Industrial Relations Commission of New South Wales CITATION : Broken Hill Commerce and Industry Consent Award, Re [2002] NSWIRComm 252 APPLICANTS: Barrier Industrial Council Broken Hill Town Employees Union PARTIES : Construction, Forestry, Mining and Energy Union (New South Wales Branch) Shop, Distributive and Allied Employees Association, New South Wales Branch, and other unions RESPONDENTS: Broken Hill Chamber of Commerce Inc, and other employers FILE NUMBER: IRC 4579 of 2002 CORAM: Wright J President; Walton J Vice-President; Boland J; O'Neill C Award - State Wage Case - State Wage Case principles - Application by employers that State Wage Case increase not be granted - Importance and urgency of proceedings - Related proceedings - Decision of Full Bench given as a matter of urgency - Reasons for decision to be provided in due course - Economic incapacity principle - Whether wage increases should be absorbed - Economic difficulties in Broken Hill area - Absorption principle - Outcome contemplated by parties when recent consent award made - Minimum rates award - Obligations of parties - Importance in industrial and employment relations that parties adhere to considered agreements - Application to defer State Wage Case increases refused - Award varied to include State Wage Case increases subject to undertakings etc. CATCHWORDS : State Wage Case principles - Award - State Wage Case - Application by employers that State Wage Case increase not be granted - Importance and urgency of proceedings - Related proceedings - Decision of Full Bench given as a matter of urgency - Reasons for decision to be provided in due course - Economic incapacity principle - Whether wage increases should be absorbed - Economic difficulties in Broken Hill area - Absorption principle - Outcome contemplated by parties when recent consent award made - Minimum rates award - Obligations of parties - Importance in industrial and employment relations that parties adhere to considered agreements - Application to defer State Wage Case increases refused - Award varied to include State Wage Case increases subject to undertakings etc. LEGISLATION CITED : Industrial Relations Act 1996 s 130 Workplace Relations Act 1996 (Cth) s 170LK CASES CITED : Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244 State Wage Case 2002 (2002) 114 IR 81 HEARING DATES: 09/26/2002 DATE OF JUDGMENT: 09/30/2002 APPLICANTS: Mr A Bukarica, Mr Smith and Ms R Greenwood Barrier Industrial Council Broken Hill Town Employees Union Construction, Forestry, Mining and Energy Union (New South Wales Branch) LEGAL REPRESENTATIVES: Shop, Distributive and Allied Employees Association, New South Wales Branch, and other unions RESPONDENTS: Mr C McArdle, Solicitor of KPMG Legal, Solicitors, Broken Hill Chamber of Commerce Inc, and other employers JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J O'NEILL C Monday 30 September 2002 Matter No IRC 4579 of 2002 BROKEN HILL COMMERCE AND INDUSTRY CONSENT AWARD Application by Barrier Industrial Council for variation re State Wage Case 2002 DECISION OF THE COMMISSION [2002] NSWIRComm 252 1 This matter concerns an application by the Barrier Industrial Council to vary the rates of pay in the Broken Hill Commerce and Industry Consent Award 2001 in accordance with the 2002 State Wage Case decision (2002) 114 IR 81. They are proceedings under the Special Case principle as a result of the application by the Broken Hill Chamber of Commerce (the Chamber), and associated employers, that the increases not be granted. However, even that description of the proceedings belies its importance and urgency. 2 Prior to the hearing of this application, the Full Bench has heard applications for expedition and stay in relation to an appeal brought from an interlocutory decision of Sams DP, given in proceedings under s 130 of the Industrial Relations Act 1996 concerning very similar issues to those involved in this matter. 3 The pertinent background is set out in our decision of 20 September 2002: Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244. It is sufficient to observe that Sams DP made interim orders restraining, amongst others, the Construction, Forestry, Mining and Energy Union (NSW Branch) (CFMEU) and the Chamber (the parties currently before us) at the centre of a dispute as to the application of the State Wage Case decision, having regard to the terms of the Award and initiatives by the Chamber to bring about an agreement pursuant to s 170LK of the Workplace Relations Act 1996 (Cth). 4 Having regard to the duration of the interim orders made by the Deputy President, the very substantial industrial dispute in Broken Hill and the significant tensions in the Broken Hill community apparently created by that conflict, we consider that the decision of the Full Bench should be given in this matter as a matter of urgency. We shall give reasons for decision in due course. 5 There were two essential contentions raised by the Chamber in its resistance to the State Wage Case 2002 increase. They were: 1. The Award should be exempt from the State Wage Case 2002 wage increase because of economic incapacity for the purposes of Principle 15 of the wage fixing principles; 2. The wage increases should be absorbed, in large part, due to the operation of Principle 8(d)(ii). That submission was met by the union parties on a number of bases including the nature and terms of the Award. 6 Whilst we are mindful of the present troubled economic circumstances affecting the community of Broken Hill it is clear that the case put on behalf of the Chamber based on economic incapacity was very weak. Having regard to the terms of Principle 15 itself and the authorities of this Commission and the Australian Industrial Relations Commission as to the application of the principle, or of counterpart principles, there was a substantial failure to mount a case by the Chamber in support of the operation of the principle. Very significantly, the Chamber failed to provide any evidence as to the economic circumstances of particular employers or groups of employers which required relief by the operation of Principle 15. The evidence relied on was unhelpfully "macro", or broad and general, in nature and did not serve to differentiate between the wide variety of employers affected by the Award, let alone their economic or employment circumstances. 7 Much attention was focussed upon the operation of Principle 8(d)(ii) of the State Wage Case principles. It was contended by the Chamber that wage increases afforded employees under predecessor awards to the Award warranted the operation of the absorption principle. This changed approach by the Chamber in effect sought an interpretation of the way in which our decision would operate. It is not necessary to approach the matter in this way as we consider that a Special Case has been established in this matter which would warrant the insertion in the Award of the full $18 increase for all classifications of work under it for two reasons: 1. That outcome, in our view, is plainly contemplated by the Award which was recently made. We do not consider that the absorption principle was contemplated in the making of the Award, except as to over-award payments, as acknowledged by the unions in their submissions. That conclusion is supported by the fact that the principle was not applied to the 2001 State Wage Case increase which occurred in the Award. 2. Further, the agreement reached by the parties for the operation of the Award contemplated that the Award be treated as a new minimum rates Award operating from 2001. The agreement did not involve, or contemplate, the Award being treated as if the absorption principle could be applied. We consider that Mr Bukarica's argument for the unions, that the issue of absorption was raised relatively late in the day as an attempt to buttress a fragile case on economic incapacity, is sound. We consider that what is proposed in these proceedings is plainly inconsistent with the prior agreements of the parties in respect of this Award. 8 Parties should, as a matter of principle, consider their situation very carefully and deliberately before conducting themselves in such a manner. It is extremely important in industrial and employment relations that parties adhere to considered agreements entered into by them. The serious circumstances created by the present difficult, regrettable and preventable industrial dispute are demonstrative of the problems which result from such conduct. No doubt, if considered counsel and advice had been provided to the Chamber in that regard, some of the present difficulties may have been avoided to the benefit of all concerned, including the Broken Hill community. 9 We grant the application by the Barrier Industrial Council filed on 9 August 2002, as varied to comply with the State Wage Case 2002 decision, which variation shall operate on and from 1 October 2002. The applicant is directed to file and serve draft orders, in both hard copy and electronic form, to reflect this decision by 4 October 2002. As noted above, the reasons for decision will be available as soon as feasible. 10 Finally, the material before this Full Bench leads to the conclusion that a division has occurred in the local community of Broken Hill the resolution of which should be assisted by this decision. It does not seem fruitful to explore, in this decision or the subsequent reasons therefor, the genesis and basis of this division, although the local community, which seems to have been relatively united in recent times, cannot benefit from such division. It is sufficient to now state that it is incumbent upon all parties to this dispute to seek to deal with the division created and to recognise that the first step to be taken is that there be mutual assurances that previous and current agreements between them will be honoured in the future in their letter and spirit; second, to recognise that the Commission is always available, at short notice, to assist them although its ability to assist may often depend on the parties' own reciprocal good faith. __________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.