling within their rosters. They, in fact, worked on a number of public holidays earlier in 2019, in accordance with their rosters, apparently without complaint. These matters are consistent with the employees expecting to work on Christmas Day and Boxing Day when they were rostered to work on those days.

(f)    The amount of notice in advance of the public holiday given by the employer when making the request

177    As has been discussed, the employees were notified that they may be required to work on public holidays before accepting their employment and were consistently reminded of that requirement after they commenced their employment. They were specifically informed of the requirement to work on Christmas Day and Boxing Day through the 2019 rosters and at meetings in June 2019.

178    I consider that the employees were given ample notice in advance of Christmas Day and Boxing Day that they would be required to work on those days.

(g)    In relation to the refusal of a request – the amount of notice in advance of the public holiday given by the employee when refusing the request

179    This matter is not relevant in this case.

(h)    Any other relevant matter

180    As I have indicated, s 114(1) of the FWA creates a prima facie entitlement for employees to be absent from work on a public holiday. It is necessary for the employer to demonstrate adequate reasons as to why it was reasonable to require employees to work on a public holiday.

181    It may be observed that the Union makes no complaint about the employees being required to work on public holidays other than Christmas Day and Boxing Day. The Union implicitly accepts that it was reasonable for employees to be required to work on other public holidays. There is an issue, then, of what differentiates Christmas Day and Boxing Day from other public holidays.

182    The Union submits, and I accept, that traditionally in the coal mining industry, employees have been asked to volunteer, but have not been required, to work on Christmas Day and Boxing Day. It can also be accepted that Christmas Day and Boxing Day are traditionally regarded by the broader Australian community as days to be spent away from work, and to be spent with family. I accept that these matters distinguish Christmas Day and Boxing Day from other public holidays to some extent. I accept that for a requirement that employees work on Christmas Day and Boxing Day to be reasonable, a strong justification is required.

Conclusion on reasonableness

183    Although a strong justification is required for the requirement that employees work on Christmas Day and Boxing Day, I am satisfied that OS has adduced sufficient evidence to demonstrate that the requirement was reasonable.

184    First, OS has demonstrated an operational need for its employees to work on public holidays, including Christmas Day and Boxing Day.

185    Second, the employees were given notice before they accepted employment with OS that they were expected to work on public holidays falling within their ordinary rosters, and were specifically informed and reminded after they commenced employment that they were required to work on Christmas Day and Boxing Day.

186    Third, the employees were paid an annualised salary, the level of which was adequate to reflect penalty rates payable under the Award for working on public holidays falling within their rosters, including Christmas Day and Boxing Day.

187    Fourth, after OS entered into its contract with BMA, there was no reasonable alternative to requiring the employees to work on Christmas Day and Boxing Day. As the employees’ salaries included components for penalties for working on those days, it would not be reasonable to expect OS to have to pay additional amounts to volunteers or labour hire employees to work on those days.

188    Fifth, OS allowed employees who demonstrated special personal circumstances to have leave on Christmas Day and Boxing Day. The requirement for employees to work on those days therefore had some flexibility. The employees who worked were either unable to, or did not attempt to, demonstrate special circumstances.

189    In these circumstances, I consider that OS’ requirement for employees to work on Christmas Day and Boxing Day was reasonable. I find that OS did not contravene s 114(2) of the FWA.

The alleged contraventions of s 45 of the FWA and cl 27.4 of the Award

190    The Union alleges that OS contravened s 45 of the FWA, by contravening cl 27.4 of the Award by failing to pay the employees double or triple time, for work performed on Christmas Day and Boxing Day.

191    The Union has now admitted that OS’ employees were paid an annual salary which exceeded the amount payable under the Award for their rosters, even assuming work on 10 public holidays in the year. The Union withdrew its submission that, “the annualised salary is [not] sufficient to cover all the entitlements under [the Award] including Christmas Day and Boxing Day 2019”.

192    The Union has not expressly withdrawn its allegation of contravention of s 45 of the FWA. However, the Union’s admission means that the allegation that the employees were not paid at the rates provided under cl 27.4 of the Award cannot succeed.

193    The proceeding must be dismissed.

Associate:    

Dated:    22 February 2022