T7638 and T7685
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Automotive, Food, Metals, Engineering, Printing Construction, Forestry, Mining and Energy Union, EMU BAY RAILWAY AWARD
Award variation - to reflect wage rates contained in the Emu Bay Railway Enterprise Bargaining Agreement 1994 - enterprise bargaining principle - special case - application dismissed REASONS FOR DECISION Introduction On 6 and 29 April 1998 respectively, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and Construction, Forestry, Mining and Energy Union, Tasmanian Branch (CFMEU) applied to vary the Emu Bay Railway Award (the award). The purpose of both applications was to incorporate into the award wage rates contained in the Emu Bay Railway Enterprise Bargaining Agreement 1994, an agreement registered pursuant to the provisions of Part IV of the Industrial Relations Act 1984. Both matters initially came on for hearing before Deputy President Johnson on Friday 8 May 1998. With the consent of the parties, the Deputy President joined the matters and proceeded to hear them as one. At that hearing the respondent employer, the Emu Bay Railway Company Limited (the Company), opposed the applications. Having previously notified the parties of its intention to do so, the Company then went on to request the Deputy President to refer the applications to the President in accordance with Section 24(4A) of the Act. In support of its request, the Company submitted that, because the applications sought to vary a minimum rates award above the safety net, Principle 13 of the Wage Fixing Principles 1997 required them to be "referred to the President for consideration as a special case". The President, having considered the materials put to the Deputy President, determined that the applications constituted a special case. For that reason he convened the present Full Bench, which heard the matter on Friday, 15 May 1998. At the hearing Mr P Baker appeared for AMWU; Mr G Cooper appeared for CFMEU; Mr K Becker appeared for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CPU); Mr M Cook appeared for the Australian Rail, Tram and Bus Industry Union, Tasmanian Branch (ARTU); and Mr J Forbes, a legal practitioner, appeared by leave of the Commission for the Company. During the course of the hearing we took oral evidence from two witnesses: Mr M K Hill, a former full-time official of AMWU, who was the principal union negotiator in the matter of the Emu Bay Railway Enterprise Bargaining Agreement 1994, and Mr R P Evetts, currently Operations Manager, Emu Bay Railway Company Limited, who was involved in negotiating agreements and industrial arrangements on behalf of the Company at all relevant times. Mr Baker began by establishing the context in which, he submitted, we should view the applications. They are, he continued, merely matters of house-keeping in that they involve no actual labour cost increases of any kind. Indeed, he went on, the AMWU's application reflects the parties' intentions as specified in Clause 2 of an unregistered memorandum of understanding made between the union and the Company1 at or about the time all the unions agreed to the Emu Bay Railway Enterprise Bargaining Agreement 1994, ie:
That memorandum of understanding, Mr Baker said, together with a similar understanding entered into by the Company and CPU, nominated as its focus the engineering workshops. However, he submitted, the enterprise agreement itself was put together from a collective point of view by a single bargaining unit. Accordingly, the industrial reality is that the supporting memoranda of understanding, as represented in Exhibits B1 and F1, must be taken to have application right across the site. It is impossible to conceive, Mr Baker argued, that they might operate in some other manner. The purpose of the applications, Mr Baker said, is to maintain the relevance of the Emu Bay Railway Award in relation to the federal Workplace Relations Act 1996 and, in particular, to any "no disadvantage" test that might fall for application in connection with a proposed Australian Workplace Agreement or Certified Agreement involving the Company's former employees. Mr Baker emphasised that the applications do not and cannot extend beyond the award in question, in a flow-on sense, because they reflect restructuring and associated efficiency measures approved in matters T2822 of 1990 (the original award variation) and T5180 of 1994 (the registered enterprise agreement). In addition, he went on, the applications apply only to relativities within the Company and do not disturb the existing classification structure, as it relates to skills and responsibilities, that the earlier cases established. It is the Commission's duty, Mr Baker contended, to provide the means for creating and maintaining an effective, secure and relevant framework of award prescribed wage rates that reflect the interests of employees and the efficient performance of work. In that light, in the circumstances of the present case, Mr Baker submitted, it is clearly appropriate to incorporate into the award the terms of an expired registered agreement2, thereby "locking them away as relevant and existing obligations between the parties".3 Mr Baker added that the Commission followed just such a course, albeit by consent, in the Goliath Cement Enterprise Award.4 Mr Baker next directed our attention to the Wage Fixing Principles 1997. He discussed the general nature of the Principles, with particular reference to the structural efficiency process, pointing out that, in their original arrangements of 1990,5 the parties took into account the imperatives of "establishing skill-related career paths", "eliminating impediments to multi-skilling", "creating appropriate relativities" and enhancing the "flexibility and the efficiency" of the industry. The changes agreed to in 1990, Mr Baker said, formed the basis of both the award variation of that time and the subsequent enterprise bargaining agreement of 1994. With those observations, Mr Baker brought us to the essential focus of his submissions concerning the Wage Fixing Principles, ie Principle 3 - Enterprise Bargaining and Principle 4 - Role of the Commission in Enterprise Bargaining. Specifically, without going to the entirety of the particular Principles, Mr Baker relied on the following provisions: "3. ENTERPRISE BARGAINING
Mr Baker submitted that where, as in this case, there exists a Section 55 agreement and two of the parties to that agreement apply to vary the underpinning enterprise award, ie the Emu Bay Railway Award, the Commission, having regard to Principle 4.1, can vary that award consistently with the Wage Fixing Principles. That power, Mr Baker contended, arises from the wide-ranging nature of orders that the Commission may make pursuant to Section 31 of the Act for the purpose of preventing or settling a particular industrial dispute that is the subject of a Section 29 hearing. In the circumstances, Mr Baker asserted, it is open to the Commission to adopt an arbitral role in the variation of an enterprise award, provided the adjustments sought are consistent with and relevant to the Enterprise Bargaining Principle, particularly Principles 3.2.1, 3.2.2 and 3.2.3. In the present matter, Mr Baker submitted, the proposed variations:6
The facts and circumstances before the Commission, Mr Baker submitted, show that the applications are entirely consistent with the Wage Fixing Principles 1997. It therefore followed, Mr Baker contended, that the applicants had made out a special case of the kind required by Principle 13 - Making or Varying an Award above or below the Safety Net. In this regard, in particular, Mr Baker pointed out that the Emu Bay Railway Award currently prescribes a weekly trade rate of $440.75. That rate, he said, is some $11 per week (in round terms) below the current safety net amount of $451.20. Clearly, Mr Baker submitted, the award as it stands does not satisfy the Commission's own Wage Fixing Principles in so far as they concern the award safety net. In support of his contentions Mr Baker relied on two Full Bench decisions of the Australian Industrial Relations Commission. The first of those matters concerned applications by several unions with members employed by Ansett Australia Limited and Qantas Airways Limited to vary a number of airlines awards.7 The purpose of the applications was to incorporate into the awards in question wage rates contained in certain expired certified agreements that the parties had replaced with more recent agreements. In that matter the Full Bench said:8
After observing that there are a number of paid rates awards that use the word "minimum", Mr Baker said the Bench later went on to add that:
and concluded with the observation that:
Mr Baker conceded that there are significant differences between Commonwealth and State legislation concerning operation of paid rates and minimum rates awards. He also agreed with comments from the Bench that, while out of term, the Emu Bay Railway Enterprise Bargaining Agreement 1994 is technically not an expired agreement. Even so, he said, having regard to the Airlines Case, the particular enterprise agreement concerned itself with the efficient performance of work and the needs of the Emu Bay Railway Company Limited. In addition, he continued, again consistently with the Airlines Case, it is in the interests of the employees concerned that the Commission should vary the award in terms of the present application. The second decision of the Australian Commission to which Mr Baker took us concerned an application by the Community and Public Sector Union to vary the CSIRO (Salaries and Conditions of Service) Award 1990 to incorporate "elements of an expired certified agreement known as the CSIRO Productivity Agreement 1995".9 In concluding that, under the Wage Fixing Principles as they operated at the time of the hearing, there were no grounds for rejecting the application, the Full Bench observed that:10
In the current matter, Mr Baker submitted, the Company is the sole employer respondent to the award and the proposed variations seek only to reflect the actual rates of pay as prescribed by the existing agreement. Had it not been for uncertainty about the future of the workshops, Mr Baker added, the review that was then taking place between unions and the Company would have led to a new enterprise bargaining arrangement. It is also the case, Mr Baker asserted, that the rates of pay that the applicant unions seek to include into the Emu Bay Railway Award will not lead to flow-on pressures in other private sector awards. This is so, Mr Baker submitted, because the award is unique in that it only has application to the Emu Bay Railway Company Limited. Finally, he concluded, the variation could not alter internal relativities because all rates would be adjusted by 3% plus 3% plus 3% or a cumulative total of 9.18% or thereabouts. In all the circumstances, Mr Baker submitted, the Commission should vary the Emu Bay Railway Award in terms of the draft order accompanying the application, with effect from the date of the Full Bench's decision. Mr Cooper submitted for CFMEU that in considering the applications, which are properly made under Section 23 of the Act, the Commission must have regard to the public interest provisions of Section 36. The question that now falls for consideration in that context, he said, is this: "What is the appropriate rate that should be contained in the award at this point in time?"11 The only reason why the 1994 agreement was not replaced, Mr Cooper said, is that the Company sold part of the business and there is no way of knowing what tomorrow holds for the remainder. The relevant circumstances are that the new owner of the business is asking the Company's employees to sign Australian Workplace Agreements if they want to continue their employment. It is therefore appropriate in the public interest, Mr Cooper submitted, that the Emu Bay Railway Award be varied to reflect the rates of pay that currently apply on site. CFMEU takes that view, Mr Cooper argued, because the wage rates in question reflect the employees' actual contributions to cultural change at the Company's workplace. In the circumstances, he continued, it is not in the public interest that employees should be sold off with a business at a lower rate of pay than that which is their current entitlement. As to the timing of the present applications, Mr Cooper submitted that we must have regard to the historical circumstances. On or about the beginning of September 1997, he explained, the Company wrote to the union parties to the enterprise agreement reminding them the agreement would expire on 5 September. The Company informed the unions that it proposed to conduct a review of the workshops, which it hoped to complete before Christmas 1997. In the circumstances, Mr Cooper said, the unions and the Company agreed that, during the review period, negotiations for a new enterprise agreement would be placed on hold and that the parties would continue to observe the existing agreement. The intention of the parties, Mr Cooper added, was to negotiate a new enterprise agreement after the outcome of the review became known. Those are the reasons, Mr Cooper asserted, why the unions took no action to vary the award at the time the term of the agreement expired. The unions, Mr Cooper said, simply acted in good faith by relying on their interim arrangements with the Company. Exhibit B1, Mr Cooper asserted, is a memorandum of understanding between the Company and AMWU that an award variation of the kind now sought should occur. A similar understanding, he said, exists between the Company and CPU.12 Witness Hill's evidence, Mr Cooper said, is that the intention of the AMWU's understanding is clearly and unambiguously expressed. If, however, according to the evidence of witness Evetts, there is some confusion about the meaning of the words used in the memorandum then, Mr Cooper submitted, "one can only speculate that there was an intention to deceive in the way it was drafted" given that, on Mr Evetts' evidence,13 the Company prepared the document.14 In the circumstances, Mr Cooper contended, it is appropriate in the public interest and consistent with the Wage Fixing Principles 1997 to vary the award so that it will reflect the wage rates currently being paid on site by the Company. Indeed, he said, paragraph 14.1 of Principle 14 - First Award and Extension to an Existing Award recognises just such an approach, ie:
It is a prime consideration for the unions, Mr Cooper submitted, that if future industrial coverage of the employees concerned is to be by way of Australian Workplace Agreements, then the relevant award should reflect current wage rates and not wage rates as they were four or five years ago. It is consistent in the public interest, Mr Cooper argued, for an award to reflect actual wage rates so as to prevent employees being disadvantaged merely because a new employer might not want to observe the wage rates contained in their enterprise agreement. Mr Becker for CPU and Mr Cook for ARTU supported the submissions of Mr Baker and Mr Cooper. The Respondent's Contentions The Commission's position regarding matters that come to it as special cases pursuant to Principle 13, Mr Forbes submitted, is that prima facie it ought not to grant claims above the safety net. So much, he said, is clear from the Introduction to the Wage Fixing Principles 1997. The safety net, Mr Forbes submitted, is really a protective mechanism; that is, it is designed to protect low paid workers, those who lack bargaining power, and those workers who are unable to achieve an enterprise outcome with their employer. Because the award safety net underpins the system of enterprise bargaining, awards should not be varied to reflect wage rates and conditions of employment achieved through that process. The purpose of the safety net, as the principles themselves declare, is to protect employees who cannot reach an enterprise agreement with their employer and to act as an incentive to bargain for more. The Emu Bay Railway Company's employees, Mr Forbes said, are not low paid workers or employees who lack bargaining power. They are highly unionised, well represented, and demonstrably capable of reaching an enterprise agreement with their employer, as evidenced by the Emu Bay Railway Enterprise Bargaining Agreement 1994. The employees concerned, Mr Forbes continued, have shown themselves to be quite capable of successfully engaging in the enterprise bargaining process for the purpose of securing outcomes in excess of the safety net. In the circumstances, Mr Forbes submitted, the Commission's prima facie position should be to protect the safety net as a safety net. To do otherwise by granting the present applications, he contended, "will transform the award from what it ought to be, which is a safety net, into what it ought not be and that is a paid rates award".15 Moving on, Mr Forbes said that the unions' submissions misconstrue the purpose of Principle 3 - Enterprise Bargaining. That Principle, he continued, is about the process of enterprise bargaining and the manner in which the parties, having reached an enterprise agreement, might convert their agreement into an enforceable instrument of the Commission, ie "A section 55 agreement or enterprise award may be made or adjusted ...". Such a conclusion, Mr Forbes contended, draws strong support from the fact that Principle 3 is replete with references to the "proposed" enterprise bargaining agreement or the "proposed" award. In relation to Principle 4 - Role of the Commission in Enterprise Bargaining, Mr Forbes agreed that the Commission can have such a role. However, he went on, that role does not mean the Commission is free to act in the manner now requested of it by the applicants. In assisting the parties to reach an agreement over and above the safety net, Mr Forbes submitted, the Commission must exercise its functions consistently with both the Act and the Wage Fixing Principles. It follows, he said, that if the Commission is to take a role in applications of the present kind, then it must do so having regard to the requirements of Principle 13. Principle 6 - The Award Safety Net, Mr Forbes contended, is also relevant, ie "Existing wages and conditions in the relevant award or awards of the Commission shall be the safety net underpinning enterprise bargaining". In the present case, he said, the Emu Bay Railway Award is the safety net underpinning the Emu Bay Railway Enterprise Bargaining Agreement 1994. That relationship is an important consideration, Mr Forbes argued, because, as outlined in the Introduction to the Wage Fixing Principles, the Commission is bound to protect "the safety net of wages and conditions". There is every reason, Mr Forbes argued, why the current award rates of pay should constitute the award safety net. The evidence of Mr Hill, he said, is to effect that the structural efficiency exercise that occurred in 1990 produced a relevant and properly constructed award safety net, ie it established appropriate rates of pay, appropriate relativities, and skill-based career paths. Principle 13 - Making or Varying an Award Above or Below the Safety Net, Mr Forbes submitted, is clearly the principle most relevant to the current applications. Principle 13, he continued, implicitly requires such applications to be heard and determined as special cases. Such cases, Mr Forbes suggested, can only be those in which there must be something so highly unusual, unique or pressing that it persuades the Commission to depart from its basic principle of protecting the safety net. In short, he said, the Commission should not lightly set aside its Wage Fixing Principles, which comprise a framework for proper management of wages and conditions and of enterprise bargaining. The current applications, Mr Forbes argued, seek to fundamentally disturb that framework by inviting the Commission to intervene in the bargaining process in a manner in which it would not ordinarily countenance. The mere fact that the applications will not result in pay increases at the workplace is not to the point. The real issue, Mr Forbes submitted, is that the applicants are asking the Commission to change the safety net as defined in the Principles into something of a very different character. That is to say on the facts of this case, Mr Forbes continued, to change a safety net award into a paid rates award - an action that the Principles do not contemplate. In the circumstances, Mr Forbes submitted, there is nothing in the submissions of the applicants concerning the Wage Fixing Principles 1997 that would justify, as a special case, such a fundamental departure by the Commission from the clearly defined framework that those Principles establish. At its highest, Mr Forbes continued, the only justification put forward by the unions in support of their applications is Clause 2 of the unregistered memorandum of understanding reflected in Exhibit B1 (see above, page 2). On this point, as a matter of evidence, there is a clear conflict in the evidence of witnesses Hill and Evetts. Each gave a different version of events, both were equally plausible. It is plain, Mr Forbes said, that Mr Hill saw the relevant clause as being a clear commitment to vary the Emu Bay Railway Award in the manner represented by the applications now before the Commission. On the other hand, Mr Forbes contended, the thrust of Mr Evetts' evidence is in effect that:16
At the end of the day, Mr Forbes conceded, the Commission must make up its own mind on the evidence as to what was or was not agreed by the parties. However, he went on, to the extent that the unions in these proceedings relied on the employer's consent to the proposed variations, the Company's submission is that the Emu Bay Railway Company did not so consent. Simply put, he said, the Company opposes the applications because it did not agree to vary the award in the first place, ie in 1994. In that regard, Mr Forbes said, it is significant to note that the Emu Bay Railway Enterprise Bargaining Agreement 1994 itself did not expressly state that such a variation would occur. If it was important to the parties that, at the end of the life of the registered agreement, the wage rates contained in it should be inserted into the Emu Bay Railway Award, the registered instrument of the Commission would have said so. But, Mr Forbes said, the evidence is that it does not contain such a provision. It is also necessary in this context, Mr Forbes said, to look at all five memoranda of understanding as contained in Exhibit F1. The "understandings", he continued, are all quite different and they apply to different unions and to different parts of the Company's business operations. One of the applicants in the current matter, CFMEU, signed a memorandum of understanding that does not include the provision upon which the union now seeks to rely. There is no evidence before the Commission as to how or why that occurred. Indeed, Mr Forbes said, there is no evidence at all that CFMEU has an understanding with the Company to increase award rates of pay. The ARTU, he added, is in a similar position. There is a further inconsistency regarding the "understandings", Mr Forbes submitted, that the Commission must take into account. The "understandings" between the Company and AMWU and CPU, which contain the relevant variation clause, only relate to the engineering workshops. However, he continued, witness Hill was unable to explain "why he signed, probably on the same day, another agreement on behalf of his Union which doesn't include that clause".17 That "understanding", we add for purposes of clarity, concerned the Company's train operations, bulk handling, permanent way and locomotive workshops. Next, concerning the issue of consent, Mr Forbes remarked that there has always been a facility available under the Principles whereby parties might process their enterprise bargaining outcomes by way of award variation instead of by way of a Section 55 registered agreement. The evidence in this case, he said, is that the parties did not opt for that course at the time. Finally on the matter of consent, Mr Forbes asked rhetorically, if the intention of the parties was to vary the Emu Bay Railway Award to increase the rates of pay upon expiry of the registered agreement, why did neither party seek to process such an application until recently, some eight or nine months after the agreement's expiry? Mr Forbes then went to the question of whether, as contended by the applicants, the proposed variations are necessary for the protection of Emu Bay Railway workers. The Company's employees, he said, are the only beneficiaries of both the award and the agreement, each of which is legally enforceable. The evidence of Mr Evetts, Mr Forbes said, is that the Company does not intend to retire from the current agreement. It follows, he argued, that employees of Emu Bay Railway are entirely protected by the award and the agreement as to their terms and conditions of employment. That protection, Mr Forbes submitted, exposes the real purpose of the applications now before the Commission: that is to say, they represent an effort by the unions to protect those of their members who now work for Emu Bay Railway, but who might in the future decide to go and work for another employer. In effect, he went on, the applications seek to change the award terms and conditions of employment so that "in the event these employees leave and are offered an Australian Workplace Agreement by another employer ... the no disadvantage test will be measured against something higher than it will be measured against today".18 Such an outcome, Mr Forbes contended, can never amount to proper justification for what the unions seek to achieve by way of the current applications. It is not the Commission's role, he continued, to depart from the Wage Fixing Principles for the purpose of ensuring that where employees voluntarily seek to work for another employer whose industrial coverage is in a different industrial jurisdiction, they will benefit from an enhanced bargaining position. In short, he concluded, it is not this Commission's function to shore up the bargaining position of certain employees "just in case something might happen in future in another jurisdiction".19 Concerning the question of flow-on consequences, Mr Forbes argued that there are two issues. The first, he said, concerns superannuation. Should the Commission grant the current applications, the base trade rate at Emu Bay Railway would become the highest such rate within Pasminco's Tasmania operations. In those circumstances, Mr Forbes contended, there is a significant flow-on potential in relation to superannuation because the Company's contributions derive from calculations based on that rate and, in addition to Emu Bay Railway, would apply also at the Risdon and Rosebery operations. Second, Mr Forbes continued, if the Commission were to vary the award in accordance with the applications, a general flow-on potential would arise in that everybody else is likely to want to do the same thing. The mere making of a decision of that nature by this Bench, Mr Forbes submitted, would contain very real potential to flow across Tasmanian industry generally. The cases relied on by Mr Baker, Mr Forbes submitted, are distinguishable from the current applications because:
More specifically, Mr Forbes added, in the Airlines Case both employers consented to the applications; there was no evidence of flow-on pressure; and, most importantly, the case was about the principles the federal Commission then had to apply in maintaining proper paid rates awards. In the CSIRO Case, Mr Forbes continued, there was no employer consent. The outcome was a highly technical decision that involved a lot of argument about which Act applied. Ultimately, the Commission decided to apply the old Industrial Relations Act, observing that:20
In the circumstances, Mr Forbes argued, it is clear that the Commission, in dealing with a paid rates award, took into account particular provisions of the relevant Act that specifically related to such awards. The decided cases, Mr Forbes submitted, are of very little use to the Commission in the current proceedings because it must deal with the applications before it in accordance with its statutory powers and the Wage Fixing Principles. In all the circumstances and for reasons advanced above, Mr Forbes submitted that we should reject the unions' applications. Findings We begin our consideration of the issues by going first to the unregistered memorandum of understanding, as reflected in Exhibit B1. As a matter of law, the "understanding" is unenforceable since it is not registered and its provisions do not comprise part of the Emu Bay Railway Enterprise Bargaining Agreement 1994. That is not to say, however, that it might not have some industrial effect in terms of the public interest and Section 20(1)(a) of the Act, ie "according to equity, good conscience, and the merits of the case". In the first place, concerning the "understanding" and timing of the present applications, we see no reason not to accept the explanation of delay advanced in submissions by Mr Cooper (above, page 7). Mr Forbes did not take issue with what Mr Cooper had to say on the matter, although he did rhetorically question the genuineness of the parties' intentions, having regard to the elapsed time between expiry of the enterprise agreement and lodgment of the current matters (above, page 12). We think Mr Cooper's unchallenged explanation provides an acceptable answer to Mr Forbes' rhetorical question, for which reason, on the question of delay, we draw no adverse inferences against the unions' applications on that point. We go next to the conflicting evidence of witnesses Hill and Evetts regarding the true meaning and intent of Clause 2 of the "understanding" in question (above, page 2). Mr Forbes urged us to accept that the evidence of both witnesses is equally plausible and that Clause 2 is quite easily open to the interpretation for which Mr Evetts contended. In our opinion, plausible though Mr Evetts' explanation might be, it lacks conviction. That is because we think the complexity (to which he admitted)21 of the understanding that he advanced regarding the meaning of Clause 2 denies the very capacity for which Mr Forbes argued, ie "it can quite easily be interpreted" (above, page 11). When pressed with questions from the Bench concerning the difficulty of assigning to the seemingly plain words of Clause 2 the meaning that he said it had, Mr Evetts conceded that "it may be termed very clumsily in this document" 22 and that "it reads that way [as if it were an agreement to vary the award] but that is not the intention of the way that it was to work".23 In that context Mr Forbes, in answer to a question from the President regarding the "real meaning of the words", urged us "not to form view based simply on the words used" but to take into account the evidence of Mr Evetts concerning the actual intention of Clause 2.24 In weighing Mr Evetts' evidence in that regard, we note his admission that the Company prepared the documents in question, ie Exhibit B1 and those included in Exhibit F1, and updated them as negotiations went along.25 In the circumstances, we have come to the conclusion that, if Clause 2 were to have the meaning Mr Evetts now says it has, then his explanation of clumsiness in its wording is entirely unconvincing and we do not accept it. The evidence of both Mr Hill and Mr Evetts is, understandably, self-serving according to the viewpoint that each represented. However, in circumstances where there is no corroborative evidence of any kind, we must, as Mr Forbes submitted, make up our own minds as to the meaning the parties intended of Clause 2. In our view the more believable explanation of that meaning is to be found in the evidence of Mr Hill, ie it was an unambiguous commitment to vary the Emu Bay Railway Award to incorporate the three increases, of 3 per cent each, that became payable over the life of the Emu Bay Railway Enterprise Bargaining Agreement 1994. We accept Mr Hill's evidence on this point, preferring it in all the circumstances to that of Mr Evetts. Favourable though that finding is to AMWU, one of the applicants in these proceedings, it is not the end of the matter regarding the memoranda of understanding. As Mr Forbes submitted, all five memoranda26 are different in that they apply to different unions and to different parts of the Company's operations. However, of more importance, we think, in relation to the current applications, is the fact that the memoranda may be divided into two clear categories. Two of the "understandings", those of AMWU (undated) and CPU (dated 31 August 1994), contain a provision in the form of Clause 2. Both memoranda apply to the engineering workshops. The remaining three "understandings", executed by AMWU (undated, but perhaps circa 22 August 1994), CFMEU (dated 17 August 1994) and ARTU (dated 17 August 1994), which all apply to the train operations, bulk handling, permanent way and locomotive workshops, do not contain such a provision. After perusing all five memoranda, we make the following observations. First, it is clear that at or about the same time Mr Hill, as AMWU representative, signed a memorandum of understanding with the Company that contained Clause 2 (the engineering workshops "understanding"), he also signed another memorandum with the Company (the locomotive workshops "understanding") that did not contain such a provision. Second, because the memorandum signed by CFMEU, one of the applicants in the current proceedings, does not include a provision like Clause 2, it is arguable that there was never an agreement to that effect between the organisation, or ARTU for that matter, and the Company. What are we to make of these inconsistencies? There is no doubt about their origin. Witness Hill, with commendable candour, did not hide from us the difficulty his organisation had in persuading those of its members who were employees in the engineering workshops to accept what ultimately became the 1994 enterprise agreement.27 His evidence, briefly expressed, was that negotiations with the Company were split into two parts - engineering workshops and locomotive workshops. In the latter case, agreement between the parties came quickly. In the engineering workshops, however, employees rejected the initial proposal, that which the locomotive workshops had accepted, and only came finally to a settlement on the basis of the "understanding" set out in Exhibit B1. Mr Hill's evidence makes it plain to us why Clause 2 is present in the engineering workshops "understandings", but not in the locomotive workshops "understandings". It follows from that evidence and from our earlier discussion on the point, that there was clearly an agreement between AMWU, CPU and the Company, regarding the engineering workshops, to vary the relevant award in the manner set out in Clause 2 of Exhibit B1. It is equally clear, however, having regard to Mr Hill's evidence and the several memoranda of understanding contained in Exhibit F1, that there was no such agreement between the AMWU, CFMEU and ARTU regarding the locomotive workshops. In our opinion, the absence of an undertaking between the unions and the Company of the kind reflected in Clause 2, regarding the locomotive workshops, is entirely prejudicial to AMWU's application in the present case. That must be the case, we think, because it would be arguably contrary to the public interest for us to attempt to give effect to the AMWU "understanding" in a manner that would, by that act alone (ie varying the award in terms of the present application) flow to the benefit of members of organisations with which the Company had no such "understanding". Mr Baker plainly foresaw his considerable difficulty in this regard, which he endeavoured to overcome by urging us to accept that "industrial reality" requires that the "undertakings" reflected in Exhibits B1 and F1 "must be taken to have application right across the site" (above, page 3). We do not share Mr Baker's view because, to do so, would oblige us to infer the existence of an agreement between the Company, his own, and other organisations in circumstances where the evidence is unambiguously to the contrary. We believe that such an action would be contrary to the public interest. For all the reasons discussed above we are of the view that in terms of "equity, good conscience, and the merits of the case", AMWU's application must fail, at any rate to the extent that it relies on the undertaking reflected in Clause 2 of Exhibit B1. We do not understand Mr Cooper to have put a great deal of weight on the agreement in Exhibit B1 in support of CFMEU's application in this case. If we are wrong in that view, then we reject the submission on the grounds that the evidence discloses there was never an agreement of the relevant kind between the Company and CFMEU. We now turn to address the contentions put to us regarding application of the Wage Fixing Principles 1997. Enterprise Bargaining Both Mr Baker and Mr Cooper urged us to accept the contention that, where there is no agreement between the parties in an enterprise bargaining situation, it is the Commission's statutory duty in the public interest to resolve the issue by arbitration. In particular, in that regard, they relied upon the following facts: (a) the current applications are properly before the Commission in terms of Section 23 of the Act, and (b) the Commission has a role to play in enterprise bargaining pursuant to Principle 4 of the Wage Fixing Principles. In such a situation, they said, the Commission may issue whatever orders it deems appropriate in the circumstances, pursuant to Section 31 of the Act. In responding to this submission we emphasise that Section 31(2)(b) of the Act prohibits the Commission from making an order under Section 31 that "makes an award or that varies or creates a provision of an award". But, that observation aside, we incline to the view that these submissions attempt to assign to Principles 3 and 4 a role and function for the Commission that the plain words of those Principles simply do not accommodate. Briefly expressed, the particular guidelines, in our opinion, make provision for:
In other words, the relevant Principles direct the Commission's attention to proposed agreements only, not to agreements that the parties and the Commission have already consummated and approved, ie in this case the Emu Bay Railway Enterprise Bargaining Agreement 1994. The agreement in question, in our view, is not a proposed agreement, but an approved and registered agreement. That fact, we think, entirely removes the current applications from the scope and intent of Principles 3 and 4 of the Wage Fixing Principles. For those reasons we reject the applicants' contentions that the Principles in question authorise the Commission to proceed to determine the current matters by way of arbitration and that it is in the public interest for us to do so. To the contrary, we believe the public interest is best protected by viewing the applications for what they are. That is to say, they are applications to vary the Emu Bay Railway Award above the safety net, not applications to approve a proposed enterprise agreement. Special Case In support of their special case applications to vary the Emu Bay Railway Award above the safety net, the applicants relied on the following merit considerations:
We accept the applicants' contention that it is a function of the Commission, according to the Principles, to ensure that "the award system provides a safety net of wages and conditions which underpins enterprise bargaining and protects employees who may be unable to reach an enterprise agreement while maintaining an incentive to bargain for such an agreement".29 That said, however, we go on to acknowledge Mr Forbes' submission, with which we agree, that while the Commission should protect the Emu Bay Railway Award as a safety net, there is nothing implicit in the Principles, in that regard, that requires or obliges the Commission to transform a minimum rates award into a paid rates award (above, page 9). The Emu Bay Railway Award, although a single enterprise award, is clearly a minimum rates award because, as the parties acknowledged, the wage rates currently prescribed in the award are below the relevant award safety net level.30 While we are disposed to think that award variation applications of that nature might well succeed, the current applications clearly go beyond that point because they seek to vary the award above the safety net level. It follows, therefore, that if we are to grant the current applications there must be, as Mr Forbes put it, something in their surrounding facts and circumstances that is so "highly unusual, unique or pressing" that persuades us to depart from the general safety net standard (above, page 10). In that context, one of the factors relied on by the applicants was the protection of the workers concerned and their investment in the efficient performance of work31 and contribution to cultural change at the Company's workplace.32 These submissions, we believe, tend to put a skew on what is, otherwise, a straightforward fact situation. As between the Company and its employees we do not believe there is any want of fairness and equity because the employees already have the protection of the registered agreement from which, Mr Forbes informed us, the Company has no intention of retiring. This brings us to the question of the potential industrial relationship between the Company's employees and a future employer purchaser of the Company's business, or parts of that business. Apart from Part IVA enterprise agreements, there are no statutory provisions in the Industrial Relations Act 1984 regarding transmission of business. In the circumstances, we cannot see how this Commission can involve itself in an enterprise bargaining situation between potential employees and an employer who is respondent to the federal industrial jurisdiction. In saying this we recognise, of course, that the Tasmanian Commission has a role in relation to establishing, in its award system, a safety net of secure, relevant and consistent wages and conditions of employment. However, it is our opinion that the level of any such safety net must derive from application of proper principles of wage fixation and not from any altruistic notions of what might constitute fairness and equity in relation to enterprise bargaining in some other industrial jurisdiction. Any attempt on our part to follow the latter course, we think, would be arguably contrary to the public interest because it would be for a purpose other than the proper application of wage fixing principles. That is to say, in Mr Forbes' words, "to shore up the bargaining position" of the employees concerned (above, page 12). The applicants, with commendable frankness, did not deny that the primary purpose of their applications is to improve the bargaining position of those of the unions' members who might choose to negotiate Australian Workplace Agreements with any employer purchaser of the Company's business.33 For reasons discussed above, therefore, we are of the opinion that to vary the award above the safety net for purposes of giving effect to such applications is contrary to the public interest. That is so, we believe, because the applications endeavour to legally bind or affect, not only the parties to the award, but some third party who is not bound by either the award or the registered agreement and who is respondent to a different industrial jurisdiction. Given our finding that the purpose of the applications, in terms of the Wage Fixing Principles, is contrary to the public interest to the extent that they seek to vary the Emu Bay Railway Award above the safety net, we do not find it necessary to consider the uncontested fact that there is no cost increase involved. As to flow-on consequences, while we do not pause to discuss the parties' submissions for reasons already mentioned, we note nonetheless that in the absence of any "highly unusual, unique or pressing" features of the kind referred to by Mr Forbes, we would expect considerable flow-on pressures to arise from award variations of the kind sought in these proceedings. Finally, we mention that we do not find the cases relied on by Mr Baker to be helpful. We do not make this observation in a critical sense, because Mr Baker quite properly drew our attention to the difficulty he had experienced in finding relevant authorities. Rather, our purpose in making the observation is simply to record that, having considered the material, we concluded that it was not to the point of the matter before us, ie whether the purpose of the relevant applications was in the public interest in terms of the Wage Fixing Principles. After taking into account all the facts and circumstances and for reasons discussed above, we refuse to make the orders sought by the applicants. Accordingly, we dismiss the applications.
F D Westwood Appearances: Date and Place of Hearing: 1 Exhibit B1. |