Australia: Fair Work Commission ruling against BHP’s COVID-19 vaccine mandate

Authors: Paul Lorraine, Justin Pen and Liz Baradan

On 3 December 2021, a Full Bench of the Fair Work Commission, Australia’s national workplace relations tribunal, determined that a direction by a BHP company which required all workers at its Mt Arthur mine to receive a COVID-19 vaccination as a condition of site entry, was lawful but not reasonable. The determination was made following findings that the company had failed to adequately consult with its workers prior to the issuance of that direction.

The decision in CFMMEU & Matthew Howard v Mt Arthur Coal Pty Ltd T/A Mt Arthur Coal [2021] FWCFB 6059 dealt with a dispute in relation to a COVID-19 vaccine mandate that was introduced at the Mt Arthur mine in the Hunter Valley in New South Wales. The Mt Arthur mine and Valley Energy Coal Pty Ltd, which owns and operates the Mt Arthur mine, are both members of the BHP group of companies.

On 7 October 2021, Mt Arthur Coal Pty Ltd (Mt Arthur), a wholly owned subsidiary of Australian mining giant BHP, announced a requirement that all workers at the Mt Arthur mine must be vaccinated as a condition of site entry (Site Access Requirement). The Site Access Requirement required the employees of Mt Arthur to:

1. have at least a single dose of an approved COVID-19 vaccine by 10 November 2021, and
2. be fully vaccinated by 31 January 2022.

The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), which represents about 700 Mt Arthur employees, and the Secretary of the local CFMMEU lodge (the Applicants) then made an application under section 739 of the Fair Work Act 2009 (Cth) seeking that the Commission deal with a dispute in relation to the Site Access Requirement.

The Commission’s jurisdiction to deal with a dispute arises under the Mt Arthur Coal Enterprise Agreement 2019, which confers broad powers on the Commission to resolve this type of industrial dispute by arbitration. Such dispute resolution clauses are mandatory in all enterprise agreements.

The Full Bench noted that employees are only obliged to comply with employer directions that are lawful and reasonable. The Full Bench also noted that reasonableness is “a question of fact having regard to all the circumstances” and rejected Mt Arthur’s proposition that an employer’s direction will always be reasonable when the objective and purpose of the direction is to achieve compliance with statutory and common law duties.

In this decision, the Full Bench held that the following factors weighed in favour of a finding that the Site Access Requirement was reasonable:

1. It is directed at ensuring the health and safety of workers of the Mine.
2. It has a logical and understandable basis.
3. It is a reasonably proportionate response to the risk created by COVID-19.
4. It was developed having regard to the circumstances at the Mine, including the fact that Mineworkers cannot work from home and must come into contact with other workers whilst at work.
5. The timing for its commencement was determined by reference to circumstances pertaining to NSW and the local area at the relevant time.
6. It was only implemented after Mt Arthur spent a considerable amount of time encouraging vaccination and setting up a vaccination hub for workers at the Mine.

However, the Full Bench ultimately ruled that the Site Access Requirement was not a lawful and reasonable direction on the principal basis that Mt Arthur had failed to follow the consultation process required under the work health and safety legislation before introducing the Site Access Requirement.

In arriving at this decision, the Full Bench noted that the employees were not given a genuine opportunity to express their views and to raise work health or safety issues, or to contribute to the decision-making process relating to the decision to introduce the Site Access Requirement. For example, the Full Bench observed that the email communication that announced the Site Access Requirement – which stated that “the company will introduce a requirement for COVID-19 vaccination as a condition of entry to BHP workplaces” – was demonstrative of the fact that the decision was “irrevocable” and “not amenable to consultation”.

Further, it was found that the employees were not provided with information relating to the reasons, rationale and data supporting the Site Access Requirement. If the Site Access Requirement was introduced after a meaningful consultation process was conducted, the factors listed above would have provided a strong case in favour of a conclusion that the requirement was a lawful and reasonable direction.

What Constitutes Consultation?

Most Australian jurisdictions have harmonised work health and safety legislation that requires consultation over safety issues, requiring in particular:

1. that relevant information about the matter is shared with workers, and
2. that workers be given a reasonable opportunity—
   1. to express their views and to raise work health or safety issues in relation to the matter,
   2. and to contribute to the decision-making process relating to the matter, and
3. that the views of workers are taken into account by the person conducting the business or undertaking, and
4. that the workers consulted are advised of the outcome of the consultation in a timely manner.

In relation to what constitutes consultation, the Full Bench noted that the requirement to consult affected workers would not be satisfied by providing them with a mere opportunity to be heard. Rather, the requirement involves providing affected workers with an opportunity to be heard and an entitlement to have their views taken into account when a decision is made.

What will constitute a meaningful opportunity to engage in consultation will vary according to the nature and circumstances of the case. The content of a requirement to consult is determined by the precise terms in which the requirement is expressed, the nature of the factual or legal issues and the factual context in which the requirement is exercised, including the particular circumstances of the affected workers.

Despite the fact that an employer retains the right to make a final decision in relation to the introduction and implementation of proposals, consultation must not be a merely formal or perfunctory exercise. The opportunity to engage in consultation “must be a real opportunity, not simply an afterthought”.

Consultation can be of very real value to both employers and employees. A meaningful consultation process can enable the views of affected workers to be put forward. This can assist employers to understand the aspects of a proposal that may produce negative consequences and receive suggestions for ways to eliminate or alleviate those consequences.

Key Action Points for Human Resources and In-house Counsel

In light of this decision, employers are advised to ensure that when introducing and implementing change in the workplace (including, but not restricted to, vaccination requirements for access to the workplace), there is full compliance with obligations regarding the implementation of workplace change. These obligations may arise under an award, an enterprise agreement or under legislation such as work health and safety legislation (and occasionally under a contract of employment), and may include obligations to provide notice of the change or information about the impact of the change, as well as the clear obligation to consult workers. In particular, where the change is related to health or safety, employers should:

• ensure that any directions or requirements to protect the health and safety of employees within the workplace are reasonable having regard to all of the circumstances of their business;
• ensure that they comply with their obligations in relation to directions or requirements regarding workplace health and safety, including considering all applicable industrial legislation and instruments;
• explain the reasons and rationale for the proposed safety requirement; and
• give workers an opportunity to be heard and to have their views taken into account before a decision is made.