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T11513

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.23 application for award or variation of award

Construction, Forestry, Mining and Energy Union, Tasmanian Branch
(T11513 of 2004)

HENTY GOLD MINE ENTERPRISE AWARD

 

COMMISSIONER T J ABEY

HOBART, 16 September 2004

New award - union coverage - interest - eligibility rules - public interest - orderly conduct of industrial relations in Tasmania - application refused

REASONS FOR DECISION

[1] On 25 May 2004, an application was lodged by the Construction, Forestry, Mining and Energy Union, Tasmanian Branch (CFMEU), pursuant to Section 23 of the Industrial Relations Act 1984, for the making of the Henty Gold Mine Enterprise Award.

[2] This matter was listed for hearing on 20 and 21 July 2004 in Ulverstone, and 5, 6 and 13 August 2004 in Hobart. Mr A Bukarica appeared for the CFMEU, Mr R Flanagan sought and was granted leave to intervene on behalf of The Australian Workers' Union, Tasmania Branch (AWU), and Mr W Fitzgerald, of the Australian Mines and Metals Association (Incorporated) (AMMA), appeared for Placerdome Asia Pacific trading as Henty Gold Limited.

Brief Overview of the Issues

[3] Henty Gold Mine commenced operations in 1996. It consists of an underground mine with associated surface milling facilities. Ownership of the mine has changed on several occasions, with the current owner, Placerdome Pacific, taking over in 2002.

[4] Since inception employment arrangements have been regulated by a registered Part 1VA Enterprise Agreement. There have been five such agreements with the current agreement1 due to expire on 18 September 2004. Employees have been represented in the negotiation process by an elected employee committee.

[5] The mine employs approximately 65 operative employees in underground and surface operations.

[6] The AWU has had a modest presence at the work site for a number of years. Evidence from the AWU witnesses indicates that membership recruitment had been difficult, largely as a consequence of relatively favourable conditions of employment prevailing at the mine. The AWU is not a party to the enterprise agreement. The AWU has however been recognised by the employer as having "right of entry" and there was evidence of representations made by the AWU on behalf of individual members.

[7] In September 2002 eight employees joined the CFMEU. This had grown to 11, perhaps 12, at the time of hearing. The employees were predominantly located within the surface mill operations.

[8] The CFMEU established a formal lodge structure at the mine in February 2004. The relevant CFMEU official, Mr Hinds, held a number of "strategy" meetings with members between July 2003 and May 2004. The union did not however make representations to the employer, preferring instead to build a "power base" first. The evidence of the mine manager, Mr Daly, was that he was unaware of a CFMEU presence on site until 10 May 2004. According to the evidence attempts by the CFMEU to gain "right of entry" were denied by the employer.

[9] At some point in time (probably early May 2004) the employer wrote to employees offering individual common law contracts, and indicating that the enterprise agreement would not be renewed following expiry in September 2004. This action sparked a chain of events.

[10] On 18 May the CFMEU lodged a s.29(1) dispute notification asserting that "the Enterprise Agreement process adopted by the Company to the agreement was not appropriate and fair", and further, "the agreement is being made under duress".

[11] Particulars provided subsequently by the CFMEU indicated that the major issue was the proposed replacement of the agreement by individual contracts.

[12] On 25 May the CFMEU lodged an application for an enterprise award to cover the Henty operations.

[13] The s.29 dispute was listed for a conciliation conference on 26 May 2004. The application for an enterprise award had also been referred to the Commission as presently constituted, and, not surprisingly, became inextricably involved in the dispute proceedings.

[14] The conciliation conference failed to settle the dispute. As a consequence the instant application was set down for hearing on 20 and 21 July 2004 for the determination of the following matters:

  • "An application foreshadowed by the employer asking that the Commission refrain from further hearing pending the determination of certain application/s which may be lodged under the Commonwealth Act.
  • Whether or not it is appropriate that an enterprise award be made binding on the Henty Gold Mine operation.
  • Whether the CFMEU can demonstrate an "interest" in any award so made."

[15] On a date between 20 and 28 May 2004 an AWU member at Henty contacted Mr Flanagan of the AWU seeking advice as to the common law contract he had been invited to sign.

[16] Following discussions amongst AWU officials the union decided to once again approach the employer, through AMMA, with the view of negotiating a collective agreement. Similar approaches in the past had apparently been rejected.

[17] On this occasion the employer expressed a willingness to explore this avenue. It follows that a completed s.55 Agreement covering the totality of operations at Henty was filed in the Commission on 11 June 2004.2 This lodgement coincided with an aggressive and apparently successful membership recruitment campaign on the Henty site by AWU officials.

[18] The s.55 agreement was listed for hearing on 20 July 2004.

[19] Because of the interrelationship between the two matters and the commonality of evidence, the parties agreed that the two matters should be heard jointly, on the understanding that separate decisions would result.

Conduct of the Application

[20] The application was heard over five sitting days. Final written submissions from the CFMEU were lodged with the Commission on 24 August 2004.

[21] Evidence was taken from the following witnesses:

  • For the CFMEU:

  • Brenton Roy Best; member of State Parliament since 1996, prior to that an organiser with the then FED&FA (subsequently CFMEU) with responsibility for certain mine sites.
  • Scott Andrew Mclean; State Secretary of the CFMEU, Tasmanian Branch.
  • Christopher Gregory Hinds; State President of the CFMEU, Tasmanian Branch, and a full-time official of the union since June 2003, with responsibilities in the mining and timber industries.

    For the Employer:

  • Stephen Phillip Knott; Chief Executive Officer of Australian Mines and Metals Association (Inc) (AMMA) since 1997. Held a number of positions in industrial relations in Tasmania and Western Australia for AMMA and the HEC since 1989.
  • Matthew Daly; General Manager of Henty Gold Mine since 2002. Prior to that held various senior management roles in Tasmania and interstate.

    For the AWU:

  • Ian Charles Jones; Union Organiser for AWU, with responsibility for west coast mines. (Note: evidence taken by telephone hook-up).
  • Ian Anthony Wakefield; Secretary of the AWU, Tasmanian Branch for the past three and a half years, prior to that an AWU organiser for seven years, and prior to that a mining employee with Pasminco Rosebery for 15 years.
  • Robert John Flanagan; Industrial Officer with the AWU, Tasmanian Branch since 1998.
  • William Lowe; Organiser for the AWU from 1982 to 1995 with responsibilities in the mining industry.

The Application

[22] The application seeks the creation of an award titled the Henty Gold Mine Enterprise Award.

[23] Clause 7 - Application of Award, reads:

"7.1 This Award applies to the Henty Gold Mine, Queenstown, Tasmania.

7.2 The enterprise for which this Award is made is the mining and mineral processing business known as the Henty Gold Mine.

7.3 This Award replaces and supersedes the Goldfields (Tasmania) Limited, Henty Gold Mine Enterprise Agreement 2001, registered under Part IVA of the Industrial Relations Act 1984."

[24] Clause 15 - Salaries, specifies salary levels for process technicians. In the case of miners there is an expression (leave reserved).

[25] Mr Hinds said that the intention of the application was to cover all classifications, including underground miners. At the time of lodgement there had not been the opportunity to consult with underground miners and hence the leave reserved clause.3 Mr McLean said that the CFMEU had no objection to the AWU or any other union with the requisite eligibility being made a party to the award. The AWU had, however, previously rejected attempts to discuss a joint approach to Henty Gold.4

CFMEU Presence at Henty

[26] Mr Hinds said that, in May 2002, a Henty worker, acting on behalf of a group of mill operators, approached the CFMEU concerning membership. They were apparently dissatisfied with the Part IVA agreement, were not members of the AWU and had no interest in joining the AWU.

[27] Mr Hinds forwarded membership forms by post. Eight employees joined the CFMEU in September 2002.

[28] Mr Hinds held a number of meetings (off-site) with members between July 2003 and May 2004. Mr Hinds described these as "strategy meetings", aimed at establishing a "power base ... before we attempted to talk to the company".

[29] In February 2004 the Henty lodge was established, with officers duly elected.

[30] In March 2004 an attempt to exercise "right of entry" was rejected by the employer.

[31] At the time of hearing the CFMEU had 12 members, although it seems likely that one was in the process of resigning and joining the AWU. With the possible exception of one, all CFMEU members are employed in the mill. There are 20 employees in total employed in the mill.

[32] The proposed introduction of individual common law contracts in May 2004 was the catalyst for firstly, the dispute notification, and shortly thereafter, the application for an enterprise award.

AWU Presence at Henty

[33] According to Mr Jones, membership of the AWU had fluctuated between seven and 12 over a number of years. Mr Wakefield said the range was more likely to have been 10 to 12. Both officials said that recruitment had always been difficult because the workforce was generally satisfied with the conditions of employment prevailing on the site.

[34] Some four years ago the then mine operator had denied AWU officials right of entry. That had subsequently been resolved and an agreed protocol concerning site visits was put in place. Mr Jones said he visited the site every six to eight weeks.

[35] The AWU has never been a party to the registered enterprise agreement. The union did over recent years make a number of approaches to the Company, through AMMA, seeking a collective agreement, with the AWU as a party. These approaches had hitherto been rejected.

[36] There was evidence that the AWU had pursued a number of matters with the Company in relation to individual members. One of these matters5 occupied some seven sitting days before the Commission at first instance, with a subsequent appeal involving the retention of counsel.

[37] The membership of the AWU increased significantly following a concerted membership campaign during May/June 2004. The following evidence of Mr Wakefield is to point:6

"And the history of relations between the AWU and the company have not been brilliant have they?---They have always been civil. There was one problem that we had when we were denied the right of entry but they have always been civil, cordial, no problems, no animosity apart from that.

Yes. But they haven't always opened the door to you, have they?---We were allowed on site. We have always been allowed on site after the demarcation, and prior to that we were actually given access as well.

I see. But there was never any invitation from the company to participate in the industrial agreement on site was there?---No.

However, that changes dramatically in June, is that right, this year?---I don't know about dramatically. It's changed.

Yes. Well, let us just look at the situation in May. In May 2004 the AWU has got 10 or 12 members?---Mm.

Not party to the agreement. That is correct?---That's right, yes.

Two weeks later you have got 40, 50 members?---Yes.

And you have negotiated an agreement with the employer. That is correct?---Yes.

Is that unconnected to the CFMEU's activities on site, Mr Wakefield?---I think so, yes.

Totally coincidental?---I think so. I think the catalyst for all was the employment arrangements they wanted to enter into. It scared the shit out of the blokes.

Mr Wakefield, you are under oath. Okay?---I'm not lying.

The position is, I put to you, that the catalyst for your increased membership on the site was the presence of the CFMEU and the application by the CFMEU?---No, definitely not.

I put to you that the company would not have negotiated with the AWU had there not been some fear that the CFMEU might succeed in its current application?---No. The problem the company had at the time was that miners were refusing to sign the bloody contracts."

[38] According to the evidence the AWU membership at the time of hearing was between 40 and 45, of which seven were employed in the mill.

History of Coverage in Metalliferous Mining prior to 1992

[39] In 1992 the then FEDFA amalgamated with a number of unions to form the CFMEU. For the purpose of this decision, there is no distinction between the two entities.

[40] This application is inextricably bound up in the broader question involving representational rights in the metalliferous mining industry taken as a whole, and not just limited to the Henty site. The AWU contends, that with the exception of the trades based unions (the AMWU and CEPU), it has exclusive rights of representation. It follows that an understanding of the historical perspective of union coverage in this sector is an important consideration.

[41] This analysis also involves questions of interpretation. For example, it was the undisputed position of all parties that the CFMEU had exclusive coverage of the coal mining industry. The AWU and AMMA were adamant that coal mining was quite separate from the metalliferous mining industry. Mr Hinds, on the other hand, saw no distinction between coal and metalliferous mining.7 There is also the question of stand-alone smelters (Zinifex Hobart and TEMCO), whereby both unions have coexisted for many years (albeit not without some difficulties from time to time).

[42] The evidence of Mr Lowe presented the following picture in relation to coverage in the pre 1992 era:

  • Anchor mine - 100% AWU membership.
  • Mersey tin mine - 100% AWU membership.
  • Kara tungsten mine - 100% AWU membership.
  • Port Latta - 45 to 50 AWU members - "... fairly nasty situation developed when half a dozen guys on the ship loading facility joined up with the FEDFA".
  • Rosebery - initially 500 AWU members and 40 FEDFA. This later dropped to 370 AWU and 20 FEDFA (winder and loco drivers).
  • Renison tin mine - total AWU membership for a long period. Subsequently changed as a consequence of a major "turf war" involving the FEDFA.
  • Mt Lyell copper - virtually 100% AWU coverage. One or two FEDFA members employed as winch drivers.
  • Savage River - coverage by TWU and FEDFA. No AWU presence. "There was some deal done in the '60s between some politicians and some union officials to allow the FEDFA to have some credibility within that part of the State."

[43] The broad picture of union coverage was not contested to any serious extent by CFMEU witnesses.

[44] Mr Lowe described the then relationship between the FEDFA and AWU as "fairly hostile". He went on to say:8

"Okay. Now, during your time as an organiser, did the competition as it is or was between the AWU and the FEDFA ever lead to any altercations between AWU officials and FEDFA officials?---It did. On many occasions between officials, between members, there was dust ups, wrestling matches, insults, a whole range of things used to happen, with a fair amount of animosity not only between the officials but the members as well. They - I don't - I never encouraged violence between members and the officials but it used to happen."

[45] Mr Lowe said that following the turf war at Renison, the AWU retaliated by signing up members in the mill at Savage River.9

[46] Mr Knott, referring to the industrial relations climate at Savage River at the time, said:10

"Prior to that time when Mr Lowe enrolled those persons from the FEDFA, are you aware of the history at Savage River Mines where members of the FEDFA would go on strike if an AWU official went on site?---There were many examples of what would be seen in a 2004 environment of ridiculous industrial relations stoppages and actions. And the specific example that you may be alluding to, I'm not aware of. But I'm aware that there was industrial relation stoppages over overtime, manning arrangements, and membership arrangements at given points of time during the mine's life."

The s.118A Order

[47] In 1992 Moore VP considered applications from both the AWU and FEDFA lodged pursuant to s.118A of the Industrial Relations Act 1988 (Commonwealth). These applications concerned the rights to represent under the Commonwealth Act the industrial interests of employees in the metalliferous mining industry in South Australia and Tasmania.11

[48] In his decision dated 5 November 1992, Moore VP noted that following inspections and hearings in Tasmania, he was informed that the AWU and FEDFA had agreed upon terms of settlement of the applications. There was not however agreement "regarding whether or not rule change pursuant to s.118A(5) should apply." The Vice President noted:

"'What was intended by this aspect of the agreement appeared to be to give the parties an opportunity to make submissions whether alterations should be made to the eligibility rules of FEDFA in relation to the employees to whom the agreement applies. This arises because in relation to a number of mines in Tasmania and South Australia, FEDFA agreed, in a memorandum of agreement, to 'vacate its claim on employees' at those mines and 'release' its membership at the site 'to join the AWU'."

[49] The Vice President further noted that the ACTU had designated the AWU as a Principal union in the metalliferous mining industry and the CFMEU/FEDFA as a significant union. Moore VP observed:

"(iii) Notwithstanding that under that system of classification the status of significant union appears to carry with it the right to recruit membership (at least in 'its area of existing coverage') FEDFA and CFMEU agreed to arrange and facilitate the transfer of its membership in the industry in Tasmania and South Australia (with some exceptions) to AWU.

(iv) specific arrangements were referred to in the agreement which I have already referred to involving FEDFA 'vacating its claims' and 'releasing' members.

(v) The effect of what I have referred to in paragraphs (iii) and (iv) was the subject of correspondence dated 15 June between ACTU and AWU and FEDFA in which it is said that 'current individual members of CFMEU and FEDFA may seek to exercise the right to remain members'. This correspondence was tendered by FEDFA and it clearly sought to rely on it when tendered as forming part of the overall agreement.

(vi) Counsel for FEDFA indicated that apart from the qualification referred to in the correspondence of 15 June, FEDFA was forgoing the right to represent these employees under the IR Act and was forgoing the right to further recruit at the establishments to which the agreement beneficially applied to AWU (see transcript page 229.7)."

[50] Moore VP concluded with the following observation:

"Even if AWU and FEDFA have a common and clear understanding of the effect of the agreement, I cannot ignore what I earlier described as the aspirations of the CFMEU. While demarcation issues may have been resolved between the organisations concerned at this point in time in relation to Tasmania and most areas of contention in South Australia, I do not accept that there is necessarily any certainty about this continuing. Mining is an industry of national significance and, in my view, any question of the rationalisation of union coverage in that industry cannot be left to be determined by contests between registered organisations, seeking to recruit disaffected members of another organisation on the one hand and seeking to retain them on the other, at the workplace at either the mines the subject of these orders or more generally at mines in the various states of the Commonwealth. Such a contest could lead to significant disputes that potentially could disrupt production or at least destabilise industrial relations at the workplace."

[51] The matter was referred to the designated Presidential Member under s.118A(5).

[52] In a decision dated 25 March 1994, Moore VP, in his capacity as the designated Presidential Member, altered the Rules of the CFMEU to give effect to the 1992 s.118A Orders. The rule alteration was expressed in the following terms:12

"Schedule 1

By adding a new sub-rule (I) of Rule 2 - Constitution - as follows:

"(I) Without limiting the generality of sub-rules (A), (B), (C), (D) and (F) above and without being limited thereby, nothing in sub-rule (E) above shall make eligible for membership of the Union any person employed by the following employers in metalliferous mining in Tasmania or South Australia:

Aberfoyle Resources Ltd Beaconsfield Gold Mines Ltd Mt Lyell Mining & Railway Co. Ltd Pasminco Mining Renison Ltd Tasmania Mines Ltd Western Mining Corporation Adelaide Chemical Company Boral Resources (SA) Pty Ltd Penrice Soda Products Pty Ltd Mt Gunson Mines Ltd Commercial Minerals (SA) Pty Ltd"

[53] Whilst there was some debate in the instant matter as to whether the rule change applied to named companies, designated mine sites or both, the practical effect of this decision was to render employees on certain mine sites ineligible for membership of the CFMEU.

[54] The only mine site of any substance not named in the order was that of Savage River. It was submitted by the AWU, supported by AMMA, that this reflected the conscious agreement of the parties at the time. Traditionally Savage River had not had an AWU presence, and it was likely that the mine would, in the near future, close. In the circumstances it was agreed to allow the status quo to continue. This submission was not contested by the CFMEU.

[55] Importantly Henty did not exist at the time of the s.118A Order. Mr Bukarica submitted that the effect of the rule change was limited to designated mine sites. It did not exclude the CFMEU from the metalliferous mining industry in Tasmania as a geographical area.

[56] Questioned on the representational role of the CFMEU post s.118A Order, Mr McLean said:13

"But in terms of a representational role, that is making awards and agreements and raising workplace issues, would you concede that the CFMEU have, since the Moore decision of the early '90s effectively vacated the field and left it to the AWU?---Yes."

[57] The evidence indicates that with certain limited exceptions at Savage River and Beaconsfield, the intent of the s.118A Order has been largely complied with. The CFMEU progressively withdrew from the industry, albeit not without some resistance from certain individuals who remained committed to the CFMEU, notwithstanding the rule change.

[58] Prior to 1990 the FEDFA had an interest in the Mining (Lead-Zinc) Award applicable to the Rosebery mine. This award was replaced by the Pasminco Rosebery (Mining) Award on 8 August 1990. Initially the FEDFA was cited in the Parties and Persons Bound clause of the new award. However on 12 July 1993 the CFMEU wrote to the Commission seeking to withdraw the CFMEU interest in the award. The withdrawal of the CFMEU was effected by a Correction Order notified in the Government Gazette on 13 April 1994 relating to an earlier Order of Gozzi C dated 28 February 1994.14

[59] Mr Hinds said that he did not agree with the application to withdraw from the award but at the time was not in a position to influence the decision. However Mr McLean said, as Joint State Secretary at the time, Mr Cordwell had the authority to make the application.15

Union Coverage Subsequent to 1992

[60] From the evidence it is clear that the metalliferous mining industry in Tasmania, and elsewhere, underwent quite massive structural changes during the early 1990s. This resulted in a very significant reduction in the total number employed coupled with a move towards direct employment arrangements. This combination had a dramatic negative impact on the level of unionisation, both in terms of total numbers and union membership density.

[61] It would seem that at some point in the late 1990s the AWU embarked on an aggressive campaign to increase the level of union membership and replace direct employment arrangements with collective awards and/or agreements.

[62] There was much evidence presented as to the efforts of the AWU in both an industrial and political sense to pursue the interests of the metalliferous mining industry workers. At the forefront of these efforts was the hours of work campaign, and changes to the Industrial Relations Act in relation to long service leave applications and transmission of business provisions. Extensive evidence was also produced as to the industrial representation of the AWU on behalf of members. At the time of hearing the following position presented as to each mine site:

Beaconsfield Gold Mine:

30 to 40 members, established delegate structure in place, in the process of concluding a collective agreement.

Australian Bulk Minerals:

140 members, established delegate structure in place, registered collective agreement.

Zinifex Rosebery:

140 members, established delegate structure, registered collective agreement and enterprise award.

Copper Mines of Tasmania:

30 members, established delegate structure, registered collective agreement.

Barminco:

80 members, established delegate structure, registered collective agreement.

Tasmania Mines:

16 members, established delegate structure.

Henty Gold Mine:

40 to 45 members, established delegate structure, collective agreement pending registration.

[63] Both Mr McLean and Mr Hinds said it was the policy of the CFMEU to target non-unionists for membership. Mr McLean said:16

"However, I do wish to comment on the general approach the CFMEU has adopted to recruitment in the metalliferous mining sector in this State. The CFMEU has adopted an approach of deliberately targeting non-union areas for recruitment. We have learnt the lessons of the early to mid 1990's and the results that normally arise when unions compete for already existing union members. It is my experience that as a result of poaching and aggressive anti-union strategies by employers in Tasmania that the West Coast mining industry has become largely non-union. I am concerned about the growth in individual contracts, sham contractor arrangements and safety standards in the industry. It is my belief that only a concerted grass-roots recruiting effort has any chance of reversing the position that currently exists in the industry."

[64] The evidence shows that the CFMEU has substantial membership in the stand-alone smelters of Zinifex Hobart (300 members) and TEMCO (50 members). Mr Hinds acknowledged that CFMEU membership at TEMCO had expanded beyond their traditional coverage following a turf war in the mid nineties. There was also evidence that the growth in membership at Zinifex Hobart had been at the expense of AWU membership.

[65] The CFMEU have eight members at Savage River (ABM). However Mr Hinds acknowledged that the CFMEU could not directly represent the industrial interests of these members, nor participate in collective agreement negotiations.

[66] The CFMEU also have a small number of members at Beaconsfield Gold although it subsequently transpired that these individuals were not financial members.

Union Coverage Interstate

[67] From the evidence it is clear that the AWU is the predominant union in the metalliferous mining industry outside Tasmania. There are however exceptions to this general rule. These exceptions include the following:

  • Weipa bauxite mine. A s.118A Order precluding FEDFA presence was revoked in light of substantial CFMEU presence and a dramatic decline in AWU membership.17
  • Broken Hill. Longstanding CFMEU/FEDFA presence through the Barrier Industrial Council registered under State Legislation.
  • BHP Billiton Iron Ore. CFMEU involvement through Pilbara Mineworkers Union.

Position of the Employer

[68] The employer vigorously opposed the CFMEU application.

[69] Mr Daly said that the Company, notwithstanding the Part 1VA agreement, had always recognised the AWU as the appropriate union to represent employees' industrial interests in the event that issues arose. Further, he was aware that the AWU had approached the Company, through AMMA, on a number of occasions seeking negotiations on a s.55 agreement to replace the existing agreement when it expired.

[70] Notwithstanding this approach, Henty had opted to offer individual contracts of employment rather than renewing the current agreement.

[71] Following a further approach from the AWU the Company agreed to go down the s.55 path for two reasons:

  • The Company recognised the AWU both in Tasmania and nationally as the appropriate union to represent employees in the metalliferous mining industry, and
  • The Company became aware that the Metalliferous Mining and Processing Award was unlikely to be finalised at the time the Part 1VA agreement expired.

[72] Mr Daly denied that the s.55 agreement was a device aimed at keeping the CFMEU off the site.

[73] The Company has refused to recognise the CFMEU as the appropriate union because the CFMEU have had no representative role over the past 10 years.

Metalliferous Mining and Processing Award

[74] This award came into effect on 2 May 1996.18

[75] The award consisted of three clauses only, Title, Scope and Operative Date.

[76] The Scope clause reads as follows:

"This award is established in respect of the industry of metalliferous mining, dredging, sluicing or other means of obtaining metallic minerals and/or the treatment of those minerals.

PROVIDED that until the making of this award has been finalised in respect to wage rates and conditions of employment or until this proviso has been deleted employers falling within the scope of this award, shall, where appropriate classifications appear therein, observe the Pasminco Rosebery (Mining) Award in all respects."

[77] In T Nos 6728, 6811 and 6900 of 1997, the AMMA, AMWU and AWU respectively were named as parties with an interest in the award.

[78] In T8247 of 1999 the CFMEU sought an interest in this award. The matter came before Imlach C on 15 April 1999 whereupon the CFMEU withdrew the application. Mr Benson, for the CFMEU said:

"MR BENSON: Mr Commissioner, in relation to the application for award interest that was put in by the CFMEU, there were certain concerns that we had at that place in time that led us to put that application in. Most concerns as far as we are concerned at this place in time have been addressed. We have reached a memorandum of understanding between the AWU and AMMA. We have a signed agreement to that effect and given that that agreement will be read onto transcript, the CFMEU is prepared to remove its application for award interest and we state that we reserve our right to seek award interest at any time in the future should we consider it to be appropriate, sir."

[79] Correspondence from the AWU to the Commission dated 12 April 1999 said in part:

"As indicated in other proceedings related to this Award, the AWU strongly opposes the CFMEU participating in this Award."

[80] The terms of the memorandum referred to by Mr Benson, was expressed in the following terms:

"Parties

  • Australian Mines & Metals Association Inc (AMMA)
  • Construction, Forestry, Mining and Energy Union, Tasmanian Branch (CFMEU)
  • The Australian Workers' Union, Tasmania Branch (AWU)
  • Australian Manufacturing Workers Union (AMWU)
  • Communications Electrical Plumbing Union (CEPU)

    Recitals

  • The CFMEU have made an application (T8247 of 1999) to seek an interest in the Metalliferous Mining and Processing Award.
  • The CFMEU have agreed to withdraw the application on the conditions set out in this Memorandum.
  • The other parties also agree to allow the withdrawal of the application.

    Agreement

    The parties have agreed to the withdrawal of the application on the understanding that this memorandum will be placed on record at a hearing of the Tasmanian Industrial Commission on 15th April 1999 and the CFMEU interest in the Goliath Cement Enterprise Award, the TEMCO Award and the Pasminco Hobart Smelter Award is retained. It is not intended that the Metalliferous Mining and Processing Award cover the above Awards.

    Signed CFMEU
    AWU
    AMMA
    AMWU
    CEPU
    Dated 15th April 1999"

[81] It would seem that little progress was made in furthering the completion of this award until an application for an interpretation was lodged by the AMWU in 2002. In a decision dated 9 September 2002, Leary P said:19

"I am of the view, having considered the history of the MMP award and the unchallenged decisions related to its creation, that it is not an award of this Commission and therefore has no application to any party.

...

I am not satisfied that a document which claims to be an award, but which does not contain relevant and applicable wage rates and conditions other than, in this case, a reference to another award in which the prescribed conditions are unlikely, subject to satisfying certain criteria, to have any application to employers and employees in the industry, can be an appropriate or enforceable award for employers and employees within its scope."

[82] Mr Bukarica submitted that given the President's observations, no reliance can be placed on the "purported withdrawal of the CFMEU's interest in the MPP". That, he said, was a matter yet to be determined.

[83] The President went on to convene a conference to determine the future course of this award, which was subsequently referred to the Commission as presently constituted. Since March 2003 there have been eight conferences under the chairmanship of the Commission and presumably numerous other meetings between the parties. Substantial progress has been made but the award is not finalised at the time of this decision.

Refrain From Further Hearing

[84] The first of the threshold issues is whether the Commission should refrain from hearing the present application due to a foreshadowed application under the Workplace Relations Act 1996 (WRA) by, or on behalf of, Henty Gold.

[85] No such application has materialised. It follows that the answer to this question is 'No'.

Determination of Interest

[86] For an organisation to be granted an interest in an award it must satisfy the Commission that the requirements of s.63(10)(c) have been met. This section reads:

"(10) After the Registrar registers an organization under this Part -

...

(c) that Commissioner shall determine which awards the organization has an interest in by satisfying himself that -

(i) the membership of the organization consists of or includes members who are employers or employees in the industry or occupation to which the awards stated in its application pursuant to subsection (1)(a)(vii) relate or who are State employees to whom those awards relate;

(ii) that membership is consistent with the organization's rules or constitution a copy of which has been lodged with the Registrar pursuant to subsection (1); and

(iii) the organization being granted an interest in an award or awards would not prejudice the orderly conduct of industrial relations in Tasmania."

[87] I deal with each sub-section in turn.

Membership

[88] There was uncontested evidence that the CFMEU has at least 11 members who are employees of the employer to which the proposed enterprise award relates.

[89] I therefore find that the requirements of s.63(10)(c)(i) have been met.

Is the Membership Consistent with the Organisation's Rules?

[90] Mr Bukarica submitted that the constitutional eligibility of the CFMEU derives from the eligibility rule of the FEDFA, which is retained in the current CFMEU eligibility rule.

[91] Rule 2(E)(a) reads:

"(E) Without limiting the generality of the foregoing and without being limited thereby the Union shall consist of:-

(a) An unlimited number of all classes of engine drivers, firemen, crane drivers, excavator drivers, pump attendants, pile drivers, motor drivers or attendants, greasers, cleaners, trimmers and other workers assisting in and about the work incidental to any engine, boiler or machinery connected with the production or utilisation of power on land or any harbour or river, and boiler attendants not generating steam for power purposes and such persons as have been elected or appointed as paid officers of the Union or a branch of the Union or whilst financial members of the organisation are elected as representatives of any working-class organisation to which the Union or a branch thereof is affiliated, or as a working class member of Parliament. (emphasis added)"

[92] This, Mr Bukarica submitted, is a "classic craft or occupation based eligibility rule" whereby the "industry" and "occupation" described are identical and eligibility is defined by work performed by the employee, rather than the industry of the employer. The industry/occupation is related to the operation of "engines", broadly defined, Mr Bukarica submitted.

[93] Mr Bukarica submitted that the broad, occupational nature of the rule was confirmed by the High Court in Re Coldham and Others; ex parte the Australian Workers' Union.20

[94] The "craft" basis of the rule was not contested by either the AWU or the employer. The AWU, however, submitted that the CFMEU had failed to produce evidence that the work performed by CFMEU members at Henty was consistent with the rule.

[95] This was not so. The evidence of Mr Knott (PN 2452 to 2460), and Mr Daly (PN2883 to 2895) clearly goes to the type of job classifications found at Henty. At the very least the Commission is satisfied that some, perhaps all of the CFMEU members, are process technicians. There was no suggestion that this class of employee did not fall within the eligibility rule.

[96] I am satisfied that the CFMEU membership is consistent with the organisation's rules and the requirements of s.63(10)(c)(ii) have been met.

Would the Grant of an Interest in the Proposed Award not Prejudice the Orderly Conduct of Industrial Relations In Tasmania?

[97] In essence this consideration embraces the public interest requirements of s.36 of the Act, and in particular s.36(2)(c), which requires the Commission, before making an award, to:

"... take into account any other matter considered by the Commission to be relevant to the public interest."

[98] Not surprisingly, there is no statutory guidance as to what factors should be considered under this broad "public interest" heading.

[99] Having reviewed the evidence and the submissions, I now turn to the considerations which I consider should be uppermost in determining the question which is at the heart of this application. That is, should an award be made?

Competition v Conveniently Belong

[100] There seems little doubt that prior to the advent of the Commonwealth WRA in 1996, the registration of organisations was founded in the notion that competition between unions for membership was both wasteful and potentially disruptive. Hence the development of the widely accepted and understood concept of "conveniently belong".

[101] It is clear that this was uppermost in the mind of Moore VP when he said:21

"Such a contest could lead to significant disputes that potentially could disrupt production or at least destabilise industrial relations at the workplace."

[102] Mr Bukarica argued that this notion has been largely overturned, and that the scheme of the WRA now encourages competition between unions. Mr Bukarica relied on an AIRC decision in Re CPSU, The Community and Public Sector Union and National Tertiary Education Industry Union in which the Full Bench observed:22

"In our view, the provisions of the WR Act depart substantially from the provisions of the antecedent schemes that were the pillars of what we have accepted to be the foundational principle of avoiding overlapping coverage and consequential competition between organisations. We consider, that among other purposes, it is now a purpose of the WR Act to allow for competition between organisations; and, to discourage primarily, if not only, that kind of competition which manifests as a demarcation dispute. That purpose may properly be said to be consistent with encouraging competition between organisations. Although we have expressed our conclusions in different language to that used by Williams SDP, it follows that we do not consider that he was in error in the conclusions he expressed to similar effect."

[103] The same Full Bench noted that the previous s.118A had been effectively eliminated for the purpose of structuring an organisation's representational rights. Such an order may now only be made if there is both a demarcation dispute and conduct restricting the performance of work or causing damage to the business of an employer.

[104] The requirements for registration under the State Act are found at s.63(1), (3), (4) and (5). In essence rules that are registered under the Commonwealth Act are to be accepted as satisfying the requirements set out in s.63(3).

[105] Notwithstanding, a discretion remains with the Registrar to refuse registration "if an organisation to which the members of the association might conveniently belong already exists".

[106] It is a reasonable assumption that the expression "conveniently belong" was borrowed from the Commonwealth Act as it then was (ie in 1984).

[107] The determination of an "interest" in an award is determined by the Commission, as distinct from the Registrar, pursuant to s.63(10)(c) of the Act.

[108] Section 63(11) requires the Commission, before making a determination under s.63(10)(c), to notify all other organisations with an interest in the award and give them an opportunity to be heard in respect of the determination.

[109] Unlike the Commonwealth Act, the State Act has effectively remained unchanged in regard to registration/interest process since the Act was proclaimed in 1984.

[110] I have reached the following conclusions relevant to this application:

1. Under the Commonwealth Act, there has been a distinct change in emphasis from a position whereby competition between unions was discouraged, to a situation whereby the Act at least allows for, and perhaps even encourages, competition.

2. The scheme of the State Act shows a bias towards discouraging competition between unions. That position remains unchanged.

3. Under the Commonwealth Act, representational rights are largely determined by an organisation's eligibility rules. Under the State Act representational rights are determined by the existence of an interest in an award.

4. It does not necessarily follow that satisfaction of the eligibility criteria will automatically lead to a grant of an interest in an award. That is a separate question to be determined on the facts and circumstances presented.

Relationship Between the AWU and CFMEU

[111] There seems little doubt that the relationship between the two unions in the metalliferous mining industry prior to the early nineties was openly hostile. Of far greater importance is the relationship, as it currently exists. Mr McLean said in evidence:23

"If the CFMEU were granted this application how would you view that in terms of competition for membership with the AWU? What would - how would you see that panning out?---I'm sure that we would come to some arrangement with the AWU as we have done in a number of other industries.

And wouldn't you be competing directly for members in mill and mine? What sort of arrangement could you possibly come to if there is just simply a direct competition?---Well, there are a number - as I said, there are a number of arrangements that we have reached with the AWU and a number of other organisations, in fact, in relation to union membership. I mean, if you're talking about open warfare in relation to recruiting members, then that most certainly wouldn't happen, and the reason that that wouldn't happen is because, not only is that not good for the unions but it's also not good for the employer, because at the end of the day fighting fights about union membership is not what it's about.

Doesn't this - but doesn't this application, if successful, potentially open that up?---There are a number of mechanisms within the Trade Union Movement that would resolve that issue, not the least of which - - - 

So are you asking Henty to place their faith in the ACTU and others to resolve those issues for them?---No, but the CFMEU and the AWU are both mature organisations and we have very few demarcation disputes that I'm aware of, in this State anyway.

When you were involved in Savage back in the '90s, can I say that there were quite a few demarcation disputes and there was a lot of aggression between the various unions?---In the '90s that would have been the case.

Yes, and what has changed it now?---People mature, Acts change, people change, more than anything personalities change and people start to understand that there is a place for everybody."

...

"Just to put in practical terms, and I know you are a practical man, if the AWU Agreement which is lodged with this Commission is approved, and the CFMEU Award is approved, the subject of these proceedings, it is simply a turf war, isn't it? We are going to compete for the same members?---There will be - there won't be a turf war, as I said to you before, we would sit down with the senior people from the AWU and we would resolve the issue.

And what if you are unable to resolve it?---The likelihood of that happening is almost non-existent.

And why do you say that so categorically?---Because we have a good working relationship with the AWU, as we do with a number of other unions, and we would always - one thing we always do is respect one another.

Right?---So it would be resolved."

[112] Wheras the CFMEU is prepared to co-exist with the AWU in terms of membership and award coverage, the position of the AWU was one of uncompromising opposition. Mr Flanagan said:24

"Okay. I think we all knew what you meant but that might be better understood. So it is specifically so. So in terms of Henty future negotiations, if the CFMEU award were to be granted, obviously AWU would seek an interest in that. How would you see - what is your view of any future negotiations with two unions competing for the same coverage?---It is going to make it messy. I mean the CFMEU, and the FEDFA before it, have always portrayed the AWU as a right wing boss' union run by shearers and in return the AWU sees the CFMEU as deceitful as the name it gives itself in that the name does not genuinely reflect, in our view, the industries that that organisation covers. So what I am saying is there's going to be rivalry and each union will be attempting to gain the loyalty of those employees."

[113] There was evidence that the CFMEU had recruited members at both Savage River (ABM) and Beaconsfield, notwithstanding the absence of representational rights.

[114] There was evidence that in relation to TEMCO and Zinifex Hobart, sites where there is joint coverage, that the CFMEU has expanded membership beyond its traditional areas.

[115] Mr Hinds said he believed the CFMEU could cover underground miners at Henty as well as mill technicians. He described the CFMEU relationship with the AWU as cordial, but not necessarily co-operative.25

[116] Mr Best said:26

"What I am wondering is whether there were demarcation difficulties because of the overlapping of the membership and disputes from time to time about the rights of - or about which organisation would have the right to represent the industrial interest of a particular class of employee?---Certainly there would be sometimes disagreement and sometimes you'd feel aggrieved because arrangements would be entered into, for example, where the CFMEU, or the FEDFA, or whatever would have a claim on a site allowance, that was allowable back then. And then what would happen is another union would negotiate something different so that would create concern and so sometimes, as a result of that, at times, not always the case, but at times there could be differences in that there would be concern about, you know, how things might be settled and that sort of thing, given what people's representation might be."

[117] Mr Flanagan said:27

"Can you recall - and I can't recall the exact date myself - but around about 2000 when Pasminco Hobart, as it then was, was negotiating a new agreement and the CFMEU were the only union not to sign off on it?---Yes, I do.

Can you elaborate on those circumstances?---At that time there was a lot of tension between the AWU and the CFMEU. The AWU was involved in a campaign of actively attempting to get back the members that we believed the CFMEU had stolen from us. There was a disagreement between the AWU and the CFMEU about what the wages outcome should have been from that agreement. The CFMEU were holding out for more. Ultimately that held the process up by a period of 12 months and the wages outcome, which we eventually got, was the same as the wages outcome that the other three unions had signed up to 12 months ago."

[118] Having regard for the totality of the evidence I have reached the following conclusions, in the event that the application was granted:

  • A return to traditional demarcation disputes in terms of one union claiming certain work to the exclusion of others is highly unlikely. Those days are behind us.
  • The environment in terms of membership recruitment would inevitably be competitive. I am unable to conclude that this would necessarily manifest itself in terms of disruption and disaffection, but the possibility is certainly there.
  • There is a strong possibility that joint coverage might prove to be a frustration and negative force in collective negotiations.

Other Considerations

[119] As to the general approach to public interest considerations, Mr Bukarica submitted "that there is no general license for the Commission to restrict or inhibit the representation rights of already registered organisations via the award making power. Rather the Commission has the ability to decline an award interest application in specific circumstances where there are compelling public interest reasons for doing so".

[120] In large measure I accept that this is the correct approach.

[121] I also accept Mr Bukarica's submission that it is not the role of the Commission to determine which organisation has the "best product". However the converse of this is that a history of neglect and inadequate representation may well constitute compelling public interest grounds to open up to competition an area which had hitherto been the exclusive province of one organisation. Indeed this was the approach adopted by Munro J in Weipa.

[122] On the evidence the AWU has demonstrated an impressive record of representation, both at an industrial and political level, in the metalliferous mining sector since the difficult period of the early nineties. The evidence of Messrs Best and McLean as to the de-unionisation of the industry was either misplaced or out of date.

[123] I am equally certain, that given the opportunity, the CFMEU would also provide effective representation in the industry.

[124] I make no finding as to which union might provide the more effective representation. That is not the role of the Commission. I do however find that there is no evidence of neglect on the part of the AWU.

[125] I have some difficulty in accepting that the employer, in entering into the s.55 agreement with the AWU, was not motivated, at least in part, by a desire to keep the CFMEU off the site. It is not surprising that an employer, given the choice, would generally prefer to deal with one union rather than two covering the same group of employees. It is also not surprising that an employer might choose to deal with a union with a long history of representation in the industry. It is quite legitimate for both employers and unions to have a preference for one form of industrial regulation over another, and within the law, to pursue strategies to achieve those objectives. I accept Mr Bukarica's submission that the employer does not have a right to "pick the other team". The employer does however have a right to express a preference.

[126] Ultimately it is the integrity of the agreement, particularly the consultative process, which is of greater importance than the timing of the negotiations.

[127] Mr Bukarica relied on a decision of Gozzi C in relation to the Roadmakers Award28 as representing the correct approach in determining questions of award interest. In that matter the CFMEU was granted an interest despite the opposition of the AWU-FIME. I take no issue with the approach of Gozzi C. However I am of the view that the facts in that matter can be distinguished from the instant application.

[128] Firstly, the FEDFA was previously party to the award prior to the amalgamation. Secondly there was no evidence at all going to the question of the orderly conduct of industrial relations in Tasmania. As Gozzi C said, it was "purely speculative" on the part of AWU-FIME that the orderly conduct of industrial relations would in some way be prejudiced.

[129] I do not accept Mr Bukarica's submission that the Metalliferous Mining and Processing Award should be disregarded in light of Leary P's decision in the interpretation case. It is true that the President found that the award was not capable of legal enforcement. But it does not follow that the earlier decisions to create the award and determine questions of interest, were simply set aside as a consequence. Indeed there is no power under s.49 to set aside an award.

[130] There are other considerations which I consider to have compelling public interest import. They are:

[131] The original s.118A Order had as its genesis an agreement, presumably brokered by the ACTU. That agreement saw the CFMEU effectively withdraw from all significant mine sites, with the quid pro quo apparently being an ability to maintain coverage at Savage River, at least for the life of the mine as it then was.

[132] The CFMEU voluntarily withdrew its interest from the Pasminco Rosebery (Mining) Award.

[133] The CFMEU did not pursue an interest in the Metalliferous Mining and Processing Award in light of a memorandum of understanding designed to protect its interests in other areas.

[134] There is no evidence of any instance whereby the CFMEU has pursued the industrial interests (as distinct from provision of advice) of a member or members in the metalliferous mining sector in the past 10 years.

[135] The combination of these factors strongly indicates that the CFMEU had voluntarily vacated the metalliferous mining sector in return for concessions in other areas. Such arrangements should not lightly be overturned.

[136] Having regard for the totality of the evidence I am not satisfied that the granting of the application for an enterprise award, with an attendant interest for the CFMEU, would not prejudice the orderly conduct of industrial relations in Tasmania.

[137] Accordingly, the application for an enterprise award is refused.

 

Tim Abey
COMMISSIONER

Appearances:
Mr A Bukarica for the Construction, Forestry, Mining and Energy Union, Tasmanian Branch
Mr R Flanagan intervening on behalf of The Australian Workers' Union, Tasmania Branch
Mr W Fitzgerald, of Australian Mines and Metals Association (Incorporated), for Placerdome Asia Pacific trading as Henty Gold Limited

Date and Place of Hearing:
2004
July 20, 21
Ulverstone
August 5, 6, 13
Hobart

1 TE1181 of 2001
2 T11540 of 2004
3 Transcript PN 1640
4 Exhibit CFMEU 3
5 T9601 of 2001
6 Transcript PN 3783 to 3795
7 Transcript PN 1305
8 Transcript PN 4212
9 Transcript PN 4236
10 Transcript PN 2543
11 Dec 1228/92 S Print K5290
12 Dec 571/94 S print L2471
13 Transcript PN 836
14 T4818 of 1994
15 Transcript PN 794
16 Exhibit CFMEU 3
17 PR900546 Munro J 22 January 2001
18 T6140 of 1996
19 T Nos 10058 and 10178 of 2002
20 [1984] HCA 62 (19 October 1984)
21 Print K5290
22 Print S9084 Ross VP, Munro J, Simmonds C 11 August 2000
23 Transcript PN 1003 and following
24 Transcript PN 4082
25 Transcript PN 1814
26 Transcript PN 489
27 Transcript PN 4069-4070
28 T4190 of 1992