The Federal Court of Australia has fined a Queensland coal miner $50,000 for taking adverse action against a drill rig operator who was stood down without pay shortly after winning significant damages for a workplace injury.

Background

Mr Haylett, represented by the CFMEU in this matter, was working as a drill rig operator for Rio Tinto subsidiary Hail Creek Coal when, on 18 November 2013, he was stood down from work by the mine manager.

Two important events preceded Mr Haylett’s suspension from work.

• Firstly, on the previous Friday (15 November 2013), Mr Haylett won $638,000 in damages against Hail Creek Coal for a serious neck injury sustained at work in mid-2009. This injury resulted in Mr Haylett requiring spinal fusion surgery and then returning to work on light duties in 2010. The injury forced his employer to retrain him from a general machine operator / labourer to a drill rig operator, and to make special provisions for his injury.

• The second event was that on the day Mr Haylett was stood down from work (Monday 18 November 2013), he undertook a medical assessment in which the doctor opined that he was unfit for his role as an ‘operator’.

After being stood down, Mr Haylett twice challenged the medical assessments of his fitness for work in the Supreme Court of Queensland and was twice successful.

During the ongoing dispute about his fitness for work, Hail Creek Coal refused to pay Mr Haylett’s wages, essentially placing him on unpaid leave for over two years. In December 2015, even after Mr Haylett was successful in having the Queensland Court of Appeal declare him fit for work, the company still refused to reinstate him to his position, or to recommence paying him wages.

Hail Creek Coal’s primary defence of its actions was that Mr Haylett’s medical assessment of 18 November 2013 was undertaken in accordance with the required five-yearly medical review process under the Coal Mining Safety and Health Act 1999 (Qld) (the “CMSH Act). The company argued it stopped paying Mr Haylett his wages given he had exhausted all of his sick leave and annual leave entitlements.

The company then argued in December 2015 that it could not reinstate Mr Haylett until after he had undergone yet another medical assessment, consistent with the CMSH Act.

In contrary, the CFMEU argued that Hail Creek Coal deliberately stood Mr Haylett down for an unlawful reason, had deliberately stopped paying his wages and that its actions had caused the former employee significant harm and financial hardship.

The decision

In his liability judgement, Justice Reeves concluded that Hail Creek Coal had taken adverse action against Mr Haylett, in contravention of s340 of the Fair Work Act 2009, and had also contravened s50 of the Act by breaching various clauses of the enterprise agreement for Hail Creek.

When determining the penalty, Justice Reeves was scathing of the company’s contravening conduct, which he noted had been ongoing for ‘more than two years’ and that was ‘no indication that Hail Creek Coal accepts that it has contravened the FW Act’.

“I consider there is a need to reflect both specific and general deterrence in this penalty, the latter to ensure that other employers are not tempted to engage in a similar course of conduct,” the Justice said.

Justice Reeves fined Hail Creek Coal $50,000 for its contraventions of the Fair Work Act.

Given Mr Haylett had abandoned his attempts to be reinstated to his position, the judgement then turned to determining how much he should be awarded in damages.

The Court rejected the employer’s argument that Mr Haylett had no entitlement to wages lost given he had already won $638,000 in damages for the workplace injury sustained in 2009. The Court considered that any award of damages should not be assessed by reference to the effect Mr Haylett’s workplace injury would have on his capacity to earn income in the future and instead, should be directed to any loss Mr Haylett may have suffered because of the employer’s contraventions of the Act

Hearings for the final amount of compensation to be paid to Mr Haylett will take place later this week.

Implications for employers

This case involved a series of contraventions of the Fair Work Act which were compounded over time by persistent wrongdoing by the employer. A number of lessons arise from this matter including:

• Employers must consider the adverse action provisions under federal workplace law when seeking to comply with relevant state legislation and in managing ill and injured employees.
• The mine manager was heavily criticised by the Court in this case for not seeking guidance from an employment lawyer or human resources / employee relations professional before making the decision to stand down Mr Haylett. Seeking guidance from an employee relations professional will mitigate the risks associated with managing ill and injured employees, including the risk of lengthy and costly legal proceedings.

AREEA’s team of employee relations and legal consultants are highly experienced in workplace health and safety matters, in the application of the adverse action provisions, and all other employment matters arising in this case. For advice, contact your local AREEA office.