Fair Work Act 2009
s.604—Appeal of decision

Helensburgh Coal Pty Ltd
v
Neil Bartley & Ors
(C2022/528)

Appeal against decision [2021] FWC 6414 of Commissioner Riordan at Sydney on 24 December 2021 in matters U2020/9414 and others.

[1] Helensburgh Coal Pty Ltd (Appellant or Peabody) seeks permission to appeal and, if permission is granted, appeals a decision of Commissioner Riordan dated 24 December 2021 (Decision) 1. In the Decision the Commissioner found that the redundancies of Mr Bartley and 21 others were not genuine redundancies as defined in the Fair Work Act 2009 (FW Act).

[2] The Decision was issued following a successful appeal (the first appeal decision) 2 by the Appellant of an earlier decision of Commissioner Riordan (the first decision)3 in which the Commissioner found that the dismissal of Mr Bartley and 23 others4 were each not a case of genuine redundancy as he considered it “reasonable for the [Appellant] to insource some, or all of the work” performed by contractors at the site and “redeploy its dismissed employee[s] into these roles.”5

[3] The background to the redundancies is not contentious and is set out in the first decision, the first appeal and, as necessary in the Decision.

[4] We granted permission to the Respondent to be represented by a lawyer in the appeal proceedings.

[5] At the commencement of the appeal hearing we indicated that it was our intention to grant permission to appeal. We concluded that it was in the public interest to grant permission to appeal as the matter raises issues of importance and general application in that the determination of the appeal will provide further guidance to parties in considering if a dismissal was a genuine redundancy in circumstances where redeployment to a position occupied by a contractor is at issue in the proceedings.

THE FIRST APPEAL

[6] In the first appeal decision the Full Bench considered whether, in a circumstance where an employee was considered for redundancy, work performed by a contractor should be considered for redeployment purposes.

[7] The Full Bench firstly determined that the term “enterprise” as used in in s.389 of the FW Act is defined in s.12 of the FW Act to mean “a business activity, project or undertaking”. Following a consideration of the decisions in Stickley v Kestrel Coal Pty Ltd, 6 the appeal of that decision in Stickley and others v Kestral Coal Pty Ltd7 (Stickley) and the appeal decision in Teterin and Others v Resource Pacific Pty Limited t/a Ravensworth Underground Mine8 (Teterin) along with a number of first instance decisions the Full Bench concluded that:

[68] It follows from the above that we agree that there are no binding principles that attach to a consideration of whether redeployment within the enterprise is “reasonable in all of the circumstances”. It also follows that we do not consider that redeployment to the work conducted by contractors is automatically excluded from such a consideration. 9

[8] The Full Bench went on to say that “[w]e would observe that it would generally be the case that a range of matters would need to be determined if redeployment to work undertaken by a contractor would be reasonable in all of the circumstances…”. 10 These matters included:

•  The degree of control over the work of the contractor by the employer

•  The length of the contract period left to run.

•  Any requirement to change the employer’s business strategy.

•  The history of contracting the work in question.

•  The rights of third parties.

•  That positions cannot be created where there are none.

•  Displacing existing occupants of positions may not be appropriate. 11

[9] The Full Bench also observed that matters of procedural fairness may require an affected contractor be given the opportunity to be heard on these issues.

[10] The Full Bench concluded that:

[69] …these are matters to be considered by a Member in dealing with an application where redeployment to the work of a contractor is being pursued. They do not form binding principles but rather may be relevant matters to consider.

[70] Further, we do not consider it reasonable to establish a rule, as suggested by the Appellant, as to what contracted work it might be feasible to consider and what should be automatically discounted in considering the reasonableness or otherwise of redeployment. The broad discretion afforded to the decision maker in determining if redeployment is “reasonable in all of the circumstances” should not be circumscribed in such a manner.

[71] As was observed in Ulan Coal Mines Ltd v Honeysett 12:

[26] First, s.389(2) must be seen in its full context. It only applies when there has been a dismissal. An employee seeking a remedy for unfair dismissal cannot succeed if the dismissal was a genuine redundancy. In other words, if the dismissal is a case of genuine redundancy the employer has a complete defence to the application. Section 389(2) places a limitation on the employer’s capacity to mount such a defence. The defence is not available if it would have been reasonable to redeploy the employee. The exclusion poses a hypothetical question which must be answered by reference to all of the relevant circumstances.

[72] It follows that we do not consider the work of contractors is automatically excluded from consideration. 13

[11] After considering the matters put in relation to the determination of whether it was reasonable in all the circumstances to redeploy employees to work performed by contractors the Full Bench also said that:

•  Regard should be had to the skills and training of the employees concerned and considered against the skills required in the work of the contractors.

•  Whether the contract work was “specialist work” was a relevant consideration.

•  The reasonableness or practicality of the employer insourcing the work performed by the contractor is a relevant consideration. This issue was highly relevant and “must be determined”. 14

[12] The Full Bench concluded that:

[91] …whether work could or should be insourced is, in our opinion, a necessary matter to decide as part of the inquiry as to whether it is reasonable, in all of the circumstances, to redeploy the employees to that work. The reasonableness of insourcing is not, in our view, the correct question and is certainly not determinative of the matter.” 15

THE DECISION

[13] After setting out some of the background the Commissioner then turned his attention to the matters identified by the Full Bench in the first appeal decision for the purpose of assessing the work of two contractors – Mentser and Nexus – and determining if that work should be insourced.

[14] The Commissioner first set out paragraphs [69], [70], [86] and [91] of the first appeal decision. He then made reference to a finding of the Full Bench in the first appeal decision in relation to the Appellant’s “philosophical” approach to insourcing before moving on, at paragraph [68] of the Decision, to those matters he considered the Full Bench had directed his attention to in the first appeal decision:

[68] I will now turn my attention to the issues identified by the Full Bench in paragraph 65 above:

a) Degree of Control

Mentser – the [Appellant] has absolute control over the work performed by Mentser, including when they undertook tasks via the daily work orders and how they do the work via work method statements.

Nexus – Nexus is controlled by the [Appellant] via work orders and project planning.

Employees of the contractors work the same roster as the [Appellant’s] employees and attend the same pre-start meeting as the [Appellant’s] employees.

b) Length of Contract

Menster (sic) – The Mentser contract had only just commenced and had almost 5 years to run.

Nexus – The Nexus contract was due to expire around the same time as the restructuring. The contract was obviously extended by 12 months. Mr Carter testified that Nexus are on a job and pay scenario, where they only get paid for the jobs that they are asked to undertake. They are not paid in advance, nor do they have a project completion payment as part of their contract.

In Daniel Stickley v Kestrel Coal Pty Ltd [2015] FWC 2884 (Kestrel Coal), Spencer C held:

“[149] With respect to s.389(2)(a) “reasonable in all the circumstances for the person to be redeployed within the employer’s enterprise”, and whether the [Respondent’s] could have been reasonably redeployed into the [Appellant’s] enterprise, it is not accepted that the [Appellant] had an obligation to redeploy the [Respondent] into a “backfill position” filled by Mastermyne employees. The timing of this project, and the short-term engagement of the project are relevant considerations, as is the [Appellant’s] prerogative to structure their workforce on the optimum, operational and flexible basis for their business.”

I note that this decision was upheld on appeal. 16

This decision can be distinguished on the basis that the contract only had a few months to operate and that it lacked common sense to disturb that arrangement for such a short period of time. In this case the contract with Mentser still has more than four years to run.

c) [Appellant’s] business strategy

Mentser – The trade work on the conveyor belts continues to be performed by the [Appellant’s] tradespersons – at no charge to Mentser. The Operator work has previously been performed by a mix involving the [Appellant’s] Operators and Contractors. The [Appellant’s] Operators were undertaking the non-trade work prior to Mentser. The fire on the conveyor belt seems to have been the catalyst for the outsourcing of this work. However, it could be argued that a change in the culture of Management was all that was needed.

Nexus – Nexus are engaged to perform project work, some of which is specialist work. There is a dispute as to whether all of the work undertaken by Nexus is either specialist work or project work. On the basis that some of the work performed by Nexus is gas pipe installation and secondary support work, I am satisfied that not all of the work performed by Nexus is either specialist work or work of a project nature.

d) Rights of Third Parties

Mentser and Nexus have contracts with the [Appellant]. The provisions of those contracts speak for themselves. It is not the role of the Commission to involve itself in contract negotiation or contract resolution between a contractor and its client. That is a matter for the Courts. The Commission only has jurisdiction through the Fair Work Act. Any other consideration is irrelevant. The [Appellant] has no relationship, contractually or otherwise, with the employees of Mentser or Nexus.

e) Qualifications of Employees

Mentser – Mentser have a number of employees who have successfully completed an AQF3 in Polymer Processing. This qualification is nationally accredited and portable. However, I am unsure of the relevance of this qualification. Neither the [Appellant] or Mr Abbott led evidence in relation to the syllabus of this qualification or the benefits of any competency acquisition in relation to performing the operator functions on the belts. The qualification certainly doesn’t allow the employee to undertake any fitter trade work. On the basis that not every employee of Mentser held this qualification at the time of the restructure, I have accepted that this qualification is desirable to perform some of the functions but not compulsory.

f) Effect on employees of Contractors if displaced

Unfortunately, the downsizing or restructuring of any organisation has an adverse effect on somebody. Put simply, an employer is trying to cut its costs and improve its profitability by hopefully increasing its productivity by maintaining its production levels whilst decreasing its input costs. I do not accept the argument by the [Appellant] that the Act does not differentiate between its employees and the employees of contractors. The [Appellant] has defined and prescribed obligations to its employees under the Act in relation to a plethora of issues including the NES, unfair dismissal and the objects of the Act. No such obligations exist between the [Appellant] and the employees of either Mentser or Nexus, except possibly in a moral sense. The principal obligation for the [Appellant] is to comply with the Act in relation to its employees.

g) Positions not to be created

In accordance with the decision of Lawrence, DP in Teterin, it is not appropriate to simply create positions where none exist. In this instance, 22 [Respondents] are claiming that their terminations were not cases of genuine redundancy and that they were unfairly dismissed. I note that there were in excess of 60 employees of Nexus and Mentser combined who continued to be employed after the restructure.

h) Itinerant Nature of Contract Work

From my experience in working within contractors over the last 35 years, I understand the itinerant nature associated with working for a contractor. The work is not secure and casual employment is prevalent. For many, it is a difficult and unfortunate circumstance. However, this decision is not about the benefits or hazards associated with working for a contractor. Mr Carter attempted to evade this question from Mr Walkaden but the simple, irrefutable facts are that, unless you are a specialist, with a well-defined skill set which is in demand in the workplace, employees working for a contractor have precarious job security compared to the directly employed employees of the [Appellant].

i) Flexibility of Contracts

I am satisfied that there is greater flexibility afforded to the [Appellant] by engaging Contractors to do work. Contractors have the capacity to ramp up or down its workforce, with little or no notice because they are either casual employees or they can be transferred to another site.

Mentser – the Mentser employees are full time employees who work the same set shifts of the [Appellant’s] employees.

Nexus – 50% of Nexus employees are casual, however, they work the set shifts of the [Appellant’s] employees and are fully engaged at the Metropolitan Mine, ie, they do not move work locations.

It is not in dispute that any employee of the [Appellant’s] working underground falls under the control and supervision of the local Deputy and Undermanager.

[15] The Commissioner then considered if either Mentser or Nexus was a specialist contractor.

[16] With respect to Mentser, the Commissioner set out the evidence of Ms Raelene O’Brien from her first witness statement including her evidence that the Appellant had separated the contractor work into three categories – sustaining work, specialist skills and finite projects. In that evidence Ms O’Brien indicated that it was determined that “sustaining work” would be insourced with the contractors performing that work displaced (along with some contractors performing some project work). 17

[17] With respect to the Mentser specialist training the Commissioner said:

[72] In this regard, the Mentser Specialist Training was the principal reason why Ms O’Brien regards Mentser to be a specialist contractor. The evidence of Mr Abbott is that the 28 modules of competency are partially delivered through a paper-based training program of just two days. The remainder of the training is delivered ‘on the job’ by having an experienced operator work with the inexperienced operator as part of a two-man crew. Occasionally, the training manager would also be underground.

…

[74] I do not agree with Mr Andrew Withers or Ms O’Brien that the training provided by Mentser is quality training. The training is not nationally recognised or accredited – nor is it portable. To suggest that the theoretical component of 28 individual and separate competencies can be obtained in two days of classroom training defies logic.

[75] The actual competencies that are gained by Mentser employees is via training that is provided on the job. Such competency acquisition is commonplace in the coal industry. It would appear that almost every non-trade competency in the coal industry is obtained by ‘on the job’ training.

[18] As to the Commissioner’s consideration if Nexus was a specialist contractor, the Commissioner observed:

[87] There is no doubt that Nexus provides a wide range of services based on a wide range of skills and competencies of its employees. It is not in dispute that the [Appellant] did not consult or ask any of its employees whether they held any of those skills or competencies or could have gained any of those competencies with some additional training. Based on the self- assessment task undertaken by the [Respondents], 9 [Respondents] identified themselves as having 100% of the suite of competencies required, whilst a further 5 [Respondents] held more than 90% of the competencies. A further 4 employees held more than 75% of the competencies. Mr Grennell agreed that no Nexus employee held all of the competencies to perform all of the work that is undertaken by Nexus at the Mine and that the Employees would normally work in groups.

[88] I am satisfied and find that Mr Davey is a witness of credit. His evidence is direct, forthright and invariably withstands initial countervailing suggestion or accusation.

[89] Mr Davey claimed that the majority of the Nexus project work was basic black coal work. This scenario was not initially agreed to by Mr Grennell but was supported by Mr Carter.

[90] Further, Mr Davey’s descriptive commentary of the “Scope of Work” for both Mentser and Nexus was accepted into evidence without objection or cross examination. Please see Appendix 1 to this Decision.

[19] The Commissioner concluded that:

[91] Based on the reasoning above, I can find no impediment to the [Appellant] if it were to insource sufficient work to allow for the [Respondents] to be redeployed.

[20] The Commissioner considered a skills self-assessment undertaken by each of the Respondents. He “[did] not accept the proposition that the employees who had not performed a task for period of time, or if at all, would require significant training or retraining to obtain [the] necessary competencies” but considered these competencies not trade or specialist skills. He then stated that the Respondents “are skilled employees. They pick up skills quickly, usually by watching someone perform the task and by reading the work method statement.” 18

[21] The Commissioner then made further specific findings as follows:

[95] I am of the view that it is feasible for the [Appellant] to insource some of the work of the contractors. There is no financial penalty associated with insourcing any of the Nexus work, simply because Nexus are now paid on a job by job basis. There is sufficient basic black coal work to gainfully employ all of the [Respondents] in this work. There are no problems associated with supervision because the local Deputy will simply provide the required supervision.

[96] I am also satisfied that it is feasible that the work of the four 2-man Mentser crews could be insourced. The [Appellant] wants dedicated crews performing work on the belts. Such an outcome is obtainable by the [Appellant] establishing the same 2-man crew per shift. The [Appellant] simply has to commit to maintaining the integrity of the belt crews rather than using these crews as some sort of supplementary labour pool for the longwall.

[97] The [Appellant] has raised the issue of the ‘operational impracticality of insourcing’. I do not agree that this barrier exists. In relation to Mentser, the [Respondents] want to work in the self-supervised 2-man crews. They are happy for Mentser to undertake the twice weekly inspections and provide the Raven report. In my view, the [Respondents] would have no problem working in self-supervised crews. If Mentser were not prepared to provide the inspections and the Raven reports, then the Deputies’ statutory reports actually provide more up to date and relevant information. Raven appears to be nothing more than a preventative maintenance (PM) computer program, which has been in existence for the last 25 years to my knowledge. I am confident that a multi-national mining company such as the [Appellant] would be utilising a PM program somewhere in the world which could be modified for the Mine.

[98] In relation to Nexus, certain elements of the ‘project work’ could be performed by the [Respondents] under the supervision of the existing local Deputy. The [Appellant] has raised that Nexus sometimes provide equipment for their tasks. I am in no doubt that Nexus would charge the [Appellant] for using that equipment. I am confident that the [Appellant] would already own the equipment needed for some of this work or would be able to hire it off a third party. Such a scenario would, at worst case, be cost neutral.

[22] Under the heading of “conclusion” the Commissioner said:

[100] I am satisfied that the [Appellant] has complied with its obligations in relation to consultation as required under the Agreement.

[101] Typically, contractors are used to supplement a permanent workforce or to provide specialist skills which are not available from the permanent workforce. I am not satisfied that either Nexus or Mentser could be regarded as supplying skills exclusively of a specialist nature. I accept the evidence of Mr Davey, that both contractors are performing basic black coal Operator work.

[102] Ms O’Brien testified that the reason Mentser were regarded as a specialist contractor was because of the Specialist Mentser Training program. I accept that the concept of the Mentser specialist sounds impressive, but the reality is very different. Whilst it takes approximately 6 months for an Operator to be trained “on the job” to be regarded as a specialist, the face to face paper or classroom training only takes 2 days for the entire 28 competencies. The “on the job” training is nothing more than having an experienced Operator in the 2-man crews. This method of cross-skilling employees is exactly the same approach adopted by the [Appellant] in relation to the training of inexperienced Operators. The 2 day in house, unportable, unrecognised and unaccredited training package is not justification to suggest that Mentser is a specialist contractor. Based on the conveyer belt skills of a number of the [Respondents], I am satisfied that a number of the [Respondents] would have far more competency to perform the Mentser scope of work then some of the Mentser employees. Ms O’Brien was wrong. Mentser is not a provider of skills that did not exist in the [Appellant’s] workforce.

[103] I accept that by outsourcing the conveyor belt work to Mentser was a result of the [Appellant] adopting a new approach to the maintenance of its conveyor belts. A new approach may have been required as a result of the fire which occurred in 2019. The Regulator certainly thought so by making the identification of risks compulsory for management. However, what has occurred is that the fire, which was not due to the actions or workmanship of the employees, has been used as a catalyst which has ultimately derived at least 8 or 9 Operators of their livelihood. Such an outcome is unreasonable and unfair. In all likelihood, if management had treated the conveyor belts as an important function of the Mine, appointed Operators as designated work crews on the belts and taken note of the defects and prioritised the work order requests, then the fire may not have occurred.

[104] A large proportion of the scope of work of Nexus is not specialist work. Nine of the [Respondents] testified that they could perform 100% of the Nexus work. It is work undertaken in a coal mine on a regular basis. The [Appellant] claims that Nexus is performing project work. I do not agree. The Nexus project was due to finish around June 2020, which coincidentally was the same time as the restructure. The 12-month extension has resulted in Nexus being paid on a job-by-job basis. Nexus is not being paid in advance or being paid upon the completion of a very large scope of work. There is no easily identifiable reason why the [Respondents] could not be performing this work. They certainly have the skills and competencies, they could work under the supervision of the local Deputy and they could supplement the [Appellant’s] workforce in other areas of the Mine on short notice and without issue.

[105] Based on the criteria identified and utilized by Ms O’Brien (see PN94 19 above), I am satisfied and find that the [Appellant’s] actions in terminating the [Respondents] and keeping either Mentser or Nexus was reasonable.

[106] I note however, that Nexus still has 9 employees on the site post [Appellant]. Eight of those roles could be performed by a majority of the [Respondents].

[102] I note that Nexus was able to sustain all of their employees post the restructure by a job sharing arrangement, which only lasted a few months, but still has some 50 or more employees engaged on a full time basis at the Mine.

[107] I find that the [Respondents’] termination was not a case of genuine redundancy.

THE APPEAL

[23] The appeal is made on a substantial number of grounds which we have set out in full at Attachment A to this decision. In summary, the grounds of appeal are:

PRINCIPLES ON APPEAL

[24] An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision-maker. 20 There is no right to appeal and an appeal may only be made with the permission of the Commission.

[25] Section 400 of the FW Act applies to this appeal. It provides that:

(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.

[26] In Coal & Allied Mining Services Pty Ltd v Lawler, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 400 of the FW Act as “a stringent one”. 21 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.22 The public interest is not satisfied simply by the identification of error, or a preference for a different result.23 In GlaxoSmithKline Australia Pty Ltd v Makin24, a Full Bench of the Commission identified some of the considerations that may attract the public interest:

… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters... 25 

[27] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 26  However, that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.

[28] The decision under appeal is of a discretionary nature. Usually, such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the decision at first instance. As the High Court said in House v The King: 27

…The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 28

[29] In Gelagotis v Esso Australia Pty Ltd T/A Esso 29 (Esso) a Full Bench of the Commission made the following observations as to the general approach where there is a challenge on appeal to findings of fact:

[43] In each of the appeals before us there are challenges to a number of the Deputy President’s factual findings. Subsection 400(2) provides that such challenges can only be made on the ground that the decision involved ‘a significant error of fact’. It is common ground that to be characterised as ‘significant’ the factual error must vitiate the ultimate exercise of discretion. In a misconduct case, such as these two matters, a ‘significant’ fact is one which is foundational to the Member’s conclusion about whether the alleged misconduct took place.

[30] The role of the Full Bench on appeal is not to comb through “the words of the decision-maker with a fine appellate tooth-comb, against the prospect that a verbal slip will be found” 30 but rather the decision should be read as a whole. However there remains a requirement to give adequate reasons for a decision.

CONSIDERATION

Relevant statutory provisions

[31] Section 389 of the FW Act sets out the circumstances where a redundancy may be considered a genuine redundancy:

389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.

[32] The requirements of s.389 of the FW Act are clear. In order to determine, in this case, if the dismissals were genuine redundancies the Commissioner was firstly required to make findings in relation to whether the person’s work was no longer required to be performed and if the Appellant had complied with any consultation obligations. These matters are not in dispute and the appropriate findings made.

[33] Second, the Commissioner was required to determine if it would have been reasonable in all the circumstances for the person to be redeployed. If the answer to this question is “yes” the dismissal cannot be a genuine redundancy.

[34] In determining if redeployment was reasonable in all of the circumstances the Commissioner needed to consider if the Respondents could have been redeployed into work being undertaken by contractors (the first appeal decision having found this was a legitimate inquiry to undertake). The first appeal decision set out those matters that should be considered in reaching a conclusion on this question.

[35] To make the statutory finding as to whether it was reasonable in all of the circumstances to redeploy the Respondents into such work, anterior questions arise first of whether insourcing the work of the contractors in question is feasible and if it is then whether redeployment of all or some of the Respondents was possible could then be considered.

[36] Having answered these two questions the Commissioner should then move onto the statutory questions to be answered – whether redeployment was reasonable in all of the circumstances and then, had the Respondents been unfairly dismissed.

[37] This approach provides clarity to the matters which require consideration as outlined in the first appeal decision and enables proper focus on relevant matters leading up to the statutory considerations. We acknowledge however that these first two matters – feasibility of insourcing and the possibility of redeployment (which, by necessity involves a broad assessment of skills) – may become intertwined.

[38] In deciding if the work of contractors could or should be insourced the appropriate matters to consider (arising from the first appeal decision) includes the following:

•  The history of contracting the work in question

•  Any requirement to change the employer’s business strategy

•  The degree of control over the work of the contractor by the employer

•  The length of the contract period left to run

•  The rights of third parties

•  That positions cannot be created where there are none

•  Displacing existing occupants of positions may not be appropriate.

[39] It could only be that having made a finding that insourcing was feasible by a consideration of these factors as is relevant to the particular case (and there may be other relevant considerations), the Commissioner could then turn his mind to whether redeployment was possible. This would necessarily involve a consideration of the nature of the work to be insourced and the skills of the workers being considered for redeployment.

[40] It should also be noted that, just because the workers to be made redundant could have undertaken the work of the contractors because they have the necessary skills etc, is not a sufficient basis by itself on which to conclude that it would have been feasible to insource the work of the contractors. That would improperly conflate two matters requiring separate consideration.

[41] Following a consideration of the matters associated with the feasibility of insourcing work of contractors and a determination if the workers had the necessary skills to undertake that work, the Commissioner needed to return to the question he was required to answer – that is, if it was reasonable in all the circumstances to redeploy the workers concerned. Again, the statutory question to be answered should not be confused with those matters that must be decided on the path to determining this question.

[42] We would also observe that the question of whether redeployment is reasonable in all of the circumstances is a question to be determined as at the time of the dismissal. It follows from this that the question of whether insourcing was feasible is a question also to be answered at the time of the dismissal.

[43] We now turn to consider the grounds of appeal.

Appeal grounds 1 and 2

[44] The Appellant submits that the Commissioner at first instance applied an incorrect test in deciding if redeployment was reasonable in all of the circumstances. In this respect it says that the Commissioner “erroneously applied a test” which is a combination of:

•  Whether the contractor work was specialist work.

•  Whether terminating the employment of employees and keeping contractors was reasonable.

•  Whether it was feasible for the Appellant to insource the work .

•  Whether the original decision to outsource the belt work was fair.

[45] Further, the Appellant submits that there are a number of matters the Commissioner should have, but failed, to take into account in determining if redeployment was reasonable in the circumstances.

[46] We do not agree that the Commissioner applied the wrong test or that he failed to take into account relevant considerations in reaching his decision.

[47] There were a number of relevant matters for the Commissioner to consider before deciding if redeployment was reasonable in all of the circumstances. We set out some of those in the first appeal decision. These were set out by the Commissioner at paragraph [66] of the Decision. We do, however, consider it worthwhile to reiterate that:

•  There are no binding rules in the application of s.389(2)(a) and the reasonableness of redeployment must be determined “in all the circumstances” taking into account the available work; 31 and

•  There is no binding principle established in relation to the consideration of the work of contractors and redeployment to such work. 32

[48] In light of these findings it is difficult to see how the scope of the Commissioner’s review, save for some matters mentioned below, could be in error. It was incumbent on the Commission to consider all of the relevant circumstances.

[49] Whether it was reasonable to insource the work is clearly a relevant consideration and we do not consider the Commissioner fell into error in this regard.

[50] A full and fair reading of the Decision indicates that at paragraph [68] the Commissioner turned his attention to the matters identified in the first appeal decision as being relevant matters to consider in deciding if insourcing was feasible. The Commissioner considered other matters he believed relevant to the question he had to determine, including whether Mentser and Nexus were specialist contractors (at paragraphs [70]-[89]).

[51] The Commissioner then concluded (at paragraphs [91], [95] and [96]) that it was feasible to insource (some of) the work of Nexus and of the four 2-man crews performing belt work for Mentser. In reaching this conclusion it is clear that the Commissioner did consider those matters identified in the first appeal decision as being relevant to the question of the feasibility of insourcing.

[52] We do not agree with the submissions of the Appellant that the Commissioner’s consideration of those matters he was directed to in the first appeal decision was done “for the purpose of dealing with them to set them to one side and deny them relevance where they do not fit comfortably with this overall determination, that it was not reasonable for Peabody to not insource the work.” 33

[53] A reading of the Decision as a whole reveals that the Commissioner placed substantial weight on a number of the matters we identified in the first appeal decision as being relevant. In particular weight was clearly given to:

1. The length of the contracts;
2. The Appellant’s business strategy;
3. Whether the work of the contractors was specialist work; and
4. To a lesser degree, the effect on the contractors if the work was insourced.

[54] Whist the Commissioner considered other matters outlined in the first appeal decision it is apparent that they were not attributed great weight given the brief review given to them. However, the factors identified in the first appeal decision will have varying relevance depending on the particular set of factual circumstances. It would be wrong to think that the matters identified are the factors that must be forensically evaluated and weighed in each and every case.

[55] To the extent it may have made for a more concise decision to have indicated very briefly the factors the Commissioner may not have considered as being of great relevance, that the Commissioner has not done so does not disclose appealable error. That the weight the Commissioner may have attributed to each factor may have varied is not evidence, in and of itself, of error.

[56] Further, the Commissioner cannot be found to be at fault because he did not articulate specific consideration of all of those matters as identified by the Appellant in ground 2 of the appeal.

[57] There are two contractors relevant to the consideration of the matter before the Commission – Mentser and Nexus – and it is appropriate, as the Commissioner did, to consider these separately.

[58] With respect to the work of Mentser, a review of the relevant evidence, in particular that of Mr Andrew Davey, Mr Andy Withers and Mr Kain Abbot strongly supports the conclusion that the findings of the Commissioner (except in relation to one matter we come to below) were reasonably open to him and that he took into account relevant matters in reaching his decision.

[59] Mr Abbot and Mr Withers both gave evidence that the Appellant must agree to the work orders and the Mentser employees report through staff of the Appellant. The Mentser contract had 3 years to run (from 2020) with a further 2 year option. It is apparent (given the distinction drawn from the decision in Stickley) that the Commissioner considered the length of the contract to favour insourcing.

[60] While the summary of the evidence is brief on the business strategy in relation to the Mentser contract, a review of the evidence of Mr Abbot and Mr Withers indicates that many of the matters the Appellant says should have been taken into account are encapsulated in the identified drivers of the strategy – that is the 2019 fire and what Mr Withers says contributed to the fire, that being the “ad hoc approach” to the belt maintenance. 34

[61] The matter in relation to the business strategy the Commissioner does not appear to have addressed in his decision is the apparent cost saving of $600,000 to the Appellant (although it is not identified in the evidence of Mr Withers over what period this saving operates) by outsourcing. The Commissioner though had little evidence of substance before him on the subject and it is not clear how the saving was quantified, whether it was contingent on other factors, or the period over which the saving might be realised.  We note as well, that, associated with this, there does not appear to be any particular contractual penalty associated with exiting the contract.

[62] The Commissioner then considered the skills of Mentser employees and the effect on those employees of the work being insourced. While we may not agree on the way the Commissioner may have expressed his views, we do not consider that the Commissioner has failed to take into account relevant matters. The skills of the Mentser employees (as indicated by the training undertaken by them) was highly relevant to a determination of the feasibility of insourcing the belt work. It is apparent form the Commissioner’s reasoning at paragraphs [72]-[75] that the Commissioner considered any skills requirements, if the work was insourced, could be met primarily through on the job training. The evidence of Mr Abbot that not all employees had completed the Certificate III in Polymer Processing suggests the training was not necessary to enable the belt work to be performed. 35

[63] In reaching his conclusion as to whether Mentser is a specialist contractor the Commissioner considered the work required to be done by Mentser, the training given by Mentser to its employees and the skills of the redundant employees. Further, the Commissioner considered the Mentser training which he assessed, based on the evidence, as being critical to Ms O’Brien’s reasons for determining the Mentser work to be “specialist” work. While we do not agree with the Commissioner’s dismissal of the training of Mentser employees because it is not accredited or transferable 36 (save for the Certificate III in Polymer Processing) the matter important to the Commissioner’s consideration is that very little of the training is delivered in the classroom with the majority being delivered on the job.

[64] The Commissioner then, at paragraph [92] of the Decision, considered the skills of the employees seeking redeployment, found they had the necessary skills or that they could acquire the skills through on the job training. Having found the insourcing of the Mentser belt work feasible and considered the specialist nature of that work and the skills of the employees concerned, the Commissioner determined redeployment to the Mentser work (insourced) was reasonable in all of the circumstances. That the Commissioner did reach this conclusion is reasonable on a fair reading of paragraph [102] of the Decision. On this question the Commissioner did make the necessary statutory finding.

[65] With respect to the Nexus work, the approach adopted by the Commissioner is not dissimilar to that taken with respect to the Mentser work. A review of the evidence in relation to the Nexus contract (that of Mr Killian Grennell, Mr Michael Carter and Mr Davey) indicates that it was open to the Commissioner to conclude that not all of the Nexus work was specialist work. This is especially so in relation to the secondary support work and other work which, on Mr Grennell’s evidence, is not specialist work. 37 This is supported by the evidence of Mr Carter (who was not cross examined on this matter and whose evidence was accepted by the Commissioner). Mr Grennell’s evidence is that the secondary support work was undertaken by about 8 Nexus employees.

[66] On the basis of the evidence, the conclusions reached by the Commissioner in relation to the business strategy and specialist nature of the Nexus work were reasonably open to him.

[67] As to the skills of the employees seeking redeployment, at the hearing of the appeal the representative of the Appellant, said that whilst not accepting without question the skills of the employees concerned, the Appellant did accept the skills and experience of the employees “which would have been valuable and which would allow them to do some of the work immediately, which was carried out by Mentser, and…to a much more limited degree…for Nexus…” 38 Having then considered the evidence as to the skills of the employees who sought redeployment, the Commissioner concluded, at paragraph [104], on a fair reading, that redeployment to some of the Nexus work (once insourced), was reasonable in all of the circumstances.

[68] The determination of the feasibility of insourcing work being performed by a contractor is one step required of the Commission in reaching a final conclusion as to whether redeployment was reasonable in all of the circumstances. It would be wrong however to conclude that the feasibility of insourcing was the only consideration. The Commissioner clearly considered, in his reasons, the skills of the Respondents and their capacity to undertake the work of the contractors. He considered the specialist nature of the work and scope of the work of the contractors and the training necessary to do the work. He considered the “operational impracticality of insourcing” but did not consider this insurmountable. Taking all of these matters into account the Commissioner reached the conclusion he did. The Commissioner was not narrowly focussed in his investigation and, having considered all of the circumstances, including the feasibility of insourcing, concluded that redeployment was reasonable in all of those circumstances.

[69] As to the ground that the Commissioner failed to take into account the distressed financial state of the mine, we do not see that the Appellant prosecuted its case that redeployment was not reasonable on this basis but rather that the financial situation was the driver of the restructure (which does not seem to have been dispute). It is, therefore, difficult to understand the Appellant’s precise appeal point. The Commissioner has not found contrary to the evidence of Ms O’Brien as to the financial state of the mine and it can reasonably be accepted that the Commissioner was cognisant of this information in reaching his decision in relation to redeployment matters.

[70] The Appellant has, otherwise, with respect to ground 2 of the appeal in particular, provided an extensive list of matters to which it says the Commissioner did not give consideration. Whilst there are a number of matters on this list that may not have been specifically dealt with in our analysis above we do not consider these to be material considerations such that a failure to consider them manifests error on the part of the Commission.

[71] We find no appealable error of the approach and range of considerations of the Commissioner. Appeal grounds 1 and 2 must therefore fail.

Appeal Ground 3

[72] This ground of appeal asserts that the Commissioner was in error in deciding that the impact of insourcing on the relevant contractor was beyond the purview of the Commission and that the Appellant had an obligation to its employees and not those of the contractors meant the impact of an insourcing decision was irrelevant or a subordinate consideration. 39

[73] We do not agree that the contracts between the Appellant and Mentser and Nexus and the need for resolution of any contractual dispute was an irrelevant consideration to the determination of whether insourcing was feasible as suggested in paragraph [68](d) of the Decision. Clearly, financial or other penalties that might apply with the early termination of an existing contract are highly relevant as to the feasibility of insourcing work. The Commissioner should have directed his attention to whether there was anything in the contractual relationship between the Appellant and the respective contractors that was an impediment to insourcing the work. If it is that the Commissioner did give consideration to this matter his reasons for dismissing it or finding it not relevant is unclear.

[74] Likewise, to the extent the Commissioner did not consider the effect of insourcing on employees of the contractor was relevant to the matter before him, he was in error. In the first appeal decision the Full Bench indicated that “displacing existing occupants of positions may not be appropriate.” The Commissioner was addressing this matter at paragraph [68](f) of the Decision. To the extent it may be seen that the Commissioner dismissed this as an irrelevant matter we do not consider the reasons given disclose why he reached this conclusion. The inquiry we found was required in the first appeal decision is not who may have applied for relief from unfair dismissal and against which employer, but how the insourcing may have an effect on the breadth of workers impacted by the decision. It was not suggested in the first appeal decision that the task confronting the Commissioner in deciding if insourcing work from a contractor was an easy task – reaching a conclusion requires a balancing of a range of factors which must be weighed on the path to reaching a decision. The Full Bench in the first appeal decision did not say that this factor was determinative of the matter, and we accept that there may be circumstances where it is not relevant. By not giving apparent consideration to this matter the Commissioner failed to consider the totality of issues before him. The responsibility on the Commissioner was to consider the issue if it was relevant and set out his reasons for reaching his conclusion.

[75] However, we do not consider that the way in which the Commissioner dealt with either issue raises sufficient doubt as to the correctness of the Decision when considered as a whole such as to provide grounds for the granting of the appeal. We accept that the Commissioner should have turned his mind to matters under each of these items and that he failed to do so or articulate sound reasons for not doing so. While constituting an error on the Commissioner’s part, we are not satisfied that the appeal should be allowed on this ground alone. We reach this conclusion as the inquiry of the Commissioner is wide ranging with many factors being taken into account with weight given to each of these as seen appropriate. These two items were not matters of great weight in the evidence or submissions of the Appellant before the Commissioner below such that the Decision should be set aside on this ground.

Appeal ground 4

[76] This ground of appeal asserts that the Commissioner made a number of factual errors. The notice of appeal lists 15 factual errors. In its written submissions the Appellant included a list of 19 errors although at the hearing of the appeal relied, ultimately, on 13 factual errors which the Appellant says are significant errors. 40 The Appellant submits that these errors are such that the Decision is unsound and cannot stand.

[77] For this ground to succeed the decision must be found to contain a “significant error of fact.” 41 As the Full Bench said in Esso for an error of fact to be “significant” it must vitiate the ultimate exercise of discretion. For the reasons given below we do not consider the errors of fact identified by the Appellant to be significant in this meaning.

[78] We have identified the errors of fact posited by the Appellant in its submissions. For the purpose of brevity in this decision we have not repeated the submissions of the Appellant on each point here but note that we have had regard to the written submission of the Appellant and Respondents in reaching our conclusions.

1. Paragraph [68](c) – gas pipe installation and secondary support work of Nexus meant not all of their work was not specialist or work of a project nature

The Commissioner’s finding on this point is based on evidence of Mr Grennell that secondary support work is not specialised 42. On this evidence we find no error of fact in the Commissioner’s conclusion.

2. Paragraph [68](e) – no evidence of the benefits of the AQF3 in Polymer Processing

The Commissioner did not say that there was “no evidence” of the benefit of the Certificate III qualification. He said he was “unsure of the relevance” of the qualification and made an observation as to the lack of evidence. A review of the evidence of Mr Abbott was that the training was directly relevant to the work of Mentser 43 and in this respect there is apparent relevance but the evidence was also that not all belt technicians had the training and there was no evidence of the content of the training. While we accept the evidence is that the training is relevant there is no evidence that the training was necessary for the operator function. This does not constitute a significant error.

3. Paragraphs [72] and [102] – principal reason why Ms O’Brien considered Mentser to be a specialist contractor was the Mentser Specialist Training

Ms O’Brien’s evidence is that “The work being performed by Mentser is, in my view, specialist work. The work being performed is belt cleaning and belt improvement. I am aware that Mentser’s employees have received specialist in-house training in relation to the skills required to perform the work.” 44 No other evidence is given by Ms O’Brien as to why she considered Mentser to be a “specialist contractor” beyond the training mentioned in the same paragraph as her comment about them being a “specialist contractor”.

We have dealt with the training issue elsewhere in this decision and do not repeat those matters here.

We find no error on the part of the Commissioner.

4. Paragraphs [74], [75], [93] and [102] – that the training provided by Mentser to its employees was ‘not quality training’

We have dealt with this issue elsewhere in the decision. We agree that the Commissioner’s dismissal of the training because it was not portable was an error. However, we do not consider it a significant error of fact. The Commissioner’s conclusion needs to be read in context of conclusion that much of the skills acquisition was from on-the-job training, a not uncommon form of training.

5. Paragraphs [76] and [97] – that Peabody would easily be able to replicate the information in the Raven reports

The ability to replicate the reports was a conclusion of the Commissioner based on his observation that a Deputy does a statutory inspection report per shift – a matter with which issue is not taken – and that these reports are retained, and his observation at paragraph [97] that if the Raven reports were not available the Deputy reports would be. The comment with respect to Peabody’s ability to source similar software it seems to us was no more than a reflection of the skills and abilities and size of the Appellant. We do not see any error of fact but, even if there is, it is not a significant error.

6. Paragraph [85] – that Peabody employees inspect the belts 700% more than Mentser employees each week

Mathematically the Commissioner was correct in terms of the formal belt inspections carried out by Mentser for the purpose of the Raven reports compared to the statutory inspections carried out by the Deputy. The Appellant’s reading of the paragraph is too narrow. To the extent operators inspect the belts as part of their duties it may be anticipated that, should employees of the Appellant be redeployed to this work, they too, would carry out such “inspections”.

7. Paragraph [93] – no significant training or retraining required to obtain competency

The written evidence of Mr Withers was that employees of the Appellant “would need to undertake a period of training and upskilling to become competent in all of the tasks required of Mentser’s employees.” Cross examination of the Respondents below as to their assessment of their skills was minimal in this regard such that the conclusion of the Commissioner as to retraining required for them was open to him.

As to the question of self-supervision we note our comments in the first appeal decision (at paragraph [94]) and remain of the view that no appealable error has been demonstrated on this point.

With respect to both the Nexus and Mentser work we note the skills assessment of the Respondents and that the Appellant did not challenge the Respondents on those matters below.

As the Appellant representative acknowledged during the appeal hearing it was not in contention that the Respondents were “skilled underground miners” with the ability to “over time and with appropriate familiarisation” pick up some, and perhaps many, of the skills relevant in the Commissioner’s decision.

8. Paragraphs [95], [98] and [104] – local Deputy will simply provide required supervision for insourced Nexus work

We agree that the evidence was that existing Nexus and Mentser work was supervised by Nexus and Mentser supervisors. The Commissioner did not find otherwise. The evidence in support of this alleged factual error does not go to the error identified. We find no appealable error in respect to this matter.

9. Paragraphs [97] – that the employees could easily self-supervise themselves in relation to the Mentser work

We accept that the evidence of Mr Withers is that, until the Appellant’s workforce were appropriately skilled, the crews would not be able to self-supervise and this would mean some additional supervision from within the Appellant’s workforce. 45 This evidence was given after the first appeal decision. For this reason the Commissioner’s conclusion would appear to be one not reasonably open to him as definitively as it has been made. We accept that the Appellant’s workforce could self-supervise after a period of upskilling but accept this may not be immediate. While this is an error we do not consider it significant such that it effected the Decision of the Commissioner.

10. Paragraph [102] – that some of the employees “would have far more competency to perform the Mentser scope of work then some of the Mentser employees”

We accept that the Commissioner made this finding on the basis of the varying skill levels of employees of the contractors and of the Appellant. We accept that some of the employees of Mentser were still being trained. 46 This would suggest that at least some of the Respondents have more experience than some of the employees of the contractors. To this extent the conclusion of the Commissioner was reasonably open to him on the evidence.

The Commissioner does not suggest that all of the Respondents had more skills than all of the employees of the contractors. To the extent that some employees of Mentser had a Certificate III in Polymers then they would have skills beyond those of the Appellant’s employees. The extent to which such skills may be absolutely necessary is a different question.

11. Paragraph [103] – the 2019 conveyor fire was the catalyst which de[p]rived 8 or 9 operators of their livelihood and that the decision to outsource the work was “unfair and unreasonable”

We have dealt with this comment by the Commissioner earlier in this decision. Suffice it to say there is no evidence to support a conclusion that the Respondents themselves were deprived of employment because of the fire. It is apparent that the Commissioner viewed the decision to outsource the belt work as resulting in 8 or 9 fewer operator provisions available with the Appellant. In any event we note that it is an observation of the Commissioner and not a matter that goes to the matter to be determined. To the extent it might be portrayed as an error of fact we do not consider it to be significant.

12. Paragraph [104] – that Nexus was not performing project work and that “the Nexus project was due to finish around June 2020”

It is evident the Commissioner was referring to “non specialised work” as he referred to the “large proportion of the scope of work of Nexus is not specialist work.” The Commissioner has, by this time, had regard to the “genuine operational reasons” of the Appellant and has determined that insourcing is feasible. That the Appellant would prefer, in having regard to such a matter, that the Commissioner had reached a different finding is not to the point and does not identify an error of fact.

The employment of supervisors was dealt with earlier in this decision and is do not repeated here.

That the employees could supplement other areas of mine work is clearly no more than an acknowledgement that the Respondents (or others performing this work for the Appellant) would have a breadth of skills in mine work that they could work in other areas of the mine. We note that an observation is not a finding of fact and that, in any event, this matter was not decisive in the Decision and hence would not be a significant error of fact.

13. Paragraph [104] – no identifiable reason why the Applicant employees could not be performing the Nexus work, could work under the supervision of the local Deputy and could supplement the Respondent’s workforce in other areas of the Mine without issue

It is evident the Commissioner was referring to “non specialised work” as he referred to the “large proportion of the scope of work of Nexus is not specialist work.” The Commissioner has, by this time, had regard to the “genuine operational reasons” of the Respondent and has determined that insourcing is feasible. That the Appellant would prefer, in having regard to such a matter, that the Commissioner had reached a different finding is not to the point and does not identify an error of fact.

The employment of supervisors was dealt with above and is not repeated here.

That the employees could supplement other areas of mine work is clearly no more than an acknowledgement that the Respondents (or others performing this work for the Appellant) would have a breadth of skills in mine work that they could work in other areas of the mine. Again, we note that an observation is not a finding of fact and that, in any event, this matter was not decisive in the Decision and hence would not be a significant error of fact.

Appeal ground 5

[79] This ground of appeal is that the finding in relation to the Mentser work was not a finding that a decision maker, acting reasonably, could have made and was hence a decision made in error. This ground of appeal is in relation to the Mentser contract only.

[80] As expanded in submissions, the Appellant takes issue with the Commissioner’s assessment of Mr Withers (paragraph [83] of the Decision), his dismissal of the Mentser training (at paragraph [102]) and his expressed view and criticism of the decision of the Appellant to outsource the belt work to Mentser following the 2019 fire (at paragraph [103]). The Appellant submits that these expressed views and conclusions of the Commissioner make the Decision unsound.

[81] We acknowledge the matters raised by the Appellant in relation to the Commissioner’s comments at paragraph [103] of the Decision and the criticism levelled at Mr Withers in the Decision at paragraph [83].

[82] We do not consider a fair reading of the evidence of Mr Withers supports a conclusion that he “has a problem with anyone questioning his decision to outsource the conveyor belt work”. Whilst the quote from Mr Withers’ indicates intemperate and unnecessary language in his evidence, it was one comment made at the end of a lengthy period of cross-examination and further questioning by the Commissioner. Mr Withers was certainly defensive of the decision taken by the Appellant to outsource the belt work but there is nothing in his evidence that supports a conclusion, as formed by the Commissioner, that Mr Withers had a “problem” with the questioning of that decision.

[83] We consider that the Appellant attempts to read too much into the comments of the Commissioner at paragraph [103] of the decision. We do not consider it was necessary for the Commissioner to make the observation he did in that it contributes nothing to the Decision, but we do not accept that it was a factor that informed the Commissioner’s ultimate conclusion. Rather, we accept it is an observation that the decision originally taken to outsource the belt work was not attributable to the skills (or lack thereof) of the employees at the workplace. This was a finding based on the evidence of Mr Withers. 47 We do agree that there is no foundation for the comment with respect to the outsourcing decision leading to 8 or 9 operators losing their livelihoods. This paragraph, or parts of it, however do need to be viewed in the context of two hearings, two extensive decisions and an appeal decision on the first decision. We agree that this case was not about the reasonableness of the original decision to outsource the work to Mentser. However, we do not consider that the reason for outsourcing or the defence of such a decision was a key consideration in the Commissioner finding that insourcing that work was reasonable in the circumstances.

[84] As to the Commissioner’s apparent dismissal of the training provided by Mentser, again the language may have been more carefully chosen by the Commissioner, but it is clear that the Commissioner sought to do no more than indicate that the provision of training to do the work does not make the work specialist work – a foundational issue in the Decision. We would add that even if the training was accredited or portable does not, of itself, make the work “specialist” work.

CONCLUSION

[85] In conclusion we would observe that there appears to be a typographical error in the Decision at paragraph [105] where (and is accepted by the Appellant and Respondent) it should read “…I am satisfied and find that the [Appellant’s] actions in terminating the [Respondents] and keeping either Mentser or Nexus was not reasonable.”

[86] Whilst the Commissioner did not explicitly state it in the Decision, we are satisfied that he considered that redeployment was reasonable in all of the circumstances and that, for all of the reasons given, the dismissals were not a case of genuine redundancy (as he does find at paragraph [108]).

[87] It is clear, from a reading of the Decision as a whole that the Commissioner considered the matters he was directed to in the first appeal decision. He considered whether insourcing the contracted work was feasible and the skills of the employees seeking redeployment and whether the employees had the skills necessary to perform that work before reaching the conclusion that redeployment was reasonable in all of the circumstances.

[88] Further, while we accept that there are some factual errors in the Decision we do not consider these to be “significant errors of fact” such that they demonstrate appealable error.

[89] While the ultimate conclusion that redeployment was reasonable in all the circumstances is not stated as clearly as it might be, it is implicit in the Decision. We do note that this Decision arose from our fist appeal decision and a second hearing with further evidence and submissions of the parties. This added to the lengthy period of time over which the matter has been heard and perhaps was a contributing factor to some lack of attention to detail in the Decision.

DISPOSITION

[90] We order that:

(a) Permission to appeal is granted.

(b) The appeal is dismissed.

(c) The file is retuned to Commissioner Riordan for further programming.

[91] In returning the file to the Commissioner the Full bench strongly recommends that the parties enter into discussions with a view to finding settlement of the applications. It is now in excess of two years since the terminations of employment with no timeframe for the final determination of the applications being apparent.

[92] Before the file is returned to the Commissioner for regular programming, to facilitate settlement of the application, the Commission can make a Member available to conduct a Member Assisted Conciliation. The parties should advise the Commission within 7 days of publication of this decision as to whether or not they wish to have a Member Assisted Conciliation.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR745382>

Appearances:

D. Williams for the Appellant.

A. Walkaden for the Respondent.

Hearing details:

2022.

Sydney by Microsoft Teams Video:

March, 25

Attachment A

Grounds for Appeal

1. Failure to apply the correct test

(a) The Commissioner failed to apply the test required under s.389(2) of the Fair Work Act which requires a determination as to whether redeployment into work was reasonable in all of the circumstances.

(b) Instead, the Commissioner erroneously applied a test which appears from the reasons to be a combination of the following considerations rather than consideration of whether it would have been reasonable in all of the circumstances for any of the Applicants to be redeployed:

(i) Whether the work being carried out by Nexus and Mentser (Contractors) was ‘specialist work’ in accordance with an assessment by one of the Respondent’s witnesses (Reasons at [102] to [105], noting that the conclusion in paragraph [105] appears to contain a typographical error).

(ii) Whether terminating the Applicants and keeping the Contractors was reasonable (Reasons at [105]).

(iii) Whether it was ‘feasible’ for Peabody to insource some of the work of the Contractors (Reasons at [95] – [96]). [Note: it is accepted that this issue is a relevant consideration as per the reasons of the Full Bench at [70], [86] and [91] however it is not in itself the correct test].

(iv) Whether the approach of Peabody to make an antecedent decision to outsource the belt maintenance and improvement work to Mentser, with the subsequent result (as the Commissioner found, although erroneously), that 8 or 9 operators lost their jobs with Peabody, was unreasonable and unfair (Reasons at [103]).

2. Having failed to apply the correct test, the Commissioner failed to identify or alternatively failed to appropriately take into account in the application of the correct test the following circumstances:

(a) In relation to the work being carried out by Mentser:

(i) Peabody’s decision to outsource the belt maintenance and improvement work to Mentser reflected a deliberate strategy which was taken following a serious safety incident, which indicated a reasonable need for a different strategic approach to the issue, and following a deliberative process of considering what approach to the work would deliver optimum operational, efficiency, cost and safety outcomes for the operation.

(ii) In the assessment of the responsible manager, a previous strategy which involved Peabody’s employees carrying out the work had failed to manage the risk associated with the work in an effective way, and that the engagement of Mentser had resulted in very positive results in relation to their work at the Mine.

(iii) The responsible manager, who held a statutory responsibility in relation to the safe operation of the Mine, was genuinely concerned that a return to the previous strategy in relation to the work was inconsistent with optimum safety compliance.

(iv) Critical aspects of the service provided by Mentser for conveyor management had never been performed by Peabody and could not practically be done by a ‘crew’ of Peabody employees.

(v) The engagement of Mentser to perform the belt improvement and management work had resulted in a saving of approximately $600,000 to Peabody in accordance with the unchallenged assessment of one of Peabody’s witnesses.

(vi) Mentser owned and deployed proprietary software in the work which was advantageous in the efficient and effective disposition of the work which was not available to Peabody.

(vii) Mentser had developed a specialist training programme for its employees deployed to the work which was advantageous in the efficient and effective disposition of the work which was not available to Peabody in relation to the training of its own employees.

(viii) None of the Applicants had completed the Mentser training or any comparable training, in particular training in polymer processing which was specialist training directed to specialist belt technicians.

(ix) Removal of work from Mentser would have had a significant adverse impact on its business and its employees engaged at the Mine in circumstance where they had committed to and invested in the delivery of the services for an extended period and there was no change proposal which affected the work they were contracted for and employed to carry out.

(b) In relation to the work being carried out by Nexus:

(i) As part of the change process, and in response to issues discussed during consultation, Peabody had already given detailed consideration to the creation of redeployment opportunities within its enterprise, and had agreed to remove a number of contractor employees Including employed by Nexus) from the operation in order to create redeployment opportunities.

(ii) The Nexus work which was retained represented project work which had never been carried out by Peabody’s employees, which had finite duration, which had been budgeted and approved as such, and which in the reasonable assessment of Peabody was most efficiently carried out by and under the supervision of a contractor.

(iii) Pursuant to the contract between Peabody and Nexus in relation to the work, Peabody enjoyed considerable advantages in terms of flexibility, risk assumption and accountability for quality which would not be available if the work was insourced in order to create redeployment opportunities.

(iv) Insourcing the work would have required the work to be supervised by Peabody, which would have required the recruitment of additional supervisors or the diversion of supervisory resources away from core work.

(v) Accepting (as Peabody did) that many of the individual tasks being carried out by the Nexus employees could have been carried out by the Applicants (or some of them), the allocation of that work to Applicants was reasonably assessed by Peabody’s witnesses as requiring a level of retraining, coordination and supervision which was not reasonable in the circumstances which prevailed, which included the above as well as the financially distressed status of the Mine.

(vi) Removal of work from Nexus would have had a significant adverse impact on its business and its employees engaged at the Mine in circumstances where they had committed to and invested in the delivery of the services and there was no change proposal which affected the work they were contracted for and employed to carry out.

(c) Generally, that the Mine was in a distressed and loss-making situation, and it was imperative that production was reduced, costs were reduced, and the operation of the Mine was as cost-effective and efficient as possible.

3. In relation to the work being carried out by both Contractors, the Commissioner erred in finding:

(a) That the impact of an insourcing decision in order to create a redeployment opportunity would have an adverse impact on the relevant contractor was beyond the purview of the Commissioner’s consideration (implicit in the Reasons at [68(d)]).

(b) That the fact that Peabody had obligations to its employees and not to those of contractors had the consequence that the effect of a redeployment decision on contractor employees was an irrelevant, or, alternatively, an immaterial or subordinate consideration (implicit in the Reasons at [68(f)]).

4. Further, and in the alternative to Grounds 1 and 2 to the extent that the matters were considered, the Commissioner made the following significant findings of fact which were material to the Commissioner’s conclusions and which were either erroneous, made in the absence of evidence or which were irrelevant to his consideration:

(a) His finding at [67(c)], based on observations in an unrelated matter, that Peabody was ‘open’ to taking over the roles, duties and responsibilities of contractors, which, if true, was an irrelevant matter.

(b) His finding at [68](c) that not all of the work performed by Nexus was specialist or work of a project nature, which was erroneous, because to the extent gas drainage works and secondary support works were retained by Nexus they were part of particular project work being undertaken by Nexus.

(c) His various findings in relation to the nature, quality and efficacy of the Mentser training, including at [68(e)], [72]–[75] and [93], which were either erroneous having regard to the unchallenged evidence of Peabody’s witnesses or which had no evidentiary basis at all.

(d) His findings at [68](h) regarding the itinerant and insecure nature of contract work, which, if true, was irrelevant to the issue of whether it was reasonable in all the circumstances for those employees to be displaced in order to create redeployment opportunities of the Applicants.

(e) His findings at [76] in relation to Mentser’s proprietary software and the extent to which it had utility or could be replicated by Peabody, which were either erroneous having regard to the unchallenged evidence of Peabody’s witnesses or which had no evidentiary basis at all.

(f) His finding at [81], [87] and [92] that no employee was asked whether they would be prepared to perform belt work or work being performed by Nexus, which was an irrelevant matter in circumstances where the Commission found that Peabody complied with its consultation obligations.

(g) His finding at [85] that Peabody employees ‘inspect the belts 700% more than Mentser employees each week’, which was plainly wrong in light of unchallenged evidence that a specific Mentser belt inspection took place twice a week, however during each shift the Mentser belt technicians would inspect the belts as part of their duties.

(h) The findings at [93] in relation to the need for significant training or retraining to obtain competency to undertake the Contractor work, which were either erroneous having regard to the evidence of Peabody’s witnesses (particularly in relation to the Mentser work) or which had no evidentiary basis.

(i) The fact that the Union was not seeking the total removal of all contractors for the Mine (Reasons, [94]) which, to the extent it was true, was an irrelevant consideration.

(j) The finding at [95] and [97] that there were ‘no problems’ with supervision of insourced work carried out by the Applicants, on the basis that the ‘local Deputy will simply provide the required supervision’, which was a finding inconsistent with the evidence.

(k) His conclusion at [102] that a number of the Applicants ‘would have far more competency to perform the Mentser scope of work then some of the Mentser employees’ was a finding with no evidentiary basis and which was erroneous having regard to the unchallenged evidence of Peabody’s witnesses.

(l) His conclusion in [103] that the outsourcing of conveyor management ultimately deprived 8 or 9 Operators of their livelihood had no evidentiary basis and was erroneous having regard to the absence of evidence that the decision to outsource the work (made in 2019 but not ultimately commenced until April 2020) had resulted in any employee of Peabody losing their job.

(m) His findings at [95], [98] and [104] that there were ‘no problems’ with supervision of insourced work carried out by the Applicants, on the basis that the work ‘could be performed under the supervision of the existing local Deputy’, which was a finding inconsistent with the evidence.

(n) His finding at [104] that Nexus was not carrying out project work at the Mine is inconsistent with the evidence that Nexus was performing work on specific projects at the Mine before and after the restructure in June 2020, and is also inconsistent with the finding at [68(c)].

(o) His finding at [104] that any of the Applicants redeployed to ‘the Nexus work’ could supplement Peabody’s workforce in other areas of the Mine on short notice and without issue, which was a finding made without any evidentiary basis.

5. In light of all of the matters referred to above, the Commissioner's conclusion that Peabody’s failure to displace Mentser and to redeploy some of the Applicants to the belt cleaning and improvement work resulted in a failure to redeploy those Applicants in circumstances where, in all of the circumstances it was reasonable to do so, was a finding which no decision maker, acting reasonably, could have made, and which therefore was a decision made in error.

 1   Bartley & Ors v Helensburgh Coal Pty Ltd [2021] FWC 6414

 2   Helensburgh Coal Pry Ltd v Neal Bartley and Ors [2021] FWCFB 2871

 3   Bartley & Ors v Helensburgh Coal Pty Ltd [2020] FWC 5756

 4   Two of the original Applicants have since discontinued their applications

 5   Bartley & Ors v Helensburgh Coal Pty Ltd [2020] FWC 5756 at [63]

 6   Stickley v Kestrel Coal Pty Ltd [2015] FWC 2884

 7   Stickley and others v Kestral Coal Pty Ltd [2015] FWCFB 4760

 8   Teterin and Others v Resource Pacific Pty Limited t/a Ravensworth Underground Mine [2014] FWCFB 4125

 9   Helensburgh Coal Pry Ltd v Neal Bartley and Ors [2021] FWCFB 2871

 10   Ibid at [69]

 11   Ibid

 12   [2010] FWAFB 7578

 13   Helensburgh Coal Pty Ltd v Bartley and Ors [2021] FWCFB 2871

 14   Helensburgh Coal Pry Ltd v Bartley and Ors [2021] FWCFB 2871 at [86] and [87]

 15   Helensburgh Coal Pry Ltd v Bartley and Ors [2021] FWCFB 2871

 16   See Stickley and others v Kestrel Coal Pty Ltd [2015] FWCFB 4760

 17   Bartley & Ors v Helensburgh Coal Pty Ltd [2021] FWC 6414 at [71]

 18   Bartley & Ors v Helensburgh Coal Pty Ltd [2021] FWC 6414 at [93]

 19   This is an incorrect reference. The Appellant suggests that the correct cross-reference should be paragraph [71] although we observe is could equally be paragraph [102]

 20   Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission and Others (2000) 203 CLR 194 [17] per Gleeson CJ, Gaudron and Hayne JJ

 21   (2011) 192 FCR 78; (2011) 207 IR 177 at [43]

 22   O’Sullivan v Farrer and Another (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 243 CLR 506 per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler (2011) 207 IR 177

 23   see: GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27]; 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd (2010) 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 207 IR 177; New South Wales Bar Association v Brett McAuliffe (2014) 241 IR 177

 24     (2010) 197 IR 266.

 25   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 [27]; (2010) 197 IR 266

 26    Wan v Australian Industrial Relations Commission (2001) 116 FCR 481 at [30]

 27   (1936) CLR 499

 28   Ibid at [504]-[505] per Dixon, Evatt and McTiernan JJ

 29   [2018] FWCFB 6092

 30   Minister for Immigration and Ethic Affairs v Wu Shan Liang and Others (1996) 185 CLR 259 at p.291 per Kirby J

 31   Helensburgh Coal Pry Ltd v Neal Bartley and Ors [2021] FWCFB 2871 at [60]

 32   Helensburgh Coal Pry Ltd v Neal Bartley and Ors [2021] FWCFB 2871 at [62]

 33   Appeal transcript, 25 March 2022, PN 68

 34   Witness statement of Andy Withers dated 30 July 2021, paragraph 7, Appeal Book p.1199

 35   Evidence of Kain Abbott, transcript 7 October 2021, PN 1300-1306, Appeal Book p.275

 36   Evidence of Kain Abbott, transcript 7 October 2021, PN 1514-1515, Appeal Book p.293

 37   Evidence of Killian Grennell, transcript 7 October 2021, PN 1716-1717, Appeal Book p.312

 38   Appeal transcript, 25 March 2022, PN 63

 39   Bartley & Ors v Helensburgh Coal Pty Ltd [2021] FWC 6414 at [68(d)] and [68(f)]

 40   Appeal transcript 25 March 2022, PN383-386

 41   Section 400(2), Fair Work Act 2009

 42   Evidence of Killian Grennell, transcript 7 October 2021, PN 1716-1717, Appeal Book p.312

 43   Witness statement of Kain Abbot dated 30 July 2021, paragraph 17, Appeal Book p.1191

 44   Witness statement of Raelene O’Brien dated 7 September 2020, paragraph 56

 45   Witness statement of Andy Withers dated 30 July 2021, paragraph 21, Appeal Book p.1203

 46   Evidence of Andy Withers, transcript 7 October 2021, PN 2179-2185, Appeal Book pp. 352-353

 47   Transcript 7 October 2021, PN1924, Appeal Book p.331