T10893
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Barminco Pty Ltd and The Australian Workers' Union, Tasmania Branch
Appeal against a decision handed down by Commissioner Shelley arising out of T10668 of 2003 - Appeal grounds 3, 5 and 12 upheld - new Order issued PREAMBLE Deputy President Watling, as he then was, was a member of the Full Bench for the hearing of this appeal. That Full Bench reached a unanimous decision. Deputy President Watling resigned from the Commission at short notice and prior to the decision being issued. Accordingly the Full Bench was re-constituted following the appointment of Commissioner McAlpine who has read all of the transcript from the hearing below, and the appeal proceedings, and perused all of the documents and authorities tendered by the parties in each matter. He has reached the same decision as the original Full Bench. REASONS FOR DECISION [1] In Matter T10668 of 2003 Commissioner Shelley determined that Barminco Pty Ltd "increase the Base Wage Rate and the Incentive Rates referred to in Clause 12 - Remuneration - of the Barminco (Copper Mines of Tasmania) Mining Production Enterprise Agreement 2000 (the Agreement) by the amount of 4.9% and pay the increase to Mining Industry Employees as referred to in the Agreement, such increase to apply from the first full pay period on or after 14 January, 2003." [2] The order of the Commissioner was in settlement of a dispute filed by the Australian Workers' Union, Tasmania Branch (AWU) pursuant to s.29(1) of the Industrial Relations Act 1984 (the Act). The dispute notification alleged that Barminco Pty Ltd (the appellant in this matter) had failed to "place appropriate weight on general industry and community wage movements when conducting a wages review pursuant to clause 12.3" of the Barminco (Copper Mines of Tasmania) Mining Production Enterprise Agreement 2000 (the agreement). [3] The agreement was registered pursuant to s.55 of the Act and the parties to the agreement are the appellant and the AWU. The agreement has application to those employees of the appellant employed at the Mt Lyell operations of Copper Mines of Tasmania, Queenstown, Tasmania and engaged as "Mining Industry Employees." [4] Sub-clause 12.3 of the agreement provides:
[5] The Grievance Resolution Procedure of the agreement is found at clause 7 and provides:
[6] The company has appealed against the decision of the Commissioner pursuant to s.70(1)(b)(ii) of the Act. [7] The grounds of appeal are:
[8] The AWU did not take issue with the bringing of an appeal against orders made pursuant to s.31 but said "...that in parallel if you like, the Commission was also exercising powers - permissive powers of arbitration as opposed to statutory powers under the referral under s.29, those permissive powers arising under the grievance procedure of the award."1 Further it was submitted that the Act does not provide for an appeal against the exercise of the Commission's permissive arbitral powers being a power the parties to an agreement have permitted of the Commission.2 [9] In addressing the grounds of appeal it is difficult to avoid some repetition as a number of those grounds deal with the same or similar issues. Appeal ground 1: [10] The order to vary the base rate in clause 12.1 of the Agreement was made without jurisdiction. [11] The agreement provides at clause 12.1 a base wage rate, expressed as an hourly rate, which can be varied in accord with clause 12.3. At clause 12.2.2(b) the agreement provides for an incentive rate based on "defined productivity measures, such as measured tonnes hauled, linear metres advanced, ground support installed etc. and may also include a component based on attendance." Clause 12.3 states that "all rates will be reviewed ....." The Commissioner's order varied both the hourly base wage rates and the hourly incentive rates. [12] The appellant submitted that s.59(1) of the Act prescribes how an industrial agreement, registered pursuant to s.55, can be varied. [13] S.59(1) provides:
[14] S.59(2) provides:
[15] The appellant submitted that neither party to the agreement had made application pursuant to s.59 of the Act and that no such application was before the Commissioner. [16] It was also submitted that s.61P provides that "The parties to a registered enterprise agreement, by mutual consent, may make a further agreement to vary the... agreement." [17] The appellant submitted that ss.59 and 61P are "specific powers to vary agreements - they form a code (exhaustive prescription) on varying agreements and limit the general powers in s.31 to `by order in writing direct that a thing be done or action taken' so that an order cannot be made under s.31 varying an agreement." [18] The application before the Commissioner was made pursuant to s.29(1) of the Act and alleged that the company had failed to "place appropriate weight on general industry and community wage movements when conducting a wages review pursuant to clause 12.3 of the Industrial Agreement." The details of the dispute were attached to the s.29 notification and said:
[19] During proceedings on 4 March, 2003, the AWU clarified its s.29 application submitting that "We are seeking that the Commission determine that rates of pay be increased in accordance with the provisions of 12.3 - and the quantum of that increase is 9.8%."3 [20] At that time Mr Fitzgerald, representing the appellant in the proceedings below, argued that the outcome sought by the AWU was not in accordance with clause 12.3. He presented a lengthy submission arguing that the Commission did not have jurisdiction to do what it was that the AWU was seeking. [21] The Commissioner determined that she had the appropriate jurisdiction to hear and settle a dispute lodged pursuant to s.29 of the Act but said that "the question of what order is made, if any, is a matter for me to determine after, and only after, I have afforded the parties at the hearing a reasonable opportunity to make relevant submissions; after I have considered the views expressed; and after I have considered whether anything is required to be done, or whether any action is required to be taken to prevent or settle that dispute. This is clearly stated in s.31(1) of the Act." [22] S.31 provides:
[23] S.31(2) provides:
[24] The appellant submitted that the maxim of statutory interpretation, "generalia specialibus non derogant" applied in this matter. "Generalia specialibus non derogant" means that where an act deals specifically with a subject a general provision in that act does not override the specific provision. Accordingly it was submitted that the general provision of s.31 does not override the specific provision in s.59. Therefore the agreement cannot be varied by application of s.31 and the order of the Commissioner is invalid as no jurisdiction exists for its making or its enforcement. [25] The respondent to the appeal, the AWU, argued that the appellant's submission that the order of the Commissioner "purported to increase the base rates and incentive rates" was not correct. It argued that the order was not a variation to the agreement nor was it an award either by its express terms or by implication. The order was made under s.31 in settlement of an industrial dispute filed pursuant to s.29(1) of the Act, or alternatively it was an order made by reference to the `permissive' arbitral power as conferred by step 4 of the Grievance Resolution Procedure of the agreement. [26] It was submitted that s.19(2)(a) of the Act allowed the Commission in determining a matter arising from an industrial dispute to "...make...an...order..." however in this matter the order does not refer to any variation to the agreement and as such is within power. The AWU argued that there is no inconsistency with s.31(2) of the Act. [27] The AWU submitted that the power exercised by the Commissioner was the power of private, or permissive, arbitration given by the parties to the Commission by reference to the agreement grievance procedure. The AWU referred to the decision of a Full Bench of the Australian Industrial Relations Commission (AIRC) in Qantas Flight Catering Limited v Australian Municipal, Administrative, Clerical and Services Union [Print PR939695]. [28] That decision relied on the findings of the High Court in the Private Arbitration Case (2001) [203 CLR 645] which were conveniently summarised by a Full Bench of the AIRC in Finance Sector Union of Australia v GIO Australia Limited [Print PR928618] in the following terms:
[29] The AWU submitted that the Commissioner was exercising a power of private arbitration in parallel with her statutory power. She did not make an award or create any new obligation for the appellant, that obligation, by application of the principles of construction, existed by reference to clause 12.3 which required a wages review and, where justified, a wage increase. FINDING [30] S.61P provides for variation to an enterprise agreement by consent, we note that the agreement the subject of this appeal is an industrial agreement registered pursuant to s.55 of the Act. S.61P has no application to an industrial agreement and is not relevant to our considerations. [31] S.59(2) requires an application for variation to an agreement, registered pursuant to s.55 of the Act, to be lodged by "the parties" to the agreement. Accordingly this application is not an application properly lodged to vary an agreement as such application would need to be an application by both parties to the agreement. [32] S.31 is a general power available for the settlement of industrial disputes lodged pursuant to s.29 of the Act. The application before the Commissioner was an application lodged pursuant to s.29 and the Commissioner, in settlement of the dispute, issued an order as provided by s.31. [33] The dispute before the Commissioner was also pursued by reference to the Grievance Resolution Procedure of the agreement. The dispute notification and attachment thereto refer to that procedure. [34] That procedure provides that the Commission can conciliate and, if necessary, arbitrate to settle a dispute or grievance. It is our view that such a procedure gives the Commission a power of private arbitration in the same way as the High Court has determined in the Private Arbitration Case. The Act under which the agreement was registered prescribes no facility for a variation to an agreement other than by consent or by an application of the parties to that agreement. [35] No request was made by the parties to the agreement for private arbitration pursuant to s.61(1). [36] It seems to us therefore that if the Commission is not exercising a power of private arbitration by application of the grievance procedure in the agreement, and absent any agreement between the parties as to the application of any other provision in the Act, that s.31 is the general power available for settlement of a dispute between the parties. [37] To find otherwise would remove the ability of the Commission to settle a dispute between parties subject to an agreement in the absence of an agreed process. [38] S.41 of the Act refers to the formulation of a grievance or dispute settlement procedure for insertion into awards and industrial agreements, and, other than by a s.29 application the only dispute procedure is that found in the agreement. [39] In this matter there is an agreed process being the grievance procedure in the agreement which provides the Commission with the power of private arbitration. [40] S.29(1) provides the general power for the Commission to hear matters in respect to an "industrial dispute." The definition of industrial dispute means a matter in relation to an "industrial matter." [41] The definition of "industrial matter" includes reference to "a breach of an award or registered agreement" together with a matter pertaining to "the mode, terms and conditions of employment." [42] The s.29 application before the Commissioner was in respect to a breach of an industrial agreement and a wage demand and as such is within jurisdiction. Basically the matter before the Commissioner was an industrial dispute about a wage demand and was not limited to the alleged breach of the agreement. The `industrial matter' related to "the mode, terms and conditions of employment..." and as such was within power. [43] We address later in this decision whether the order of the Commissioner was an appropriate resolution to the industrial dispute. [44] However we are of the view that the order made by the Commissioner was within jurisdiction and reject appeal ground 1. Appeal ground 2 [45] The Commissioner made a legal error and made a mistake of fact when she concluded at Decision 172 (paragraph) that the Agreement provides for wage movements, and that "no obligation beyond those they already agreed to upon making the agreement is being imposed on the Company." [46] It was submitted by the appellant that clause 12.3 did not provide for wage movements, it did no more than provide for a review and Mr Wakefield of the AWU agreed that the clause did not mean an increase would follow, he said that there was no agreement about what the clause actually meant but that "we have learnt from this mistake."4 [47] The appellant said that as it had not agreed to an increase the order of the Commissioner did impose a new obligation. [48] The AWU submitted that paragraph 172 of the Commissioner's decision correctly stated that the agreement did provide for wage movements and therefore no obligation beyond those already agreed was being imposed on the appellant. [49] It was argued by the AWU that the Commissioner was required to "form a view of the proper construction of the relevant terms of the Agreement" and submitted that the proper construction of the terms imposed upon the company an obligation to conduct annual wage reviews and to conduct such reviews in a specific way, further, the Commissioner correctly determined that the company had not complied with its obligation. FINDING [50] We disagree with the Commissioner that the agreement provides for a wage movement but are of the view that the reference to a "rates review" and "general industry and community wage movements" found in clause 12.3, implies an increase in the rates as prescribed. Mr Wakefield of the AWU testified that clause 12.3 does not guarantee a wage increase. [51] Further it would defy credibility if the employee parties to the agreement accepted that the review would not result in some increase in the wage rates. There is no other provision for an increase over the three year life of the agreement. [52] Whilst clause 12.3 does not implicitly impose an obligation for a wage movement it does imply the possibility of a wage movement as a result of a wage review. Accordingly we do not agree that the Commissioner has created an obligation not already provided by the application of clause 12.3. [53] We reject appeal ground 2. Appeal ground 3 [54] The Decision and Order are unreasonable and unjust as no increase in rates can be justified having regard to the productivity, efficiency and financial performance of Barminco at Mt Lyell. [55] The Commissioner found at para 141 that "...in considering whether there should be any movement in wage rates, up or down, the parties shall give equal weight to both factors...." [56] It was argued by the appellant that the Commissioner had made an error of law by implying a term of equal weighting into subclause 12.3. Chesire Fifoot and Furmston's Law of Contract, Fourteenth Edition 2001 at pages 157-158 provides:
[57] The appellant referred to the evidence of Mr Wakefield and submitted that he had accepted that the information provided by the appellant as part of the review demonstrated that it was losing money. It was Mr Wakefield's evidence that he thought that the appellant had placed too much weight on the fact that it was losing money. [58] The Commissioner acknowledged that the appellant had been forced to make a number of redundancies and said at para 80 "The contract was based on 8% profitability. Instead they were losing 6 1/2%." [59] At para 155 she said "I also accept the evidence of the respondent in respect of the productivity, efficiency and financial performance of Barminco at Mt Lyell. I accept that the operation has sustained a loss during a substantial part of the period during which the agreement has been in place." [60] It was submitted by the appellant that Mr Wakefield testified that there was no `extensive discussion' about what subclause 12.3 actually meant or what it was intended to deliver in terms of wage increases, or even if there would be any increase. Accordingly the Commissioner erred by making a presumption as to the intention of the parties. Further the term implied by the Commissioner varied the agreement and is a legal error and its application is a mistake of fact both of which are fatal to her decision and order. It was submitted by the appellant that it seemed that the Commissioner's main criticism of the review process was that the company did not give equal weight to each factor prescribed in subclause 12.3. That is not what the agreement provides according to the appellant and Mr Wakefield was unable to present any evidence otherwise. [61] Mr Wakefield's evidence revealed that the AWU understood and accepted that the company was "actually losing money", nevertheless he believed that the company had put more weight on that fact and so was unwilling to pay any wage increase in accord with subclause 12.3. [62] The appellant said that even though the Commissioner made a mistake of fact in applying equal weight to both factors her final conclusion was also in error. Whilst the loss incurred was 6.5%, this equated to an outcome 14.5% below the company's expectations. On this basis the result should have been a reduction of 2.35% in rates of pay not an increase of 4.9%. [63] The AWU argued that the company had failed to take into account or `have regard to' all of the factors specified in subclause 12.3. It was submitted that the term `have regard to' had been addressed in a number of authorities. In the decision of a Full Bench of the Federal Court in Edwards v Giudice and Others (1999) [169 ALR 89, at 92] it was said that "...the use of the words `have regard to' signify that each must be treated as a matter of significance in the decision-making process...." A Full Bench of the Federal Court in Minister for Immigration and Ethnic Affairs v Baker (1997) [45 ALR 136] said "The words `having regard to' and the disjunctive `or' must not be given the effect of requiring a blinkered decision to be made on the basis of criminal conduct considered in isolation." In Friends of Hinchinbrook v Minister for Environment and Others (No.3) (1997) [77 FCR 153] (Friends of Hinchinbrook) a Full Bench of the Federal Court said "There is always a difficulty when a statute provides that a decision-maker shall `have regard to' a particular matter or series of matters. While it is clear that what is meant is that the decision-maker must apply his mind to the matter or matters stipulated, and `take them into account and give weight to them', cf R v Hunt Ex parte Lean Investments Pty Ltd (1979)180 CLR 322 at 329-330; 25 ALR 497 at 504 per Mason J, it leaves it open what weight or influence each of the particular matters is to have in the decision to be made: cf Windeyer J in Giris Pty Ltd v Commissioner of Taxation (Cth) (1969) 119 CLR 365 at 384." In Australian Consumer & Competition Commission v Leelee Pty Ltd (1999) [FCA 112] (Leelee) "The expression, `have regard to' is a common one. It means no more than to take into account or to consider: The Macquarie Concise Dictionary, 2ed His Honour Justice Mansfield said: 831. `A' v Pelekanakis (1999) FCA 236 concerned, inter alia, the obligation of the Minister for Immigration and Multicultural Affairs under s.54 of the Migration Act 1966 (Cth) to have regard to all the information in the application for a visa when considering that application. Weinberg J said at par 58: `The expression `have regard to' must, in context, mean `take into account.' It does not, of course, require the recipient of the information to accept it as true, to act upon it, or even ultimately to be influenced by it - Hoare v The Queen (1989) 167 CLR 348 at 365. It does, however, require the recipient of the information to consider it properly in the context of performing the statutory duty imposed upon him, and to which the information to be considered is directed..." [64] The Commissioner found at para 136 that:
[65] And further at para 141:
[66] It was submitted by the AWU that it was incorrect that the Commissioner implied, as a term of the agreement, that there be equal weighting to each of the factors for consideration. The AWU said that she did no more than give the words found in the agreement their ordinary and natural meaning. To this end reference was made to a number of authorities amongst which is a decision of the Federal Court in Construction, Forestry, Mining and Energy Union v Mount Thorley Operations Pty Ltd (1997) [79 FCR 96] (Moore J.) which discussed a provision of an award in respect to the Reduction of Hands clause. His Honour found that the words in the clause should have their ordinary meaning being consistent with the language used, further he said that the construction contended by the company in that matter "would effectively deprive the clause of any utility at all." [67] In Ambulance Service Victoria (South Western Region) v Australian Liquor Hospitality and Miscellaneous Workers Union (1998) [80 IR 275] Northrop J referred to a decision of Madgwick J in Kucks v CSR Ltd (1996) [66 IR 182] where His Honour expressed the legal principles for interpretation as follows:
[68] The Federal Court in City of Wanneroo v Holmes (1989) [30 IR 379] said "Indeed it has been said that a tribunal interpreting an award must attribute to the words used their true meaning even if satisfied that so construed they would not carry out the intention of the award making authority - Re Health Administration Corporation; Re Public Hospital Nurses (State) Award (1985) 12 IR 122; Rogers Meat Co Pty Ltd v Howarth (1960) AR(NSW) 291; Re Government Railways and Tramways (Engineers etc) Award (1928) AR 53 at 58 (Cantor J)." [69] Interpretation was again addressed in Short v Hercus Pty Ltd (1993) [40 FCR 5121, at 518] where it was said that "The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken......" [70] Whilst the rules of interpretation are well known to the parties and to the tribunal, their relevance in respect to this matter are questionable; the issue which the appellant raised is that the Commissioner applied to the provisions of subclause 12.3 an intent that did not exist; not that she misinterpreted the provision. FINDING [71] The Commissioner found that equal weight should be applied to each of the factors prescribed in clause 12.3 and as such implied a process not necessarily prescribed therein. The words in clause 12.3 are limited and provide little assistance as to their application other than that the parties are to `have regard to' certain factors in the process of their review. [72] The decision of the Federal Court in Friends of Hinchinbrook states:
[73] In Leelee it was said "The expression, `have regard to' is a common one. It means no more than to take into account or to consider...." [74] The authorities generally suggest that when considering the phrase `have regard to' a decision maker is required to take certain matters into account but the phrase does not prescribe the weight or influence to be applied. [75] To apply the natural and ordinary meaning to the words in clause 12.3 cannot support a finding that each factor should be applied equal weight or influence for the purpose of determining an outcome. [76] The evidence of Mr Wakefield supports the view that the appellant did have regard to all of the information the AWU provided and he testified that he thought that "they did take it into account."5 [77] The Commissioner fell into error by applying an equal arithmetic weighting to both factors and then dividing the community wage movement in half. The Company approach which attempts to justify a 2.35% wage reduction is equally flawed. This approach depends entirely on the level of desired financial return which is determined unilaterally by the Company. This simplistic arithmetic approach would only have relevance if the parties to the Agreement jointly owned the financial targets with wage movements directly linked to financial performance. The economic factors presented by the company are matters to be properly taken into account, but it is not possible on the construction of Clause 12.3 to apply a precise arithmetic weighting to each. [78] The Commissioner was not necessarily wrong in concluding that a wage increase was justified. The formulaic approach she adopted was not however reasonably open to her. [79] It is not an unreasonable expectation that a wage movement would follow a review as provided by clause 12.3. It would be unlikely that the Commission would approve any agreement that did not include some provision for a wage increase for the term of its duration and there was no contest that the community wage movement for the period under review was 9.8%. [80] The employees, party to this agreement, despite the expectation of an increase, have been denied any movement due to what appears to be the result of the appellant's contractual arrangements. Such a result was not within the control of, nor was it caused by any action of the employees. [81] We uphold appeal ground 3, the Commissioner erred by determining that an increase of 4.9% could be justified. A proper consideration of the factors for review would not result in an increase of 4.9%. Appeal ground 4 [82] The Commissioner gave insufficient weight to the financial position of Barminco at Mt Lyell. [83] The financial position of the appellant was a consideration that the Commissioner took into account as a matter `to have regard to' by reference to subclause 12.3, however, the appellant argued, had the Commissioner correctly applied that factor it should have resulted in a reduction in wages. Further it was submitted that the AWU did not contest the fact that the company faced a `parlous financial position.' [84] The AWU generally relied on its submission in respect to appeal ground 3 but submitted that the conclusion reached by the Commissioner in settlement of the dispute involved an exercise of discretion. The principles enunciated in the House v King (1936) [55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan] are relevant to an appeal against an exercise of discretion. That decision of the High Court states:
[85] It was submitted by the AWU that the determination of the industrial dispute was not simply a mathematical exercise as is being suggested by the appellant. The Commissioner did take into account the financial position of the appellant as was required by subclause 12.3 so it cannot be argued that she gave insufficient weight to that factor. FINDING [86] Whilst we have found in ground 3 that the formulaic approach adopted by the Commissioner was not open to her, we are satisfied that she did take into account the financial position of the appellant. In para 155 the Commissioner accepts the evidence in respect of the "productivity, efficiency and financial performance of Barminco at Mt Lyell". [87] It is not possible for this bench to determine with precision whether the Commissioner gave sufficient, insufficient, or indeed too much weight to the financial position of the appellant other than to note that she has applied "equal weight to the factors to be considered as set out in clause 12.3 of the agreement." [88] Nevertheless it would seem that by applying a simple mathematical formula the quantum determined is not able to be supported. Whilst the AWU argue that the task before the Commissioner was not a simple mathematical exercise the agreement is silent as to how the factors are to be considered. The Commissioner was required to `have regard' to the factors described, it was a discretion as to what weight she applied to those factors and she applied equal weight and by so doing the quantum determined could not be justified. [89] Notwithstanding, we reject appeal ground 4. We are of the view that it is not relevant what weight the Commissioner applied to the financial position of the appellant as, firstly; it is unclear what weight was applied to that particular factor, other than the Commissioner stating that she applied equal weight to each of the factors, and secondly; we have determined that the quantum of increase awarded could not be supported in any case. Appeal ground 5 [90] The Commissioner acted on a wrong principle in granting wage increases outside the Wage Fixing Principles of the Commission. [91] It was said by the appellant that the Commissioner's order was outside the Commission's own wage fixing principles and to award a wage increase outside those principles is an error. In this matter the increase awarded purported to be an exercise in comparative wage justice which is not allowed by the principles. [92] The AWU rejected the submission that the wage fixing principles were relevant in this matter, it was noted that in the hearing below the appellant made no reference to the principles and their relevance has only been raised on appeal. The AWU submitted that the matter before the Commissioner was the settlement of an industrial dispute pursuant to s.29 of the Act not a claim to vary an award which would invoke the principles. The Commissioner was acting under the grievance procedure of the Agreement which provided a permissive power to arbitrate to settle an industrial dispute. [93] There was no submission by the appellant at the hearing below seeking relief by reference to the Incapacity to Pay principle. The AWU argued that there was no evidence before the Commissioner that the financial standing of the appellant `as a whole' could not bear the cost of a wage increase. FINDING [94] We agree that the correct principles for the grant of wage increases in awards are those prescribed in the Commission's Wage Fixing Principles (the principles). However we note that in the proceedings below no reference was made to, or reliance placed upon, those principles. In this matter it is the agreement which provides, at clause 12.3, how rates of pay are to be increased, that prescription is not in accord with the Commission's principles. [95] Notwithstanding, we are of the view that the Commission should be guided by its own principles in all proceedings where they are relevant, whether or not the parties have referred to or relied upon them. [96] Whilst the principles provide clear guidance as to how awards may be varied, they are silent on how the Commissioner should have approached the instant matter. That is not entirely surprising, given the unusual and possibly unprecedented set of circumstances confronting the parties and the Commissioner. The principles do however state that "The Commission will continue to play an active role in encouraging and facilitating workplace bargaining." We consider that the involvement of the Commission in an agreed Dispute Settlement Procedure, as was the case in the matter below, is consistent with this statement. [97] In the absence of precise guidance in the principles, we are of the view that an order made pursuant to s. 31 should not be made in a manner which circumvents those principles and that any exercise of discretion requires a consideration of those principles and it is in the public interest to do so. [98] In this case the Agreement provides a mechanism for an annual review of wage rates. However no increase had actually applied since the inception of the agreement in October 2000 and there was little prospect that an increase would apply in the foreseeable future. [99] The appellant did not mount an incapacity to pay argument in line with principle 14. Economic material was presented which, from the appellant's point of view, purported to demonstrate that labour cost increases were undesirable, this did not amount to a demonstration of very serious or extreme economic adversity. The evidence revealed that wage increases had been paid to other staff of the appellant within the previous six months. Irrespective of the merit or otherwise of those wage increases, the picture presents of an employer unwilling to pay a wage increase to the employees subject to this application, rather than any incapacity to pay. [100] We are unable however to find support within the principles for the order made by the Commissioner. [101] Absent any other factors such as changes in work value, we are of the view that the application of the cumulative impact of the 2001 and 2002 Safety Net Adjustments to the base rate alone would be consistent with the spirit of the principles. [102] We uphold appeal ground five. Appeal ground 6 [103] Considering the evidence, the Commissioner made a mistake as to the facts and a legal error in concluding that the review was not conducted properly. [104] It was submitted by the appellant that the evidence does not suggest that there was any predetermined outcome of the review and Mr Wakefield's evidence supports that position. Reliance was placed on the evidence of Mr Wakefield who agreed that the appellant had considered what the AWU had presented nevertheless it had indicated that no increase would be forthcoming. [105] The appellant claimed that the review had been undertaken as prescribed in the agreement; just because there was no increase as a result does not mean that the review was not conducted properly. There were discussions between the parties about the information provided and the appellant discussed that information with Mr Bailey in Western Australia. Mr Mayes however said that he had decided before he made the phone call to Western Australia that no increase could be justified. That being so the appellant submitted that at that stage the AWU had the opportunity to influence Mr Maye's decision. [106] The Commissioner found at para 148:
[107] It was submitted by the AWU that the evidence of Mr Mayes, for the appellant, supports the finding of the Commissioner that although the appellant took into account the information provided by the AWU it was only the financial position and viability of the company that seemed to be of relevance, Mr Mayes said that the appellant had focussed on its financial performance and that the primary consideration was that the Mt Lyell business unit was losing money. Mr Maye's evidence supports the contention that it was the viability of the business that the appellant `had regard to' in the review. FINDING [108] It is our view that on a proper reading of para 148 the Commissioner concluded not so much that the review was not properly conducted but rather that the appellant approached the review with a predetermined position. [109] Mr Wakefield testified that the Commissioner's consent order made in respect to the review was complied with by the parties and it is accepted that the appellant did consider the material presented by the AWU. The following evidence of Mr Mayes is pertinent to the approach taken by the appellant to the review process:
Mayes: The incentive rates have room to move up or down, okay, but the base rate no. The base rate was fixed...."6 "Let's have a look at - you have said in response to a question from Mr Fitzgerald that you didn't regard the outcome of wage increases at other mines as having any relevance given their different corporate structure. Do you recall that? I am talking there to them being publicly listed companies? Mayes: Yes, that's right, that's correct."7 [110] Mr Mayes testified that he did not consider the wage movement information provided by the AWU in respect to general industry and community wage movements as relevant. He said that the data in respect to wage movements referred to publicly listed companies and the appellant is a private company. [111] Further Mr Mayes said:
Mayes: Because of the commercial viability of our operation."8 "So given all of the things that you say are irrelevant, how can you now say to us that you considered factors other than the financial performance of the company, given your evidence today? Mayes: But the primary denominator in all this is the performance of the company at this operation. If you're losing money, you're not going to put your hand up to lose more are you?"9 [112] It would appear from the evidence of Mr Mayes that the only factor in clause 12.3 that the appellant had regard to was the financial performance of the company. Such approach does not satisfy the intent or spirit of clause 12.3 and it was open to the Commissioner to conclude that the review was not conducted properly or at the very least that the appellant had a pre-determined position which would not be swayed by any material presented by the AWU. [113] We are of the view in consideration of the evidence of Mr Mayes that it was reasonably open to the Commissioner to conclude that the appellant approached the review with a predetermined position. [114] We reject appeal ground 6. Appeal ground 7 [115] The Commissioner made a legal error and an error of fact in finding that there had been a breach of the Agreement involving a failure by Barminco to have appropriate regard for general and community wage movements, and in then proceeding to determine the outcome of the review. [116] It was submitted that the Commissioner had made an error of law and fact by finding that the appellant had breached the agreement as it did not apply equal weighting to the factors to be taken into account. The Commissioner found at para 150 that the appellant "failed to have appropriate regard for, and to place appropriate weight on general wage and community wage movements when conducting the wages review pursuant to clause 12.3 of the Agreement, and, in failing to do so, have breached an agreement registered under s.55 of the Act." [117] The appellant argued that there was no evidence to support the finding that the review had not been undertaken in accord with the provisions of clause 12.3. Further there was no industrial dispute in respect to the claim by the AWU that the agreement had been breached. Nevertheless and regardless of those findings the simple mathematics of the factors to be taken into account would not result in a wage increase. [118] The AWU generally adopts its submissions for appeal ground 6 but submitted that the Commission was obligated to decide whether the agreement had been breached. The breach of the agreement found by the Commissioner was the industrial dispute she was required to settle and for which the order was issued. FINDING [119] It seems to us that the appellant did not take into account the information provided by the AWU, that information related to general and community wage movements. Mr Mayes testified that the predominant factor relevant to his consideration was the economic performance of the appellant. [120] Mr Wakefield said "I think they said that we understand what you are putting. They might have gone as far as saying they accept what we put but then they put their position......"10 [121] It was also Mr Wakefield's evidence that it was his experience that a review usually meant that wages would be increased and this was not an unreasonable expectation in our view. It would be unlikely that the AWU would agree to the clause in the knowledge that no increase would result from the review. [122] We think it was open to the Commissioner to find that the agreement had been breached however such breach was procedural and is not a breach as contemplated by the Act. [123] We detect no error and reject appeal ground 7. Appeal ground 8 [124] As there was no breach of the Agreement leading to the notification of dispute, the Commissioner had no power to make the Order. [125] It was submitted by the appellant that there was no breach of the agreement as the Commissioner had incorrectly found that the agreement was breached because appellant had "failed to have proper regard for, and to place appropriate weight on general and community wage movements." As this finding is an error there can be no breach of the agreement, if there is no breach there is no industrial dispute and as such the Commissioner had no power to make the order. [126] The AWU argued that the non compliance with the terms of an agreement by the appellant was a breach of that agreement and the reason for the industrial dispute notified pursuant to s.29 of the Act. To determine whether an industrial dispute existed the Commissioner was required to hear the parties to be able to decide whether in fact such a breach had occurred. FINDING [127] We agree with the Commissioner's finding that there was a breach of the agreement however, and as is noted in our finding in respect to appeal ground 7, we are of the view that the breach was in procedure only and not a breach as contemplated by the Act. The original application was amended during proceedings to that of a claim for a wage increase. There can be no doubt that an unsatisfied wage demand sits squarely with the expression "mode, terms and conditions of employment" in the definition of "industrial matter". As such the Commissioner was dealing with an industrial dispute. [128] We reject appeal ground 8. Appeal ground 9 [129] The Commissioner made a legal error in awarding an increase when it was outside her jurisdiction to do so. [130] It was submitted by the appellant that as there was no breach of the agreement there was no power to vary the agreement or make the order. [131] According to the AWU the Commissioner was settling an industrial dispute about an industrial matter. An industrial matter is defined in the Act at s.3(1)(a)(b) as being "a breach of an award or registered agreement." Accordingly the Commissioner had the jurisdiction to issue the order in settlement of the dispute. FINDING [132] We have addressed this appeal ground in our finding in respect to appeal ground 1. [133] We reject appeal ground 9. Appeal ground 10 [134] The Commissioner made a legal error in making an order by arbitration under s.31. [135] The order issued by the Commissioner was made under s.31 of the Act. The appellant argued that the parties had not provided consent for her to vary the agreement therefore the order issued must be an award however there is no power under s.29 for the making of an award in respect to the hearing of an industrial dispute, as such the order made pursuant to s.31 of the Act was an error at law. [136] It was the submission of the AWU that the Commissioner did not vary the agreement or an award, the order was made in settlement of the industrial dispute notified and is a valid order under s.31 of the Act. FINDING [137] This appeal ground has been dealt with in our finding in respect to appeal ground 1. [138] We reject appeal ground 10. Appeal ground 11 [139] The Commissioner made a legal error in varying the Agreement under the general powers in s.31(1) when variation is limited by specific power in ss 59 and 61P(1). [140] In respect to this appeal ground the appellant relies on its submissions in respect to appeal ground 1. [141] The AWU also relied on its submissions generally but argued that the Commission did not vary the agreement therefore neither s.61P or s.59 are applicable or relevant. FINDING [142] S.61P is not relevant to this matter as the agreement under review is an industrial agreement, s.61P has application only to an enterprise agreement. [143] There was no application pursuant to s.59 before the Commissioner. [144] We have addressed the application of the general power pursuant to s.31 of the Act in our finding in respect to appeal ground 1. [145] We reject appeal ground 11. Appeal ground 12 [146] The Commissioner made a legal error and an error of fact in finding that Barminco did not bargain in good faith. [147] At para 134 the Commissioner found "....I am not satisfied that Barminco bargained in good faith as required under the terms of the order." The order, issued with the consent of the parties and referred to in para 134, provided:
[148] The appellant argued that the basis on which such a finding was made was the Commissioner's finding that the appellant did not consider the material provided by the AWU and failed to give appropriate weight to the factors for consideration. [149] It was submitted by the appellant that it did consider the information provided and that sufficient weight was given to both factors. [150] The appellant submitted that the prime requirements for bargaining in good faith go no further than the following:
[151] It was submitted that the appellant had, as a matter of law, complied with the order to bargain in good faith. [152] The AWU argued that the finding that the appellant had not bargained in good faith was "merely another method of describing Barminco's failure to comply with the obligations prescribed in clause 12.3 of the agreement." FINDING [153] We are of the view that there is no requirement `at law' to bargain in good faith. The parties were undertaking a review in accord with clause 12.3 of their agreement; it is therefore arguable whether that was an exercise in bargaining and whether there was a requirement to bargain in good faith other than by adherence to the Commissioner's consent order. The agreement prescribed the factors to take into account and Mr Wakefield testified that the appellant had understood the information and claims made by the AWU. [154] We uphold appeal ground 12 as we doubt whether there was a requirement for the appellant to bargain in good faith, the only requirement expected of the parties to the agreement was to `have regard to' factors detailed in clause 12.3. The agreement goes no further than providing that requirement, there is no prescription as to how those factors are to be considered. [155] Our finding in respect to appeal ground 12 has little bearing on, and is not fatal to, the Commissioner's decision. Appeal ground 13 [156] There are no other grounds specified by the appellant. CONCLUSION [157] The Wage fixing Principles make it clear that the Commission is to play an active role in encouraging and facilitating workplace bargaining. We emphasise that where an agreement is in place, the Commission will not lightly substitute its view through an order made pursuant to s. 31 of the Act. We note that the Act only provides for an application pursuant to s.29 for the settlement of a dispute between parties to an agreement other than when the parties make application pursuant to s.59(2) or seek private arbitration pursuant to s.61. An order issued pursuant to s.31(1) is in settlement of a dispute notified under s.29 of the Act. [158] The Commission has a statutory role in settling industrial disputes and Division 4 of the Act provides the process to be followed. [159] S.19 provides the jurisdiction of the Commission and prescribes:
[160] The Act defines an `industrial dispute' as a dispute in relation to an `industrial matter'. An `industrial matter' is defined as "any matter pertaining to the relations of employers and employees and, without limiting the generality of the foregoing includes-
[161] S.29(1) of the Act prescribes:
[162] S.29(1D) of the Act prescribes:
[163] The agreement the subject of these proceedings was registered pursuant to s.55 of the Act and includes therein a grievance resolution procedure which allows either party to bring a matter to the Commission for "conciliation and/or arbitration." [164] The powers available under s.31 are broad, however they should, in matters such as this, be exercised with caution. S.20(1)(a) of the Act requires that the Commission "shall act according to equity, good conscience, and the merits of the case without regard to technicalities or legal forms...." S.20(1)(d) requires the Commission to "have regard to the public interest." [165] In this matter the parties have been unable to find an agreed outcome. In the circumstances we are of the view that the Commission, in exercising its statutory responsibilities and obligations under the Act, should do no more than apply the cumulative effect of the Safety Net Adjustments as determined in the State Wage Cases of August 2001 and August 2002 to the base rate only. That represents an increase of $0.92 per hour to the Base rate. [166] The agreement provides (where relevant) that:
(a) Base rate;
[167] There was insufficient material before both this Full Bench and the Commissioner below for any consideration of a review of the incentive rate. An incentive rate requires specific and defined criteria, other than safety net adjustments, to justify any movement. We are of the view that it is inappropriate for the Commission, unless specifically requested to do so, to interfere with an incentive rate scheme or formula. [168] Pursuant to s.71(13(a) of the Act we revoke the order issued by the Commissioner for the reasons espoused in this decision. [169] To give effect to our findings we make the following Order: ORDER We hereby order pursuant to s.71(13)(a) of the Act that Barminco Pty Ltd, Locked Bag 3, Queenstown, Tasmania 7467, pay its Mining Industry Employees employed under the terms of the Barminco (Copper Mines of Tasmania) Mining Production Enterprise Agreement 2000, a Base Wage rate of $13.79 per hour for the full shift worked or any parts thereof on a pro rata basis. The increase will take effect from the first full pay period on or after 14 January, 2003.
Appearances: Date and place of hearing: 1 Appeal Transcript PN61 |