The Australian Workers' Union v Barminco Pty Ltd [2015] FWC 99 (12 January 2015) [2015] FWC 99 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.739 —Dispute resolution The Australian Workers’ Union v Barminco Pty Ltd (C2013/4891) Mining industry COMMISSIONER LEE MELBOURNE, 12 JANUARY 2015 Alleged dispute concerning redundancy entitlements for Barminco Pty Ltd employees at Rosebery Mine, Tasmania - suitable alternative employment. [1] On 25 June 2013, The Australian Workers’ Union (the Applicant) notified a dispute with Barminco Pty Ltd (the Respondent) to the Fair Work Commission (the Commission) pursuant to the dispute settlement procedure contained in clause 7 of the Barminco (Tasmania) Enterprise Agreement 2012 1 (the Agreement). [2] The application lodged stated that the dispute related to clauses 7 “Dispute Resolution Procedure”, 11 “Termination of employment” and 24 “Redundancy” of the Agreement. BACKGROUND TO THE DISPUTE AND THE PROCEEDINGS THUS FAR [3] I have previously set out the background to this dispute in an earlier jurisdictional decision in this matter. 2 For convenience that background is reproduced here: “ [3] In May 2013, the operator of the Rosebery Mine in Rosebery, Tasmania, announced that the Respondent, was unsuccessful with its tender application for a new contract to commence from 1 July 2013. This raised the prospect of possible redundancy for approximately 120 of the Respondent’s employees. [4] The Respondent offered alternative employment at another site to a number of employees and that employment was accepted by a significant number of those employees. Other employees resigned their employment. [5] On 25 June 2013, the Applicant lodged an application with the Commission to deal with a dispute with the Respondent. That application related to a number of employees whose circumstances subsequent to the tender process remained a matter of dispute. [6] The dispute was listed for conciliation by Commissioner Deegan on 28 June 2013. [7] On 12 July 2013, the Applicant wrote to the Associate for Commissioner Deegan indicating the following: “The union corresponds with you regarding the abovementioned matter. The circumstances of a number of the employees affected by this dispute have now been resolved. However, there are a number of employees the union believes are redundant. The company does not share the unions view. Accordingly, the union requests the matter be relisted for conference/programming.” [8] The matter was subsequently allocated to me. [9] I listed the matter for conference on 1 August 2013 and again on 30 August 2013. The Australian Mines and Metals Association (AMMA) were granted permission to appear for the Respondent.” 3 [4] The conferences failed to resolve the matters in dispute. Ultimately it was determined the dispute would be arbitrated. JURISDICTION: [5] During the conferences referred to in paragraph 4 above, the Respondent’s representative raised a jurisdictional objection. It was agreed that directions would be set to allow for the determination of the jurisdictional objection prior to seeking submissions on the question to be determined. [6] While the Respondent initially posed a single jurisdictional objection, a second was raised when submissions were filed. Both jurisdictional objections raised by the Respondent were dealt with and both were ultimately dismissed. The jurisdictional decision 4 was not the subject of appeal. [7] Relevantly, the jurisdictional decision contained the following determination: “ [80] I am satisfied that the Commission has the necessary jurisdiction to determine the answer to the following question: “Were any or all of the following groups of named employees; [A], [B] and [C] 5 offered an acceptable alternative position within the meaning of clause 24.1(c) of the Barminco (Tasmania) Enterprise Agreement 2012 (the Agreement) at the time of the cessation of the Barminco contract at the Rosebery Mine?” [81] If the answer to the foregoing question is Yes, it is agreed by the parties that the relevant group/s of employees are not entitled to a redundancy payment under the terms of the Agreement. [82] Conversely, if the answer to the question is No, it is agreed by the parties that the relevant group/s of employees are entitled to a redundancy payment in accordance with the terms of clauses 24.3 and 24.4 of the Agreement.” [8] It is important I note at this point the framing of the question did not properly deal with the circumstances of employees in category C. Having considered further the construction of the clause, subsequent to the framing of the question, it is evident that it matters not whether employees in Category C are offered an acceptable alternative position. What matters is whether they meet the criteria in clause 24.1(c)(iv) of the Agreement. If they do, they are entitled to a redundancy payment. If they do not, it is then that the consideration turns to whether the employee was offered an acceptable alternate position. [9] Subsequent to the jurisdictional decision being published, directions were issued for the filing of materials relevant to the substantive questions to be determined. It was agreed by the parties that the matter could be determined on the papers and that a hearing was not necessary. Despite the initial directions issued by me, further material was filed and responded to by both parties. The final written submission that was filed on the 7 October 2014 was the Respondent’s rejoinder. The Applicant responded to specific questions raised by the Respondent in their rejoinder by supplementary statement filed 28 October 2014. [10] In the course of the filing of those materials, a further ‘preliminary question” was raised by the Respondent, at least in respect to the jurisdiction to determine the matter in relation to some of the employees. The basis of this further objection was essentially that it had become known to the Respondent, after the filing of the Applicant’s materials, that a number of the relevant employees, prior to the termination of their employment by the Respondent on 11 July 2013, had accepted and/or commenced employment with Redpath Australia Limited (Redpath) or MMG Limited (MMG) at the Rosebery Mine and this conduct constituted a repudiation of their contract with the Respondent. [11] On that basis, the Respondent submitted that these employees are not entitled to redundancy pay as the Respondent had not terminated their employment. I declined the request of the Respondent to deal with the repudiation question as a further preliminary issue but would deal with it as part of the overall consideration of the answer to the question posed. To approach the matter in that way is more efficient in light of the fact that the consideration of the repudiation argument as well as that of the alternative employment argument requires some consideration of the relevant evidence. THE EVIDENCE [12] An agreed statement of facts was filed in this matter. Drawing on the agreed facts document and some other material, it is clear enough the following facts are largely not in dispute. However, where there is some dispute on the facts, this has been noted: A brief history of the Respondent in Tasmania and Rosebery. The Respondent is an underground mining contractor which provides mining Services to mine tenement holders on a contract basis. The Respondent has had a continuous presence in Tasmania since 1999. That presence has varied from time to time from one site to three sites. The Respondent was engaged to perform underground mining services with MMG at Rosebery in Tasmania under a series of differing contracts with the last contract expiring on 30 June 2013. MMG did not renew its contract with the Respondent at Rosebery when that contract expired on 30 June 2013. Since that date the Respondent has had no presence at the MMG Rosebery mine. The Respondent’s last day of work under its contract at the Rosebery mine was 30 June 2013 and that therefore from that date, it would not be required to perform services at that site. What happened when the Respondent lost the contract with MMG at Rosebery? In April 2103 MMG announced that it would be “insourcing” a number of functions being performed by the Respondent at that time when the contract with Barminco expired on 30 June 2013 and that beyond that date MMG would be continuing to contract out the development function. MMG subsequently began to advertise for applications to fill the roles which MMG was insourcing. In early June MMG announced that Redpath had won the development contract and that the Respondent had been unsuccessful. The Respondent advised employees in early June that Barminco had been unsuccessful in winning the contract and would demobilise on or about 30 June 2013. Employees were advised at this time that the Respondent’s Human Resources would meet with employees to discuss options but that they would not be paying redundancy. Employees were also advised that they should apply for positions with the successful contractor, Redpath. The Respondent did meet with the majority of employees and informed them that their focus was on redeployment and if they could not find employment, employees would be place on stand-by until an alternative position could be found. The Applicant claims that employees were told at this time the standby pay rate would be the base rate of pay at 42 hours per week. The Respondent disputes this and submits that the standby rate was not discussed at this time. The Applicant claims that the Respondent confirmed there would be no redundancy payment. The Respondent claims that they indicated redundancy was a last resort after redeployment options were exhausted. On 1 April 2013 the Respondent was successful in gaining a contract at the Renison Mine which commenced on 1 April 2013. On 27 June 2013 Copper Mines of Tasmania announced that the Respondent had been selected to undertake the underground mining services at Mount Lyell effective 1 September 2013. On 28 June 2013 through to 2 July 2013, a number of the Respondent’s employees received a letter offering them “an equivalent position” in Queenstown from 1 September 2013 and payment at the base rate of pay plus attendance rate, from 5 July 2013 to 1 September 2013. Subsequently, the Respondent agreed to pay its employees formally of Rosebery up until 5 July 2013 at their usual rates of pay. The Respondent on 1 July 2013 increased its offer to pay “standby” (until the employees could take up work at Mt. Lyell on 1 September 2013) at 38 hours per week at 75% of employees average annual earnings. Employees were advised again that they would not be required to work during the standby period. Employees who did not accept the offer of alternative employment received advice dated 11 July 2013 that included the following: “I confirm your rejection of the alternative position offered to you at Mt. Lyell dated 28 June 2013. It is the company’s view the position offered to you meets the criteria of clause 24 of the Barminco Tasmania Enterprise Agreement 2012 and accordingly your rejection of the role is accepted as you providing notification of termination of employment without notice effective 3 July 2013”. (I note that the actual termination date varied for each employee. 6 ) Other matters The type of mining services provided by the Respondent at Rosebery, Mt. Lyell and Renison is broadly similar, though there are some differences in the services performed. Notably, the work at Rosebery is largely development work, whereas at Mt. Lyell and Renison, there is production work in addition to development work. Category A employees are those employees who assert that the requirement to undertake the period of standby does not constitute an acceptable alternate position. The employees in Category A are: Mr K Dicker; Mr R Gleeson, Mr J Macreadie, Mr G Marshall and Mr H Stevenson. (5 employees) Category B employees are those employees who assert that the excess travel time and the requirement to undertake the period of standby does not constitute an acceptable alternate position. The employees in category B are: Mr A Archer; Mr D Blanche, Mr L Ling; Mr G O’Neill, Mr K Howorka and Mr M Weldon. (6 employees) Category C employees are those employees who assert that a direct or personal impact based on personal experience or connection with the history of the alternative site precludes the employee working at that site. The employees in this category are: Mr S Howorka and Mr H Stevenson (2 employees) There are a total of 13 employees that are the subject of this application. Each employee in Category A had accommodation arrangements in place while working at Rosebery and a particular routine associated with those arrangements and the place of employment. Employees who transferred from Rosebery to Queenstown were not provided with Company supplied accommodation and were required to make their own arrangements. Each of the employees in Category B were residents of Rosebery or (nearby) Tullah. The Rosebery Mine is located within the township of Rosebery. It is a very short travel time from Rosebery to the MMG Mine. It is approximately 15 minutes travel time from Tullah to Rosebery. The BMJV (The Respondent (Barminco) joint venture) operate a residential camp for employees who are not local west coast of Tasmania residents at Pea Soup Creek just outside of Zeehan. The travel time from the residential camp at Pea Soup Creek outside of Zeehan to Renison is approximately 20 to 25 minutes. The travel time from Rosebery to the Renison mine is approximately 15 minutes. The travel time from Tullah to Queenstown is approximately 1 hour. The travel time from Rosebery to Queenstown is approximately 50 minutes. THE EVIDENCE OF THE EMPLOYEES [13] Each of the affected employees provided a witness statement. Their evidence is not contested. It is not necessary to set out the evidence given by each employee. Similarly, the evidence of Ms. Papantoniou, the HR Business Partner for the Respondent is not contested. As is evident in the consideration, I have had regard to the relevant evidence. THE LAW TO BE APPLIED [14] The general approach to the construction of enterprise agreements was considered in the Full Bench decision of the Commission, The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd. 7 In that decision the Full bench stated that; “Principles of construction of agreements General approach [19] The general approach to the construction of instruments of the kind at issue here is set out in the judgment of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union ( Wanneroo ): “The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘... ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia [1998] FCA 249 ; (1998) 80 IR 345 (Marshall J). ” [20] To this we add the oft-quoted observations of Madgwick J in Kucks v CSR Limited that a narrow pedantic approach to interpretation should be avoided, a search of the evident purpose is permissible and meanings which avoid inconvenience or injustice may reasonably be strained for, but: “. . . the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some interiorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.” [21] Although their Honours were each dealing with the proper interpretation of an award, the same principles are apt to apply to the interpretation of enterprise agreements. For example, similar observations were made in Amcor Limited v CFMEU ( Amcor ): “Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.” [22] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in Wanneroo : “It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes [1989] FCA 369 ; (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg George A Bond and Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380): “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.”” 8 [15] The legal position on the powers of the Fair Work Commission to arbitrate disputes generally is as follows. [16] Sub-sections 595(1) and (3) of the Fair Work Act 2009 (the Act) provide that: “ 595 FWC’s power to deal with disputes (1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision in this Act. … (3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.” [17] The Commission is empowered to deal with disputes through the operation of Division 2 of Part 6 - 2 of the Act, specifically sections 738 and 739 . Relevantly, section 738 provides that: “ 738 Application of this Division This Division applies if: (a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146 ; or (b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6) ; or (c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or (d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.” [18] Section 739(3) provides that: “ 739 Disputes dealt with by the FWC (1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute. ... (3) In dealing with a dispute the FWC must not exercise any powers limited by the term.” [19] The specific dispute settling procedure in the relevant agreement needs to be considered in terms of the relevant law. [20] The Agreement in this matter (which is a single enterprise agreement made in accordance with section 172(2) of the Act) includes a term that provides for a procedure for dealing with disputes at clauses 7.2 and 7.3: “7.2 In the event of any dispute arising as to the interpretation of this Agreement or any dispute (excluding matters concerning the termination of employment) pertaining to the employment relationship the following procedure shall apply. 7.3 Procedure (a) When a grievance arises the matter shall in the first instance be discussed between the employee/s and the Immediate Supervisor. If the matter remains unresolved:- (b) It may be referred for discussion between the employee/s and the Project Manager. If the matter remains unresolved:- (c) It may be referred for discussion between the employee/s and the Company’s nominated offsite senior manager. (d) If the matter cannot be resolved directly between the parties to the dispute, or if it is not practicable for steps (a) and (b) to be completed because of the nature of the dispute, either of the parties to the dispute may refer the matter to senior representatives of the company and state officials of the AWU for discussions. (e) If the matter remains unresolved:- (f) Either party may refer the issue to FWA for conciliation. (g) If conciliation is unable to resolve the matter, the Union or the Company may request FWA to arbitrate the matter. (h) Subject to the rights of appeal, the Parties shall be bound by the decision of the arbitrator. Any appeal will be by way of review rather than by re-hearing. (i) At the stage of the process referred to in (b) above and thereafter an employee may be represented by the Union or another employee.” CONSIDERATION Did the conduct of the “relevant” employees constitute a repudiation of their contract? [21] As mentioned above, a further jurisdictional objection was raised by the Respondent in this matter. The objection is set out clearly in the Respondents’ outline of submissions: “At its simplest, it is [the Respondent’s] position that each of the relevant employee’s conduct in accepting and commencing employment with Redpath or MMG prior to the termination of their employment with [the Respondent] on 11 July 2013: a) constituted a repudiation of their contract of employment with [the Respondent] with the result that the relevant employee, not [the Respondent], terminated their employment with [the Respondent] and accordingly, b) the relevant employees are not entitled to redundancy pay under clause 24 of the Agreement as a redundancy has not occurred under clause 24.1(a) of the Agreement.” [22] The relevant employees the subject of this argument are Mr K Dicker, Mr J Macreadie, Mr A Archer, Mr D Blanch, Mr L Ling, Mr G O’Neill, Mr H Stevenson, and Mr S Howorka. On their own evidence, each of these employees commenced employment with a new employer, either MMG or Redpath, between the 3rd and 8 July 2013. The Respondent, in submissions dated 11 August 2014, sets out in a table 9 the relevant chronology for each of the relevant employees. All of the relevant employees commenced employment with their new employer after their employment ceased with the Respondent, with the exception of Mr. A Archer who apparently was employed by both Redpath and the Respondent for two days on the 3rd and 4th of July 2013. Each of the relevant employees had accepted a position with another employer and commenced work with either MMG or Redpath prior to the Respondent confirming the termination of their employment on 11 July 2013. [23] Before dealing with the repudiation submission of the Respondent, it is necessary to consider the objection of the Applicant to the repudiation argument being dealt with at all. [24] The Applicant submits, essentially as a primary submission, that I should not consider the submissions made by the Respondent on the repudiation point at all. Essentially the Applicant’s submission as to why the repudiation argument should not be determined is that there has already been a determination on jurisdiction in relation to this matter; that it is not “appropriate” for the Respondent to now suggest that there is any controversy different to that which existed at the time that the question for determination was agreed by the parties or when the initial jurisdictional objections were determined and that the Doctrine of res judicata estoppel arises which should prevent the Respondent arguing matters that were raised and decided in the jurisdictional decision already given and operates to prevent the Respondent raising matters that were not raised in the earlier proceedings but which they were aware of, or should have been aware of. [25] I do not accept this submission from the Applicant. If it is the case that the relevant employees were not made redundant because there was repudiation of the contract, this is a matter that goes to the Commission’s jurisdiction to answer to the question that has been posed. The fact that a jurisdictional point was not raised because there was a lack of awareness of a factual circumstance, in this case the obtaining of other employment by the “relevant employees”, does not mean that the factual circumstance can be ignored. The matter for determination depends on the relevant employees actually being redundant, a fact that was not controversial prior to the filing of the relevant employees witness statements. [26] If the employees were not actually redundant, there is not a jurisdictional basis to consider the answer to the question posed as to whether they were offered acceptable alternative employment. The question only arises in the circumstances where there is a consideration of whether there is a redundancy payment to be made after applying the facts to the criteria in clause 24.1(c) of the Agreement. It is simply not an option to suggest that a jurisdictional objection such as that raised in relation to repudiation can be side stepped, as it were. To do so would be an error of jurisdiction. [27] The Respondent submits that there can be no doubt that the relevant employees actions in accepting and/or commencing work with either Redpath or MMG prior to the termination of employment satisfies the test of repugnancy in Cementaid (NSW) Pty Ltd v Chambers 10 (Cementaid). [28] In Cementaid, it was held that a repugnancy between the continuation of the two contracts will exist if any of the following questions are answered in the affirmative: (a) is the second activity incompatible with the fulfilment of the employees duty to his other employer? (b) does it involve an opposition or conflict between his interest and his duty to his employer? (c) does it impede the faithful performance of his obligations to his other employer? (d) is it destructive of the necessary confidence between employer and employee? [29] It is submitted by the Respondent that, as the new employment was exactly the same (albeit for a different employer) and it would have been impossible to perform both jobs at the same time, it was wholly inconsistent with the continuation of their respective contracts of employment with the Respondent. As the actions convey an intention to no longer be bound by the terms of their contract of employment with the Respondent the actions of the employees amount to a repudiation of the employment relationship. [30] I do not accept the argument of the Respondent that the conduct of the relevant employees, including Mr. A Archer, had the effect of ending the contract of employment prior to the confirmation from the Respondent on 11 July 2013 that the employment contract had ceased. [31] The first issue is whether or not in the circumstances it was impossible, as put by the Respondent, for the employees to perform both jobs. It is clear that from 30 June 2013 the relevant employees were not required to attend for work at Rosebery. It is clear that the Respondent terminated the employment of all of the employees, including the relevant employees on or before 11 July 2013. [32] None of the relevant employees commenced employment with the new employer before 30 June 2013. From that date, until 5 July 2013 they were paid their full rate of pay, and from 5 July 2013, they were paid at 75% of their average pay. [33] The employees were not required to attend the workplace from 30 June 2013. It is hard to reconcile that position with a claim that the relevant employees had repudiated their contracts. As they were not required in the workplace by the Respondent until 1 September 2013, it was entirely possible, rather than impossible, for them to perform both jobs during the period from 30 June 2013 to 11 July 2013. Indeed, the respondent had encouraged them to find other employment. [34] The submission of the Respondent is that it was open to employees to mitigate their losses during the standby period by finding other employment during the standby period. 11 Indeed it is possible that the employees could have, despite having obtained employment with another employer, resigned from the new employer to take up their redeployed role when needed on 1 September 2013. [35] There is an obvious tension in the submissions of the Respondent here where on the one hand, they are comfortable with the employees taking up other employment to mitigate their losses during the standby period but also seek to argue that by doing so, they have repudiated their employment. I note that my consideration is focused on the period up until 11 July 2013, the point at which the Respondent confirmed termination of employment. If employees were employed at both organisations from 1 September 2013, when they were required to attend work at either Mt Lyell or Renison for the Respondent, and for their new employer simultaneously, my view on the whether the employees had repudiated their employment relationship with the Respondent would likely differ at that point. [36] Considering the factual circumstances in this matter, I am not satisfied that the relevant employees, including Mr. A Archer, repudiated their contracts of employment prior to 11 July 2013. The test of repugnancy as per Cementaid is not evident. [37] However, if I am wrong on that point, that there was a repudiation of the employment relationship, was there a termination of the contract of employment? [38] The respondent submits, and I agree, that it is accepted a repudiation of a contract of employment has the effect of bringing an employment relationship to an end, and, once accepted by the other party, ends the contract of employment. The respondent further submits and I agree that acceptance of repudiation is a voluntary act which requires knowledge of the repudiation with the effect to bring the contract to an end or, if the repudiation is not accepted, affirming the contract. 12 [39] The situation here is that the Respondent was unaware of the purported repudiation. 13 At most, Ms. Papantoniou had an “inkling” that a number of employees, including the relevant employees had received offers of employment from MMG or Redpath. 14 [40] I note that the Respondent complains of the alleged conduct of the employees and the Applicant, in allegedly concealing the information that they had obtained alternative employment, which had the effect of denying the Respondent the right to accept the repudiation of the relevant contracts of employment. However, the fact is that the Respondent was unaware of the purported repudiation, if it did in fact occur. As they were unaware, they did not accept it. As it was not accepted by the Respondent, there is no termination of the contract of employment at some earlier time than 11 July 2013. At that time, the contract of employment was clearly terminated by the Respondent, as the employees had rejected the offers of alternative employment. The employees were redundant as the Respondent no longer had any work for the employees to do. Alternative positions were offered to the employees. If the positions were acceptable, within the meaning of clause 24.1(c) of the Agreement, then under the terms of the agreement, no redundancy payment is payable. The questions to be determined [41] Clause 24.1(c) of the Agreement sets out the objective criteria to apply to the facts, in determining whether a redeployment opportunity constitutes suitable alternative employment. Clause 24.1(c) of the Agreement reads as follows: “24 Redundancy ... (c) Alternative employment No redundancy payment will be payable to an Employee if the Company is able to offer, or cause to be offered to the Employee, another acceptable alternate position, that is; (i) Within the Employees skill, competence or training. (ii) on substantially similar terms and conditions of employment (including travel time); and (iii) with continuity of service. (iv) Provided that the exclusion in 24.1(c)(i),(ii) and (iii) shall not apply, if a person can demonstrate a direct or personal impact based on personal experience or a connection with the history of the alternative site, which precludes the person working at that site. In the event that the company is not persuaded by the circumstances of the person, the Commission will determine the matter by conciliation, or failing resolution, arbitration.” [42] There is no reason to believe that any one of the criteria in (i), (ii) or (iii) is dominant in terms of the weight they are to be given. The Respondent submits and I agree, that the onus of establishing that proposed alternative employment is suitable alternative employment lies with the Respondent. 15 [43] It follows that in arbitrating this matter, the task is to make an objective assessment by weighing up all of the criteria stated in clause 24(c) of the Agreement, applying the criteria to the facts in this matter and determining, for each employee in category A and B that the Respondent sought to redeploy, whether or not the position offered was acceptable alternative employment. [44] I note at this point that the approach for the two employees in category C is different. Those two employees rely exclusively on the provision in (c) (iv) which excludes the criteria in (i) (ii) and (iii). I will deal separately with the circumstances of these employees later in the decision as it involves a separate consideration of the construction of the terms of this part of the Agreement. [45] The Respondent submits that, having regard to the questions that have been framed to be answered in this matter, it follows that in determining whether the Respondent offered an acceptable alternate position to each of the employees, that question is to be determined solely on the reasons put forth by each of the employees by virtue of their category. That is the Commission is to determine: “(a) in relation to Category (A), whether the so-called period of 'standby' means, of itself, that that the new position is not an 'acceptable alternate position' as it is not on 'substantially similar terms and conditions of employment (including travel time)' pursuant to clause 24.1 (c)(ii) of the [Agreement]; (b) in relation to Category (B), whether the so-called 8 week period of 'standby' and the additional travel time means, of themselves, that the new position is not an acceptable alternate position' as it is not on 'substantially similar terms and conditions of employment (including travel time)' pursuant to clause 24.1 (c)(ii) of the [Agreement]; and (c) in relation to Category [C), whether the personal circumstances of each of these employees mean that they fall within the exception in clause 24.1 (c)(iv) of the [Agreement]. [46] I note that the requirements of clause 24.1(c)(i) and (iii) are satisfied. 16 The dispute revolves around 24.1(c)(ii) of the Agreement and the associated standby period and travel time. I further note that the Applicant also makes reference to different shift rosters as an additional consideration. The various employees gave evidence on this matter. However, I agree with the Respondent that any such change is not a term of the employees’ employment. Both positions would be covered by either the Agreement or the Mt Lyell Agreement which both provide that the relevant term is that the employees are required to work a ‘8, 10 or 12 hour shift roster system as required by the company”. 17 Category A - Standby Period [47] In relation to Category A employees, the Respondent’s primary position is that the so-called 8 week stand by period is not a “term” of the offer and is therefore irrelevant for the purposes of the Commission’s analysis. To accept this submission would require in my view an overly narrow interpretation of “terms and conditions of employment”. The fact that an offer of employment is not available for an 8 week period is on its ordinary meaning, a term of the employment. That is, one of the terms of the employment is that employment will not begin until sometime in the future. It would be absurd and illogical outcome for it to be otherwise. To illustrate the point, perhaps the offer of employment included a term that the waiting period to start work was for a longer period, perhaps 6 months. It would be illogical that the disadvantage associated with this would not properly be taken into account. For these reasons this submission is rejected. [48] The alternative submission put by the Respondent is that, if the stand by period was in fact a term of the offer made by the Respondent, the reduction in remuneration experienced by the employees during this time is not significant enough to mean that the role at My Lyell was not on “substantially similar terms and conditions” for two key reasons: the quantum of the reduction (particularly when considered against the annual earnings of the employees) and the fact that it was a “one off” reduction for a known and limited period of time and secondly, that it was within the Respondent’s rights under the Agreement (and the Mt Lyell Agreement) to only pay employees their base wage rate when they are not at work. This submission leads in turn to a dispute between the Applicant and the Respondent as to the correct construction of clause 16 which deals with base wage rate. [49] However, it is not necessary to deal with that construction point other than to point out that employees are entitled under the Agreement to be paid a base wage rate, “for ordinary hours of work”. However, the employees were not at work. There was no work to do and the employer did not require them to be at the workplace. The better view is that the payments made during the “standby period” were an ex gratia payment made by the employer in recognition that the new role did not commence for another 8 weeks. I note that this is broadly consistent with the submissions of the Respondent. 18 [50] The key issue is then, whether or not the reduction in remuneration during the period of standby is significant enough to determine that the role at Mt. Lyell was not on substantially similar terms and conditions. The loss that would be suffered by each of the employees varies. However, the evidence is that the maximum loss suffered by an employee in category A (Mr G Marshall and Mr A Archer) would be $5,213.12, approximately 5% of their annual salary. The Respondent points out that this disadvantage was a “one off”, it was not a permanent reduction in remuneration, there was certainty that the amount would be no greater and that, as discussed earlier in the consideration of repudiation, it was open to employees to mitigate their loss by taking up employment during the period of stand-by. [51] The Respondent draws my attention to the decision in Richards Mining Services v Zoe Dunkerley 19 where the Commission found that a reduction of approximately 4% of salary was not sufficient to render the alternative employment unacceptable. Also cited was the decision in National Union of Workers v Tontine Fibres (A Division of United Bonded Fabrics Pty Ltd 20 where a potential loss of overtime leading to a loss of earnings did not render the offer unsuitable. I have noted these decisions and that each of them turn on their own combination of facts. [52] In my view, the reduced amount of payment, while a disadvantage for employees, has to be seen in context, it is the only disadvantage for the employees in this category. Moreover, it is a “one off” and in context, a relatively minor disadvantage. The factors must be looked at as a whole. In this case, there is no dispute that the position offered was acceptable in all respects when the criteria is applied, with the stand-by period and its quantum of payment being the only criteria in dispute. When considered against the totality of the criteria in (i) to (iii) it is not of such significance in the circumstances of this matter to support a finding that the employment is not acceptable. [53] The answer to the question in respect to category A employees is yes, they were offered an acceptable alternate position. Under the terms of the Agreement they are not entitled to be paid redundancy pay. Category B - Standby period and travel time [54] The circumstances surrounding the consideration of standby time dealt with in respect to the category A employees equally applies here. However, the question for the category B employees is whether the reduced payment for the standby period, combined with the additional travel time renders the offered positions unacceptable. [55] It is not in dispute that the travel time from Rosebery to the Rosebery mine is neglible as the mine is in the town. Travel time from Tullah to Rosebery is 15 minutes; Tullah to Queenstown is approximately 1 hour and from Rosebery to Queenstown is approximately 50 minutes. Employees who transfer from Rosebery to Queenstown are not provided with Company supplied accommodation and are expected by the Respondent to make their own arrangements for accommodation. [56] All of the employees in category B resided in close proximity to the Rosebery mine, either in Rosebery or Tullah. They therefore had two options in relation to their new role at Mt. Lyell should they have accepted it. Travel the additional distance to and from work each day or relocate their residence. For those who live in Tullah, they normally travelled for 15 minutes and would now travel for one hour, an additional 45 minutes each way or 90 minutes per day. For those residing in Rosebery who previously had negligible travel time, the additional travel is 50 minutes each way or 100 minutes per day. [57] For the purposes of this decision, the uncontested evidence of all of the employees that relocation was not feasible for a range of reasons. Therefore, their consideration of the alternative offer of employment included the contemplation of additional travel. [58] In considering additional travel, the Respondent drew my attention to National Union of Workers - re Appeal 21 . In that case a Full Bench of the Australian Industrial Relations Commission held that an extra 90 minutes of travel per day (not factoring in peak hour traffic) was not enough in the circumstances of that case to render the alternative employment unacceptable notwithstanding that employees in that case also suffered a wage decrease and the offer of transport by the employer was only for a 12 month period. [59] In the case of Spotless Services Australia Ltd 22 , an additional 50 minutes of travel per day was involved. In that case where it was held the alternative employment was acceptable, the Commission was influenced by the nature of the industry which Spotless operated in where contracts were won and lost and this fact was recognised in each employee’s contract of employment which permitted Spotless to change the location of the work. [60] The Respondent asserts, and I agree, that the cases cited, particularly Spotless show that the additional travel time cannot be considered in isolation. It is a relative concept and it has to been considered within the context of the particular industry under consideration, in this case, the mining industry. [61] The Respondent points out that the employees contracts of employment contain a similar provision to that in Spotless, that the contract of employment includes the following: “You may also be required to transfer to another site due to operational requirements”. [62] The Applicant contends that by virtue of the operation of clause 3 of the Agreement, that aspect of the contract of employment has no effect. 23 [63] Clause 3 of the Agreement includes the following : “The intent of this agreement is to comply with the Fair Work Act 2009 and reflect the terms and conditions outlined in the letters of appointment but in any case of inconsistency the more favourable position to the employee will apply”; [64] The Applicants submission on this point has some force, though I agree with the Respondent’s rejoinder that whether it does so depends on whether receiving redundancy payments is, in fact, the more favourable than ongoing employment. [65] However, even if this aspect of the contract of employment has no effect as contended by the Applicant, it is an agreed fact in this matter that the nature of the industry in which the Respondent operates is such that contracts are won and lost from time to time. When a contract at a site is lost the Respondent may be required to look at redeployment options at alternative mine sites and engage in consultation with the affected employees and their union representatives. 24 [66] It is a reality that mine sites are in rural areas and generally speaking some considerable distance from each other. This should be taken into consideration. They are different circumstances to those that would be considered when considering and acceptable alternate role, in a metropolitan setting. [67] In this context, while the travel time to Rosebery weighs’ against a finding that the employment is acceptable alternative employment, there is force to the Respondent’s submission that if the additional travel time in this matter renders the offer to be not an acceptable alternate role, then it suggests that it would never be possible to offer an acceptable alternate role, as to do so would mean that only a role in another mine very close to the original mine would be acceptable. I don’t agree that would never be possible, but I do think it would be unlikely. This would be an absurd outcome as it would mean that it would be extremely difficult for the Respondent to offer an acceptable alternative position as extra travel will almost always be a feature of that offer. [68] Of course, for Category B employees, the travel consideration needs to be combined with a consideration of the standby period. As already stated, the standby period is, when considered in context, a minor issue. I do not consider that the travel time and reduced pay during the standby period combined are of such disadvantage to render the offer of alternative employment unacceptable, when considered within the context of employment in the mining industry on the west coast of Tasmania. [69] The answer to the question in respect to category B employees is yes, they were offered an acceptable alternative position. Under the terms of the Agreement they are not entitled to be paid redundancy pay. Categroy C -Personal Circumstances. [70] Clause 24.1c of the Agreement provides that even if an offer of alternative employment is made to an employee which satisfied the criteria in clauses 24.1(c)(i)(ii) and (iii) an employee will still be entitled to redundancy entitlements if the employee can demonstrate a direct or personal impact based on personal experience or a connection with the history of an alternative site, which precludes the person working at that site. [71] The Applicant submits, and the Respondent agrees that whether an employee falls within this exclusion will depend on their own factual circumstances Mr S Howorka. [72] The evidence of Mr. Howorka is that he worked at Renison on two occasions. The first occasion was from 2000 to 2002 approximately. The second period was from 2004-2005. During the first period, he was working on a level of the mine that, presumably because it was considered unsafe, crews refused to work at that level. Consequently, the level, (Blackwood 1660) was barricaded off as unsafe. In 2003, two employees were killed working in that location. [73] During Mr. Howorka’s second period of employment, he was working on the 1359 level at Renison. After he worked there, the 1359 level collapsed, killing an employee As a consequence of the incidents at Renison Mr. Howorka feels he can no longer return to work at that mine. [74] I note that the Respondent raises questions about the circumstances surrounding the timing and circumstance of the rejection of alternative employment by Mr. Howorka. However, this is speculation as to the motives of Mr. Howorka. It does not alter the evidence he has given which is, as I said, uncontested. [75] The terms of clause 24.1(c)(iv) of the Agreement require that the employee “demonstrates” certain things set out in the clause. Those factors are separated by the word “or” and so are alternatives, one or other can be met in order to “demonstrate” for the purposes of the clause. To demonstrate means to make evident by arguments or reasoning; prove. 25 It is not in my view simply a matter of an employee casting about for some speculative reason as to why they cannot work at the site. The demonstrated evidence must be sufficient to find that the employee is “precluded” from working at that site. Precluded means “to shut out or exclude; prevent the presence, existence or occurrence of; make impossible.” Thus to preclude means something more than a demonstration of inconvenience, dislike or a preference to not work at the site. However, the clause should not be interpreted in a vacuum. It should be considered in the context of the mining industry within which it operates. [76] In my view, the uncontested evidence of Mr. Howorka demonstrates a personal impact based on a connection with the history of the alternative site. The deaths that occurred in two locations within the exact location of the mine where he has previously worked are significant and can readily be understood as having the capacity to have an impact on him. Within the context of the mining industry, and considering the clause in that context, it is likely that its purpose is to deal with circumstances such as this. Indeed, if the evidence of Mr. Howorka is insufficient to invoke the operation of this clause, it is difficult to imagine what would. In my view, the evidence demonstrates that this impact has lead him to feel that he can no longer work at that mine and is therefore precluded from working at that mine. This means that exclusions in clause 24.1(c)(i)(ii)(iii) do not apply to Mr. Howorka. He was made redundant on July 11 2013 and is entitled to be paid the redundancy pay he was entitled to at that time, in accordance with the agreement. Mr H Stevenson [77] Mr. Stevenson provided evidence that he worked at Mt. Lyell previously for approximately 13 years until he resigned on 16 March 2011. Mr. Stevenson claims he resigned because he was; “...fed-up with the harassment he was experiencing from fellow employees. Those fellow employees are long term residents of Queenstown who like [Mr Stevenson] have been employed by the various contractors at Queenstown as they come and go. [Mr Stevenson was] aware that those employees were at the time still working at Queenstown and continue to do so. [Mr Stevenson] had raised [his] concerns at that time with the Site manager for [the Respondent] and then Redpath Gary Mayes who acted on my complaint with the employees concerned to stop the harassment. The harassment did stop briefly following that action by Gary Mayes but began to happen again after... some time because Gary Mayes had left the site.” 26 [78] These circumstances led Mr. Stevenson to advise the Respondent on 2 July 2013 that he could not return to Queenstown because he had worked there previously and had been bullied and harassed. [79] There is no evidence to contradict the evidence from Mr. Stevenson that the employees engaged in bullying behaviour and that they still work at My Lyell. It demonstrates a direct impact based on personal experience with the alternative site. However, whether this is sufficient to satisfy whether the employee is precluded from working on that site is another matter. The Respondent submits, and I agree, that the mere fact that Mr. Stevenson may be subject to bullying is not enough to establish that he is precluded from returning to the site and that, should there have been bullying behaviour, this could have dealt with by the Respondent via investigations and disciplinary processes and/or through an application to the Commission’s anti bullying jurisdiction. [80] For these reasons, I am not satisfied that the circumstances pertaining to Mr. Stevenson are sufficient for me to agree that he was precluded from working at the alternative site. I note that Mr. Stevenson also relies on the stand by period as part of the reason for not accepting the alternative employment. I have already dealt with this in respect to the category A employees. Under the terms of the Agreement Mr. Stevenson is not entitled to be paid redundancy pay. CONCLUSION: [81] For the reasons set out above, my decision, made pursuant to the dispute resolution procedure in the Agreement and section 739 of the Act, is that redundancy pay is payable to Mr. S Howorka as he is excluded from the operation of subclauses 24.1(c) (i)(ii)(iii) of the Agreement. However, with the exception of Mr. Howorka, I am satisfied that all other employees were offered acceptable alternative positions as defined by this Agreement. The agreement does not contemplate a reduction in redundancy pay. 27 It follows that under the terms of the Agreement, as they were offered acceptable alternative positions, all the employees the subject of this application, with the exception of Mr. Howorka, are not entitled to any payment for redundancy. COMMISSIONER 1 AE400363 2 [2014] FWC 1954 3 The Australian Workers’ Union v Barminco Pty Ltd , [2014] FWC 1954 , [3] - [9] 4 The Australian Workers’ Union v Barminco Pty Ltd , [2014] FWC 1954 5 Category A: Requirement for period of standby does not constitute reasonable alternative employment. Catergory B: Excess travel time and standby does not constitute reasonable alternative employment. Category C: Personal impact based on personal experience of connection with history at the alternative site, does not constitute alternative employment. 6 Respondent’s outline of submissions, filed 11 August 2014, [37] 7 [2014] FWCFB 7447 8 The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd, [2014] FWCFB 7447 , [21] - [22] 9 Respondent’s outline of submissions, filed 11 August 2014, [40] 10 Unreported, Supreme Court of New South Wales, BC9504439, 28 March 1995, 29 March 1995 11 Respondent’s Further Outline of Submissions, filed 12 September 2014, [37(c)] 12 Sargent v ASL Developments Ltd (1974) 131 CLR 634; O’Connor v S.P. Bray Ltd [1936] NSWStRp 14 ; (1936) 36 SR (NSW) 248 13 Respondent’s outline of submissions, filed 11 August 2014, [59] 14 Witness Statement of Ioanna Papantoniou, dated 11 August 2014, [16] 15 Australian Chamber of Manufactures v Derole Nominees Pty Ltd [1990] AIRC 980 ; (1990) 140 IR 123 16 Applicant’s outline of submissions, filed 30 June 2013, [18]-[19] 17 See clause 12.2 of the Agreement and the Mt Lyell Agreement 18 Respondent’s Further Outline of Submissions, filed 12 September 2014, [35] 19 [2013] FWC 4022 20 [2007] AIRC 952 . 21 [2007] AIRC FB 1016 22 [2013] FWC 4484 . 23 see Visscher v Guidice [2009] HCA 34 24 Agreed Facts document, filed 5 September 2013, [32] 25 Maquarie Dictionary 26 Witness Statement of H Stevenson [5] 27 Note a recent Full Bench Maritime Union of Australia v FBIS International Protective Services (Aust) Pty Ltd [ [2014] FWCFB 6737 ] dealt with a similar situation of an agreement that did not allow for a reduction in the amount of redundancy paid. 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