Australia’s first failed vaccine mandate – what does this mean for the future of mandatory COVID-19 vaccination directions?

In an Australian first, the Full Bench of the Fair Work Commission has found that BHP’s vaccine mandate was not a lawful and reasonable direction. Why did it differ from recent successful vaccine mandate authorities and what does this mean for the future of mandated vaccine directions for employers?

BHP’s COVID-19 vaccine mandate

On 7 October 2021, BHP announced that all workers must have at least a single dose of a COVID-19 vaccine by 10 November 2021 and be fully vaccinated by 31 January 2022 as a condition of entry to BHP’s workplaces across Australia (Site Access Requirement). This resulted in over 30 employees at the Mt Arthur open cut mine (Mine) being stood down, without pay, following their failure to provide evidence that they had received a COVID-19 vaccine in compliance with BHP’s Site Access Requirement. The employees at the Mine were employed by Mt Arthur Coal Pty Ltd (Mt Arthur), a member of the BHP group of companies.

In what has been labelled a ‘landmark’ ruling on vaccine mandates, and in circumstances where there were no applicable Public Health Orders mandating vaccinations, a special five-member Full Bench of the Fair Work Commission held that BHP’s Site Access Requirement was not a lawful and reasonable direction.

What is a lawful and reasonable direction?

In the absence of a Public Health Order or an express term in an enterprise agreement or employment contract, employers seeking to mandate COVID-19 vaccinations are required to rely on the implied term in employment contracts that employees must follow the lawful and reasonable directions of their employer. Essentially, employees are only required to obey a direction that is not only lawful, but also reasonable, which is a question of fact to be determined having regard to all of the circumstances.

The Full Bench accepted that the Site Access Requirement was prima facie lawful because the direction was to protect the health and safety of workers at work at the Mine pursuant to Mt Arthur’s primary duties under the Work Health and Safety Act 2011 (NSW) (WHS Act). As such, the Full Bench held that the Site Access Requirement fell within the scope of employment, and there was nothing illegal or unlawful about a direction to be vaccinated.

However, the Full Bench held that the Site Access Requirement fell short of constituting a reasonable direction due to Mt Arthur inadequately consulting its workers as required under sections 47 to 49 of the WHS Act and the applicable enterprise agreement.

Mt Arthur’s consultation obligations

The WHS Act in NSW adopts the Commonwealth Model WHS Laws that have been also been implemented in the Australian Capital Territory, the Northern Territory, Queensland, South Australia and Tasmania.

The WHS Act requires employers to consult with workers who are, or are likely to be, directly affected by a matter relating to work health or safety. Consultation requires that:

• relevant information is shared with workers;
• workers be given a reasonable opportunity to express their views, raise work health or safety issues, and contribute to the decision-making process;
• the views of workers are taken into account; and
• workers are consulted and advised of the outcome of the consultation in a timely manner.

In turning to what constitutes satisfactory consultation, approved Codes of Practice (based on a national code of practice developed by Safe Work Australia) are admissible in proceedings for offences against the WHS Act. The Full Bench determined that, while offences under the WHS Act were not directly applicable to the matter, in determining whether Mt Arthur met its consultation obligations under the WHS Act it would consider the NSW Government Code of Practice: Work Health and Safety Consultation, Cooperation and Coordination (the Code), which provides practical guidance for employers on how to effectively consult with workers under the WHS Act.

The Full Bench accepted that Mt Arthur also had consultation obligations under its applicable enterprise agreement. The enterprise agreement adopted the model consultation clause under the Fair Work Regulations 2009 (Cth), which requires employers to consult with employees once a definite decision has been made to introduce a major change to ‘production, program, organisation, structure or technology’ that is likely to have a significant effect on employees, including where a major change could result in the termination of employment.

From about 31 August 2021, Mt Arthur commenced an education program for all employees, regularly circulated announcements about the health benefits of vaccinations and provided employees with information about booking vaccination appointments.

Between 31 August 2021 and 7 October 2021, BHP announced to all employees employed by the BHP group of companies that it was actively assessing whether to mandate the COVID-19 vaccine and make it a condition of entry to all BHP workplaces in Australia, including the Mine. During this assessment, BHP set up a central mailbox for employees across all the various BHP entities, including Mt Arthur, to ask questions and make comments about the Site Access Requirement, and it responded to all concerns, including those raised by union representatives.

On 7 October 2021, BHP announced that the Site Access Requirement would be implemented at all of BHP’s workplaces across Australia, including the Mine. Mt Arthur submitted that, between 7 October 2021 and 10 November 2021, it and BHP continued to consult and engage with employees.

However, despite Mt Arthur and BHP taking these steps in consulting with employees before implementing the Site Access Requirement, the Full Bench held that BHP failed to comply with its consultation obligations under the WHS Act and the enterprise agreement.

So, in circumstances where BHP appeared to engage in a reasonable consultation process, provided employees and union representatives a reasonable opportunity to express their views and then considered their feedback, why did BHP’s process fall short of the consultation obligations under the WHS Act?

Full Bench finds BHP’s consultation process inadequate

Taking into consideration guidance provided in the Code, the Full Bench found that employees were not given a reasonable opportunity to express their views, contribute ideas in relation to the decision-making process, or raise work health and safety issues. Employees were not provided with information about the reasons, rationale and data supporting the proposed Site Access Requirement.

The Full Bench also found that BHP did not directly engage with health and safety representatives, and meetings that occurred after the Site Access Requirement announcement were not about whether the Site Access Requirement would be introduced, but rather, how and why it would be implemented.

The Full Bench determined that the Site Access Requirement was not a reasonable direction, having regard to BHP’s inadequate consultation and consequent failure to comply with the WHS Act.

What does this mean for the future of vaccine mandates?

With the growing trend towards the implementation of mandatory vaccination policies in industries that Public Health Orders do not currently apply to, many employers have been left concerned about the lawfulness and reasonableness of future COVID-19 vaccine mandates.

In providing relief for employers, the Full Bench accepted that there were considerations weighing in favour of a finding that the Site Access Requirement was reasonable. This included that it was directed at ensuring the health and safety of workers, and that it was a reasonably proportionate response to the risk created by COVID-19.

The Full Bench remarked that if BHP had fulfilled its consultation obligations, these considerations would have provided a ‘strong case in favour of a conclusion that the Site Access Requirement was a reasonable direction’.

Additionally, the Full Bench commented that the consultation deficiencies could still be addressed by consulting with employees about whether or not the Site Access Requirement should be imposed. The consultation should be directed at whether a site access requirement should be adopted, and if so, the terms of such a requirement. Provided Mt Arthur and BHP commenced its consultation in a timely fashion, the Full Bench expected that Mt Arthur would be able to make a decision about mandatory vaccinations before the relaxation of COVID-19 related restrictions in NSW on 15 December 2021 (which at the time, was less than two weeks away).

Key lessons for employers when introducing mandatory vaccination policies

In light of the Full Bench suggesting that there were numerous considerations weighing in favour of the Site Access Requirement, this decision does not suggest that future vaccine mandate directions will not be reasonable.

However, it provides a timely reminder for employers about the importance of complying with their consultation obligations imposed by the WHS Act and applicable enterprise agreements and ensuring they engage in a genuine consultation process with employees prior to a decision to implement mandatory vaccinations. Employers and persons in control of businesses should also carefully review and consider the guidance contained in the relevant Codes of Practice to determine how to satisfy their duties under the WHS Act.

The Full Bench remarked that, although adequate consultation does not require employees to agree to the direction or have the power of ‘veto’, employees should have a reasonable opportunity to persuade their employer in relation to a decision to introduce mandatory vaccination policies.

If you are an employer and need any assistance with navigating Public Health Orders for your industry or considerations for implementing mandatory COVID-19 vaccine policies, please contact a member of our workplace relations and safety team.