Industrial Relations Commission of New South Wales CITATION : Barrier Industrial Council dispute with Broken Hill Chamber of Commerce and Others re Breach of Award and The Construction, Forestry, Mining and Energy Union (New South Wales Branch) dispute with Broken Hill Chamber of Commerce and Others re alleged breach of Award [2002] NSWIRComm 232 APPLICANT (Matter IRC4102 of 2002) Barrier Industrial Council PARTIES : APPLICANT (Matter IRC5070 of 2002) The Construction, Forestry, Mining and Energy Union (New South Wales Branch) RESPONDENT (both matters) Broken Hill Chamber of Commerce and Others FILE NUMBER: 4102 and 5070 of 2002 CORAM: Sams DP Industrial disputes - State Wage Case increases - incapacity to pay - s170LK agreements under Federal Act - potential for industrial disputation - interim orders sought. CATCHWORDS : Held, real and potentially very serious dispute - Commission's concern for stable industrial relations - power to make interim order - interim order made. LEGISLATION CITED : Industrial Relations Act 1996 Workplace Relations Act 1996 State Wage Case 2002 [2002] NSWIRComm 118 CASES CITED : CSR Limited and Others, AIRC (Dec 2186/95 M Print M5779) Maritime Union of Australia and Others and ASP Ship Management Pty Ltd and Another, AIRC (C2002/3662 and C2002/3801, Melbourne, 4 August 2002) HEARING DATES: 09/05/2002 DATE OF JUDGMENT: 09/06/2002 APPLICANT (Matter IRC4102 of 2002) Mr P Coleman of Counsel APPLICANT (Matter IRC5070 of 2002) Mr A Bukarica LEGAL REPRESENTATIVES: Construction, Forestry, Mining and Energy Union (New South Wales Branch) RESPONDENT Mr C McArdle, Solicitor (with Mr D Klepac) JUDGMENT: 7 - - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 6 September 2002 Matter IRC02/4102 NOTIFICATION UNDER SECTION 130 BY THE BARRIER INDUSTRIAL COUNCIL OF A DISPUTE WITH THE BROKEN HILL CHAMBER OF COMMERCE AND OTHERS RE BREACH OF AWARD Matter IRC02/5070 NOTIFICATION UNDER SECTION 130 BY THE CONSTRUCTION, FORESTY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH) OF A DISPUTE WITH BROKEN HILL CHAMBER OF COMMERCE AND OTHERS RE ALLEGED BREACH OF AWARD DECISION AND ORDERS [2002] NSWIRComm 232 1 Shortly put, this matter arises from disputes notified under s130 of the Industrial Relations Act 1996 ("the Act") by the Construction, Forestry, Mining and Energy Union (New South Wales Branch) ("the CFMEU") concerning a failure of the respondents to the Broken Hill Commerce & Industry Consent Award to agree to pay the $18 per week 2002 State Wage increase to employees under this Award and matter IRC4102 of 2002, a notification by the Barrier Industrial Council of a dispute with the Broken Hill Chamber of Commerce and others re breach of Award . The disputes are related to matter IRC4579 of 2002, an application by the Barrier Industrial Council re State Wage Case 2002. 2 The Broken Hill Chamber of Commerce ("the Chamber") on behalf of its members has put that the employers cannot afford to pay the $18 State Wage Case increase arising from the State Wage Case 2002 [2002] NSWIRComm 118. It is claimed that the local industry is depressed and to pay the increase will force businesses to close and exacerbate unemployment in Broken Hill. The Unions have asked for evidence of the employers' incapacity to pay and say if the Chamber wishes to argue economic incapacity, the State Wage Case Principles provides it an opportunity to do so. 3 The Chamber has responded to what it submits is the intransigent and unrealistic attitude of the Unions, by holding meetings of employees and offering agreements under s170LK of the Workplace Relations Act ("the Federal Act"). It is said the Unions only represents 4 to 5 per cent of the Broken Hill workforce. 4 The disputes have been listed for conciliation on a number of occasions. I was satisfied after proceedings yesterday that Certificates of Unsuccessful Conciliation should be issued in accordance with s135(2) of the Act in respect to both disputes.. 5 The dispute proceeded to arbitration yesterday afternoon. Mr A Bukarica appeared for the Construction, Forestry, Mining and Energy Union, New South Wales Branch; Mr P Coleman of Counsel appeared for the Barrier Industrial Council, the Broken Hill Town Employees' Union and the Shop Distributive and Allied Employees' Association and Mr C McArdle, Solicitor, appeared for the Broken Hill Chamber of Commerce. 6 Yesterday, I issued directions for the hearing of matter IRC4579 OF 2002 in Broken Hill on 19 and 20 November. I note that these proceedings are subject to a special case reference to his Honour the President, pursuant to Principle 15 of the State Wage Case Principles. CONSIDERATION 7 For practical reasons, it is not possible for the Commission to summarise the submissions of the parties. It is sufficient to say that I have considered these submissions in light of the Commission's powers to make interim orders pursuant to s136(1(d) of the Act. 8 Whether the members of the Chamber have the right to offer their employees s170LK agreements under the Federal Act is not a matter which I need determine in these proceedings. 9 Rather, the Commission cannot ignore the practical industrial realities which underpin this dispute. Further, the Commission has a statutory obligation, in the arbitration of a dispute, pursuant to s136 of the Act, to take preventative action in respect to "a situation that is likely to give rise to an industrial dispute (see the Act's Dictionary). I have no doubt that this is a situation which is real and potentially very serious. 10 Indeed, I have been informed of an ugly incident which occurred in Broken Hill on Wednesday night involving an allegation of malicious damage to commercial property. Whether that incident is related either directly or indirectly to the present dispute is not known. However, the inference is obvious. It was Mr McArdle who raised this matter in the conciliation proceedings when he asked of the union official's knowledge of the incident and who was involved. It hardly needs to be said that if there is any allegation of criminal activity against any person or persons, such matters should appropriately be raised with the relevant authorities. 11 In my opinion, the steps taken by the Chamber to offer s170LK agreements, cannot be viewed in isolation from the consent award it entered into only twelve months ago. The Chamber is not only a party to the Award, but a major one. It was directly involved in the Award negotiations. The Award has a term of three years, expiring on 30 June 2004. 12 I am compelled to observe that the steps taken by the Chamber are, prima facie, in conflict with its obligations under the Award and the agreement it entered into with the Unions to accept and abide by the terms and conditions of a State award for a period of three years. It was a commitment given to this Commission in the proceedings for the making of the consent award on 11 April 2001 (Matter IRC1503 of 2002). 13 Such commitments and the agreement should not be lightly departed from. 14 I am gravely concerned that the steps taken by the Chamber will fracture the co-operative approach to industrial relations which has existed in Broken Hill for many years. There is a long and stable history of State industrial regulation in Broken Hill. It is no coincidence that the offer of s170LK agreements by the Chamber to employees otherwise covered by the State award is in direct response to matters that are properly before the Industrial Relations Commission of New South Wales for determination under the Act. Sadly, the Chamber's actions are a recipe for industrial disaster. 15 Whatever be the merits of the Chamber's claim - and I have no doubt that the Broken Hill region is suffering economically - the Chamber's response has been little short of provocation and amounts, in my view, to an incitement to industrial action. I cannot be any more blunt. 16 I would make the following pertinent observations: 17 Firstly, the Chamber has the right to pursue its claim of incapacity to pay State Wage Case increases through Principle 15 of the State Wage Case Principles. As a responsible peak employer body, I would have expected it to do so rather than resort to the alternatives it has so far taken. 18 Secondly, the offer of s170KL agreements under the Federal Act, is no more and no less than a crude industrial tactic to force the Unions to accept the Chamber's position on the $18 State Wage Case increase. 19 Thirdly, s134(4) of the Act requires the parties to an industrial dispute to negotiate in good faith. I am well convinced that the Chamber's actions are directly contrary to the spirit and intent of s134(4). THE ORDERS 20 From the authorities referred to by Mr Bukarica, it seems to me unarguable that one purpose, inter alia, for the making of an interim order is to preserve the status quo between disputant parties until the substance of the dispute is finally resolved. 21 So much is clear from CSR Limited and Others (Dec 2186/95 M Print M5779) in which Williams DP said: An interim order is generally made for the purpose of maintaining the status quo pending completion of a full hearing. In this case, I identify the relevant status quo in relation to industrial relations representation as being that which was determined by the QIRC. I have reached this conclusion, notwithstanding the fact that the QIRC's determination was under the relevant state legislation, applied only to state registered unions and does not and cannot affect directly the entitlements of the counterpart federally registered unions. It would be possible to consider one status quo as being that which pertains at a federal level, namely that both the AWU and CFMEU have constitutional entitlements to represent the industrial interests under the Act of certain classes of employees. But to adopt that approach would, in my view, be too narrow. It fails to recognise the industrial reality that industrial relations in this particular area have been regulated and continue to be regulated under the state system. … And from The Maritime Union of Australia and Others and ASP Ship Management Pty Ltd and Another (C2002/3662 and C2002/3801 AIRC, Melbourne, 4 August 2002, in which Watson SDP said at para 33: Having regard to the authorities and the submissions of the parties I am of the view that the Commission does have powers to make an interim order directed to preserving the subject matter of a proceeding before it and maintaining the ability to effectively utilise jurisdiction in those proceedings in relation to both the s170FA and exceptional matters order sought. … 22 Notwithstanding that these are decisions of the Australian Industrial Relations Commission under the Federal Act, the principles there espoused are applicable as a matter of general industrial law and principles. 23 I am satisfied that the Commission has the power to make an order requiring the status quo to be maintained while the substance and merits of a dispute are heard and determined by the Commission. Usually, such orders are sought against Unions to ensure that industrial action cease or not take place in order to restore the disputant parties to the status quo. I cannot see why an order should not be made against an employer who has taken steps which are so obviously designed to alter the status quo. Prima facie, such steps have prejudiced the legitimate industrial interests of other parties to the Award, whether their members have been directly approached or not. 24 It needs to be emphasised that the steps so far taken are, in my view, designed to achieve a result which may well be able to be obtained by using the legitimate and usual processes under the Act and the Commission's Wage Fixing Principles. 25 Moreover, I have no doubt at all that it is in the public interest for an interim order to be made pursuant to my obligations under s146(2) of the Act. 26 However, I am not convinced that it is appropriate to make the orders proposed by the Union in Ex"2" in the proceedings. 27 On the other hand, I do not accept that the interim orders I propose to make are, as Mr McArdle contends, a restraint on a group of individual employers from exercising rights available to them under the Federal Act. No application for a s170LK agreement has been lodged, let alone approved by the Australian Industrial Relations Commission. There can be no conflict between Federal and State law. 28 The interim orders do no more than maintain the existing status quo and hopefully avoid a situation which may give rise to the potential for a serious industrial dispute. 29 I now make the following orders: INTERIM ORDER Pursuant to s136(1)(d) of the Industrial Relations Act 1996, the Commission makes the following interim order : 1) The Broken Hill Chamber of Commerce, it's officers, members, agents and employees, shall take no further steps to disturb or alter the status quo as to the existing industrial regulation and rates of pay and conditions of employees employed by parties to the Broken Hill Commerce and Industry Consent Award 2001 . 2) The Barrier Industrial Council, it's affiliated Unions and their members, shall refrain from taking any industrial action in respect to the disputes. 3) The parties are to re-commence good faith negotiations in accordance with cl 1.12 of the Award. 4) This order shall take effect from 6.00pm on 6 September 2002 and remain in effect for twenty-eight days thereafter or unless otherwise ordered by the Commission. These proceedings are adjourned accordingly. Peter Sams Deputy President 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.