In a significant decision regarding workplace mandatory vaccination policies, the Fair Work Commission (FWC) found that a mining employer had not met its consultation obligations when introducing such a policy.

In CFMMEU v Mt Arthur Coal (2021), the FWC dealt with a dispute raised by mining workers and their union regarding a requirement or direction that all workers at the mine were to be vaccinated against COVID-19 as a condition of site entry. To enter the mine, employees needed to have at least a single dose of an approved COVID-19 vaccine by 10 November 2021 and be fully vaccinated by 31 January 2022. Employees were directed to provide evidence of their compliance with these requirements by those dates.

Nothing in public health orders, the enterprise agreements or the express terms of the employment contracts permitted the employer to impose these requirements. The legal basis for the vaccination requirement was an implied term obliging employees to follow their employer’s lawful and reasonable directions.

What is a lawful and reasonable direction?

In the absence of any contrary intention of an employer and employee, there is an implied term in every contract of employment to the effect that employees must follow the lawful and reasonable directions of their employer.

A direction is lawful if it relates to the subject matter of the employment and involves no illegality. The direction must fall within the scope of the employment contract. An employee does not have to obey a direction that goes beyond the nature of the work the employee was contracted to perform, although an employee is expected to obey instructions that are incidental to that work.

A direction that endangers the employee’s life or health, or which the employee reasonably believes endangers their life or health, is not a lawful order unless the nature of the work itself is inherently dangerous, in which case the employee is deemed to have contracted to undertake the risk.

An employee cannot be instructed to do something that would be unlawful, such as drive an unregistered and unroadworthy vehicle.

Whether a lawful direction is reasonable depends on:

• the nature of the employment;
• whether it is usual for such directions to be issued in the workplace; and
• the terms of any applicable industrial law, award or enterprise agreement.

The FWC rejected the proposition that an employer’s policy or direction will be reasonable if a reasonable employer, in the position of the actual employer and acting reasonably, could have adopted the policy or made the direction. The FWC observed this raises more questions than it answers. How does one discern what a ‘reasonable employer’ ‘acting reasonably’ could do?

A direction does not have to be irrational or bizarre, or so unreasonable that no reasonable person could have issued it, to be an improper direction.

On the other hand, a direction can be reasonable, even if it is not the preferable or most appropriate course of action, or in accordance with ‘best practice’ or in the best interests of the parties.

An employer has a degree of ‘decisional freedom’ or ‘managerial prerogative’ when it exercises its power to issue directions to employees. A court or tribunal will not seek to second-guess the employer exercising that discretion unless it lacks evident or intelligible justification.

Directions that have been found to be lawful and reasonable have included:

• a direction that an employee refrain from wearing a caftan while performing duties (and so being visible to co-workers and the public);
• a direction to remove an eyebrow ring while at work (where there is a genuine need for it);
• requiring an employee to attend a medical examination to determine their fitness for work (on reasonable terms);
• requiring an employee to provide a medical report indicating diagnosis, likely capacity and time to return to ordinary duties (rather than just providing a medical certificate);
• an order that a senior employee not make public comments about decisions the employer has made in relation to its business;
• a direction that an employee not privately contact a co-worker (after the employee had been counselled in relation to sexual harassment of the co-worker); and
• a direction to an employee to maintain the confidentiality of information gathered and recorded during disciplinary processes.

Was Mt Arthur Coal’s direction in relation to mandatory vaccination lawful and reasonable?

The FWC ruled the direction fell within the scope of the employment, and there was nothing ‘illegal’ or unlawful about a requirement to be vaccinated. However, while the employer’s decision to impose the vaccination requirement was legal, the employer’s failure to reasonably consult with the affected employees made the direction unreasonable.

In this case, the consultation obligation arose under applicable work health and safety legislation. The obligation on employers to consult about decisions to implement risk control measures, such as mandatory vaccination policies, was qualified by ‘so far as is reasonably practicable’. The FWC observed that if there was a surge in COVID-19 cases such that the risk of transmission substantially increased, or if a new, more transmissible or virulent COVID-19 variant became prevalent, then such circumstances may warrant a truncated consultation process.

The FWC also observed that adequate consultation does not require those consulted to agree to the direction, or to give them a power of veto. However, it does require that the affected employees have a reasonable opportunity to persuade the employer to revoke or modify the decision to introduce the requirement.

In this case, employees were not asked to contribute ideas or suggestions in relation to the decision-making process, the risk assessment or rationale that underpinned the decision to introduce the requirement. No genuine attempt was made to consult with the unions or to have direct engagement with health and safety representatives during the assessment phase. Employees were not invited to contribute scientific, medical or safety data. They were also not informed that such information may influence the employer’s assessment and recommendation for COVID-19 vaccination as a workplace entry requirement.

Despite ultimately finding the vaccination requirement to be unreasonable, the FWC considered the following factors to be relevant and pointed towards a finding that the direction may have been reasonable:

• it was directed at ensuring the health and safety of workers;
• it had a logical and understandable basis;
• it was a reasonably proportionate response to the risk created by COVID-19;
• it was developed having regard to the circumstances at the workplace, including the fact that workers cannot work from home and come into contact with other workers while at work;
• its implementation timing was calibrated with circumstances pertaining to NSW and the local area at the relevant time; and
• was only implemented after the employer spent a considerable amount of time encouraging vaccination and setting up a vaccination hub for workers at the mine.

The FWC observed that if the decision to introduce the requirement was the outcome of a meaningful consultation process, there would have been a strong case in favour of a conclusion that the requirement was a reasonable direction.