C2004/4070, Transcript of Proceedings [2004] AIRCTrans 4295 (5 November 2004)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
PO Box A2405 SYDNEY SOUTH NSW 1235
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TRANSCRIPT OF PROCEEDINGS

O/N 14572
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

VICE PRESIDENT LAWLER
SENIOR DEPUTY PRESIDENT KAUFMAN
COMMISSIONER DEEGAN

C2004/4070

APPEAL UNDER SECTION 45 OF THE ACT
BY ANGLO COAL (MORANBAH NORTH MANAGEMENT)
PTY LIMITED AGAINST THE DECISION MADE BY
SENIOR DEPUTY PRESIDENT DRAKE AT SYDNEY
ON 12 MAY 2004 IN C2001/636 RE ROPING-IN
AWARD

SYDNEY

10.33 AM, WEDNESDAY, 27 OCTOBER 2004

Continued from 24.9.04

PN1420

VICE PRESIDENT LAWLER: Yes, Mr Taylor.

PN1421

MR TAYLOR: Thank you. On the last occasion I outlined the way in which I would be putting my submissions. Just to recap just very briefly, her Honour, of course, at first instance rejected the appellant's site specific award and rejected the suggestion of a hybrid award approving instead the association's proposal to rope in the appellant into the industry award. I will come in a little detail to what we say in response to the suggestion that to rope in was in sum an error but as an overall submission, we say that absent the issues about the appellant's site award, this Commission would have no difficulty, as in Bengalla, in finding that the industry award that applies to every other coal mine that has an award is an appropriate award, it having been simplified by Commissioner Bacon.

PN1422

That, of course, including other mines within the Anglo group of companies who are similarly bound by that award. So if there is to be any errors identified they are, in our - in my respectful submission, only ones that could arise out of the rejection of the applicant's site specific award or any variation that could have been made to their application. Two reasons, of course, were given by her Honour for rejecting the appellant's site specific award. The first being that it split rates into base plus site and the second that the rates were not properly fixed.

PN1423

But it should be noted, of course, that her Honour also identified at paragraph 265 other difficulties with the appellant's site specific award but she did not have to consider, but which nevertheless existed. So one should not, of course, move from the proposition that those two matters, if capable of being addressed, would mean that there was no other difficulties with the proposed site specific award. The Commission will recall that with respect to the base plus site issue, I put submissions on that matter on the last occasion and I do not wish to repeat those.

PN1424

The Commission will recall that the purpose, at least on the face of the award, the only purpose or effect it would have would be to cause sick leave to be paid out on the basis of - just the base not base plus site. All other entitlements appeared at least on the appellant's submission to be entitlements which were calculated on both. Notwithstanding the suggestion that the purpose of the site specific award was to mirror the Technicians Award, it did not mirror it in that regard. The Technicians Award, sick leave on termination, is paid out on base plus site.

PN1425

It is unusual that people from outside are so keen to hear my submissions that they hang outside the windows to do so. Of course, I put submissions about how confusing the base plus site was and in my respectful submission, no serious attempt has been made on appeal to suggest that to split the rates was appropriate. Rather, it was said that her Honour erred in not continuing to go to the point of saying: well, if it is inappropriate, I can nevertheless take the application and turn it into one which does satisfy me as being appropriate by combining the base plus site.

PN1426

There were some issues of evidence which I took the Commission to which I just wanted to remind the Commission of because they lead into the next issue and which, in my respectful submission, are of some importance. I took the Commission to some of the evidence given by Mr Smith in cross-examination about how he derived the rates of pay that he thought were appropriate to be placed into the proposed site specific award. That evidence included firstly that the Technicians Award rates were used as nothing more than a starting point. Secondly, that there was an assumption of 48 hours but that was an assumption not based on a proper or full analysis of the actual hours that people worked.

PN1427

Thirdly, while comparisons were made in respect of the industry award and the Commission will recall that there were those comparator cut off points that Mr Smith had and he had two sets. He had an initial set and then he changed having added in the extra money that would have to be paid to calculate 48 hours as against his original calculation which was done on about 1-1/2 or 2 hours above 37.5. He then fully accepted that what he had then done was change those cut off points and by the cut off points, of course, I am reminding the Commission these were the comparisons between the three groupings within the site specific award and the various groups that you find in the industry award and how one can draw a comparison.

PN1428

It was his evidence that that was nothing more than a guide and that one would be wrong to assume that there was any necessary definitiveness about the comparison he had made. It was done as a guide for the Commission, not one that, in my respectful submission, would allow the Commission to have or draw conclusions that there was appropriate work value assessments fixed between the comparators that he had done. He himself went out of his way to say you would not necessarily take my comparison as the be all and end all. You would need to examine the particular circumstances of particular groups and levels more carefully to be - to do the job properly.

PN1429

So that leads me now into where we - where my submissions came to and that was dealing with the second reason that her Honour rejected the site specific award and that is that the rates in that award were not properly set. Now, on appeal the appellants challenged that but in truth, in my respectful submission, what the appellants do is effectively concede that the rates are not properly set, according to wage fixing principles, but say that what her Honour should have done is dealt with that situation by - in some manner and my friend, in his submissions on the last occasion at paragraph number 1096 of the transcript, talked about that being in one sense the heart of the error that her Honour made in the appellant's case.

PN1430

My friend said if her Honour was correct in identifying the two issues that she has discussed to this point, then the proper approach was to set out to address them if that were possible in a way that overcame them whilst giving effect to the earlier findings which were to the effect that an enterprise focused award would be very appropriate. Now, I emphasise the words "if that were possible" because as I will come to in more detail, in my submission, it was not possible for her Honour to address the issue of rates not being properly set.

PN1431

Contrary to the way the case has been put on appeal, this was not a matter that was readily fixable by her Honour and that is because there simply was not evidence led before her Honour that would have enabled her to properly fix the rates. To use my friend's expression about it being the heart of their case, their case in essence has a hole in the heart that can't be fixed because in the absence of evidence that would allow her Honour to find a CT rate, to determine whether - how one then takes from that internal relativities of the three groups, her Honour could not have fixed it.

PN1432

Her Honour could not have fixed it short of inviting the appellant to, in a sense, start again and put a whole lot of more evidence before her. Certainly it is no answer on appeal to suggest now that this appeal bench can, as my friend's written submissions in reply suggest, that it is capable of being readily fixed by simply taking Bacon's simplified rates and doing some mathematical adjustments to it and coming up with a rate because - and I will come - I will need to come to that particular proposal in some detail. In essence, the proposal again relies on this assumption made by the employer, particularly by Mr Smith, as to how one draws comparisons to the industry award and the site specific award.

PN1433

There are assumptions there about what is appropriate work value comparisons which are not assumptions, for which there is a proper evidentiary basis. I took the Commission the way in which - - -

PN1434

VICE PRESIDENT LAWLER: Why is not Mr Smith's determination as to what is appropriate relevantly evidence of that? Mr Smith is an experienced person in the coal mining industry, familiar with the work that is being done.

PN1435

MR TAYLOR: Yes. I can't say there is no evidence but - and I will come to this in more detail when I actually look at the proposal but Mr Smith's evidence in short is not evidence that even Mr Smith said was definitive. He himself said: I've just got a guide here. There is no evidence as to what might be a CT rate or a 100 per cent rate and if you look at, as I have to some extent already in my submissions and which I will come back to during the course of my submissions today, the evidence about the process Mr Smith adopted.

PN1436

It does not get to a level which could ever satisfy the Commission that there was appropriate work value comparisons being made of a sort that the Commission would need to be satisfied of in its approach to wage fixing applying the wage fixing principles. So that is the essential hole in the heart of this case, that to rely on Mr Smith's evidence as the be all and end all, is always going - was always going to be insufficient and her Honour could not have fixed the case that was being run on the evidence that was before her. Now, I wanted to spend now, please, a little bit of time dealing with the proper approach to setting rates of pay.

PN1437

I have - the Commission will have available to it from the last occasion a folder of authorities titled: APESMA Authorities and Materials. It is a slim white folder and I will turn to some of those materials now. The starting point is, of course, principle 11 and tab 4 has the wage fixing principles and I think a tab towards the back are the current principles and the Commission will find principle 11 headed: first award and extension to an existing award. That, of course, states that conditions and rates must be consistent with obligations placed on the Commission under part 6 of the Act which, of course, includes the requirements of 88A(b) and 89A(3), namely that the award be a safety net of minimum terms and conditions.

PN1438

Principle 11 goes on in the subparagraphs to state particular regard must be had to certain matters, the first is relevantly the minimum wage rates in other awards provided they have been adjusted to the previous national wage case and are consistent with the decision of the August 1989 national wage case. That is a comparison made against other awards where the minimum rates adjustments principle has been applied. It is the same approach which the Commission adopts when simplifying wage rates as it did in the paid rates review case, to which I will come.

PN1439

So in other words, principle 11A is making is clear that particular regard must be had to properly fix rates under other awards and that was the approach, of course, that the Full Bench took in Bengalla and the paragraph reference to that decision is paragraph 22. Principle 11 also notes in paragraph - subparagraph (c) that alterations to wage rates must be based on proper work value and specifically refers to 89A which, of course, in subsection (3) requires rates to be minimum rates. Now, the Commission will, of course, be aware that in the award simplification decision, the Full Bench considered the requirements of the Act and in particular 88AB and concluded that rates in awards had to be minimum rates.

PN1440

That particular case did not require adjustment of the rates because the rates had already been fixed under the MRE process. It was, of course, in the pay rates review decision that the Full Bench considered the requirements of 88AB and 89A(3). I do not take the Commission to that in terms but, of course, the approach that the Commission concluded was appropriate there, that is, that where minimum rates adjustments had not occurred, to go through a process, a conversion process, to properly fix minimum rates of pay was a conclusion that the bench reached as to what the legislation required for awards.

PN1441

So the same approach would appropriately be taken with respect to new awards. So her Honour was required by the Act, specifically by sections 88A and 89A(3) to set properly fixed minimum rates of pay. That is clear from the reasoning in the award simplification case and the paid rates review cases and arises from principle 11. As I noted earlier in my submissions that the Full Bench in Bengalla was considering an appeal from a decision where the appellant had argued at first instance that the Commission should adopt a classification system unilaterally developed by preference to the industry award structure.

PN1442

At paragraph 23 the Full Bench stated that implicit in principle 11A and the reference to relevant minimum wage rates is the emphasis that must be given to properly set minimum rates and the Full Bench then noted that placing emphasis on the requirement that the relevant classifications have properly set minimum rates, may be a substantial consideration in the exercise of discretion to make an award in the circumstances to which principle 11 applies. Now, so far the authorities that I have taken the Commission to, other than Bengalla, particularly the paid rates review and the cases that flowed from that, were cases where one was looking not at a new award but at an existing award and translating the rates.

PN1443

There is authority and there was authority in place before her Honour considered the matter but the same approach is taken with respect to new awards and one of the decisions in the folder that I have just directed the Commission's attention to is behind tab 5. That is a decision of Global Telesales. It is print number 927484, a decision of a Full Bench headed by the President of 10 February 2003. This, notwithstanding it being a Full Bench decision, was a first instance decision. There had been a section 108 reference to a Full Bench to determine a new award for call centre employees.

PN1444

This was an area where there had been a lot of disputation and the parties put substantial submissions as to how call centre employees should be regulated by award. On page 2 of the decision in the middle of the page, one sees the issues that the Full Bench were called on to determine by arbitration, the first of which was the classifications and wage rates. That is an issue that the Commission deals with from pages 10 and following and the Commission will see on page 10 the heading: decision on the structure and wage rates. Here the bench note that the award would apply to one employer only.

PN1445

Further in that first paragraph under that heading, say because we are dealing with one employer, it is appropriate to pay particular regard to the way in which the work has been organised and the resulting relativities. The bench rejected the structure put forward by the union and then in the third paragraph under that heading, say this:

PN1446

The fixation of minimum rates is dealt within the paid rates review decision in fixing an appropriate structure and wage rates, the first task is to establish the key classification in order to make a comparison with 100 per cent relativity in the Metal Industries Award.

PN1447

They then deal with some of the particular evidence and over on page 11, they determine having considered the training together with skills required and used should place the competent CSA, which is a particular type of employee, at the 100 per cent level in the structure we have decided. The competent CSA should be placed at grade 3 and should be aligned at certificate level 3. Then they say this:

PN1448

Having determined the key classification, we have looked closely at the internal work value relativities implemented by GTS and with some modification, we believe the structure should be as follows.

PN1449

Then the Commission sets out the internal relativities based around the key classification. In our respectful submission, the authorities at the time the matter was proceeding before Drake, were well settled as to how one goes about fixing rates. ASU and Global Telesales is one example of others where the Commission had taken that approach, applying the paid rates review approach as required by the legislation to fixing rates, including for new awards. So there is no suggestion - sorry, I withdraw that.

PN1450

The Commission would not move from the premise that principle 11 in some way provides a wider or different approach to setting rates of pay than that adopted in cases such as the Global Telesales case. While the natural justice argument that my friend raises is wider than this, and I will come to the wider argument in a moment, there can't be any question, in my respectful submission, that a party in proceedings before the Commission certainly well represented, it does not need, as a matter of natural justice, to be told that the Commission will apply the legislative requirements and the wage fixing principles that flow from those requirements when determining claims, including claims for a new award.

PN1451

VICE PRESIDENT LAWLER: Mr Taylor, what was her Honour going to do if the fortuitous event of Commissioner Bacon's award simplification decision happened, because the rates in the award you are proposing were not properly fixed either, were they?

PN1452

MR TAYLOR: No, they were not.

PN1453

VICE PRESIDENT LAWLER: Your side was certainly well represented, I might say so, yet you did not lead any evidence either about fixing the rates.

PN1454

MR TAYLOR: No. Your Honour is correct about that. There are some things I wanted to say about that. My client's position before Senior Deputy President Drake was that the company should be roped into the existing award and that included its rates. Before her Honour the association's position was that as to conditions, it had been simplified, notwithstanding that there might be further simplification, but it was accepted that as to rates, it had not yet been simplified. A submission was put to her Honour but if the industry award needed to be modified in any way, it was open for her Honour to do so.

PN1455

It must be accepted that if her Honour had roped in the company into the award without excluding the rates, and then that point was taken on appeal, then that would have been a good appeal point. It would have been a point that, subject to issues of leave and the like, would have been a point that would have great force. It must be understood that APESMAs position was being put against a background in which the parties knew that the rates in the main award were in the process of being simplified. So as a matter of practicality, there was not going to be a long term practical issue there.

PN1456

The second thing that at least was in the mind of the parties, and this was put before her Honour, although ultimately one accepts its weight and relevance is small, that there had been other respondents roped in by consent before and after to the award as a whole, not just rates. So there had been a sort of expectation that this was not a major issue in those circumstances. Of course, in Bengalla the company had been roped into the industry award and the point was not even taken on appeal that there was a difficulty about that. While the company - - -

PN1457

VICE PRESIDENT LAWLER: I suppose you would also say well, in the fortuitous event that Commissioner Bacon's decision did happen, were entitled to reap the benefit of it here. Full stop.

PN1458

MR TAYLOR: Yes. I frankly, your Honour, credit her Honour with it not being merely fortuitous that her Honour was mindful of the fact and she says so in her judgment that the decision had been simplified and the rates were simplified and it was on that basis that she could draw certain conclusions about the appropriateness of the award. So it was more than, I think, a happy coincidence. Her Honour, I think, was mindful of it and if Bacon's - if the Commission's decision had not come down by that stage, I do not doubt that her Honour would have had to consider a different approach.

PN1459

But she did not have to and she correctly applied an approach to wage fixing principles. There were a couple of other notes about the background to this which I thought might be relevant. While the company below took the issue that the rates as well as conditions in the industry award were not simplified, no submission was put, at least I could stand corrected but I do not recall a submission being put that if her Honour decided to rope in, she should not rope in as to the rates.

PN1460

It was not something that was looming large in that sense although - sorry, the focus was on the conditions issues but there is no doubt that if her Honour had come to the view that she came to about the - the conclusion she reached about the site specific award and it being inappropriate because amongst other things, it did not have properly fixed rates before the Commission's decision came down, she would have erred if she had then roped in as to rates. Of course, on appeal what the bench has constituted now and needs to consider is whether her Honour erred in what she did so.

PN1461

There was no error, in my respectful submission, in her Honour finding that the rates were not properly fixed, no error in taking the approach of saying that in the absence of it being properly fixed, it was not appropriate to make the award in those terms. The company knew that what the requirements of the wage fixing principles were and I, on the last occasion - I won't read it again - I drew attention to paragraph number 5513 where my friend made some submissions about the CT10 rate and the approach that one takes in fixing rates but did not run their case on the basis of putting evidence as to how their award could meet the principles.

PN1462

No error arises for failing to - I am sorry, I withdraw that. So no error arises in the way her Honour applied the principles. No error in not saying that her Honour was going to apply those principles for the reason that I put earlier that there is no natural justice issue in the Commission failing to state that it is going to apply its usual approach. So if there is any room for error left, and this is the area that my submissions will now come to in more detail, it can only be the suggestion that her Honour did not then go on to give an opportunity to the company to, in some way, justify its rates.

PN1463

Or maybe - and this is, I think, the way my friends put it - rather the Commissioner should have resolved that issue for herself in some way. She should have somehow dealt with the issue and in short, the submission response is that there is no error in failing to fix it up because she could not have done so on the evidence and that is something I am going to need to come back to so I can demonstrate that. No error secondly in deciding that the industry award was a suitable award, given the objectives of the Act to ensure appropriate safety net conditions in circumstances where this industry award is accepted to be and is said to be by the Commission, a suitable safety net for mines of this type.

PN1464

In any event, one has to keep in mind that her Honour was mindful of the fact that there were potentially other problems with this site specific award that she would otherwise have to address, including - and this is really fundamental, going to the question of rates and relativities and properly fixed rates, the appropriateness of the classification structure itself. The classification structure had some real difficulties and I am going to come to what they were, but her Honour, in paragraph 265 amongst other things notes that that would have been an area.

PN1465

So it was not - fixing it was going to require starting with the classifications and really starting from scratch and in the absence of the evidence that - given the evidence that was led, her Honour could not have done so. Now, I think it might assist the Commission if I just spend a little time on this issue, just recalling what submissions were made by the parties about rates of pay and the proper approach to fixing rates of pay. Can I do so by reference to the - to my written submissions and in particular paragraph - starting with paragraph 32 of those submissions.

PN1466

So in the respondent's submissions as filed in paragraph 32, I note or summarise that the nature of the written submissions made by the appellant at first instance about the approach to be taken and in 32(a) I note that the written submissions made no reference to why the Commission would consider the rates to be properly fixed, nor made any reference to the wage fixing principles. In 32(b), I noted that in closing, the appellant's submissions were essentially limited to a statement that it was desirable that the rates would at least match the general standard in the industry award and that the way the Commission could satisfy itself about that would be to apply the no disadvantage test.

PN1467

The Commission was told not to be too distracted by the specificity of the calculations that were made. The respondent, the association's, position was simply that her Honour should rope in to the award. There were some written submissions that the respondent put before her Honour which the Commission might note. They are found in the appeal book at volume 2. I am sorry. If the Commission would not mind going to appeal book, volume 2 and go behind tab 8 where the association's written submissions to her Honour are found.

PN1468

So volume 2, tab 8 starting at page 7. The page numbering is in the top right-hand corner but I am directing the attention to paragraph 19. It was here - the written submissions are dealing at this stage with the proposed company award and in paragraph 19, the association submitted that the proposed award did not meet the requirements of the wage fixing principles and in particular did not meet the requirements of sections 3, 88A, 88B and section 143. If one goes down the page to paragraph 20.3, the association submitted that the rates were significantly below the safety net.

PN1469

Turning the page to paragraph 21, the association noted that the award did not comply with 88B(2)(a) and principle 11A in that it contains - I am now reading:

PN1470

Contains rates of pay that are significantly below the safety net for a 48 hour week in respect of classifications which, because they are determined at the discretion of MNC, do not permit the Commission to identify whether they are set at a level that has an appropriate relativity to other awards based on the skill, responsibility and the conditions under which the work is performed.

PN1471

VICE PRESIDENT LAWLER: You would say that is another way of saying they are not properly fixed minimum rates?

PN1472

MR TAYLOR: Yes. While I might have rushed it a little, my earlier submission wherein I had started with principle 11 and said well, properly fixed, is a reference to the approach that is taken in and picked up in the paid rates review case. Properly fixed has now a well understood meaning. Now, in closing submissions, the association put submissions as to the inability of the Commission to be satisfied that the classifications proposed married up to the industry award in the way Mr Smith said and amongst other issues as to why the Commission could not be satisfied that the rates were appropriate.

PN1473

So there were submissions put about wage fixing principles and the company's response was, I have already identified, that which was set out in paragraph 32 of the - of my written submissions in - on this appeal. I have already noted that as part of the oral submissions in reply, that Senior Counsel for the appellant at paragraph number 5441 noted 88A and 88B and 5545 noted the object set out in section 3(d)(ii) to set a fair minimum rates of pay. At paragraph number 5448, Senior Counsel - I am not sure I need to get the Commission to open it, but I might just read it.

PN1474

I am sorry, I think - I withdraw that. That was the passage that I had already paraphrased about the approach being one which the Commission would be generally satisfied would meet the no disadvantage test. That really was as much as the appellant could say, with respect, in closing submissions given the nature of the evidentiary case that had been put before her Honour. It did not ever get any higher than a suggestion that one could in some way feel generally satisfied on a no advantage test. It never got to actually focusing on the proper approach to fixing rates.

PN1475

Now, I want to, as I said, come to the proposal that is put on appeal that her Honour effectively could have done in - could have fixed and a proposal was put on appeal. But before I do so there are some submissions that the appellant puts that it was open to her Honour to have fixed the rates, vis-a-vis, the Technicians Award. Now, most of the evidence and submissions are focused on a comparison with the industry award but, of course, the Technicians Award had been made and then further considered and simplified before her Honour was asked to make the decision.

PN1476

There is some suggestion in the appellant's written submissions at paragraphs 12 to 14 and 17 which seem to suggest that the proposed site specific award rates could be justified by reference to the Technicians Award rates. Now, on appeal I think my friend said something to the effect of that her Honour, or the appeal bench, could in some way be satisfied that they appear, the rates appear to in some way relate appropriately to each other. This has been dealt with in my written submissions from paragraph 39 onwards and I do not read all of that but can I draw the Commission's attention to the written submissions in paragraph 39 onwards.

PN1477

In particular to the evidence references set out there which make it clear that the company never attempted to draw any particular comparison between each award and the Technicians Award, vis-a-vis, rates. It certainly did so by way of conditions but not, vis-a-vis, rates. The evidence of Mr Smith was that the Technicians Award rates were no more than a starting point, a loose comparison, and really were used essentially to - the only real use of it was to copy the approach of splitting the appropriate safety net rate into two and calling one a base and the other a site allowance.

PN1478

I note in paragraph 43 of the written submissions that the fact that no benchmarking or assessment of the relativities had been done between the two awards is clear from just examining the rates, that the top of the MNC award, 80,000, including the site allowance, is less than that paid to a crew coordinator under the Technicians Award who is considerably lower in responsibility of any view. They are effectively the deputy or supervisor of mine workers. Similarly, the rate for a technician, which is the base rate under the Technicians Award, is more than that paid to a senior chemist, a chief surveyor or a senior foreperson.

PN1479

One could not, and her Honour could not have found any basis to justify the rates based on the rates in the Technicians Award and to be fair to the appellant, there was never an attempt on their evidence to do so. They never suggested to her Honour that that was a way in which they had worked the rates out. So certainly the association, on appeal, can see no basis for the suggestion that somehow her Honour erred in not taking the Technicians Award rates and finding that the proposed rates were approximately fixed, vis-a-vis, those rates.

PN1480

It is true that the Technicians Award rates could be said to be properly fixed following the simplification of that award, but that is where it ends. No attempt was made to draw links or comparisons between the two in a way that could lead to any conclusions about the proposed rates in the company's site specific award for staff. While I am considering the Technicians Award, one of the additional points that my friend in his closing said was an additional appeal point was her Honour's conclusion that paragraph 220 of her Honour's decision that there are some significant differences between the Technicians Award and the proposed site specific award.

PN1481

My friend said she erred in that respect. There was evidence put on by both parties but it was not essentially relevantly different as to the differences and there were differences between them that extended beyond rates and extended beyond the fact that technicians and crew coordinators get significantly higher site allowance. Ms Bolger summarised the relevant differences in one of her statements which can be found - and I do not take the Commission to this but just note - can be found in appeal book volume 3 behind tab 11. It was exhibit 3 in the proceedings before her Honour.

PN1482

At tab 8, Ms Bolger has attached key differences that one finds between the two awards which included issues such as no payment for working at a higher classification, no process for agreeing on shift lengths, no minimum 10 hour break between shifts. These were all things that one would find in the Technicians Award but not in the proposed award for staff. We say her Honour did not err at all in suggesting that there were some important differences between the two awards which somewhat affects and ameliorates the suggestion of benefit of the two awards being mirrored in some way.

PN1483

VICE PRESIDENT LAWLER: Mr Taylor, would you go so far as to say that the earlier Full Bench erred in failing to properly fix minimum rates?

PN1484

MR TAYLOR: Sorry, which Full Bench? Which decision are you referring to now?

PN1485

VICE PRESIDENT LAWLER: Sorry, the Full Bench that made the Moranbah North Technicians Award.

PN1486

MR TAYLOR: Yes. No, your Honour. There are some important things to understand about the Technicians Award decision and I think it is appropriate that I take the Commission to that. I was going to come to that next in any event but in short, that decision was made shortly after the requirements to - shortly after section 89A and its requirements were put into the legislation and before the award simplification decision and before the paid rates decision. So they were examining it at an early stage of the Commission thinking about this.

PN1487

It is important to understand they did nothing more than make an interim award and they said the rates would have to be - potentially have to be reconsidered. So one has to understand the - - -

PN1488

VICE PRESIDENT LAWLER: That is enough. That is enough.

PN1489

MR TAYLOR: Yes, but I did want to ask the Commission to open that decision in any event because a large part of the appellant's case rests on the presumption that because the technicians decision came out the way it did, it would be inappropriate - I think they used the expression bizarre - for the Commission to take any other approach. With respect, when one examines the decision, those submissions just are not made good. It is behind - it is in the appellant's authorities in volume 1 behind tab 1. It is the decision that we have been referring to as the technicians case.

PN1490

CFMEU v Aberdare - A-b-e-r-d-a-r-e Collieries at print number 7254, a decision of a Full Bench on 8 December 1997. Now, can I just - I have about five different copies of this decision, all with different page numbering. Can I just confirm the Commission is looking at one that has 19 pages?

PN1491

VICE PRESIDENT LAWLER: Yes.

PN1492

MR TAYLOR: Good. The Commission here was considering an award for this particular site in circumstances where the mine was commencing operation and against a background in which 89A had come into the Act and against a background in which the parties could not reach agreement as to some important issues which then the Commission decided needed to be determined. So if the Commission turns to page 11 of the decision as printed, at about point 2 of the page, the Commission identifies what it says are the major issues for determination at this stage.

PN1493

There are four points there, the first of which is whether a separate award should be made and that is dealt with further down that page and one sees in the third paragraph that the Commission came to the view that a separate award for this mine was required and it says - the bench said the requirements of section 89A alone make this necessary. So 89A, was for a large part, drove the issue to create a separate award for this mine. Of the other four issues that had to be determined by this decision, the second one you see on page 12 is the issue of a single stream work-force.

PN1494

That was an issue that arose in those proceedings because of demarcations that arose between CFMEU and other union - and workers covered by other unions and it was seen as appropriate to have all workers working under the same classifications and not demarked by way of their skills. That is not an issue in these proceedings, of course. The third issue was one sees the heading at the bottom of page 13: recruitment from the retrenched members' list. Again not an issue that was relevant to these proceedings. The fourth issue we see at page 16 at about point 4 on the page.

PN1495

That is the heading: annualised salaries. Now, while that is - annualised salaries is an issue in - was an issue in the proceedings before her Honour in this matter. It was a quite different issue that the Full Bench was considering here. The issue that they were considering here was the fact that unlike APESMA in these proceedings, the CFMEU was not willing to allow annualised salaries by agreement and the Commission will recall on the last occasion I referred to the evidence of Ms Bolger that by contrast the association was quite willing to introduce annualised salaries by agreement if that was seen as necessary.

PN1496

The Commission in this case was dealing with a situation where there was a dispute that had to be determined and the - in the last full paragraph on page 16, the bench said this:

PN1497

In the circumstances of the present case, we are prepared to include in the award the annualised salaries proposed by the company. We are satisfied that these have been calculated on the basis of the rates and entitlements in relevant provisions of the P and E Award and having regard to the intended work arrangements at the mine ...(reads)... provided that the rates have been fairly determined.

PN1498

I emphasise those words because what the bench was doing there, of course, was examining workers who work on fixed rosters which would enable one to properly and easily determine their rates of pay and annualise them in the way that Vice President Ross did in the Masters and Deckhands decision to which I will come to. Although it may be more appropriate for such packages - I am reading on:

PN1499

Although it may be more appropriate for such packages to be established by agreement and having regard to the operations of the particular mine, rather than described in a safety net award, the developments referred to earlier and the breakdown of negotiations between the parties have prevented this approach being followed for the Moranbah North mine.

PN1500

I stop there for a moment and say the bench was clearly indicating that annualisation of rates is not something that would necessarily ordinarily be done through the award process. It was one that one would rather do by agreement and the evidence in these proceedings is not only that the association was willing to enter into an agreement for annualised salaries, if necessary, but the evidence was also that as a matter of practice at mines throughout Queensland where the industry award applies, as a matter of practice, rates are annualised by agreement, in that case, predominantly if not exclusively by agreement between the individual employees and their employer.

PN1501

So the bench here was not suggesting, rather, I would submit, suggesting to the contrary. It was not suggesting that annualised rates were to be preferred by way of award provision when dealing with a safety net award. Just continuing now on the top of page 17 and reading on, the bench said this:

PN1502

On the material before us, we are not persuaded that the rates proposed by the company for inclusion in the award would be unfair to the employees concerned. This assessment has necessarily had to be made before the mine comes into full and regular production in the event that ...(reads)... application may be made by either party to vary the award.

PN1503

The award itself is behind tab 2 and it is as titled to be - no, I am - not sure - I withdraw that. Yes, the award rate is behind tab 3, I think, but it was - it is titled an interim award and that is clearly what it was. Now, the last thing to note about the technicians case is the emphasis the bench placed otherwise on the appropriateness of using the industry award as the touchstone for fair conditions, rather than the preferences of the employer or the particular way in which the employer has decided to organise their method of working, which is, as we understand it, the appellant's touchstone.

PN1504

I refer now again to page 17 of the decision. There is the heading one sees at about point 2: other matters and the second paragraph there. If I can read that. The bench said:

PN1505

In general, we have decided that the award for the Moranbah North mine should be based on relevant provisions of the P and E Award -

PN1506

I interpose there. That, of course, was the industry award for mine workers and continuing -

PN1507

and should contain minimum rates of pay and conditions which are consistent with the provisions of section 89A of the Act. The award should apply to the employment of all persons classified as technicians or crew coordinators and should include test case standards incorporated into the P and E Award on matters such as parental leave and protection against discrimination ...(reads)... based on the P and E Award.

PN1508

Then the bench said this:

PN1509

We do not need to refer specifically to other provisions of the P and E Award as we have taken the view that these are part of the general conditions in the coal mining industry and consistent with the Act form the safety net standards for employees in that industry ...(reads)... the matter for detail are to be discussed between the parties. It is our preference that, given this decision, the parties now finalise by agreement the award that should be made.

PN1510

So the bench was clearly using the industry award as its touchstone and saying that it is appropriate for the industry conditions to be the conditions that one takes as an appropriate basis for these workers. One should also note that, as is clear from the last sentence I read, that the eventual award and its detail, some of which is relied on by the appellant to say here is an appropriate award for technicians and therefore appropriate for staff, was not a matter of arbitration as to all those matters of detail. The bench decided the four points to which I have referred the Commission did not go on to deal with those other matters.

PN1511

VICE PRESIDENT LAWLER: Is that a convenient moment for a morning tea adjournment?

PN1512

MR TAYLOR: Yes, it is, if it please. Thank you.

SHORT ADJOURNMENT [11.30am]

RESUMED [11.50am]

PN1513

VICE PRESIDENT LAWLER: Mr Taylor, do you expect to much longer?

PN1514

MR TAYLOR: Yes.

PN1515

VICE PRESIDENT LAWLER: Your best estimate?

PN1516

MR TAYLOR: My best estimate would seem me probably finishing just on the other side of lunch, sort of maybe half an hour on the other side of lunch.

PN1517

VICE PRESIDENT LAWLER: Okay. We just wondered whether or not there is any utility in contemplating sitting through until it is finished, rather than taking a luncheon adjournment.

PN1518

MR TAYLOR: Well, I won't oppose that. Once I - maybe once we get closer, I will have a better idea how much more I have to do. Certainly I am flexible in that regard.

PN1519

VICE PRESIDENT LAWLER: Mr Buchanan, do you expect to be much time?

PN1520

MR BUCHANAN: I think at the moment 20 or 30 minutes, your Honour.

PN1521

VICE PRESIDENT LAWLER: Okay. Well, let us see how we go.

PN1522

MR TAYLOR: The next thing I wanted to turn to was the appellant's suggestion on appeal as to how the rates in their proposed award could be made in light of the Bacon decision which I understand to be at least an example, if not the solution, to the suggestion that the difficulty that her Honour faced was easily remedied, an expression that my friend used a couple of times in his submissions. Now, that will be found in the appellant's reply in written submission filed on 17 August. It is a three page submission and in paragraph 7 on the second page of it, one sees the proposed rates.

PN1523

Now, as I understand what has been attempted here, the first column headed: minimum rate is the rate that the simplified industry award fixes for levels which Mr Smith, on his second attempt, decided were appropriate levels for the three groups. Then we see something called a residual component which, of course, is not a residual in the sense used by the Commission when simplifying award rates. It is a residual to take us to the rate that the company had suggested was an appropriate base rate. So we see, for example, in the first line, for the first group the figure 35,000.

PN1524

Then we have a site allowance of 15,000 for an effective award salary. So those - the residual component in the site allowance, as we understand it, are amounts which are intended to compensate above the minimum rate which is now 35 hours and which, of course, under an award which is said - or the calculations have been done on the basis that people work 48 hours. So presumably compensation for the extra hours is to be found somewhere in that residual and site allowance figures.

PN1525

So the proposal is to, in a sense, keep the exact same figures that were being proposed to her Honour but introduce only one change and that is split the base rate from one amount into two amounts calling one a residual, but not fixing any of the difficulties that her Honour was faced with as to the appropriateness of these rates. The first and probably most fundamental one being the fact that one can't understand from the evidence how these rates are arrived, vis-a-vis, properly fixed rates but there are a number of other difficulties.

PN1526

I want to remind the Commission of what they are by reference to the written submissions of the - of the respondent, my written submissions, which - and in particular paragraph 36. Paragraph 36 has a series of subparagraphs which deal with the evidence as to the nature of the material that was before her Honour with respect to satisfying her as to the appropriateness of the rates. Paragraph 36(a) deals with a point that her Honour notes in the decision at paragraph 261 of the decision that on the company's proposal, both its original application and its later two versions were all appropriate rates, notwithstanding the massive differences in the rates.

PN1527

Mr Smith thought they were all appropriate rates, a matter which one would need to take into account when assessing the appropriateness and validity of Mr Smith's evidence. In 36(b), which is on page 11, I note the material which I have already taken the Commission to about the need to make assumptions as to the cut off points between the industry award and the proposed MNC award and I note there the evidence as to the difficulty that the Commission would have in making those - to drawing conclusions, given the nature of the company's evidence.

PN1528

Mr Smith's evidence that while he believed that the first set of assumptions were appropriate, he then changed his view about those assumptions and drew different cut off points. So the Commission was left with the position where Mr Smith had two goes, both of which he thought were appropriate and even the second one was said to be a guide, not determinative and he candidly admitted that he had changed his assumptions, once he took into account the overtime computation because otherwise his proposed award could not have married up to the industry award rates.

PN1529

If Mr Smith's original cut off points had been used, then on no way could one see that the rates were - proposed rates were better than or equal to the industry award. As noted towards the bottom of page 11, the principal two witnesses from the company, Mr Smith and Mr Hendry, disagreed about how classifications should be lined up. Mr Hendry's evidence was that Mr Smith put some arbitrary lines across the industry award classifications and that evidence is consistent with Mr Smith's evidence about not being definitive or determinative but only a guide, although Mr Hendry seemed to put it on a slightly higher level of - where he has described it as arbitrary.

PN1530

In 36 - so the bottom line is one can't from that evidence - her Honour was unable from that evidence and one still is unable, notwithstanding the new proposal, to draw any conclusions about the appropriate work value of the three groups that are proposed in the site specific award. 36(c) notes another fundamental difficulty with the proposed - can I just go back one step, re the question of the different classifications? Between the second and third attempt to put an award before her Honour, or in the third attempt, some definitions were added to the three groups.

PN1531

But if one examines those definitions, one finds that they actually really added very little to what was there before. In essence, one reads definitions which says something to the effect of a level 2 is someone with higher or with higher skill than a level 1. One does not get any degree of real clarity. Mr Hendry was cross-examined about whether those definitions made any particular difference to this view as to where people would be slotted in and that evidence is found at paragraphs numbers 4565 and following.

PN1532

He was asked about differentiating between a professional at level 1 and a professional at level 2 and it was suggested to him that the descriptors really made little difference. One would not have taken a particularly different approach before or after and towards the end of that passage at around 4570, one sees Mr Hendry effectively conceding that there was little difference. So it can't be said those definitions were somehow an important change that occurred between the variations in the award. Mr Smith, in his evidence-in-chief, which for the record is tab 21 of volume 3, he gives the evidence as to how he came up with the higher rates, the later proposal.

PN1533

He makes no mention there of the definitions that were introduced being relevant to changing his cut off points. Rather, if you look at - if one looks at the cross-examination, and I read this on the last occasion, that Mr Smith at paragraph number 2617, the evidence there, in my respectful submission, makes it clear that it was the higher rates necessarily flowing from the fact that he was now working on 48 hours rather than 42 hours, which was the key driver in having to change the cut off points, the addition of definitions was not a matter of significance.

PN1534

Coming back to the respondent's written submissions at 36(c), another fundamental difficulty with the proposed MNC award was that the classification descriptions are based on that grade which the company itself determines to be appropriate. So while there is a - some very broad descriptions of duties in the definitions, ultimately if one reads those definitions and certainly on the evidence that Mr Smith and Mr Hendry gave, it is to MNC to determine which level 1 falls. A matter of some importance because if you take the - a technical officer at level 1, a technical officer is paid some $20,000 less than a supervisor level 1.

PN1535

So whether one determines that someone has sufficient supervisory duties to be classified as a supervisor rather than a technical officer, makes a huge difference. That is something which is left under this award to the company to determine and which, on the evidence, the company's witnesses could not agree on. So we had the evidence of Mr Smith that once any supervisory duties were part of your responsibility, you became a supervisor. Mr Hendry's evidence: no, you would have to have a majority of your duties, had to be supervisory before you become a supervisor.

PN1536

So some real difficulties with the nature of the classifications which flow on to some fundamental difficulties in being able to establish any proper work value for these groups. The classifications are so vague and so much in the hands of the company that the Commission can't make a safety net award based on these definitions. Now, this is an area that her Honour did not ultimately determine, of course, but she noted that she had real concerns about the classification structure. That is a matter which is expanded on in the written submissions and I do not wish to take any significant time on.

PN1537

It is said, it was said before her Honour, and I think similar submissions were put before this bench against that, two things. Firstly, it is said against that, that the Technicians Award definitions are very brief and to the point and that is true. But there is an importance difference. In the Technicians Award, you are either a technician or a crew coordinator and a crew coordinator is someone who has statutory duties of a deputy, has some level of management responsibility. So there is only two grades. You do not need to have lengthy definitions. You either are a deputy and have - and are a crew coordinator or you are not.

PN1538

Here, of course, we are dealing - just stopping there, without taking the Commission to the evidence, Mr Gillespie at paragraph numbers 3592 and following accepted that was the case, that it was very straight forward. Here you have got three groups with very vague definitions which are intended to cover people from a base grade clerk through all the supervisory levels, through all the different types of work, warehouse operators, professionals, professionals who do have some level of management or supervisory responsibility and who do not, right up the senior professionals and senior managers.

PN1539

As became clear in cross-examination of the company witnesses, there was no clarity in these definitions. So Mr Hendry - I withdraw that. I can't now recall if it was Mr Hendry or Mr Smith. One of them had great difficulty with an IT worker as to whether that person would be a technical officer or a professional officer. As a technical officer level 1, they would be paid about 20,000 less than a professional officer level 1. There was real uncertainty as to which of those two they would fall into, given the classifications. So there was some real difficulties in the Commission ever being satisfied about rates, given the nature of the definitions.

PN1540

The other point that set against the submission that these definitions are vague and unclear is that if one goes to the simplified P and E Award, that the award, industry award that applies to mine workers, one finds there some very general definitions. My friend took the Commission to pages - the relevant pages of that award which dealt with the definitions. But contrary to the suggestion that there are - there is some - that there is no greater clarity, under that award there is a particular approach that the Commission has set and which is evident on the face of the award, that before one is classified - I should stop and actually open it so that we can examine the terms.

PN1541

If the Commission would not mind, it is in volume 2 of the employer authorities at tab 12. So volume 2 of the authorities at tab 12 one finds the - make sure I have got that right - yes, that is right. One finds the order that varied the P and E Award to put in the classification structure and an order dated 12 January 2001. Relevantly on page 3 and following, we see the classification structure. It replaced work models and the second paragraph of 18.1 notes that the new structure is a single stream structure with no demarcations. Then it says this:

PN1542

It allows for a list of mine site competencies to be developed. Each mine's indicative competencies will use as a guide the competency standards contained in the coal industry training package.

PN1543

That is important to note for what we read on. So we have here mine site competencies being developed with a particular guide and then reading on:

PN1544

The definitions for each of the classification levels are necessarily general and intended to cover the types of work actually performed under this award. To eliminate doubt, the work performed by the employee, the assessment of the employer against mine site standards and in relevant cases the appointment of an employee to a particular classification by the employer are the only relevant matters that determine an employee's entitlement to wages pursuant to this clause.

PN1545

So the clause has as its assumption that there will be an assessment of an employee against standards being the standards which, on the previous page, are to be developed against a particular background. Then in 18.2, employees have to be told, in the second dot point, the requirements to occupy each classification. So again we get tied in, there are standards which are set at a mine site and employees must then be told what those standards are. So each level has particular standards and if we go to page 7, we see the indicative - and 18.8 we see indicative competencies for the different levels.

PN1546

So we have a system which is more - certainly gives some level of real clarity to be developed at a mine site basis as to what competencies are required in order for employees to be graded at particular levels. One can then have an objective system for determining a matter which, with respect, to the appellant's proposal is not evident on their proposal. Now, I want to come back before I conclude, I want to deal with the issue that your Honour, the Vice President, raised about potential view of a tension between the approach taken here and the approach taken in other places, such as Bengalla and by her Honour.

PN1547

I want to deal with that. I am not walking away from that but I wanted to note that the suggestion that the definitions that are proposed in the award are somehow sufficiently detailed by reference to the P and E Award is one which the Commission would not accept, given the particular way that the P and E Award definitions are said to work. The relevant definitions - the definitions about which I have been talking are found in volume 3 of the appeal book and I probably should have started this part of the submission by asking the Commission to open it. I do not think it is too late for it to be useful.

PN1548

If the Commission would not mind turning to volume 3 of the appeal book. This is the proposed award that her Honour was asked to make by the appellant. So tab 28 you find the proposed award in its last incarnation and at paragraph 5.2 we see the definitions that were placed in at this last stage. So the Commission will note the difference between an administrative officer level 1 who is said to do work of an administrative clerical or technical nature which requires the application of qualifications and relevant practical experience. The difference between that and level 2 is apparently that the relevant practical experience is said in level 2 to be extensive.

PN1549

Secondly, that the person is said to have a more extensive range of skills and knowledge at a higher level than that required of level 1. How one can, on the basis of that, draw any useful conclusions as to the relevant internal relativities of those positions, with respect, is not one that would have been available to her Honour. The definitions are vague and one is very - certainly the definitions themselves do not assist one to properly understand the relevant work value between those two positions. The same submissions could be made about the other groups, the supervisory officers and the professional officers.

PN1550

I have mentioned already the dispute on the evidence between the company's employer witnesses as to when and how many supervisory duties were required to differentiate between levels 1 and 2 and can I just, without asking the Commission to read it in detail, a note that this is summarised at paragraph 80(c) of the respondent's submissions. So paragraph 80(c) of the submissions that we filed in reply details the evidence as to the ambiguity between the - that gave rise to the conflict of evidence between Mr Smith and Mr Hendry as to the meaning of the different classifications.

PN1551

So one sees at page 26 of the written submissions footnote 123 is the reference to the evidence where Mr Hendry gave as to particular positions - that was the IT position could be either a technical officer or a professional officer. So that was Mr Hendry's view. It could be one or it could be other under the definitions, notwithstanding a $10,000 difference in pay, depending on which of those two were said to be the appropriate classification. Earlier on that page, the Commission will note the evidence which is summarised in footnote 122 about the mine surveyors.

PN1552

Again Mr Hendry and Mr Smith, when cross-examined about the mine surveyor, had different views about whether that person should be a professional officer level 2 or a professional officer level 1. Again, something that would make a significant difference under their proposed award, a difference of some $15,000 between those two grades. That showed - that evidence showed up a difficulty with the comparators because under Mr Smith's comparators, that person would come across at a level 1 but Mr Smith thought it may be more appropriately a level 2.

PN1553

So without asking the Commission to read all that evidence, can I note that there is that evidence which is pulled out at paragraph 80(c) demonstrates the difficulties that were flowing from these classifications and the difficulties that then would mean it would be, with respect, impossible for her Honour to have formed any proper view about the relevant work value of these different classifications. At paragraph - just turning back in the respondent's written submissions now to paragraph 36(d).

PN1554

There I note a further difficulty. That is the issue of hours per week. The calculations that Mr Smith did started on the premise of a rate of pay in the industry award that was set for 37.5 hours and then he included additional amounts to bring it up to 48. But as her Honour noted, there was no clear evidence as to what the hours of staff that were actually worked. At paragraph number 2508 Mr Smith said he had done no analysis of the hours actually worked and Mr Hendry gave evidence-in-chief at paragraph 93 of his affidavit that there were some 19 production staff who regularly worked 50 hours per week.

PN1555

Notwithstanding - that was approximately 25 per cent of all the staff worked 50 hours. The calculations were done at 48. My friend's calculations now, by the by, start with the Commissioner Bacon's decision rates which are now rates for 35 hours but with no attempt, it appears, to build in to that calculations any further amounts to take into account that we are now talking a different stream, 35 and 48, rather than 37-1/2 and 48. This - so her Honour was dealing with a situation where unlike the Full Bench in the technicians case, we did not have clear evidence as to the hours that people were working on, a fixed roster that could enable her to be satisfied that the rates proposed were properly fixed rates.

PN1556

That is not something that her Honour could fix, as my friend says can easily be done, when her Honour comes to decide the question of setting properly fixed rates. At paragraph 36(e) of the respondent's submissions, there was issues there related to annual leave. These are matters of detail but matters of important detail regarding the calculations. Mr Smith made - had to make certain assumptions about what overtime payments people would be entitled to under the award when annualising.

PN1557

He assumed that people would receive overtime payments for 44 weeks per year but did not seem - and the evidence references are set out there - did not include the fact that the 19 staff members working on rotating shift were entitled to additional leave and that affects the calculation of overtime because they should have been given at least one further week of overtime payments. 36(f) notes a further difficulty regarding leave loading and 36(g) notes that the evidence was that the shift allowances that were being proposed were, and Mr Smith conceded this, less than that which the industry award would have provided and must be further taken into account.

PN1558

In 36(g) - sorry, that was 36(g). So it is not a simple matter at all to simply take some rates and say well, therefore it is no worse off. My friend's calculation might start with Commissioner Bacon's minimum rates but does not then, in any way, attempt to deal with the many difficulties that were - that would have been before her Honour if she had attempted to try and deal with it. Difficulties which, in my respectful submission, were fundamental and which, as I have said, were really a hole in the heart of their case. Her Honour could not have fixed it.

PN1559

Certainly the proposal that is put before this appeal bench is not a fix in any way. Can I turn now to deal just in passing with the issue of annualised rates. The company's proposal rests on an assumption that it is appropriate to have annualised rates. The association, on appeal, does not say that there is anything fundamentally contrary to wage fixing principles to have annualised rates, provided they are properly fixed and provided they start from a basis that they are properly fixed in accordance with wage fixing principles in the way that the Full Bench did in the technicians case and the way in which Vice President Ross did in the Deckhands case.

PN1560

The Commission, before it can make annualised rates, must be satisfied that those rates are properly fixed by doing the sort of calculations which her Honour could not do on the evidence that was before her. The next issue that I wanted to deal with were the - the various submissions that have been made on appeal with respect to the error said to be made by her Honour in roping the company into the industry award and the respondent's written submissions on this start at paragraph 49 and go through to paragraph 62.

PN1561

Certainly at its fundamental level we say that there is no error, given her Honour's wide discretion, given that the industry award had been recently simplified, given that the industry award applies to staff engaged at every coal mine in Queensland, New South Wales and Tasmania, except to the extent to which there are any - that are award free. Given all those facts, given the fact that this coal mine does not operate in a manner significantly different to those coal mines, there is no inherent error in the conclusion that the industry award is an appropriate award.

PN1562

Her Honour's judgment in this respect starts at paragraph 270 and 270 and 271 her Honour notes that the industry award has been simplified. At 272 her Honour notes the advantages that flow from an industry award applying, advantages which include uniformity of conditions. At paragraphs 54 and 55 of the - of my written submissions on appeal, I note factors which her Honour took into account and which are in favour of the question of - or the issue of industry awards and I will come back to that when I deal with this issue of tension between her Honour's approach and other approaches that has been raised on the last occasion.

PN1563

Her Honour's approach, in my respectful submission, was certainly not in error to place some emphasis on uniformity and is consistent with the approach that the Full Bench took in G & K O'Connor Proprietary Limited which is in the respondent's authorities and materials folder at tab 2 and also consistent with what the Full Bench said in Bengalla which is at tab 1. Can I just draw attention to what the Full Bench in Bengalla said at paragraphs 17 and 18 and 19 in particular.

PN1564

The Full Bench in Bengalla was noting that - at paragraph 15 it noted that before 1993, the Act contained section 94 which required the Commission to, so far as possible, and so far as it considers proper, to have uniformity throughout an industry carried on by employers in relation to hours of work, holidays and general conditions in the industry. That section was removed but the Full Bench in Bengalla nevertheless said in paragraph 17 that:

PN1565

Considerations based on common occupations and competencies, business competition and common work value assessments are readily assimilated into arbitral decision or patterns about minimum standard rates of pay and conditions.

PN1566

In paragraph 18 the Full Bench refer to the pre-set of O'Mara J which they set out in paragraph 16 and say that that has relevance to a contemporary contested roping in awards and say this:

PN1567

The Commission will give weight to considerations that will often gravitate toward an acceptance that the appropriate award to be made is one which ropes the relevant employer party into a widely applicable industry award.

PN1568

In paragraph 19, the Full Bench sets out a judgment of Munro J in PKIU and Midwest Times and there is a passage there set out in the third paragraph of that passage that Munro J found that he was satisfied that Midwest should be roped into the relevant industry award which he said provides a set of minimum entitlements and conditions of employment, it acts as a safety around which more flexible arrangements can be negotiated. Her Honour did not err in placing some weight on the factors which are said in those decisions to be relevant factors when considering the appropriateness of an industry award.

PN1569

At paragraph 273 of her Honour's judgment, she notes benefits of uniformity across the industry and at paragraphs 274 and following, her Honour considered and rejected some specific criticisms of the industry award, many of which are repeated here on appeal and which I did intend to turn to in terms because they have been raised as separate errors of her Honour. Now, I am in the Commission's hands about that but there is, I think on my count, something like 15 to 20 separate issues that has been raised about the industry award and its appropriateness, each of which on one view would require some level of response.

PN1570

That is my intention, unless the Commission is minded not to deal with it on that - or need it dealt with on that basis.

PN1571

VICE PRESIDENT LAWLER: Mr Taylor, I think you need to take your own course.

PN1572

MR TAYLOR: Yes. I am - - -

PN1573

VICE PRESIDENT LAWLER: The Full Federal Court has recently emphasised an appeal bench of the Commission cannot act unless it finds error and I was at pains to ask Mr Buchanan to identify precisely where the errors were.

PN1574

MR TAYLOR: Yes.

PN1575

VICE PRESIDENT LAWLER: He has done that. If you think you have adequately dealt with them, that is fine. If you wish to go to them one by one, that is a matter for you.

PN1576

MR TAYLOR: Yes. I think I will deal with some of them and I will take my own course with respect to others.

PN1577

VICE PRESIDENT LAWLER: An alternative option is to deal with it by way of a brief written summary, if you wish.

PN1578

MR TAYLOR: I think my preference at this stage would be to complete the oral submissions and - rather than deal with them in writing, if that is convenient.

PN1579

VICE PRESIDENT LAWLER: Certainly.

PN1580

MR TAYLOR: The first of which is the suggestion that classifications are - that the classifications in the industry award are out of date and so inappropriate to be made applicable to this particular mine site and at paragraph 76 of the respondent's submissions, that is dealt with in short form. This was not a feature, as I apprehended it, of the written submissions or notice of appeal but certainly it has now been submitted to this bench that the industry award classifications are out of date and there are employees covered by this site who do not work in classifications contained within the industry award.

PN1581

Fundamentally the answer, I submit, is that the Commission would move off the basis that this award had been simplified. If there was a point to be taken about the appropriateness of the classifications, it was a point that could have been taken before Commissioner Bacon. I do not believe it was. Anglo Coal, of course, was represented in those proceedings. There has been no application to vary that award. The Commission would not move off an inference that there was anything out of date about that award. The classifications in there are rightly not likely discarded, given their decades of use.

PN1582

The evidence was from Mr Gillespie that he accepted that various classifications in the industry award were still in use and that is at paragraphs 3672 to 3684. Mr Hendry, in his affidavit at annexure 5, identified people employed at this mine site who were covered by classifications in the industry award. Can I ask the Commission to open volume 1 of the appeal book at tab 5. This is the evidence of Mr Gillespie. At 3672, the evidence starting from 3672 is to this effect:

PN1583

The industry award has certain classifications. Can I just get your evidence as to whether you understand that these are jobs that are done or work in accordance with those classifications as done in coal mines in Queensland. I think, and correct me if I am wrong, you have agreed you have already given evidence ...(reads)... yes, look, I think there are some.

PN1584

Then various other positions are put to Mr Gillespie and he accepts that they exist and then if I - just to speed things along if I take the Commission down to 3684 where this passage ends, the question is put:

PN1585

And wherever there is not a direct fit with the duties of a position in place at a particular mine and the award classification in circumstances where the award is binding on that particular mine operator, the approach is this ...(reads)... to determine the appropriate award classification. Yes.

PN1586

So that combined with the evidence of Mr Hendry about how it was quite possible to put employees into the award definitions and that is found at paragraph number 4297 and following, and the fact that he had actually done this exercise, Mr Hendry had done this exercise, putting his employees into the award classifications, necessarily so in order to give evidence about whether they would be worse off or not under the proposed award, is evidenced which demonstrates that the industry award classifications have relevance and have - and are appropriate to coal mines generally.

PN1587

Just turning a little earlier in the evidence that Mr Gillespie gave at tab 5 of appeal book 1 at paragraph 3493, Mr Gillespie was asked some questions about the classifications in the award. At 3493 he agrees that the definitions and classifications have developed historically over many years. There is then some questions about how those classifications were banded together and at 3498, he agrees that he has become quite familiar with the classifications in the award. At 3501, a question is put to him:

PN1588

Coal mines use different names for positions which have similar duties. Yes, some smaller mines might put a couple together, for example, to come up with a different classification ...(reads)... are not necessarily appropriate for all those people.

PN1589

He then agrees that the nature of industry awards is that they apply to a range of employers with a range of classifications. Then at 3504, this passage can be read:

PN1590

An experienced industrial relations practitioner in the coal industry such as yourself, such as Mr Hendry, are able to marry up award definitions with the operational staff that they have in their mine ...(reads)... he would obviously know.

PN1591

So there is no difficulty contrary to the suggestion with the classifications in the industry award. In my friend's submissions, he drew attention to some evidence about whether a particular professional engineer would fall into a particular classification in the award and there is evidence to - Mr Hendry was cross-examined about professional engineers at paragraph number 4607 to the effect that there are four professional engineer classifications in the award and one could put a professional engineer into one of them.

PN1592

Mr Hendry's point seemed to be that if you just - these definitions in the award do not necessarily marry up precisely with the particular position that he had in mind, a particular professional engineering position. I think he recognised that his proposed award, which had less classifications for a professional engineer, was even less able to give him the ability to place someone within a particular classification. There is certainly on the evidence no difficulty in classifying people such as engineers or senior engineer.

PN1593

It should be noted re classifications that in Commissioner Bacon's decision of 8 October, which - I do not ask the Commission to turn to but can be found at tab 7 of the appellant's first folder of authorities. In that decision in which he simplified the award, at paragraph 116 he said that this issue of classifications is one that is appropriately a matter for enterprise negotiations. So we have, in my respectful submission, no need for one to be critical of the industry award which has been found to have appropriate classifications for the industry to the extent to which there is any particular issue with respect to a particular classification.

PN1594

Commissioner Bacon thought that an appropriate matter for enterprise negotiations. That does not sit well with the company's approach, of course, because what the company wanted before her Honour and wants on appeal is an award that means it does not have to negotiate. It gets an award that simply replicates its system of work and removes to the extent possible any potential for the need to negotiate about anything because they have got everything they want.

PN1595

VICE PRESIDENT LAWLER: So the Commission should actively set out to make awards that are inappropriate to the particular circumstances of the particular business in order to provide an incentive to an employer to bargain away the inappropriateness?

PN1596

MR TAYLOR: Not at all, your Honour, but what it does not lead to is a conclusion that because an employer has a particular method of work and a particular desired outcome, that the Commission would simply make an award that replicates that rather than make an award that over 55 years and through a simplification process has been determined to be appropriate for the industry. Employers across this industry covered by this award, if there is an issue about a particular classification, can enter into negotiations about it.

PN1597

The nature of the Act's approach, in my respectful submission, is to set a fair minimum safety net of conditions and then say however, if at a particular enterprise you wish to have other particular conditions, you can do so by way of enterprise negotiations.

PN1598

SENIOR DEPUTY PRESIDENT KAUFMAN: Mr Taylor, in the situation that was confronting her Honour here, being an application for the making of the first award, is not the obligation on the Commission to look at the work that is being done and then assess proper minimum rates for the classifications in the workplace? Now, if the company's classifications - proposed classifications structure does not fit and the industry award does not fit precisely in the making of the first award, why did not her Honour err in potentially advocating her function of assessing for herself what is the work done, what are the appropriate classifications for that work, is Joe Blow a this or that, is Sue Smith a this or a that and what is the appropriate rate.

PN1599

MR TAYLOR: Yes.

PN1600

SENIOR DEPUTY PRESIDENT KAUFMAN: Was that not her function?

PN1601

MR TAYLOR: Her function was to set an appropriate rates of pay for the work done at that coal mine but I resist the suggestion, if it be made, that her Honour or any member of the Commission must, when examining a new award for a particular employer, set an award which reflects the exact positions that happen to exist at that employer at that time.

PN1602

SENIOR DEPUTY PRESIDENT KAUFMAN: On what basis do you reject that?

PN1603

MR TAYLOR: Well, can I say this, your Honour? Neither award that was before her Honour proposed to reflect the way work was being done. There were no classifications.

PN1604

SENIOR DEPUTY PRESIDENT KAUFMAN: I accept that.

PN1605

MR TAYLOR: Yes. So her Honour needed to satisfy herself that she was fixing safety net conditions. In my submission, there could be no error in saying that if this mine is not relevantly different to mines that an industry award said to be appropriate for coal mines is applicable, the fact that not every classification in the industry award is being used, does not mean that it is not an appropriate award. The evidence which I took the Commission to a moment ago is that the employer was able to take the industry award and work out how it applies to this particular mine.

PN1606

If their award was made, that would have had to have been done similarly. They would have to have taken their award and worked out how to apply it. Her Honour certainly did not err in finding that the industry award was an appropriate - it sets appropriate standards. Certainly her Honour needed to turn her mind to whether any particular award that she was making is suitable for that particular employer. It is not sufficient for her Honour to simply say there is an industry award and therefore it should be made.

PN1607

Her Honour was careful to say that she was not doing that but in circumstances where there was evidence and it was not contested that this mine was not relevantly different in the manner of its operation to other coal mines to which the industry award applied, her Honour, in my respectful submission, can't be said to have erred in finding that the industry award was appropriate. Now, the question might be said well - but maybe there might be an even more appropriate award. That seems to be a suggestion that comes from the other side of the bar table.

PN1608

She could have crafted a particular award. She could have but she did not err in finding that the industry award is appropriate. If the Commission were to take a view that every time a new employer was to be roped in, the Commission must consider site specific awards in great detail, then that would put, with respect, an onerous obligation on the Commission every time it needs to consider a new award. So it is not that her Honour disregarded the way work was being done but her Honour was faced with two applications, competing applications, neither of which reflected the way in which the classifications were, in fact, working.

PN1609

The evidence was that like every other coal mine, you had production supervisors, you had surveyors, you had clerks, you had all the sorts of classifications that you find in the award and so there was no reason for her to find that the industry award was inappropriate and no reason for her to suggest that she needed necessarily to craft an award that had classification levels which were specific to each of those different types of positions which existed at that mine. That was not being advocated on the other side of the bar table, I might add.

PN1610

They wanted the broadest groups which they could then determine, people could appropriately be put into and I have already made submissions about the difficulties and ambiguities that were replete in that sort of approach. Probably one of the most significant things said about the industry award and its appropriateness or otherwise before her Honour and now repeated on appeal is that the industry award has a wages and overtime structure, rather than annualised rate of pay. In my respectful submission, there was no error in her Honour finding that there was no difficulty in continuing - in this mine site having a wages and overtime award made applicable to it in the same way that applied at all the other mines.

PN1611

There are a number of reasons for that. Firstly, Commissioner Bacon had - having simplified the award, had not changed that approach. So post-simplification, there was a simplified award that had a wage and overtime structure that applied generally to coal mines. The evidence that was led was that where that industry award applies, there is no barrier or difficulty in mines engaging staff on the basis of annualised salaries by way of over award contracts. Mr Gillespie's evidence at paragraph number 3443 was that this is the industry norm, the way in which the industry generally operates.

PN1612

So that you have award conditions which act as a safety net and which one can calculate the base by which one cannot fall and then above that, one can enter into contracts for annualised rates. Other evidence references include Mr Hendry at 4195 and 4797 to similar effect, that this is, in his experience, the way in which it is done.

PN1613

SENIOR DEPUTY PRESIDENT KAUFMAN: But does that require those companies keeping records of the nature that this company says having an annualised salary in this award would obviate the necessity for?

PN1614

MR TAYLOR: It would, your Honour. The no - there is no relevant difference between the obligations that would fall on this company and every other company bound by the industry award. So the reference - or the emphasis was being placed on regulation 131E, the obligation to keep records. Now, there were some things I did want to say about that. There is some evidence. It was exhibit APESMA7 which is found at - and I do not ask the Commission to open this but found at appeal book volume 3 at tab 15 that at least the production staff were - there was a roster of hours that were worked by the 19 production staff that record their hours.

PN1615

Technicians, who are under this annualised system, similarly have to have hours worked recorded to calculate annual leave and the like and Mr Hendry gave some evidence about this at paragraph numbers 4204 and following. I do not think I need the Commission to open it but he noted that that document, APESMA7, he agreed is kept for hours worked every day. He said yes for the purpose of leave management. That is paragraph number 4212. Mr Hendry and Mr Gillespie both accepted that this is an obligation that falls equally on everyone else in the industry.

PN1616

For those who are working regular rostered hours it is, of course, a relatively easy method to - easy matter to record hours of being worked and for those who might be said to be the more white collar workers, the clerks, storemen and the like who are not working regular rostered overtime, there is an - the regulation on its face does place an obligation to keep some record of the hours, but one which is not relatively different to many awards where this system is in place. It is - this company attempts to make themselves seem somehow different or special but it is an obligation that flows under the Act and flows in respect to awards generally which have this usual approach of a rate of pay for a number of hours plus another rate of pay if people work overtime or shift or the like.

PN1617

Can I note re this issue of wages and overtime? At paragraph 57 of the - of my written submissions on appeal, I note the fact that this issue is not unique in the industry, it is not unique to Anglo Coal. Not only does Anglo Coal companies have the industry award applying at other mine sites, as a result of enterprise agreements which are a matter of the Commission's record, there are a number of mines where mine workers, by virtue of those agreements - and by mine workers I mean not staff but those who are traditionally covered by the CFMEU. By virtue of those agreements are paid annualised rates.

PN1618

At those mines, staff are covered by the industry award, are on its face, covered by an instrument which requires a wage and overtime system. There is no reason why the Commission would think there is something fundamentally impossible about the situation where mine workers have annualised rates by some industrial instrument and staff do not. Certainly no application has been made to vary the industrial instrument in those mines to mean that staff have the same annualisation as mine workers. That is not surprising, given the evidence which I have already noted that it is common and usual by way of individual agreements, staff have annualised rates of pay.

PN1619

Notwithstanding that the award is there to set the base or the safety net to enable you to want to ensure that there is a level below which the annualised rates cannot fall. Now, there is submissions that I propose to make but given the time, I think I will consider reducing to a short note, just highlighting the evidence that was led - that was obtained in cross-examination to the effect that what the company wanted to do was avoid the need to negotiate generally.

PN1620

There are various evidence references where Mr Hendry was cross-examined that his fundamental difficulty with the industry award was that whereas the industry award might require some level of a need to enter into a negotiation about a particular matter, that was not something the company wished to do. Certainly did not wish to, if it could avoid it, certainly did not wish to have what he called the third party, the association, involved in those - in any negotiations if it could be avoided. In my respectful submission, the industry award can be taken as a balance of the employer and employee interests over 50-odd years.

PN1621

You start from the point that that is a fair and simplified appropriate award for a coal mine generally. The fact that the employer does not want to have to negotiate about anything is not an appropriate basis to then say well, on that basis it is appropriate for us to fix an award that moves away from that balance and which gives you, the employer, all the outcomes that you would prefer to have. So whether it is annualised pay, whether it is pay paid monthly or weekly, these are matters which the company does not want to have to negotiate about. It wants an award that reflects its preferred way of dealing with the matter.

PN1622

Some of the other issues raised with the industry award, I think on appeal some point was made, at least on Mr Buchanan's feet if not in the written documents, that the award is a members only award. It only applies to members of APESMA. The evidence was both from Mr Bolger and Mr Gillespie that in the industry, employers applied the award as a matter of practicality without reference to whether people were members or not. But I do not think Mr Buchanan ultimately was suggesting that her Honour was wrong in making a members only award.

PN1623

Certainly the company did not suggest that if the industry award were to be made, it should be made on some other basis and the association put actively that her Honour, if she was really concerned about this issue, could make the industry award binding on the employees, whether they are members or not. That was put as an alternative, not the association's preferred alternative, and there was no suggestion that that was a point that was embraced, rather than contrary.

PN1624

VICE PRESIDENT LAWLER: Where we do stand at the moment, Mr Taylor, in terms of your expectation as to the duration of your further submissions?

PN1625

MR TAYLOR: I think, your Honour, I would have something in the order of probably 40 minutes or so. 30, 40 minutes.

PN1626

VICE PRESIDENT LAWLER: No further change on your estimate, Mr Buchanan?

PN1627

MR BUCHANAN: No, your Honour.

PN1628

VICE PRESIDENT LAWLER: Fine. We will take the luncheon adjournment now and resume at 2.15.

LUNCHEON ADJOURNMENT [1.00pm]

RESUMED [2.15pm]

PN1629

VICE PRESIDENT LAWLER: Mr Taylor, can I just - I have just adjourned a reasonably significant certification matter that was started at 9 o'clock this morning until 4 and I do need to finish hearing the argument at 4 o'clock. So can you count upon stopping with sufficient time to give Mr Buchanan a period that he has indicated he needs, which I think was half an hour, was it, Mr Buchanan?

PN1630

MR BUCHANAN: Half an hour. Yes.

PN1631

VICE PRESIDENT LAWLER: Yes. To the extent that there are other matters that need to be addressed, the discrete. At the end, you may be able to submit a written note.

PN1632

MR TAYLOR: Sure. Yes. I do not think that will be a difficulty, your Honour - Commissioner. I intend to just make a final couple of points about the submissions made attacking the industry award, spend a brief moment on the issue of error said to arise because her Honour did not consider a hybrid, spend a little bit of time on the suggestion that your, the Vice President, raised about principles being assessed and that will really conclude the submissions.

PN1633

VICE PRESIDENT LAWLER: Thank you.

PN1634

MR TAYLOR: The last thing I wanted to say about the appropriateness or otherwise of the industry award is a submission that responds to submissions of my friend regarding the impact of the decisions of the Full Bench regarding the simplification of the P and E Award. There was a series of decisions at tabs 9 to 12 of the appellant's second volume of authorities which - wherein BHP Coal is the first party name mentioned and one might refer to them as the BHP Coal decisions which involved arbitration over the simplification of the P and E Award including as to the classification structure and the rates of pay for those classifications.

PN1635

My friend went to those decisions, I ascertain, because in his submission it assists the bench to understand the issues involved in this appeal. In my respectful submission, those decisions are not ultimately helpful because this case is not an appeal from Commissioner Bacon's decision to simplify the award. There is, in my respectful submission, a danger that if one focuses on the merits of the industry award generally, whether it has appropriate classifications, whether it generally deals with annualised rates of pay or not and the like. Criticisms that were made in this case that on one view are capable of being made about the industry award generally.

PN1636

There is a danger that this case becomes in a sense a defacto appeal from the decision of Commissioner Bacon. Commissioner Bacon simplified the award in the circumstances where the parties were not seeking a new classification structure. No appeal from that decision. So the Commission here would move on the premise that whatever the Full Bench did in the P and E Award proceedings with respect to that industry award, that does not detract from the appropriateness of the industry award as simplified by Commissioner Bacon.

PN1637

The fact that the Full Bench in those decisions with respect to the P and E Award took a different approach with respect to mine workers and determined on five classifications for mine workers, does not reflect on the appropriateness, in my respectful submission, of the simplified award for staff. The staff, of course, have many more levels and types of work that need to be covered by an award and so - and there is a long tradition of having the classifications which we find in the industry award.

PN1638

And one would not be quick to draw a conclusion that because in industry award proceedings related to mine workers, a certain approach was taken that do not necessarily mean that there is anything wrong with the approach that Commissioner Bacon took and therefore anything wrong with the industry award as an appropriate award for staff employed in coal mines such as these mine in question in these proceedings. I also note, although I do not spend the time to take the Commission to them in terms, that the industry award as simplified by Commissioner Bacon, contains a number of facilitative provisions which would permit a level of crafting of relevant conditions to suit a particular enterprise.

PN1639

So one would not come to any conclusion that the industry award is somehow not appropriate, the facilitative provisions certainly are there to assist to deal with any particular mine site issues. With respect to the question of the hybrid award, I will be brief. I think a lot of these submissions have been made so - and I can rely essentially on the written submissions. The appellant challenges the decision below on the basis that her Honour did not consider making a hybrid award which takes elements of the proposed MNC award and crafts them according to what her Honour thought was more appropriate.

PN1640

It is not actually submitted that her Honour ought to have crafted a hybrid award, rather nevertheless it is said that her Honour erred in not doing so. Now, her Honour's reasoning is found at paragraph 294 of her Honour's decision. Neither party, it might be said, put submissions suggesting that it was a good idea to create a hybrid award, although both acknowledged that it was an option available to her Honour. Her Honour placed weight in paragraph 294 on the virtue of uniformity of conditions across coal mines.

PN1641

While it might be said that there were other matters which her Honour could have given greater weight to, for the reasons set out in the respondent's written submissions from paragraphs 17 and following, there was no appealable error in her Honour finding important to the virtue of uniformity and for that reason to reject the proposal of a hybrid award. I rely without going into details, on the submissions set out in paragraphs 70 to 75 of the respondent's written submissions.

PN1642

Your Honours and Commissioner, I wanted to spend just a short amount of time responding to your Honour, the Vice President's, invitation at paragraph number 1331 on the last occasion as to why this is or is not an appropriate case for the Commission to consider setting principles to give guidance as to the exercise of the discretion involved in making a new award and in particular as to how to take account of the various objects that one finds in section 88A and section 3 of the Act. Your Honour, the Vice President, noted at that part of the transcript the potential to see a difference in the approach taken by the Commission in cases such as Bengalla and in the approach taken by her Honour at first instance as against the approach taken by the Commission in the technicians case or in the P and E Award simplification cases.

PN1643

There is, of course, some authority on the extent and capacity of the Commission - - -

PN1644

VICE PRESIDENT LAWLER: Mr Taylor, can I interrupt this to say - let me withdraw that invitation.

PN1645

MR TAYLOR: Yes.

PN1646

VICE PRESIDENT LAWLER: It strikes me that in the absence of notification of appropriate parties like the ACTU and VECCI and the Australian Industry Group, it is inappropriate to contemplate that course.

PN1647

MR TAYLOR: Yes.

PN1648

VICE PRESIDENT LAWLER: We are agreed about that so you can move on.

PN1649

MR TAYLOR: That would have been one of the submissions I have made. On that basis I turn past that but I think it is still appropriate for me just to spend a few moments discussing the existence, whether or not the Commission might find a tension between the approach taken in the Bengalla decision and by her Honour below and the approach taken in the technicians and BHP Coal cases. In my respectful submission, there is not a tension between those approaches for these reasons. In the Bengalla decision, in the technicians case - sorry, I withdraw that. In the technicians case, there were certain matters which, as I raised earlier, the Commission needed to determine between the industry award was not at that time simplified.

PN1650

But it was not a decision which said that it is necessary, pursuant to the legislation, to tailor an award to meet the employer's preference. The decision, as I noted particular passages earlier today, emphasised the importance of industry award conditions as being appropriate or being, to use my own expression, the touchstone for setting safety net conditions. In Bengalla, there was no error that found on appeal from a conclusion that the industry award is appropriate, even if the employer would have preferred an award tailored to its particular type of operation.

PN1651

While there were different results in those cases, there is no, in my respectful submission, tension between the general approaches taken by those Full Benches. In Bengalla and in the case of her Honour decided below, the Commission was considering whether a specific mine should or should not have an industry award applying. The BHP Coal cases, or the P and E Award simplification cases, were cases as to whether the industry award itself should be tailored to meet the needs of the industry. There are obviously quite different exercises being considered in those circumstances and there is not, in my respectful submission, a tension in the way in which those cases were resolved.

PN1652

For the Commission to say we start from a premise that there is an industry award which is simplified and it is suited to the industry and we find no error in saying that that is therefore appropriate to a particular mine, there is no tension with the fact that at the same time there is a Full Bench saying when considering the industry award, we need to consider whether the industry award needs to be simplified, altered, to take into account the needs the industry. Can I spend a moment just putting some submissions about what the Commission would do if contrary to my submissions, the Commission is of the view that the appeal is in some way to succeed.

PN1653

It is not frankly clear, in my respectful submission, what the appellant believes would be the appropriate approach in that circumstance. It is clear that her Honour, in her decision, had not determined generally the appropriateness of the MNC award, that she found it inappropriate for two specific reasons, but as has already been noted at paragraph 265, she made it clear that there were other concerns that she had which she had not yet turned to. This is a matter which is dealt with in my written submissions at paragraphs 79 to 81.

PN1654

But in short, if contrary to my submissions, this bench thought the appeal would succeed, in my respectful submission, it would need to be remitted back in some - to some capacity, depending on the nature of the errors so that her Honour could complete the process. So for example, if this bench found contrary to my submissions that there was an error in her Honour not properly considering whether rates of pay could be properly fixed under the proposed award, her Honour would then need to consider how that could be done. I interpose there.

PN1655

That, of course, would be something that would - a conclusion reached contrary to my submission that her Honour could not do it on the evidence that is before her because of all the difficulties that I have identified, including the ambiguity of the classifications and the complete lack of useful evidence as to how they could marry up to any properly fixed rates of pay. In my respectful submission by way of conclusion, the bench, of course, if it accepts my submissions, will not need to concern itself with that question but will rather form the conclusion that there was no error demonstrated in the approach of Senior Deputy President Drake at first instance.

PN1656

That the errors that have been so far identified or at least categorised as such are not errors or certainly not errors in a House v R sense. By way of conclusion, it is my submission that no error could be said to arise in drawing a conclusion that an industry award is appropriate for a work site which is not relevantly different to the other work sites governed by an industry award. There might be no prima facie assumption in favour of an industry award but that once a Commission has properly considered the matter, it will be a very rare case where on appeal, an appeal bench would form a conclusion, then the exercise of a single member's wide discretion that there was some error in determining that an industry award was appropriate.

PN1657

I note, of course, that was the approach taken in Bengalla. As to the question of rejecting the proposed MNC award, in circumstances where the company failed to present evidence which would enable the Commission to determine the appropriateness of the rates, there cannot be any serious criticism of her Honour's conclusion that the rates were not properly fixed in accordance with the principle, nor any serious criticism, I respectfully submit, with the proposition that to split rates into two amounts was inappropriate. There is not really a lot of room for debate about those conclusions.

PN1658

Her Honour did not err in all of that process. If there is any point that the appellant has, it is that having reached that process of reasoning, her Honour should have in some way come back and given another opportunity to the appellant to put submissions to deal with those matters. Ultimately though the Commission, having considered the evidence in this case, would not find any House v R error arising there in circumstances where - - -

PN1659

VICE PRESIDENT LAWLER: It is not a House v R. It is a jurisdictional error. A failure to afford procedural fairness is the way it is put.

PN1660

MR TAYLOR: Yes.

PN1661

VICE PRESIDENT LAWLER: Which goes to jurisdiction.

PN1662

MR TAYLOR: I accept that. We, of course, say with respect to natural justice that no party is afforded - there is no absence of natural justice for a party not to be aware of the way in which the Commission approaches these matters.

PN1663

VICE PRESIDENT LAWLER: I think you have already put those arguments today.

PN1664

MR TAYLOR: I have.

PN1665

VICE PRESIDENT LAWLER: You took us to paragraphs in your own submissions - - -

PN1666

MR TAYLOR: Yes.

PN1667

VICE PRESIDENT LAWLER: - - - which although they did not use the expression properly fixed minimum rates, but averted to the relevant provisions and principles.

PN1668

MR TAYLOR: Yes. I do not - I am really just summarising it and I do not think I need to go further but just simply to say that for those reasons and for the added reasons set out in the written submissions, leave would be refused, this appeal would be rejected and while I reserve, in a sense attempted to reserve to myself the proposition of putting some short written note about the various evidence references in which the company, particularly Mr Hendry, gave evidence about unwillingness to negotiate.

PN1669

I think her Honour, in her judgment, has picked up the main points there and I do not see a need to prolong the matter by putting - doing that. So that would conclude the submissions that I would put on behalf of the respondent.

PN1670

VICE PRESIDENT LAWLER: Thank you, Mr Taylor. Mr Buchanan, before you start, do you accept that it was not in dispute below or alternatively open for her Honour to find that there was not any relevant difference between this mine and other open cut - analogous open cut mines in the eastern states?

PN1671

MR BUCHANAN: That the mining method was not relevantly different? That was not in dispute, your Honour.

PN1672

VICE PRESIDENT LAWLER: That is just slightly different. Mr Taylor, somewhere in this decision, I think her Honour says that this mine is not materially different. Can you just point to the paragraph?

PN1673

MR TAYLOR: Paragraph 2 notes that coal mining methods are not different and - - -

PN1674

VICE PRESIDENT LAWLER: I thought it was - is it asserted in your written submissions? I am sure that I read somewhere either her Honour or you were asserting that there is no material or relevant difference between this mine and other analogous mines in Queensland.

PN1675

MR TAYLOR: Yes.

PN1676

VICE PRESIDENT LAWLER: Is that a matter in dispute, Mr Buchanan?

PN1677

MR BUCHANAN: There was no evidence, your Honour, from which a conclusion could be drawn that the organisation of staff or the allocation of duties to particular staff mirrored the position of other mines, but it was not in dispute that the mining method was the same. In fact, Mr Hendry's evidence at one point was that classifications were changing all the time to affect actual work requirements. As high as it gets is her Honour's statement in paragraph 2. There was no evidence, no effort, I do not think, in the evidence to - you would have to go to Ms Bolger's evidence.

PN1678

VICE PRESIDENT LAWLER: Well, I accept the cross-examination by Mr Taylor that went to the proposition that there were clerks there and production supervisors and that there were functions at this mine that were common to all mines.

PN1679

MR BUCHANAN: That is undoubtedly so, that there are functions. The way in which they are performed is not the subject of particular evidence.

PN1680

VICE PRESIDENT LAWLER: Yes. Thank you.

PN1681

MR BUCHANAN: On a comparative basis.

PN1682

VICE PRESIDENT LAWLER: Thank you.

PN1683

MR BUCHANAN: Your Honours and Commissioner, there are a series of points that we wish to make which I think I can make shortly. For the most part I can do it, I think, by reference to paragraph numbers in the previous transcript. There are - what has been said today does not significantly extend the scope of the matters that we wish to reply to. On the last occasion at paragraph 1143, our learned friend said as he said today that her Honour had decided on the merits that the industry award was an appropriate safety net award. We do not need to repeat the submissions we made before about the significance of the structure of the industry award wages and overtime, weekly pay, 37-1/2 hour week.

PN1684

The classification structure, none of which reflected the actual working arrangements at the enterprise. These were all imposed because of her Honour's approval of the concept of uniformity. We did want to draw attention though to something that was remarked upon in the Bengalla decision which is in our learned friend's folder at tab 1, something this is discussed between paragraphs 15 and 17, pages 8 and 9 of that decision where the Full Bench, paragraph 15, said this:

PN1685

The existence of a general industry award of that kind is not a conclusive or determinative consideration in determining an issue about whether a roping in award or some other award should or should not be made ...(reads)... Industrial Relations Act 1988.

PN1686

Without reading it, it provided that the Commission should provide for uniformity throughout an industry carried on by employers. Then the Full Bench said:

PN1687

That provision was re-enforced by the pressure for consistency in the application by arbitral determination of work value assessments and wage fixing guidelines ...(reads)... Federal award making jurisdiction.

PN1688

Then paragraph 17:

PN1689

The repeal of section 94 of the IR Act carried away much of the underpinning rationale of relatively automatically roping in of new dispellance to existing industry awards.

PN1690

Correspondingly, as we put in our submissions in-chief, the focus now is on the enterprise and even if a matter were finally balanced, which we submit this matter was not, the inclination would always be to an enterprise award rather than an industry award. At paragraphs 1166 and 1167, our learned friend suggested that the present appeal was, in a very large sense, a re-run of the Bengalla appeal. There are two very important differences however, so far as the present case is concerned. There was no award of Bengalla for either group of staff, either the mine workers or the staff.

PN1691

Here the Technicians Award was in place, not in principles approved by the Full Bench for this particular enterprise and those principles had been echoed and endorsed in the later Full Bench decisions about the simplification of the P and E Award. The second point of distinction is that Bengalla was a case about leave to appeal. It was not a case that ultimately endorsed any concept of uniformity. It was a case which turned upon the proposition that Commissioner Wilks had been able to distinguish the Moranbah North case.

PN1692

Of course, the Moranbah North case would not be distinguished here because one was dealing with the very same enterprise. It was a decision that turned upon a disinclination to interfere with an exercise of a discretion, notwithstanding, as the Full Bench said, that mines might differ about a proper outcome. It is not a decision, in our respectful submission, that in any sense, stands in the way of the award sought by the appellant in the present case. The third point is this. At paragraphs 1193 and 1195, it was suggested that as a matter of practicality, annualised salaries were not an issue before her Honour.

PN1693

They were in an important sense, in our submission, and we need, I am afraid, to go to the transcript for a moment, commencing at paragraphs 1544 in volume 1, tab 3. Therein are some passages which I did not take the Commission to in chief. Ms Bolger was being cross-examined. The passage commences at the top of a page and it went to this effect:

PN1694

Well, you were not interested in an award that contains annualised salaries. I've indicated that I think it is more appropriate to have rates on a weekly basis and I've done that for a number of reasons ...(reads)... would you agree with that or not?

PN1695

There was an objection. Then 1549:

PN1696

It would've been very easy, wouldn't it, to have had some discussions about this?

PN1697

There is some exchange about that that I do not need to go to at the bottom of the page:

PN1698

Any concerns about the intricacies of the calculations could have been revealed and discussed, could they not? Yes. We invite Moranbah North to have discussions with us ...(reads)... the chance that they have now produced.

PN1699

Pausing there for a moment, no consent to any enterprise focus and then going on:

PN1700

Because you wouldn't consent to that approach, it follows that you would not consent either to annualised salaries. Is that right? As I've indicated, the association doesn't in principle have a difficulty with annualised salaries ...(reads)... are such discussions available or not? Enterprise award, annualised salaries. No.

PN1701

So no enterprise focus, no annualised salaries. That was the position that the respondent took into the proceedings. Now, it was also said by our learned friend today that in the technicians case, the CFMEU had been unwilling to agree to annualised salaries where the respondent to this appeal was prepared to discuss such matters. May we just refer very briefly again to the technicians decision in our folder of authorities. First volume, tab 1 at page 16 in a paragraph that was not the focus of our learned friend's attention. The second last paragraph on the page:

PN1702

The CFMEU considered that annualised salaries were being negotiated in the coal mining industry. However, it was submitted that a safety net award should provide safeguards for employees with respect to, for example, working overtime or on weekends ...(reads)... having regard to the established standards in the P and E Award.

PN1703

That really is, in effect, the same position that was put to her Honour and that is put on the appeal and it is the position that was effectively rejected by the Full Bench when it approved annualised salaries in the technicians case. The next point relates to the - the next couple of points relate to the extent to which there was any debate at all by the parties about the question of properly fixed minimum rates. We need to invite attention again to the submissions, the written submissions below in volume 2 at tab 8 to supplement the references that our learned friend gave in the course of his submissions today.

PN1704

We wish to refer firstly to paragraph 13 which commences at the bottom of a page under the heading: industry award as a suitable award:

PN1705

The Commission would be satisfied that the industry award provides a suitable safety net of minimum terms and conditions consistent with the Commission's wage fixing principles and the Act for staff employed in coal mines in Queensland.

PN1706

This is the case given. 13.1:

PN1707

The industry award was simplified and so complies with the requirements of sections 89A and 143 by Commissioner Harrison.

PN1708

At the end of that passage:

PN1709

It is noted that whether the industry award has been simplified as to conditions is a matter of factual contest between the parties.

PN1710

But the central assertion is that the award has been simplified and so it complies with the requirements of the Act and it may be regarded as a suitable safety net. 13 - I am sorry, 16.7:

PN1711

Applying an industry award with established classifications with properly set minimum rates will be consistent with principle 11A of the wage fixing principles.

PN1712

Again, the assertion appears to be that the rates have already been properly fixed. 16.8:

PN1713

Applying an industry award with established classifications with properly set minimum rates is consistent with the objects set out in section 88B(iii)(a).

PN1714

VICE PRESIDENT LAWLER: Are you about to take us to the submission where you say well, that is just incorrect?

PN1715

MR BUCHANAN: No, I am not, your Honour, but the reason I am - - -

PN1716

VICE PRESIDENT LAWLER: Does this not harm your case rather than advance it?

PN1717

MR BUCHANAN: No, no.

PN1718

VICE PRESIDENT LAWLER: That just means the issue was even more squarely raised.

PN1719

MR BUCHANAN: No, because the assertion was the industry award in its then present form was a suitable - was an award with properly set minimum rates. What I am coming to - - -

PN1720

VICE PRESIDENT LAWLER: At the time the - at the time her Honour came to make the decision, that was a true and correct statement?

PN1721

MR BUCHANAN: Well, at the time that the decision was made, these submissions had been falsified because it is clear that at the time of the hearing, at the time the submissions were made, the award was not in that state at all. But the particular matter that I wanted to come to, your Honour, is that there is no suggestion here from anybody that there needed to be any reference to, for example, the C10 rate or the sort of exercise that her Honour ultimately thought was important.

PN1722

SENIOR DEPUTY PRESIDENT KAUFMAN: Is that not implicit in the submission that the award was - an the award was properly fixed in the notes, albeit the submission was wrong?

PN1723

MR BUCHANAN: There had been no exercise down by anybody comparing the industry award rates to the metal industry.

PN1724

VICE PRESIDENT LAWLER: But his Honour's point is that when you say - when you use the expression properly fixed minimum rates, that necessarily implies because of the paid rates decision, that at the time they were properly fixed that the exercise of linking it back to the C10 rate had occurred.

PN1725

MR BUCHANAN: That is what is said now. I do not think that is said. I do not think it is said now that - - -

PN1726

COMMISSIONER DEEGAN: Is there anywhere there where they actually say the industry award as it currently stands has properly fixed minimum wage rates? The two provisions you took us to first say the industry award currently has a safety net of minimum terms and conditions.

PN1727

MR BUCHANAN: Yes.

PN1728

COMMISSIONER DEEGAN: Then it goes into the future tense and says applying an industry with properly fixed minimum rates would be in accordance with the principles. Is there somewhere there where it says the industry - it says there is a factual dispute about whether the industry award conditions have been simplified?

PN1729

MR BUCHANAN: This was not talking about the future. This was talking about - - -

PN1730

COMMISSIONER DEEGAN: No, I am talking about at the beginning. It says terms and conditions. It does not say minimum rates. It says the industry award - see, the Commission would be satisfied that the industry award provides a suitable safety net of minimum terms and conditions.

PN1731

MR BUCHANAN: Well, Commissioner, 16 point - - -

PN1732

COMMISSIONER DEEGAN: And in 13 - - -

PN1733

MR BUCHANAN: 16.7 and 16.8 - - -

PN1734

COMMISSIONER DEEGAN: Yes, 16 is, it seems to me, in a different tense.

PN1735

MR BUCHANAN: 16.8 is not. These submissions were not addressed to some future circumstance.

PN1736

COMMISSIONER DEEGAN: Well, it says further applying an industry - it does not say applying this industry award with its established - it says further applying an industry award with established classification with properly set minimum rates is consistent. That is true. There is no doubt about it.

PN1737

MR BUCHANAN: Nobody was suggesting - - -

PN1738

SENIOR DEPUTY PRESIDENT KAUFMAN: But that was a submission, as I read it, in support of the industry award.

PN1739

MR BUCHANAN: That is right, at that time - - -

PN1740

SENIOR DEPUTY PRESIDENT KAUFMAN: At that time.

PN1741

MR BUCHANAN: - - - in that form.

PN1742

COMMISSIONER DEEGAN: Well, I do not read it that way.

PN1743

VICE PRESIDENT LAWLER: They were wrong about it as at the time the submission was made but at the time her Honour came to read this - these submissions at the time she was making a decision, they had become correct submissions.

PN1744

MR BUCHANAN: Yes, but the effect of the submissions at the time they were made is that it was not necessary to relate the rates, for example, to the Metal Industry Award.

PN1745

VICE PRESIDENT LAWLER: Yes.

PN1746

MR BUCHANAN: Could I invite attention to 27.2, just to attempt to resolve the Commissioner's difficulty? This is in the conclusion. The industry award contains properly fixed - - -

PN1747

COMMISSIONER DEEGAN: Well, that is what I was asking you. Where did - is there somewhere where it actually said that and you said - - -

PN1748

MR BUCHANAN: Contains properly fixed rates. The effect of the submission was that the industry award, as it stood, was a suitable comparator and I will come in a moment to what we said about this. In so far as her Honour said: well look, you have not set out to establish a relationship with the Metal Industry Award, neither had that exercise been done for the industry award at that time and neither was any attempt made to do it in the proceedings.

PN1749

SENIOR DEPUTY PRESIDENT KAUFMAN: Do I understand your position to be that given that it was put that the industry award was a properly fixed minimum rates award, you did not need in your award to go back to the C10? You just had to demonstrate that your rates were not more disadvantageous compared with the industry award.

PN1750

VICE PRESIDENT LAWLER: Were properly linked to the industry awards.

PN1751

COMMISSIONER DEEGAN: Were properly fixed minimum rates.

PN1752

MR BUCHANAN: Our comparison - our focus on the industry award - no, no. Our focus on the industry award was for the purpose of showing that there had been a - we had passed the no disadvantage test, generally so called.

PN1753

VICE PRESIDENT LAWLER: But that is not the relevant test.

PN1754

MR BUCHANAN: No. I appreciate that is the way that the appeal is now being argued in the light of her Honour's conclusions.

PN1755

VICE PRESIDENT LAWLER: No, no, it is not the relevant test - - -

PN1756

MR BUCHANAN: But, your Honour - - -

PN1757

VICE PRESIDENT LAWLER: Whether it is argued that way or not, it is not the relevant test.

PN1758

MR BUCHANAN: We have referred to the Technicians Award. The Technicians Award had been simplified. Nobody at first instance said this award does not pass the test because it does not establish a relationship with the Metal Industry Award. Commissioner Hodder, before the hearing, before these submissions were made, had said the base rates in the Technicians Award, not the base plus site, but the base rates are properly fixed minimum rates.

PN1759

COMMISSIONER DEEGAN: Commissioner Hodder said the base rates in the Technicians Award were properly fixed minimum rates without the site allowance?

PN1760

MR BUCHANAN: He did.

PN1761

VICE PRESIDENT LAWLER: Where did he say that?

PN1762

MR BUCHANAN: In his decision. I obviously need to go to it. I did go to it in-chief but - - -

PN1763

VICE PRESIDENT LAWLER: Yes.

PN1764

SENIOR DEPUTY PRESIDENT KAUFMAN: That was a long time ago, Mr Buchanan.

PN1765

MR BUCHANAN: Yes, I know. It is in volume 1 of the authorities, tab 2, and it is paragraph 10.

PN1766

MR TAYLOR: Can I just - I apologise to my friend - just correct any misapprehension. It was not never APESMAs case below before her Honour that the industry award was simplified as to rates of pay. So whatever might have been read into that, Ms Bolger gave evidence that - and her evidence was it had been simplified other than as to rates of pay and that is found in APESMA exhibit 3 at tab 11 at paragraphs 4 and 10 and the case proceeded on that understanding.

PN1767

VICE PRESIDENT LAWLER: Sorry, exhibit 3?

PN1768

MR TAYLOR: Exhibit 3. It is behind tab 11 of volume 3 at paragraphs 4 and 10. APESMAs view was that it had been simplified as to conditions but not as to rates and that was - and the company's view is that it had - that while there had been some simplification, the simplification as to rates and conditions still had to be completed and that - there was a dispute about the conditions but not as to the rates. That was the basis that was argued - I mean, I could find references where I put that in submissions too but that was the APESMA position.

PN1769

VICE PRESIDENT LAWLER: You would agree, Mr Taylor, there is a certain tension between that evidence that was given by the witness and what is written in the paragraphs that Mr Buchanan has just taken us to?

PN1770

MR TAYLOR: Yes. There is a small amount of tension. The paragraphs went to conditions, not rates of pay and I made that clear.

PN1771

COMMISSIONER DEEGAN: Yes, but some of the paragraphs did go to rates of pay, the final paragraph 28 or whatever it was did go to rates of pay.

PN1772

MR TAYLOR: This was in circumstances where we - - -

PN1773

VICE PRESIDENT LAWLER: 16.7 properly set minimum rates.

PN1774

SENIOR DEPUTY PRESIDENT KAUFMAN: 27.2 contains properly fixed rates.

PN1775

MR TAYLOR: I am sorry, I have lost the - it was tab 8, was it not?

PN1776

VICE PRESIDENT LAWLER: Mr Taylor, can I raise some issues with Mr Buchanan?

PN1777

MR TAYLOR: Sure.

PN1778

VICE PRESIDENT LAWLER: Mr Buchanan, you have just taken us to paragraph 10 of Commissioner Hodder's decision.

PN1779

MR BUCHANAN: Yes.

PN1780

VICE PRESIDENT LAWLER: Is it not the case that the true principle is that the only way that rates can be properly described as properly fixed minimum wage rates is if the process set out in the paid rates decision has been followed, that is, a linkage has been made to the C10, either directly or indirectly?

PN1781

MR BUCHANAN: Yes, I accept that, your Honour.

PN1782

VICE PRESIDENT LAWLER: To the extent that Commissioner Hodder's decision does not give effect to that principle it is wrong.

PN1783

MR BUCHANAN: Well, if that is so but remember that Commissioner Hodder referred to, in the footnote, to the decision of Vice President Ross and I went to that also.

PN1784

VICE PRESIDENT LAWLER: Yes.

PN1785

MR BUCHANAN: Vice President Ross established a linkage with respect to some classifications and not so directly with respect to others but Commissioner Hodder's decision was not attacked before her Honour.

PN1786

VICE PRESIDENT LAWLER: No, no, no. I am sorry, I am not interested at the moment, just in terms of getting things conceptually clear, I am not concerned with what was said before her Honour or not. But what is the correct principle to apply? You can't rely upon that if it is erroneous as a matter of objective principle.

PN1787

MR BUCHANAN: I accept that, your Honour, but it has not been shown to be erroneous except to the extent that the linkage has not been demonstrated. It is not transparent.

PN1788

COMMISSIONER DEEGAN: So there is no linkage between what your company put up and the Technicians Award? You did not show which part of the Technicians Award you were relying on for each of the classifications that you were putting up.

PN1789

MR BUCHANAN: We did not go behind Commissioner Hodder's decision. That is true.

PN1790

COMMISSIONER DEEGAN: No, but Commissioner Hodder was making a decision about the Technicians Award which probably did have properly fixed minimum rates. The only question I asked was whether he said that only the base rate was properly fixed minimum, because I understand that you needed both to make the properly fixed minimum rate.

PN1791

MR BUCHANAN: But I know with the first award principle, we did not have to independently go back to the Metal Industry Award. We only had to make - establishment a proper relationship with awards in which the rates had been properly fixed.

PN1792

COMMISSIONER DEEGAN: What was the proper relationship?

PN1793

SENIOR DEPUTY PRESIDENT KAUFMAN: Where did you do that?

PN1794

MR BUCHANAN: Well, we did not do it mathematically precisely, your Honour.

PN1795

VICE PRESIDENT LAWLER: No, because you applied a no disadvantage test approach rather than a properly fixed minimum rates approach.

PN1796

MR BUCHANAN: Yes.

PN1797

VICE PRESIDENT LAWLER: Which you necessarily thought you had to do because no one was arguing about properly fixed minimum rates at that stage because neither award had properly fixed minimum rates and you knew that the award, in a merit sense, up the creek without a paddle if your rates were less than those in the industry award.

PN1798

MR BUCHANAN: Quite so. Quite so. The contest was an essentially practical one but the point I want to make about it, and I need to give one further reference. It was not the field of contest between the parties and nor, would it appear, a matter that her Honour was troubled about until the decision came to - and may I illustrate why that is so and I am not seeking to embarrass my learned friend with these references. I just want to re-enforce the submission that this was not the subject of much attention. In fact, it was not.

PN1799

The linkage with the Metal Industry Award was not the subject of any attention by anybody. Perhaps we all made mistakes but we would, with respect, include her Honour in that description, if it be an accurate one. May I illustrate why that is so? I need to go to my learned friend's submissions at the end of the case in volume 2 behind tab 7.

PN1800

VICE PRESIDENT LAWLER: Mr Buchanan, just before you go on.

PN1801

MR BUCHANAN: Yes.

PN1802

VICE PRESIDENT LAWLER: Do you accept that this is - we are in a grey area as to whether or not this is true in reply and it may be that Mr Taylor may need to put in some brief written note to which you would have an opportunity to reply about what you are now going to.

PN1803

MR BUCHANAN: I thought this was a true reply, your Honour, because - - -

PN1804

VICE PRESIDENT LAWLER: Okay, fine. No, that is fine.

PN1805

MR BUCHANAN: I have no doubt my learned friend will - - -

PN1806

VICE PRESIDENT LAWLER: I will wait - I will wait until Mr Taylor complains.

PN1807

MR BUCHANAN: Yes.

PN1808

VICE PRESIDENT LAWLER: Yes, we are going to volume 1.

PN1809

MR BUCHANAN: Volume 2, tab 7, paragraph 5175. This was the submission about the industry award providing a suitable safety net of conditions.

PN1810

VICE PRESIDENT LAWLER: Sorry, appeal book volume 2 or materials volume 2?

PN1811

MR BUCHANAN: I am sorry, your Honour. Appeal book volume 2.

PN1812

VICE PRESIDENT LAWLER: Yes. Tab?

PN1813

MR BUCHANAN: Tab 7.

PN1814

VICE PRESIDENT LAWLER: Yes.

PN1815

MR BUCHANAN: Paragraph 5175. It is not very far in. We have been concentrating on rates, of course, but the same issue of principle probably arises about conditions. Look 5175, my learned friend here is talking about the award providing a suitable safety net of conditions at the end of that paragraph. Then in 5176 the industry award, second line, has been simplified, etcetera, etcetera. At the end of that paragraph, clearly been simplified in accordance with item 51. Then her Honour:

PN1816

Mr Taylor, if there has been a failure to get to the end of the simplification process in relation to this award, well that is an impediment that all the other parties to the award in Queensland are suffering from ...(reads)... that are operating within the Commission.

PN1817

So at this point, the end of the case in the submissions, it did not appear to be important to her Honour that the simplification process may or may not have been finished, something which had been at issue between the parties. I am just trying to illustrate the proposition that we advanced earlier, namely that this case was ultimately decided in an area that was not the subject of debate. Not the subject of debate, not the subject of attention, not the subject of remark by her Honour.

PN1818

VICE PRESIDENT LAWLER: Mr Buchanan, I can well understand why you would feel, if I can put it in the vernacular, spived by the decision that we got.

PN1819

MR BUCHANAN: Yes.

PN1820

VICE PRESIDENT LAWLER: The questions whether or not is a matter of relevant appeal law. The issue was in truth raised firstly in relation to the references that Mr Taylor has taken us to.

PN1821

MR BUCHANAN: Yes.

PN1822

VICE PRESIDENT LAWLER: And secondly whether or not the last sentence of the decision discharged the obligation to provide procedural fairness.

PN1823

MR BUCHANAN: I am going to come to that, your Honour.

PN1824

VICE PRESIDENT LAWLER: I do not speak for the other members of the bench there but that is the way I see it at the moment.

PN1825

MR BUCHANAN: Yes. I am going to come to that, your Honour, as quickly as I can. On the way there though, I need to make one point about what was said that we were aware of the wage fixing principles and we did not take advantage of our opportunity to address them when we put submissions and particular passages were referred to. May I put those in context first and then I will come to your Honour's point. I should say if - neither of us have referred to this but the case - - -

PN1826

VICE PRESIDENT LAWLER: Mr Buchanan, I am sorry for interrupting you again but - - -

PN1827

MR BUCHANAN: That is all right, your Honour.

PN1828

VICE PRESIDENT LAWLER: - - - but I need to.

PN1829

MR BUCHANAN: Yes.

PN1830

VICE PRESIDENT LAWLER: What you are saying amounts to this is that there was a mistake on the part of APESMA in the way it was presenting its case because it was erroneously asserting that the award had been fully simplified and that there was a properly set safety net and properly fixed minimum wages conditions. So they were mistaken about that. That is utterly beside the point, is it not, as to whether or not that is a necessary requirement for the making of whatever award her Honour was going to make and the issue was whether or not, because of that discussion, that issue had been sufficiently ventilated that when the Bacon decision came down, her Honour was perfectly entitled to act upon it.

PN1831

Now, even though APESMA may have been mistaken, whatever that position may have been at the time of the hearing, it was certainly the correct position at the time her Honour made the decision.

PN1832

MR BUCHANAN: Her Honour was entitled to reopen the question. Certainly that is so.

PN1833

VICE PRESIDENT LAWLER: Okay. So why did not the last sentence of the decision give you the opportunity because it - why did not that - why is that not a matter that squarely arose out the Bacon decision?

PN1834

MR BUCHANAN: All right. Your Honour, let me come to that now before the other matter that I was going to refer to because - I need to make one, at the risk of - risk of being tedious about this, that the first award principle, which was the principle that everybody was concentrating on - - -

PN1835

VICE PRESIDENT LAWLER: Just one moment, Mr Buchanan. I am sorry.

PN1836

MR BUCHANAN: Yes, your Honour.

PN1837

VICE PRESIDENT LAWLER: Yes, sorry, Mr Buchanan.

PN1838

MR BUCHANAN: I just very quickly make this point again if I may before I answer your Honour's question. In determining the content of a first award, the Commission will have particular regard to relevant minimum wage rates and other awards, provided the rates have been adjusted in the previous national wage cases decisions that are consistent with the decision of the August 1989 national wage case. Our contention was, and it was not disputed by anybody at the time, the Technicians Award had been adjusted. So you could have regard to the rates in the Technicians Award.

PN1839

But that is the language that is used in the principle: have regard to. It does not say reflect mathematically, it does not say derive a relationship with the Metal Industry Award or the C10 award or anything of that kind. In a first award, the principles say that you must - you have regard to rates that have been properly fixed. It is true that there are decisions of the Commission and my learned friend - our learned friend referred it to one that say that you want to go through the same exercise. Now, leet me come, if I may, to your Honour's question.

PN1840

Her Honour's invitation is contained in paragraph 297. There are two difficulties with the proposition that - - -

PN1841

VICE PRESIDENT LAWLER: I suppose your first point is that that is not an adequate response that her Honour should have not merely, in some delphic fashion, given that opportunity but rather contacted you and said: I am going to re-list the matter for hearing to hear submissions about this - - -

PN1842

MR BUCHANAN: Yes, and I want to hear submissions in particular about the significance of the C10 rate. There are two difficulties with the proposition that this represented a real opportunity. The first is that the MNCs application had already been rejected and her Honour says that in paragraph 296: I have rejected MNCs application. The second is that the APESMA application had been accepted. Paragraph 296, second sentence - third sentence: I have decided to accept the APESMAs application.

PN1843

So the invitation in 297, which was to give consideration to any changes to the proposed order, may be considered appropriate. It has to be seen in that context. It was not an invitation to debate the foundation for her Honour's decision and particularly not an invitation to debate the rejection of the MNC application upon the two grounds that her Honour gave. Now, there was a somewhat related submission that was made that I - that first I had some difficulty following. I think our learned friend said paragraph 1231 to 1235 that we had an opportunity to argue for annualised rates in the industry award arising from Commissioner Bacon's decision.

PN1844

But I am afraid I do not understand that and that does not appear from her Honour's decision either. Now, before I deal again very briefly with the question of the rates, I should go back to the suggestion that we were aware of the wage fixing principles and we had an opportunity to deal with it. Neither of us have referred to this but the case that would be against us on this point is a case called Association of Architects in the High Court. I can't give your Honours the reference but no doubt it could be found.

PN1845

The principle for which it stands is that natural justice requires only that a party have a reasonable opportunity to meet an issue which arises in a case, not that they be afforded the best possible opportunity or something of that kind. It is a well enough - it is a well enough known principle.

PN1846

VICE PRESIDENT LAWLER: That is the common sense principle.

PN1847

MR BUCHANAN: Yes, quite. Quite, but we do not, I hope it is appreciated, put this on - at a high level of technicality. We think the position is, with respect, rather more fundamental than that. Our learned friend said at paragraph 1269 that we were aware of the wage fixing principles and he referred to, in the submissions - in the transcript paragraph 5513 which is in volume 2 at tab 7. I just need to put that passage in context. 5513 I had said to - I will come back to it in a moment.

PN1848

I need to go to a passage you referred to this morning, 5448 to 5450. This is all behind tab 7 in volume 2. 5448, there has been some reference to direct negotiations. It starts:

PN1849

It can't really simply be a matter for criticism if that is an objective the company wishes to continue pursuing.

PN1850

The second point that we wanted to make at this stage relates to first award principles. Under the first award principles, members of the Commission are obliged to have regard to relevant minimum rates in other awards and may I stress the word "minimum" and to award simplification criteria. Now, subject to what I am going to say shortly about minimum rates, we accept at a practical level, that it would be desirable to at least match the general standard in the industry award. The way to do that in a sensible and realistic fashion, notwithstanding all the detailed evidence about calculations and things of that kind, the way to do that is to apply the no disadvantage test, etcetera, etcetera.

PN1851

The detailed evidence about calculations is interesting but its real value is in establishing an overall level of magnitude. Your Honour, with respect, does not need to become too distracted by the specificity of the calculations which were made. The next point we want to make, your Honour, is that the industry award has got some real problems so far as the first award principle is concerned. It does not yet have properly expressed minimum rates and it has not been simplified in the real sense. It is useful in that regard to look at - that should be contrast with the P and E Award with which the industry award has often been associated.

PN1852

It is then that we handed to her Honour the folder which the appeal bench has as volume 2 of our authorities. We went through the material I took your Honours and Commissioner Deegan to in-chief about the structure of the P and E Award, the way in which it was modernised, the simplification of the definitions. We contrasted it with the structure in the staff award, until we get to paragraph 5512 where this was said:

PN1853

The rates of pay - I think I have been using the term supplementary payment. I shouldn't do that. I think that's a hangover from the past, isn't it, but the rates of pay your Honour has pages 6 and 7 ...(reads)... would properly be used to set the minimum rates in some other award.

PN1854

The effect of that submission was that if you are using the no disadvantage test, you are lowering the bar. Now, I know that somebody is going to suggest from all this that I am somehow digging my grave or something - - -

PN1855

VICE PRESIDENT LAWLER: The person that spoke - the person that spoke these words clearly knew all about the need to connect to the metals award.

PN1856

MR BUCHANAN: Well, I need to come back to that, your Honour. It is certainly true that the industry award needed to connect to the metals award. That is certainly true.

PN1857

SENIOR DEPUTY PRESIDENT KAUFMAN: Because there was not another award that had already made that connection?

PN1858

MR BUCHANAN: Because it was an existing award which had rates that had to be converted but we were asking for a new award and the first award principle does not say that the rates have to be expressed as minimum rates and what - minimums rates and what. You see, when you convert an award, the paid rates review decision had to do with paid rates awards originally. You had to express the rates as minimum rates properly fixed and a residual component which would not be adjusted. Well, I see your Honour, the Vice President, shaking your head but - - -

PN1859

VICE PRESIDENT LAWLER: Sorry. No, I am shaking - yes, I am shaking with the - my head not at the incorrectness of what you saying but at the complexity of the implications of what you are saying. I thought the whole point of the system was that whatever its defects, whatever be its defects, the insistence upon connection back to the C10 rate was a factor that led to - tended to lead towards consistency in award making across the Commission. If you are right and one can just forget about that when one is making first awards, that gives rise to the prospect of far less consistency because it becomes much more of a blancmange discretion and how long is the chancellor's foot? How long is the piece of string? That depends upon the particular view of the particular member.

PN1860

MR BUCHANAN: Let me, your Honour, draw attention to this, if I may. If you were dealing with a paid rates award and you expressed part of the rate as a minimum rate and the rest as a residual payment and you froze it, which is what originally the suggestion was that you would freeze and not adjust it for national wage movements - - -

PN1861

COMMISSIONER DEEGAN: That is what happens, is it not?

PN1862

MR BUCHANAN: That is one thing. Then you make a first award and I think Commissioner Deegan, on the last occasion, resisted the proposition that you would have to express some part of the award rate in the first award as a residual payment.

PN1863

COMMISSIONER DEEGAN: The residual payment is what you are paying currently in a paid rates award which is not the properly fixed minimum rate.

PN1864

MR BUCHANAN: Yes.

PN1865

COMMISSIONER DEEGAN: That is frozen.

PN1866

MR BUCHANAN: Well now, assume - - -

PN1867

COMMISSIONER DEEGAN: Right. So you - - -

PN1868

SENIOR DEPUTY PRESIDENT KAUFMAN: It is absorbed over time, is it not?

PN1869

MR BUCHANAN: Yes.

PN1870

COMMISSIONER DEEGAN: That is right. It is absorbed.

PN1871

MR BUCHANAN: Well now, assume you make a first award that has to pass - that has to meet the first award principle, that is, the rates in it have to be set by reference to rates in existing awards and you have, as a matter of practicality, to pass a no disadvantage test.

PN1872

SENIOR DEPUTY PRESIDENT KAUFMAN: Well, that raises a question whether it was the minimum rates that have to - - -

PN1873

MR BUCHANAN: Yes.

PN1874

SENIOR DEPUTY PRESIDENT KAUFMAN: - - - compare or the total rate.

PN1875

MR BUCHANAN: Part of the rate - - -

PN1876

VICE PRESIDENT LAWLER: But your point - your more fundamental point is the seven member Full Bench has set the words of the principle and we are within the words of the principle.

PN1877

MR TAYLOR: That is quite so.

PN1878

SENIOR DEPUTY PRESIDENT KAUFMAN: It does not make any reference to connection to C10.

PN1879

MR BUCHANAN: That is exactly so, your Honour, and I do not want to resile from that primary position. But assume that you express, as her Honour thought we should, some part of the rate by reference to the C10 rate, and you express it as a minimum rate, what do we do with the balance?

PN1880

COMMISSIONER DEEGAN: What balance? There should not be a balance in a first award.

PN1881

MR BUCHANAN: Well, there - the first award won't pass the no disadvantage test.

PN1882

COMMISSIONER DEEGAN: There is no no disadvantage test attached to a first award. The only place you have a no disadvantage test is in AWAs or certified agreements. If you can find a first award that has got a residual in it, I will be very surprised. A first award is a new rate. You do not have award - an award there. If you rope into an existing award, yes, there is a residual because the minimum rates adjustment has left a residual but a first award by its very nature should only have a minimum rate.

PN1883

MR BUCHANAN: Well, I think that is the point that Senior Deputy President Kaufman made on the last occasion. Perhaps we have been too distracted by considerations of equity but if that is the right approach, then all that is necessary is to fix a minimum rate and that is even easier than the exercise I suggested in our reply submissions. But it would not stand in a very equitable relationship for the industry award and equity was the focus of attention below.

PN1884

COMMISSIONER DEEGAN: But by right, a first award, having regard to other awards, should have come up with something very like the minimum rate in the industry award. Now, I know Mr Taylor raised a question about they would be worried about it if you were roped into an industry award and the residual did not apply. I do not know whether the residual applied or not. However, in the first award, there is no place for a residual and I fail to see where you could get one form.

PN1885

MR BUCHANAN: Well, Commissioner, that would be a solution and the result would be that the rate in the award sought by Moranbah North would be apparently much less than the rate in the Technicians Award.

PN1886

COMMISSIONER DEEGAN: But what it would not be would be a properly fixed minimum rate.

PN1887

MR BUCHANAN: Well, it would be properly fixed if you simply selected the C10 classification and built everything around it.

PN1888

COMMISSIONER DEEGAN: It is not that easy just simply selecting a C10 classification and building everything else around it.

PN1889

MR BUCHANAN: Well, with respect, it is lucidly easily in this case because you have a basic clerical level that fits very neatly with what Commissioner Bacon said was the basic clerical level in the industry award.

PN1890

COMMISSIONER DEEGAN: Well, that might be your submission, Mr Buchanan, but that is not what it looked like to me.

PN1891

MR BUCHANAN: You have an under-manager that fits very neatly with what Commissioner Bacon said was the level for an under-manager and you have a level in between. That is tremendously easy but the rates are supposed to be part of the overall safety net of awards. An award is not a safety net. The system of awards as a whole is the safety net.

PN1892

COMMISSIONER DEEGAN: Every award is supposed to be a safety net, Mr Buchanan.

PN1893

MR BUCHANAN: Well, I beg to differ, Commissioner. The system of awards is expressed to be the safety net but this award had to take its place in a sensible and realistic fashion within the system of awards. It had to take its place, bearing in mind that it bore no relationship on anybody's view to rates that were actually paid. Nevertheless, it had to take its place in a way that was with infidelity with the first award principle. That was the primary obligation and if there was a conflict between that principle and other principles, our submission is that the first award principle is the one that deserved most attention.

PN1894

Even, if I might say so with the greatest of respect, even amongst the members of the appeal bench, the application of the linkage with the Metal Industry Award has thrown up apparently differing outcomes. It certainly would throw up on one view that has been discussed with us, an outcome that would have the award rate set at a very low level. If the obligation - and it might tend against the idea that you could rope into an industry award that contained residual payments. How could you make a first award which amounted to being roped into an award with a residual payment?

PN1895

That would not appear to comply with the pure version of the first award principle because you should not have residual payments in a first award. You should only have minimum rates and they should be fixed with an enterprise focus. Well, if that is so then her Honour's decision carries that fundamental flaw within it also. Now, I was going, your Honours, but I think I will resist the temptation, I was going to attempt to come back to the relationship with Commissioner Bacon's fixation of rates because it is clear that the position fits rather neatly.

PN1896

It was not a matter that was debated before her Honour because on nobody's case did the occasion arise to do so. It has been debated here. We rather hoped that, if I might so with respect, that the scope of the debate, notwithstanding that it might have revealed errors of approach of various kinds, might have yielded the - might have furnished the material to provide a solution without the need for a further hearing. The matter has been fully ventilated and in our submission, the appeal bench is in a position to decide it as a matter of principle.

PN1897

But if that is not so and without intending any disrespect to her Honour, it would be, in our submission, better if a member of the appeal bench that has heard the submissions on the appeal and been privy to the debate were to have the task of any further step that was necessary in the proceedings because it is clear that the debate here has gone forward - I do not mean anybody, Commissioner. It is clear that the debate here has gone forward in a fashion that it did not before her Honour. I think that is as much as I want to weary the Commission with the submissions in reply. Than you, your Honour.

PN1898

VICE PRESIDENT LAWLER: Very good.

PN1899

MR TAYLOR: Your Honours, Commissioner, the only thing that I wanted to ask leave to do, my friend took, at the outset of his submission in reply, to some transcript of cross-examination of Ms Bolger regarding the association's willingness or otherwise to invite - to have annualised rates. I could not, in the time that my friend was on his feet, find the evidence reference but there is another - some other evidence, references, at least one other which is relevant to that issue. If I could have leave to - - -

PN1900

VICE PRESIDENT LAWLER: You do not have any problem with that, Mr Buchanan?

PN1901

MR BUCHANAN: No, but my point was a very limited one, your Honour. It related to an enterprise specific award. Whatever my learned friend finds about a general preparedness to discuss annualised salaries won't bear upon that point of law.

PN1902

VICE PRESIDENT LAWLER: I do not see any problem with transcript references being supplied.

PN1903

MR BUCHANAN: No. No, your Honour.

PN1904

VICE PRESIDENT LAWLER: Thank you, Mr Taylor. Needless to say, we reserve our decision.

ADJOURNED INDEFINITELY [3.30pm]