Australia: No remedy for mine workers who lost jobs after refusing to move interstate

A Full Bench of the Fair Work Commission has upheld the actions of a company which directed its employees to relocate interstate or have their employment terminated: Bourke & Clifford V OS MCAP [2022] FWCFB 178.

Background facts

OS MCAP is a subsidiary of BHP and provides services at BHP-owned mines around Australia. The employment contracts of certain OS MCAP employees specify that they can be required to work at multiple sites around Australia.

In 2021, OS MCAP notified its employees that their services at the Mount Arthur Coal Mine in NSW would be discontinued. However, employees were advised that their employment with OS MCAP would continue at another worksite. Employees were invited to express their preference of worksite, but available locations were generally in Queensland and South Australia. Employees were also told that if they did not wish to relocate, they could resign.

A group of 17 employees refused to be relocated. After unproductive discussions with OS MCAP, these employees were given a deadline to communicate their intention to continue or discontinue their employment. The employees did not respond to this request and their employment was terminated.

First instance decision

The employees each made unfair dismissal applications in the Fair Work Commission. Each was represented by the Mining and Energy Union.

Hearing the 17 matters concurrently, DP Saunders determined that, by refusing to relocate in accordance with their employment contracts, the 17 employees had failed to comply with a lawful and reasonable direction from their employer.

Moreover, his Honour found that these employees had abandoned their employment and repudiated their contracts. This meant that they had not been dismissed by OS MCAP and nor had they been forced to resign. As a result, there was no remedy available to them under the Fair Work Act 2009 ('FW Act').

The employees appealed this decision.

Appeal decision

On appeal, the Full Bench of the Fair Work Commission agreed with the decision of DP Saunders. The employees argued, unsuccessfully, that their work was restricted to the Mount Arthur site by an implied contractual term. The Full Bench rejected this proposition.

The Full Bench affirmed that OS MCAP's offer of redeployment was a direction under the employment contract. It did not matter that OS MCAP had framed this direction as a choice between redeployment and termination.

The 17 employees had demonstrated their intention not to comply with their contractual duties by:

• disputing the accuracy of OS MCAP's claims about whether redundancy payments were due;
• expressing their opposition to continue their roles at another worksite; and
• failing to nominate a redeployment location and failing to notify OS MCAP of their intention to continue or discontinue work when requested.

Each employee's conduct, therefore, amounted to an abandonment of employment and a renunciation of the employment contract, bringing the employment relationship to an end.

In the Full Bench's view, the significant distance of the relocation, which would have required employees to move from NSW to Queensland or South Australia, was not a relevant consideration.

Were the workers entitled to redundancy pay?

Employees have redundancy entitlements under the National Employment Standards. Employees are entitled to redundancy pay where their employment is terminated at the employer's initiative because:

• the employer no longer requires the job being done by the employee, to be done by anyone; or
• the employer has become insolvent or bankrupt (s. 119(1) FW Act).

There are also often redundancy entitlements under industrial awards. However, it is not always clear-cut whether an employee has been made redundant.

In this matter, the work of the 17 employees was no longer required by OS MCAP at the Mt Arthur Mine. However, because OS MCAP was willing to engage these employees at other worksites, and relocation was authorised under their contracts, the employees were not dismissed and there were no redundancies.

Another way to think about this is that the employer still required the 'job to be done' because part of the job was relocating when required. As DP Saunders explained [63]:

Significance of this decision for workers

This outcome suggests that some multi-site employers can lessen their redundancy obligations by including relocation terms in employment contracts. This would theoretically allow the closure of an entire worksite without enlivening redundancy entitlements, as long as the employer has other active worksites and is willing to redeploy affected workers.

While in some cases, employees might prefer relocation to termination, in others, it will create unacceptable burdens. In such cases, some employees will have little choice but to resign and will face all the consequences of redundancy without any of the benefits.

Notably, the Full Bench concluded that the burden (of relocation) on the employee is not a relevant consideration where relocation is authorised under the contract. However, it may well be a relevant consideration if the contract is silent on the issue or if it arises under an enterprise agreement. For employees, this decision highlights the importance of understanding what can be required of you under your employment contract, as it may affect your entitlements when employment circumstances change.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.