DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Construction, Forestry, Mining and Energy Union
v
Glencore Mt Owen Pty Ltd
(C2014/7421)

Arbitration of dispute concerning employer’s direction banning smoking in the workplace.

[1] On 1 January 2015 Glencore Mt Owen Pty Ltd (Mt Owen) banned smoking across the Mt Owen Complex, which is comprised of the Mt Owen open cut mine, the Coal Handling and Preparation Plant (CHPP) at the Mt Owen mine, and the neighbouring Glendell open cut mine. This application concerns a dispute as to the introduction of the smoking ban across the Mt Owen Complex for Mt Owen’s employees who work at the CHPP (Dispute).

[2] Thiess Pty Ltd (Thiess) operates the Mt Owen mine (other than the CHPP) under contract with Mt Owen. There is a related dispute involving Thiess and the introduction of the smoking ban for its employees who work at the Mt Owen mine. 1 That dispute is being held in abeyance pending the outcome of this Dispute.

[3] Approximately 31 employees of Mt Owen who work at the CHPP are covered by the Mt Owen Mine Enterprise Agreement 2010 (Enterprise Agreement). Clause 30 of the Enterprise Agreement sets out a procedure for dealing with disputes “arising between the company and an employee or employees as to the application of this Agreement or in the course of employment, or in relation to the National Employment Standards”.

[4] The Construction, Forestry, Mining and Energy Union (CFMEU) made an application to the Fair Work Commission (Commission) under s.739 of the Fair Work Act 2009 (Cth) (Act) to deal with the Dispute.

Issues

[5] There is no dispute between the parties as to the following matters, and I am satisfied that:

(a) the Dispute is a dispute “arising between the company and an employee or employees … in the course of employment”;

(b) the preliminary steps in the disputes procedure in clause 30 of the Enterprise Agreement have been undertaken in relation to the Dispute;

(c) the Commission has the power to arbitrate the Dispute in accordance with clause 30(5) of the Enterprise Agreement; and

(d) the direction banning smoking at the workplace is not contrary to, or inconsistent with, any term of the Enterprise Agreement.

[6] The parties agree that the question the Commission has been asked to arbitrate under the disputes procedure of the Enterprise Agreement is whether the direction given by Mt Owen to its employees who work at the CHPP to ban smoking at the Mt Owen Complex is a lawful and reasonable direction. This issue arises because, in the absence of an express term, there is an implied term in each contract of employment to the effect that the employee will comply with the lawful and reasonable directions of the employer. 2 This is one of the principal ways in which an employer’s managerial prerogative arises from a legal perspective.3

[7] The CFMEU accepts that Mt Owen’s direction banning smoking at the Mt Owen Complex is a lawful direction. Accordingly, the sole issue between the parties is whether the direction banning smoking at the Mt Owen Complex for employees who work in the CHPP is a reasonable direction.

Legal principles – reasonable directions

[8] The test of whether a direction is lawful and reasonable was stated by Dixon J in R v Darling Island Stevedoring and Lighthouse Ltd; Ex parte Halliday and Sullivan 4 in these terms:

“But the award could not safely, or, at all events, fairly impose upon the employees an obligation to obey all instructions given by employers…Some qualification or restriction was necessary. Naturally enough the award adopted the standard or test by which the common law determines the lawfulness of a command or direction given by a master to a servant. If a command relates to the subject matter of the employment and involves no illegality, the obligation of the servant to obey it depends at common law upon its being reasonable. In other words, the lawful commands of an employer which an employee must obey are those which fall within the scope of the contract of service and are reasonable…But what is reasonable is not to be determined, so to speak, in vacuo. The nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case the award, governing the relationship, supply considerations by which the determination of what is reasonable must be controlled.”

[9] In Woolworth Ltd v Brown 5 a Full Bench of the Commission observed as follows:

“In the modern era employers face an often bewildering array of statutory obligations in relation to matters such as health and safety, discrimination, taxation, trade practices and fair trading to mention the most obvious examples. Employers face potential liability arising from their common law duty of care to their employees and to members of the public. Employers may be subject to contractual obligations that require them to conduct their business in a particular way or to meet particular standards or observe particular constraints. For these reasons it is entirely reasonable, and often necessary, for employers to put in place policies, with which employees must comply, to facilitate the employer’s compliance with its obligations and duties.  (at [24])
...
What is reasonable will depend upon all the circumstances including the nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument governing the relationship. A policy will be reasonable if a reasonable employer, in the position of actual employer and acting reasonably, could have adopted the policy. That is, a policy will only be unreasonable if no reasonable employer could have adopted it. A policy will not be unreasonable merely because a member of the Commission considers that a better or different policy may have been more appropriate. As the Full Bench observed in the XPT case, albeit in a somewhat different context, it is not the role of the Commission ‘to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.’” (at [35]) 6

[10] In Briggs v AWH 7 the Full Bench relevantly said (at [8]):

“The determination of whether an employer’s direction was a reasonable one … does not involve an abstract or unconfined assessment as to the justice or merit of the direction. It does not need to be demonstrated by the employer that the direction issued was the preferable or most appropriate course of action, or in accordance with “best practice”, or in the best interests of the parties. The proper approach to the task is that identified by Dixon J in The King v Darling Island Stevedoring and Lighterage Company Limited; Ex Parte Halliday and Sullivan.”

[11] Whether a direction is reasonable is essentially a question of fact and balance. 8

Is the direction to ban smoking at the workplace reasonable?

[12] There are a number of factors which are relevant to an assessment of the reasonableness of Mt Owen’s direction to ban smoking at the CHPP. 9 I will address each of them in turn below.

The nature of the employment and impact of the direction on employees who smoke

[13] The employees in the CHPP who are covered by the Enterprise Agreement work 12.5 hour shifts, and rotate between day shift (commencing at 6:45am) and night shift (commencing at 6:45pm). There are two paid 30 minute breaks in each shift.

[14] The work undertaken by the employees in the CHPP can be physically and emotionally demanding. The breaks provide the employees with an opportunity to eat and rest.

[15] Mr Hunter, a Technician employed in the CHPP and the CFMEU Lodge President for the CHPP, gave evidence that it would take approximately 16 minutes for an employee to drive the 2.8km from the CHPP to the front gate of the Mt Owen Complex, smoke a cigarette and drive back to the CHPP. Mr Hunter also gave evidence in cross examination that a light vehicle is almost invariably available during the paid 30 minutes breaks for employees who work in the CHPP.

[16] Mr McLeod, Operations Manager for the Mt Owen mine, accepted that, in light of (a) the size of the Mt Owen Complex and the location of the CHPP within it, and (b) the duration of paid meal breaks (30 minutes), it would be “difficult but not impossible” for an employee to leave the CHPP, drive to the front gate of the Mt Owen Complex (and therefore outside the Mt Owen Complex), smoke a cigarette and then get back to the CHPP within a 30 minute break. Mr McLeod also gave evidence that an employee would need to obtain permission (either prior to or during the break) from their supervisor before leaving the Mt Owen Complex during a 30 minute break to have a cigarette.

[17] The evidence revealed that about three out of the approximately 31 employees who work at the CHPP are smokers of cigarettes. None of those three employees have taken up the offers of support made by Mt Owen to assist employees to quit smoking, nor have any of them sought permission from their supervisor to leave the Mt Owen Complex during a 30 minute break in order to smoke a cigarette.

[18] Mr Hunter gave evidence that a number of employees who work in the CHPP and who smoke have complained to him about the impact of the smoking ban. They have told Mr Hunter that “it is very difficult to get through an entire shift without being able to smoke”.

[19] Given the duration of the shifts (12.5 hours) and the fact that it would be difficult for an employee to be able to leave the Mt Owen Complex during a break to smoke outside the Mt Owen Complex, I accept the evidence that some employees, particularly heavy smokers, are finding it very difficult to get through an entire shift without being able to smoke anywhere in the workplace.

[20] The ban on smoking is also a restriction on the personal liberty of the employees who work at the CHPP. Employees have a legitimate interest in being able to choose whether or not to engage in a lawful activity such as smoking cigarettes during a work break.

[21] These matters weigh in favour of the CFMEU’s contention that the direction banning smoking across the Mt Owen Complex is unreasonable. However, they are ameliorated somewhat by the measures put in place by Mt Owen to offer support to employees to quit or reduce smoking, including by offering to reimburse expenses incurred by employees in purchasing products such as Nicorette Patches and Nicorette Gum to assist them to quit smoking or to deal with nicotine cravings during a work shift. 10

Risks associated with smoking and the employer’s legislative obligations concerning occupational health and safety in the workplace

[22] The literature and other guidance material relied upon by both parties to the Dispute establishes that:

(a) smoking is a significant health hazard to both the smoker and those who are subjected to passive smoke (otherwise known as environmental tobacco smoke (ETS)); 11

(b) there is no safe level of exposure to ETS; 12

(c) smoking in the workplace gives rise to a fire risk; 13

(d) there is no legal obligation to provide designated smoking areas in the workplace, although some employers elect to do so; 14 and

(e) employers who allow smoking in their workplace are at risk of being sued by either employees or members of the public who suffer ill health as a result of passive smoking. 15

[23] Mt Owen has a legitimate interest in dealing with these matters in the workplace in a reasonable way. Indeed, Mt Owen has an obligation under the Work Health and Safety Act 2011 (NSW) (WHS Act) to “ensure, so far as is reasonably practicable, the health and safety of workers” and others who visit its workplace. 16 The duty to ensure health and safety requires the employer:17

(a) to eliminate risks to health and safety, so far as is reasonably practicable; and

(b) if it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks so far as is reasonably practicable.

[24] The expression “reasonably practicable” is defined in the WHS Act as follows: 18

“‘reasonably practicable’, in relation to a duty to ensure health and safety, means that which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters including:

(a) the likelihood of the hazard or the risk concerned occurring, and

(b) the degree of harm that might result from the hazard or the risk, and

(c) what the person concerned knows, or ought reasonably to know, about:

(i) the hazard or the risk, and

(ii) ways of eliminating or minimising the risk, and

(d) the availability and suitability of ways to eliminate or minimise the risk, and

(e) after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk.”

[25] Accordingly, if an employer is “reasonably able” to put in place a measure which eliminates risks to health and safety, rather than just minimising those risks, it should do so.

[26] The direction given by Mt Owen to ban smoking across the Mt Owen Complex eliminates from the workplace (a) fire risks associated with smoking and (b) the risks associated with passive smoking. The direction may also reduce the harm caused by smoking to a smoker if the smoker reduces the number of cigarettes they smoke in a day as a consequence of the ban.

[27] In my view, Mt Owen was “reasonably able” to issue the direction to ban smoking at the workplace, having regard to all relevant matters including those set out in s.18(a) to (e) of the WHS Act. In particular:

(a) there is a strong likelihood that permitting smoking in the workplace will harm the smoker and any persons who come into contact with ETS. The likelihood of smoking cigarettes causing a fire in the workplace is low;

(b) the degree of harm that might result from exposure to ETS or a fire at the workplace is significant;

(c) the literature and guidance material relied on by the parties demonstrates that Mt Owen is, or ought reasonably be, aware of the hazards caused by smoking in the workplace and the ways of eliminating or minimising the risks;

(d) there are a number of ways of minimising or eliminating the risks of exposure to ETS, such as by implementing designated smoking areas at appropriate locations in the workplace or banning smoking at the workplace. In my view, both of those ways are available and suitable methods of minimising or eliminating the risk of exposure to ETS. The risk of fire from cigarettes may be eliminated by banning smoking or it may be minimised by the use of appropriate cigarette bins and instructions to employees. They are both available and suitable ways to eliminate or minimise the risks; and

(e) in my view, there is little cost involved in either banning smoking from the workplace or putting in place designated smoking areas.

[28] It follows that Mt Owen has acted consistently with its obligations under the WHS Act by issuing the direction to ban smoking across the Mt Owen Complex. Further, assuming the direction is enforced and complied with, Mt Owen’s actions will also eliminate its legal exposure to a claim for loss or damage caused by smoking at the workplace.

[29] It should be noted that I am not, by this analysis, suggesting that Mt Owen was in breach of its obligations under the WHS Act when it permitted smoking in particular parts of the Mt Owen Complex. The WHS Act permits employers to satisfy their obligations under the statute in different ways. However, the WHS Act encourages the introduction of measures that eliminate risks over those that minimise risks where the employer is “reasonably able” to implement the measures.

[30] In my view, the matters set out in paragraphs [22] to [29] above weigh in favour of the reasonableness of the direction, although they are not determinative of the reasonableness of the direction.

Previous directions at the Mt Owen Complex as to restrictions on smoking in the workplace

[31] Prior to the direction to ban smoking at the workplace from 1 January 2015, Mt Owen prohibited smoking in all enclosed areas at the Mt Owen mine and CHPP (including in vehicles) and in some outdoor areas. At that time Mt Owen permitted employees to smoke in the following areas in the workplace:

(a) more than 10 metres from the muster area;

(b) more than 10 metres from the CHPP training room; and

(c) other open areas located away from the site infrastructure.

[32] The evidence did not reveal when this policy or direction was introduced.

[33] These earlier measures were obviously put in place by Mt Owen in an attempt to minimise the risks to employees arising from passive smoking. Although this earlier direction (a) is relevant from an historical point of view because it sheds light on past practices in the workplace and (b) may itself have been a reasonable direction by Mt Owen, it does not, in my view, impact one way or the other on the reasonableness of the later direction to ban smoking at the Mt Owen Complex from 1 January 2015.

Practices elsewhere in the Glencore group of companies

[34] Mr McLeod gave evidence that full smoking bans have been implemented at the following open cut mines 19 owned by the Glencore group of companies in the Hunter Valley:

(a) Mangoola open cut mine became smoke free in late 2010;

(b) Glendell open cut mine became smoke free in June 2011;

(c) Ravensworth open cut mine became smoke free on 18 February 2013; 20

(d) Bulga open cut mine became smoke free on 7 April 2014; and

(e) Mt Owen open cut mine became smoke free on 1 January 2015.

[35] Mr Hunter gave evidence that he was aware of the Glendell, Mangoola and Ravensworth open cut mines being smoke free. There was no dispute that the Liddell open cut mine, another Glencore operation in Hunter Valley, is not a smoke free mine and that designated smoking areas remain in place at the Liddell mine. There was no evidence as to why Liddell does not have a smoking ban across the mine or whether such a ban may be implemented in the future.

[36] Mr Hunter also gave evidence that:

(a) the dispute settlement procedure in each enterprise agreement that applies at the Glendell, Mangoola, Ravensworth and Bulga open cut mines only provides for arbitration with the consent of all parties; and

(b) the dispute settlement procedure in the enterprise agreement that applies at the Liddell mine provides that disputes in relation to the company’s corrective and disciplinary policy do not require the consent of all parties prior to the Fair Work Commission arbitrating such a dispute.

[37] The implication from Mr Hunter’s evidence is that, had the CFMEU had the right to have this issue arbitrated at any of the Glendell, Mangoola, Ravensworth or Bulga open cut mines, it would have done so.

[38] The fact that Glencore has introduced a smoking ban across five out of six of its open cut coal mining operations in the Hunter Valley and is not simply isolating the Mt Owen mine for differential treatment supports, in my view, the reasonableness of the direction issued to employees who work at the Mt Owen Complex. That it has not been possible for the reasonableness of the direction to ban smoking at the other mines 21 to be arbitrated pursuant to a disputes procedure in an enterprise agreement is relevant in so far as it indicates that there may have been, or may remain, opposition to the direction issued at those other mines, but does not, in my view, alter my opinion that this factor supports the reasonableness of the direction issued at the Mt Owen Complex.

Changing attitudes towards smoking in the workplace and public places

[39] WorkCover New South Wales’ Passive Smoking Guide includes the following statement in relation to smoking trends:

“Since the early 1950s the percentage of adult smokers has been in decline. By the mid-1990s a growing awareness that passive smoking could harm the health of non-smokers led to the widespread adoption of smoke free policies in workplaces and public places.

Smoke-free policies have now been adopted by the majority of workplaces in NSW including all Federal and NSW Government departments and most private companies. Public places so designated and public places that are also workplaces have been subject to the provisions of the Smoke-Free Environment Act 2000. This embraces shopping centres, malls and hospitality venues. All commercial airlines operating within Australia have banned smoking on their flights.”

[40] The legislative scheme established by the Smoke-Free Environment Act 2000 (NSW) restricts where people can smoke 22 and not whether people can smoke.

[41] The trend towards smoke-free workplaces and public places provides some support for the reasonableness of the direction to ban smoking at the Mt Owen Complex. However, the nature of the employment at the CHPP 23 distinguishes the CHPP from many other workplaces where employees can readily leave the workplace during a meal or other break to smoke a cigarette. Accordingly, in my view, this factor weighs marginally in favour of the reasonableness of the direction.

The terms of the Enterprise Agreement

[42] Clause 4.1 of the Enterprise Agreement provides that one of the parties’ objectives is “to produce a health and safety culture where the highest standard is an unquestionable priority of all employees and where every employee is committed to the end”. The terms of the Enterprise Agreement do not otherwise touch on the issue of smoking in the workplace.

[43] In my view, the imposition of the smoking ban at the Mt Owen Complex seeks to establish the “highest standard” of health and safety for employees who work in the CHPP by eliminating the risks associated with smoking in the workplace. Accordingly, this factor provides some support for the reasonableness of the direction to ban smoking on the Mt Owen Complex from 1 January 2015.

Employee support for, or opposition to, the direction

[44] The idea of banning smoking at the Mt Owen Complex was raised by employees of Mt Owen.

[45] No evidence was adduced as to the precise numbers of employees who support or oppose the direction to ban smoking across the Mt Owen Complex. The evidence adduced on this topic was general in nature. 24 The effect of the evidence was that some of the employees who work in the CHPP support the ban on smoking and others oppose it.25

[46] The evidence revealed that none of the three smokers employed at the CHPP has made a direct complaint to Mt Owen about the smoking ban, although one or more of them may have been behind the decision by the CFMEU to notify Mt Owen of an industrial dispute and to take that dispute all the way to arbitration. 26

[47] In the circumstances, I am of the view that this is a neutral consideration as to the reasonableness of the direction.

Consultation with employees

[48] Mt Owen engaged in extensive consultation with its employees from about June 2013 prior to making its decision to impose a ban on smoking at the workplace. The consultation with employees continued after the decision to impose the ban was made until the ban was implemented on 1 January 2015. This factor supports the reasonableness of the direction given by Mt Owen.

Notice prior to implementation of the direction

[49] Mt Owen gave its employees about six months’ notice prior to the implementation of its ban on smoking in the workplace. The length of this notice period weighs in favour of the reasonableness of the direction.

Offer of ongoing support to employees

[50] Mt Owen offered ongoing support to its employees for them to participate in a range of quit smoking programs. The employees were informed in toolbox meetings of the support that was available to them. The nature of the support offered to employees was a reimbursement of up to $300 per employee for costs incurred by the employee in purchasing any one or more of a range of quit smoking products or programs. This factor weighs in support of the reasonableness of the direction.

Conclusion as to reasonableness of the direction

[51] Having carefully weighed each of the factors set out in paragraphs [13] to [50] above, I am of the view that it was open to a reasonable employer in the position of Mt Owen, acting reasonably, to issue a direction to its employees working in the CHPP to ban smoking at the Mt Owen Complex. Put another way, this is not, in my view, a case in which no reasonable employer could have issued the direction issued by Mt Owen banning smoking at the Mt Owen Complex. Even if I held the view, which I do not, that a different direction concerning smoking at the Mt Owen Complex, such as the previous direction banning smoking at the workplace save in specific locations, may have been more appropriate or better, that would not have altered my conclusion as to the reasonableness of the direction issued by Mt Owen. 27

Conclusion

[52] For the reasons set out above, I find that Mt Owen’s direction to ban smoking at the Mt Owen Complex for employees who work in the CHPP is lawful and reasonable. Accordingly, I determine the Dispute by way of arbitration by endorsing Mt Owen’s right to issue the direction and declining to grant any of the relief sought by the CFMEU.

COMMISSIONER

Appearances:

Mr Adam Walkaden on behalf of the CFMEU;

Mr Jack de Flamingh, solicitor from Corrs Chambers Westgarth, on behalf of Mt Owen.

Hearing details:

2015.

Newcastle:

November, 16.

 1   Matter C2014/7423

 2   Adami v Maison de Luxe Ltd (1924) 35 CLR 143 at 151

 3   CFMEU v HWE Mining Pty Ltd [2011] FWA 8288 at [8]

 4   (1938) 60 CLR 601 at 621-622.

 5   (2005) 145 IR 285

 6   See, too, CFMEU v HWE Mining Pty Ltd [2011] FWA 8288 at [12]

 7   (2013) IR 231 159

 8   McManus v Scott-Charlton (1996) 70 FCR 16 at 30C

 9   There was no dispute between the parties as to the relevance of each of these matters to the reasonableness of the direction to ban smoking.

 10   Statement of Ashley McLeod dated 29 September 2015 at attachment AM3

 11   WorkCover NSW Passive Smoking Guide at p3

 12   National Occupational Health & Safety Commission Guidance Note on the Elimination of Environmental Tobacco Smoke in the Workplace at p1

 13   NSW Cancer Council Recommendations for the Workplace at p3; National Occupational Health & Safety Commission Guidance Note on the Elimination of Environmental Tobacco Smoke in the Workplace at p2

 14   NSW Cancer Council Recommendations for the Workplace at p4

 15   WorkCover NSW Passive Smoking Guide at p2

 16   s.19 of the WHS Act

 17   s.17 of the WHS Act

 18   s. 18 of the WHS Act

 19   All underground mines are, of course, smoke free workplaces.

 20   Mr Hunter gave evidence that the Ravensworth mine became smoke-free in August 2013, rather than in February 2013, as asserted by Mr McLeod. In my view, little turns on the precise date on which the Ravensworth open cut mine became smoke free. Accordingly, I do not need to determine this factual dispute.

 21   Glendell, Mangoola, Ravensworth and Bulga

 22   For example, smoking is prohibited in enclosed public places and certain outdoor public places.

 23   See paragraphs [13]-[19] above

 24   See, for example, statement of Kyle Hunter dated 3 September 2015 at [19] and statement of Ashley McLeod dated 29 September 2015 at [15]-[16]. In order to address this factor, I do not need to resolve the factual disputes between Mr Hunter and Mr Hassett as to what was said at particular meetings or discussions and whether Mr Hargraves was speaking on behalf of all employee representatives at a particular meeting.

 25   See, for example, statement of Kyle Hunter dated 3 September 2015 at [19] and statement of Ashley McLeod dated 29 September 2015 at [15]-[16]

 26   I note that in the related dispute concerning Thiess there are some 400 employees who are now subjected to the smoking ban across the Mt Owen Complex. There may be a significant number of those employees who smoke or would wish to have the option of smoking at work. The outcome of the current dispute may have an impact on the related dispute concerning Thiess.

 27   Woolworth Ltd v Brown (2005) 145 IR 285 at [35]; Briggs v AWH (2013) IR 231 159 at [8]

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