Failure to Consult Employees means Vaccine Requirement Unreasonable

Construction, Forestry, Maritime, Mining and Energy Union, Mr Matthew Howard v Mt Arthur Coal Pty Ltd T/A Mt Arthur Coal [2021] FWCFB 6059

Construction, Forestry, Maritime, Mining and Energy Union v BHP Coal Pty Ltd [2022] FWC 81

Introduction

In this case (the Mt Arthur Decision), a full bench of the Fair Work Commission (the Commission) considered whether an employer’s COVID-19 vaccination requirement constituted a lawful and reasonable direction to employees.  The direction was made at the employer’s initiative, rather than as a result of a government-imposed vaccination requirement.  In this instance, the Commission concluded that the direction was not a reasonable direction, given the absence of meaningful consultation between the employer and affected employees.

Facts

Mt Arthur Coal Pty Ltd (Mt Arthur), a member of the BHP group, employs people who work in an open cut coal mine in the Hunter Valley, NSW (the Mine).  The Mt Arthur Coal Enterprise Agreement 2019 (the Agreement) applies to the majority (724/980) of people employed by Mt Arthur and working in production and engineering.  The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) represents approximately 700 of these employees.

On 7 October 2021 Mt Arthur announced that vaccination against COVID-19 would be a condition of entry to the Mine (the Site Access Requirement). Under the Site Access Requirement, employees were required to:

  • have at least one dose of an approved COVID-19 vaccine by 10 November 2021; and
  • be fully vaccinated by 31 January 2022.

Employees were required to provide Mt Arthur with evidence of their compliance with the Site Access Requirement.  Employees would not be permitted to access the Mine after midnight 9 November 2021 unless provided evidence of receiving one dose of an approved COVID-19 vaccine.

The CFMMEU and Mr Howard (the secretary of a local group of members of the CFMMEU who work for Mt Arthur) (the Applicants) applied to the Commission under the Fair Work Act 2009 (Cth) (FW Act).  The Applicants sought for the Commission to deal with the dispute in accordance with the dispute resolution procedure in the Agreement.  Under the Agreement, a dispute could be referred to the Commission “as a last resort” where the matter remained unresolved from conciliation.  The dispute concerned whether the Site Access Requirement was a reasonable and lawful direction with respect to the employees at the Mine covered by the Agreement.  The Applicants sought to prevent Mt Arthur from dismissing or disciplining employees who failed to provide evidence of COVID-19 vaccination until this decision was delivered; however, this application was dismissed.  Numerous unions and employer bodies were granted leave to intervene in this case.

Evidence

A number of factual propositions relating to severity of disease and prevention of COVID-19 were uncontentious. It was accepted that COVID-19 vaccines were safe and effective and reduced some of the risks surrounding COVID-19 transmission and infection.  The Applicants challenged part of the evidence of two of Mt Arthur’s witnesses on the basis of a lack of impartiality.  The Commission admitted the evidence in both instances but would attach less weight to the relevant evidence, where appropriate.

Issue

The issue before the Commission was whether the Site Access Requirement constituted a reasonable and lawful direction with respect to the employees covered by the Agreement.

Law

In the absence of contrary intention, all employment contracts contain an implied term requiring employees to follow the lawful and reasonable directions of their employer.

A lawful direction is one which:

  • falls within the scope of the work which the employee has been engaged to perform;
  • does not endanger the employee’s life or health, unless the employee’s role is inherently dangerous (i.e. the employee has been contracted to take the risk/s); and
  • does not require the employee to do anything unlawful.

Whether a direction is reasonable is a question of fact, to be determined objectively, having regard to all circumstances.  It is unnecessary to demonstrate that the direction was the preferable or most appropriate course of action.  The Commission rejected the submission of the one of the interveners that there is a high threshold for establishing reasonableness.  In any given context, there may be a variety of options available to an employer which are reasonable.  A direction which does not have any apparent or intelligible basis will not be a reasonable direction, although there are other grounds for establishing unreasonableness.

Decision

The Site Access Requirement did not implement a requirement from a public health directive. The basis for the Site Access Requirement was the implied contractual term requiring employees to follow the lawful and reasonable directions of their employer.

The broad arguments advanced by the Applicants in support of the direction not being reasonable and lawful were:

  • the consultation requirements under the Work Health and Safety Act 2011 (NSW) (WHS Act) were not complied with in making the Site Access Requirement;
  • the consultation requirements in the Agreement were not met in making the Site Access Requirement;
  • Mt Arthur failed to meet its obligations under the Privacy Act 1988 (Cth); and
  • the Site Access Requirement impinged upon the right to bodily integrity.

The primary contention advanced by Mt Arthur was that its duty under the WHS Act and common law to ensure the health and safety of employees and others, insofar as is reasonably practicable, supported lawfulness and reasonableness of the Site Access Requirement.

The Commission accepted that purpose of the Site Access Requirement was the protection of the health and safety of employees and others at the Mine.  The Commission considered, prima facie, that the Site Access Requirement was lawful as it fell within the scope of the employment of the relevant employees and vaccination is not illegal or unlawful.

Consultation obligations under the WHS Act

Mt Arthur submitted that the requirement for a direction to be reasonable does not include an obligation to consult under the WHS Act or from any other source.  The basis for this argument was that the reasonableness of the direction is to be determined according to the effect of the direction, rather than the process through which the direction is made.  This submission was rejected by the Commission.  A range of factors will determine whether a direction is reasonable and here, consideration of the obligations under the WHS Act were relevant to ascertaining whether the direction was reasonable.

Section 47 of the WHS Act imposes an obligation on an employer to, so far as is reasonably practicable, consult with workers who are (or are likely to be) directly affected by a matter relating to work health or safety.  Section 48 of the WHS Act further sets out the nature of the consultation required, while section 49 sets out when consultation is required.  In the context of a mine, consultation must involve a mine safety and health representative who must be provided with access to information relating to hazards in the workplace which affect workers.  There is limited authority regarding the consultation requirements under sections 47 to 49 of the WHS Act; however, there is case law on consultation obligations under various industrial instruments.  The Commission set out a summary of principles from these cases and considered that they could be used to assist in interpreting the relevant provisions of the WHS Act. Some of the key principles include:

  • the content of the requirement to consult is context dependent, what will constitute consultation is flexible;
  • the people being consulted should be given an opportunity to be heard and express their views and have their views considered; and
  • consultation must not be merely formal or perfunctory, it must be real.

One contextual factor relevant to determining the content of a consultation requirement is whether the facts require a quick response.  The Commission considered that if there were a surge in COVID-19 cases whereby the risk of transmission increased substantially or a more transmissible strain of COVID-19 emerged, a truncated consultation process may be appropriate, given that the duty to consult operates so far as is reasonably practicable.

The NSW Government Code of Practice Work Health and Safety Consultation, Cooperation and Coordination (the Code) describes each element required to satisfy s 48 of the WHS Act (i.e. the nature of consultation required under the WHS Act).  The Commission found that the Code did not give rise to additional or separate consultation requirements and that compliance under the WHS Act did not require compliance with the Code. Nevertheless, it considered that the Code was relevant to assessing whether Mt Arthur had satisfied its obligations under the WHS Act.

Mt Arthur submitted that it complied with the requirements of section 47 of the WHS Act.  There were three phases to the introduction of the Site Access Requirement.

  1. Options phase – in this phase, an educational program was introduced and COVID-19 vaccination was promoted to employees. In August 2021, an options analysis was presented to the leadership team, resulting in a recommendation that COVID-19 vaccination become a condition of entering BHP workplaces, including the Mine.  This recommendation was supported internally, subject to risk assessment, consultation and ensuring there were processes in place for individuals with a medical contraindication to the available vaccines.
  2. Assessment phase – Mt Arthur submitted, that on 31 August 2021 the assessment phase commenced whereby BHP announced it was considering whether it would make vaccination a condition of entry to its workplaces and that a risk assessment would be undertaken. BHP set up a mailbox expressly inviting comments and questions regarding the proposed Site Access Requirement, 480 enquires were received, 20 of which came from Mt Arthur employees.  These enquiries were collated and considered.  Mt Arthur submitted that correspondence was received from unions and BHP responded to the concerns of unions in writing and through meeting union representatives.
  3. Implementation phase – this phase began on 7 October 2021, with BHP announcing that the Site Access Requirement Preview (opens in a new window)would be introduced at all BHP workplaces. Mt Arthur contends that during this phase, consultation and engagement were continued.

The Applicants submitted that the announcement regarding the introduction of the Site Access Requirement was made without any real consultation and was presented as though it would be implemented (rather than as something which Mt Arthur proposed to implement or that may be implemented).

The Commission considered that whilst it was clear that the Mt Arthur employees had received information regarding COVID-19 and vaccination, BHP and Mt Arthur proceeded as though consultation was not required prior to the decision to implement the Site Access Requirement.  Language used in announcements indicated that there was to be no meaningful consultation or that a decision had already been reached.  Employees were not asked to contribute ideas or suggestions regarding decision making or risk assessment.  Further, employees were provided with little to no information regarding the risk assessment.  The Commission also considered that no genuine attempt had been made to consult with unions and during the assessment phase and there was no direct consultation with health and safety representatives.

The Commission considered that what occurred during the implementation phase (including meetings with employees and unions, provision of information about risk assessment) better aligned with the requirements of a consultation process under the WHS Act.  Nevertheless, the opportunity to meaningfully engage occurred after the decision to implement the Site Access Requirement had been made.  The Commission found that after the Site Access Requirement was announced at the implementation phase, Mt Arthur and BHP did not have open minds regarding whether it should be introduced.

Employees at Mt Arthur did not have a reasonable opportunity to provide their views and contribute to the decision-making process surrounding the Site Access Requirement.

In effect the Employees were only asked to comment on the ultimate question: should the Site Access Requirement be imposed? The contrast in the consultation or engagement with Employees in the implementation phase compared to the assessment phase is stark and suggests that during the assessment phase the Respondent was not consulting as far as is reasonably practicable as required by s.47 of the WHS Act.

The Commission concluded that Mt Arthur had failed to engage in consultation as required under sections 47 and 48 of the WHS Act. The Commission considered that the inadequacy of the consultations engaged in by Mt Arthur was relevant to the reasonableness of the Site Access Requirement.  Mt Arthur submitted that a failure to comply with the consultation requirements should not determine the reasonableness of the Site Access Requirement as compliance with the consultation requirements would not necessarily result in a different outcome.  The Commission considered this was misconceived given that consultation is not binary, and employees were denied the chance for a different result.

The Applicants and union interveners submitted that consideration of employment laws, including the WHS Act are relevant to the lawfulness of a direction.  While declining to conclude on the point, the Commission observed that the authority for Mt Arthur to issue a lawful and reasonable direction does not arise from the WHS Act, but rather from an implied contractual term.  Therefore, a failure to consult would not invalidate a direction given under an implied contractual power.

Consultation obligations under the Agreement

Schedule 2.3 of the Fair Work Regulations 2009 (Cth) provides a model consultation term for enterprise agreements.  This model term is contained in the Agreement and gives rise to an obligation to consult where an:

…employer has made a ‘definite decision’ to introduce a ‘major change’ to ‘production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees.’

After considering case law interpreting the model consultation term, the Commission concluded that the Site Access Requirement constituted a change how the Mine is organised, under the model consultation term. The Commission also considered that the Site Access Requirement has a significant effect on employees, given that it exposes employees who choose not to be vaccinated to the potential for disciplinary action.  The Commission observed that it appeared as though Mt Arthur had substantially met its obligation to consult under the Agreement as it consulted employees after it had decided to introduce the Site Access Requirement.  However, it was not necessary to reach a conclusion on this point, given the findings made with respect to the WHS Act.

Privacy

The Applicants submitted that the Site Access Requirement was unlawful, involved unlawfulness or was not a reasonable direction, as Mt Arthur had failed to meet its obligations under the Privacy Act 1988 (Cth) (Privacy Act).  Under Australian Privacy Principle 3.3, Mt Arthur must not collect sensitive information about a person without their consent and unless the information is reasonably necessary for, or directly related to, Mt Arthur’s functions or activities.  The Commission considered it unnecessary to reach a conclusion regarding whether Mt Arthur had breached its privacy obligations, given the findings made regarding the reasonableness of the direction.  This issue has been considered in more detail in a subsequent decision: Construction, Forestry, Maritime, Mining and Energy Union v BHP Coal Pty Ltd [2022] FWC 81 (21 January 2022) (the Queensland Decision), which is discussed below.

Bodily integrity

Arguments were also advanced that the Site Access Requirement violated the right to bodily integrity.  The Commission found that this right was not contravened by the Site Access Requirement.  Nevertheless, the Commission accepted that the Site Access Requirement amounted to a form of economic and social pressure.  It considered that this practical effect highlighted the significance of Mt Arthur’s failure to adequately consult employees.  This issue was also considered in the Queensland Decision, discussed below.

Other relevant circumstances

It was submitted that the Site Access Requirement was unreasonable as its implementation was not required by section 19 of the WHS Act (which sets out a duty of care to ensure the health and safety of employees).  The Commission considered it unnecessary to ascertain whether Mt Arthur was required to introduce the Site Access Requirement under the WHS Act, but was unpersuaded that the Site Access Requirement was unreasonable on this basis.

Numerous other relevant circumstances were advanced by Mt Arthur, the Applicants, and the interveners.  The Commission considered that the seriousness of COVID-19 and the effectiveness of vaccination were relevant to whether the Site Access Requirement was reasonable.  When the Site Access Requirement was introduced, the region in which the Mine is located had the greatest number of COVID-19 cases in NSW in the 4 weeks preceding its introduction when compared to other local health districts in NSW.  The Commission further considered the potential increase in spread of COVID-19 following easing of restrictions and the associated uncertainty for the Mine were relevant to the reasonableness of the Site Access Requirement.

Conclusion on whether the Site Access Requirement was a reasonable and lawful direction

The determinative consideration for the Commission was the absence of consultation in accordance with the requirements of the WHS Act.  Mt Arthur’s failure to comply with its consultation obligations under the WHS Act meant the Site Access Requirement could not be regarded as reasonable.  There were a range of factors in favour of the direction being reasonable, including that it was directed towards the health and safety of workers, it was proportionate to the risks associated with COVID-19, it had a logical basis etc.  The Commission considered that if Mt Arthur had met its consultation obligations and as a result of consultation, decided to introduce the Site Access Requirement, there would be a strong case to support the argument that the Site Access Requirement was reasonable.

The Queensland Decision

The consultation issues described above have since been resolved.  A site access requirement (of COVID-19 vaccination and proof) also relevantly applied to BHP employees at 14 other sites in Queensland.  The CFMMEU subsequently disputed, on behalf of its members employed by BHP at these sites, that this requirement was a lawful and reasonable direction, having regard to the Privacy Act and the right to bodily integrity.  The Queensland Decision sets out the Fair Work Commission’s recommendations (and reasons) on these issues.  Deputy President Ashbury applied the findings of fact regarding COVID-19 risk and vaccination from the Mt Arthur Decision.  It was noted that the circumstances at the Queensland mines were largely the same as at the Mine, although the risks were now more acute given the increased prevalence of COVID-19.

The CFMMEU contended that the pressure exerted upon employees to forego their right to bodily integrity weighed against the conclusion that the site access requirement was reasonable and when combined with the alleged privacy breaches, led to a conclusion that the requirement was unreasonable.  Applying the conclusions from the Mt Arthur Decision, Deputy President Ashbury considered that the impact of the site access requirement on the right to bodily integrity was not alone determinative of the reasonableness of the direction.

The CFMMEU submitted that the consent given by employees to provide their vaccination status to BHP was vitiated by the threat of disciplinary action or termination of employment.  This was rejected by Deputy President Ashbury who considered that the economic and social pressure created by the site access requirement was not coercion in a legal sense and did not vitiate employee consent.  This pressure was relevant but not determinative.  BHP requested that employees provide evidence of vaccination which included, amongst other information: the date of both vaccinations, vaccine type, and document number (therefore showing the “tick” from Queensland’s check-in app was insufficient).  Deputy President Ashbury considered that this information was reasonably necessary for BHP’s functions and activities, given, inter alia, that it was necessary to inform decisions regarding COVID-19 controls and for BHP’s compliance with the relevant health and safety legislation.  The CFMMEU’s submission that evidence of vaccination should be provided through the check-in app was rejected, given, amongst other factors: the risk of fraud, practical difficulties in checking vaccination status upon site entry and the increased risk of human error.  It was concluded that this site access requirement was a lawful and reasonable direction.

Compliance Impact

The Mt Arthur Decision illustrates the importance of complying with the consultation requirements under occupational health and safety legislation and ensuring that meaningful consultation takes place where required.  It also demonstrates that non-compliance with these requirements may have broader consequences; as in this decision, the failure to consult resulted in the Commission concluding that the Site Access Requirement was not a reasonable employment direction.  The language used when engaging in consultation should also be carefully considered as this may be relevant to determining whether genuine consultation has occurred.  The Mt Arthur Decision also assists in interpreting the consultation requirements set out in the WHS Act, which is based on model laws that have been adopted in every jurisdiction except for Victoria and Western Australia.

Useful guidance is also provided with respect to the factors that may be considered in determining whether a COVID-19 vaccination requirement is reasonable and lawful direction.

Importantly, the Mt Arthur Decision does not stand for a general proposition that employer directions concerning vaccination are not reasonable.  Rather, it demonstrates what may be required for such a direction to be both reasonable and lawful.  The Queensland Decision illustrates circumstances in which a vaccination directive constitutes a reasonable and lawful direction. The Mt Arthur Decision and Queensland Decision are highly fact specific and only consider a vaccination direction made by a particular employer at particular sites, in the absence of a corresponding public health order or directive.

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