The Queensland Resources Council (QRC) recently released its “State of the Sector” quarterly report in which CEO Michael Roche said that the mining industry is hurting and that the name of the game is survival as the industry is “trying to keep its head above water”. The report indicates that Mr Roche’s opinion is shared by other industry leaders in Queensland, some of whom say they have “never seen it this bad.”1
The QRC quarterly report indicates that one third of all coal mines in Queensland are running at a loss and states that 21,000 resource sector jobs have been lost in the past 2 years. Mr Roche says further resource jobs will be lost over the next few months and calls upon the government to take steps to protect as many of the remaining 60,000 Queensland resource sector jobs as possible.
Although the decline of the industry comes as no surprise, the severity of the situation does appear to have exceeded expectations. That is evident from reports published by the Department of Employment:
- In August 2014 the Department published a report regarding the outlook of the mining industry which predicted a 4.5% decrease in employment to November 2018, which involved an estimated loss of 12,300 jobs;2
- However, in March 2015 an Industry Employment Projections Report prepared by the Department indicated that employment in the industry had declined by 43,000 jobs (15.8%) over the preceding 12 month period.3
The ups and downs of the mining industry have not escaped the attention of the courts. During the mining boom high awards of personal injury damages for future economic loss were common and damages were paid for the loss of a chance to obtain high paid work in the mines.4 The common nature of high damages awards reflected the prevalence of employment opportunity in the mining industry.
The decrease of employment opportunities in the mining industry has also been reflected in numerous judgments. For example in Klein v SBD Services Pty Ltd 5Justice McMeekin rejected the plaintiff’s claim that he would have maintained continuous employment in the mining industry. That finding was not only made when bearing in mind the plaintiff’s poor employment history, but also because each of the miners that gave evidence had not maintained full employment in the mining industry since February 2009.
Similarly in Little v McCarthy & Anor6a 29 year old auto electrician’s claim of $834,000 for future economic loss was not made out. In that case the plaintiff had sustained a soft tissue back injury as a result of a motor vehicle accident. He alleged that, but for the injury, he would have sought and maintained employment in hard and demanding work at a mine site until he reached 60 years of age. The plaintiff had undertaken a short period of heavy work but had no experience working at a mine site. In that matter Justice McMeekin found that there was no guarantee that the plaintiff would have ever obtained a job at a mine site. In so finding Justice McMeekin noted the absence of evidence addressing the prospects of the plaintiff obtaining employment in the industry in light of the significant downturn.
Discussions regarding the downturn also feature in cases where individuals were already employed in the mining industry prior to sustaining injury, or obtained employment in the industry in their injured state. In those cases the court addresses the vagaries of the mining industry by applying a higher than usual discount for contingencies.7
These issues are likely to remain relevant for many years to come as the mining industry is one of only 2 industries in Australia in which declines in employment are projected until November 2019. That is particularly so given that employment in mining is projected to fall by a staggering 17.8% nationally.3
When it comes to awards of future economic loss, the court is required to engage in the art of double prophesying. That is because consideration needs to be given to what path a person would have followed if they were uninjured and what is likely in the future in their injured state. If faced with a substantial claim for economic loss, a savvy defendant ought to undertake comprehensive investigations and collect evidence regarding:
- The availability of work;
- Labour market conditions;
- The plaintiff’s work history, qualifications ambitions and experience; and
- The experience of comparable workers.