Industrial Relations Commission of New South Wales CITATION : Transport Industry (State) Award - Application by Transport Workers' Union of Australia, New South Wales Branch for a new award; Application by Employers' Federation of New South Wales for variation of award. [2000] NSWIRComm 42 Transport Workers' Union of Australia, New South Wales Branch New South Wales Road Transport Association Inc PARTIES : Employers' Federation of New South Wales Australian Business Industrial Australian Industry Group Labor Council of New South Wales FILE NUMBER: IRC6475 of 1998 CORAM: Wright J President; Peterson J; Connor C CATCHWORDS : Award - Application for new Award - Special Case - Wage Fixing Principles - Wage increases consented to by majority parties - Effect of agreement between parties. State Wage Case August 1997 (1997) 73 IR 200 State Wage Case June 1998 (1998) 79 IR 416 CASES CITED : State Wage Case June 1999 (1999) 88 IR 363 Re Transport Industry (State) Award (unreported, Full Bench, IRC96/5261, 20 December 1996) Re Carpenters and Joiners and Bricklayers, Construction Award [1968] AR (NSW) 32 HEARING DATES: 02/01/2000; 02/02/2000; 02/03/2000; 02/04/2000; 02/28/2000; 03/01/2000; 03/02/2000 DATE OF JUDGMENT: 03/31/2000 APPLICANT Mr A Hatcher (of counsel) for the Transport Workers' Union of Australia, New South Wales Branch Mr S Skyring for the Employers' Federation of New South Wales RESPONDENTS LEGAL REPRESENTATIVES: Mr Higgins (of counsel) with Mr M Baroni for the New South Wales Road Transport Association Inc Mr G Poulton with Ms L Brooks for Australian Business Industrial Mr B O'Donnell and Ms J Lowlett for Australian Industry Group Mr Lennon for the Labor Council of New South Wales JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J., President PETERSON J. CONNOR C. Friday, 31 March 2000. Matter No. IRC6475 of 1998 TRANSPORT INDUSTRY (STATE) AWARD Application by the Transport Workers' Union of Australia, New South Wales Branch for a new award. DECISION OF THE FULL BENCH 1 This decision concerns two applications for variation of the Transport Industry (State) Award (the award), the first of which was brought by the Transport Workers' Union of Australia, New South Wales Branch (the TWU) and referred to this Full Bench as a Special Case within the meaning of the Wage Fixing Principles, and the second of which was filed in these proceedings by the Employers' Federation of New South Wales (the Federation) as, in effect, a counter claim. 2 The circumstances in which these applications arise are as follows. The TWU's application, as originally filed on 7 December 1998, sought increases in wage rates for transport workers of the order of eight per cent at the bottom of the scale and six per cent at the top. These increases were designed to equal the value of increases awarded in State Wage Case decisions in August 1997, June 1998 and June 1999 but from which transport workers were excluded as a result of the award made in their interest by the Full Bench in December, 1996. That award provided for an immediate increase of eight per cent with a further seven per cent to apply approximately six months later. The combination of those increases with the further claims the subject of these proceedings meant that, if granted, the increases would exceed those allowable under the Principles and thus it was necessary to hear the matter as a Special Case. 3 The TWU's original application was opposed by all interested employer groups. However, in December, 1999 the New South Wales Road Transport Association Inc (the RTA) filed a counter claim which sought significant alterations in award conditions which, the RTA proposed to argue, were required to offset, and thereby justify, the increases sought by the TWU. The hearing of those applications commenced on that basis on 1 February 2000. At the start of proceedings the following day, the TWU and the RTA announced that they were likely to reach an agreement which they would seek to have made as a common rule award. The formal agreement was announced on the third day of hearing. The TWU's application was amended without objection to reflect the terms of the agreement. Eliminating for convenience some of the subsequent history, in due course the RTA sought by consent and obtained leave to withdraw its application; the Federation filed an application the import of which was to seek a reduction in the rate for Saturday work performed as ordinary hours, from time and a half to time and a quarter, which it pressed as an essential supplement to the agreement; the TWU and the RTA pressed their agreement and opposed the Federation's application; Australian Business Industrial and Australian Industry Group indicated that they "did not oppose" the agreed position of the TWU and the RTA, but also supported the Federation's application; the Federation opposed the agreement unless it was accompanied by the lower rate for Saturday work. The Agreement 4 The agreement, which as we have said the principal parties wish to be approved as an award, provides for two increases in wage rates, each of five per cent; the first to be payable from the date determined by the Commission and the second twelve months thereafter. However, the second increase is not to compound the first increase; that is, both increases will be in the same amount. There will be no increase in allowances. These wage increases - which may be offset against any existing overaward payment (see cl. 2A, Commitment of the proposed award) - are said to be justified by the following alterations to conditions: (a) The starting time for the span within which ordinary hours may be worked is advanced from 6 a.m. to 5 a.m., thus permitting ordinary hours to be worked within the span of 5 a.m. to 6 p.m. (b) The starting time for the span for early morning shift is advanced from 5 a.m. to 4 a.m. The restrictive provision requiring the consent of the majority of employees in the yard to the working of an early morning shift is removed. (c) Ordinary hours, now permitted to be worked on a Sunday, are paid at the rate of double time. A clarification of this clause will provide the rate for 'overtime' hours worked on a Sunday will be double time. (d) The award presently provides for meal breaks to be taken between 11 a.m. and 2 p.m. This can create problems with traffic regulations which require a break after 5 hours' driving and cause the loss of paid but unproductive time. The clause will now permit an employee to work for no longer than 5 hours without a break thereby synchronising the breaks and avoiding that loss. (e) In clause 41, Uniforms and Protective Clothing, provision is made for the supply to an employee who comes into contact with direct or reflected sunlight of special clothing and or headgear, sunglasses and sunscreen, as identified in the clause. (f) In clause 43, Cabins, Hoods and Windscreens, an additional sentence will provide: A requirement that employers provide air-conditioning in the cabin of each vehicle shall be the subject of future consideration by the parties. 5 Another aspect of the agreement is the recording of a statement to the following effect: No change to meal break in the award which currently permits employers to give notice of overtime. This is apparently a reference to an occasional disagreement in the industry about an employee's right to receive tea money when notified on, say, Monday that he will be required to work overtime on each day that week, or over a longer period. It seems that some employees take the view they are entitled to tea money for each day in respect of which they have not been notified on the immediately preceding day. This agreed statement is intended to alleviate that disagreement, at least to some extent. While the matter of the award's meaning and effect has not been debated before us, we would note that clause 8.2.1. of the proposed award repeats the existing provision, that meal allowance is payable "unless notified the previous day or earlier" (our emphasis). The 1996 Decision 6 On 20 December 1996, the Full Bench (Bauer, Peterson JJ. and McKenna C - unreported, IRC96/5261), after hearing a Special Case which was seriously contested by certain employers, approved and adopted an agreement under which were to apply two wage increases of eight and seven per cent, from 26 December 1996 and 31 May 1997 respectively, with a number of variations being made to award conditions, again as offsets minimising the financial impact of the increases. The TWU and the RTA had negotiated an agreement which they then also wanted to become an award with common rule effect. On that occasion the Federation and a separate group of transport industry employers, 66 in number, appeared to oppose the award, substantially on the ground that they would receive little or no benefit from the offsets and so the wage increases were not justified for them. The agreement was supported by the Australian Chamber of Manufactures, New South Wales Branch, Mayne Nickless Ltd., and Cleary Bros. Appearances by the Chamber of Manufactures of New South Wales (Industrial) - now Australian Business Industrial - and the Metal Trades Industry Association - now Australian Industry Group - were withdrawn. 7 In the course of its decision, the Full Bench said: We have come to the conclusion that the agreement presented as a special case satisfies the requirement that it must possess circumstances which take it out of the ordinary. We consider that the elements of the agreed package are, taken together, of such moment that it is appropriate that an award be made reflecting the package with two exceptions both of which the TWU indicated were not objectionable to it. They are the retention of cl.5, Award Modernisation and the elimination of the proposed cl.25, Union Recognition. We observe that the latter clause cannot give the TWU any status which it does not already have under the Award. The Award document, when settled by the Registrar, will show, as does the existing award, the TWU as the applicant in the proceedings. We consider there is a significant public interest element in ensuring that changes of the kind demonstrated in this case which are not simply money-related but also symbolic of attitudinal change, should be given an opportunity to operate. The Parties 8 The proceedings have been affected once again by a question concerning the degree of interest in the award of the employer groups. While the TWU accepted that, apart from the RTA which is obviously the principal employer representative for this award, each of the major associations were entitled to be treated as parties to (as opposed to interveners in) the proceedings, an issue arose as to the weight to be given to submissions made against the proposed award by, ultimately the sole objector, the Federation. 9 The Federation's identity as a party rested on its having disclosed that it has a member with employees covered by the award, namely New Wave Transport. However, the position eventuated where that employer was demonstrated in the evidence to be unaware of the Federation's application. The conclusion is unavoidable that the application for a reduction in the Saturday work rate was not brought to remedy any particular concern of New Wave Transport. Indeed, the Federation eschewed the idea that it should attempt to establish its case by adducing positive evidence in support; it would rely upon the evidence it expected to obtain in cross-examination of the witnesses called by the TWU and the RTA. These considerations will be seen in due course to be of moment in minimising the impact and importance of the Federation's case. 10 In the 1996 Special Case the Full Bench, observing that the Federation's role then was more in the nature of an intervener, said this: We note that our concern about the identity of members for whom the Federation would claim to speak in these proceedings was not clarified. In these circumstances, the position of the Federation seems to be one of principle and not one of direct representation of any members, rather in the position of an intervenor than a party. 11 In this case the membership was declared, at least to some extent, but at the same time as the Federation's interest in the proceedings was thereby established, the degree of overall objection to the agreement, by other employer groups, was shrinking. At the end of the proceedings there was no identifiable employer of transport workers opposed to the award being made. 12 This raises the question of the role in award-making proceedings of employer organisations who have recognised membership coverage and concomitant status but no demonstrated concern within its membership. Where the proceedings are not in the nature of a test case, that is a case the results of which are intended to be of application to awards generally, it is necessary that the organisation, in order to be afforded the status of a party, must identify at least some actual membership bound by the award involved. However, the weight to be attributed to that interest will be a matter of degree in the circumstances of the case. In the present matter, that interest has been demonstrated to be minuscule, if not non-existent. The Evidence 13 In granting leave to amend the application in conformity with the agreement reached on the third day of the proceedings, a procedure was adopted which would permit supplementary evidence to be adduced by the RTA and to afford the other parties an adequate opportunity to ensure they were in a position to test that material by cross-examination. 14 The evidence in the proceedings may be summarised as follows: Wayne John Forno has been an organiser with the TWU since 1994 and is the acting sub-branch Secretary for the Sydney and Central Sub-branch of the TWU. His evidence related some of the history of award regulation in this industry and the way in which the award had played a central role in providing wage rates in a context of little or no over award payments. He dealt with the difficulties in the industry associated with the introduction of enterprise bargaining by the 1987 State Wage Case decision; there was an industry resistance to negotiating increases with offsets. In 1989, the TWU's membership having an attitude so negative to enterprise bargaining, an industry-wide agreement was negotiated with the RTA for a four per cent movement in the award with widening of the spread of ordinary hours and greater flexibility in the taking of meal breaks. The evidence continued the history through the early 1990s and dealt extensively with the circumstances which led up to the December 1996 decision of the Full Bench. In relation to the award made by the Full Bench, Mr Forno said: (a) The overall effect of the new award has been to even up the market place. Companies who had not negotiated an enterprise agreement could access the new flexibilities. Since December 1996 the 4 hour casuals and the early start provisions have been universally used in the transport industry. The additional features, such as Saturday work, are generally customer driven. This flexibility is increasingly used as the retail sector continues to expand into weekend trade and calls upon their transport operators to provide a Saturday transport service. (b) In September 1997 the Union's Committee of Management resolved to initiate a new wage campaign called the "5% plus 5%" campaign whereby transport companies were required to pay an additional 5% by December 1997 and a further and 5% compounding by December 1998. (c) As contrasted with the 1994 "fair wages" campaign, no significant award trade offs were involved in this campaign. There are a number of reasons why the Union did not offer award trade offs as of this campaign, namely: (i) The claim for 5% plus 5% wage increases was less than the 15% fair wages campaign claim; (ii) The membership would be hostile to negotiating further Award trade offs only nine months after the most significant changes to working conditions on record were introduced into the Award. It was felt that any further trade offs would be considered as cutting into core award conditions; (iii) The 15% movement in the Award had been paid for in full by the offsets and the two outstanding $8 safety net adjustments from the 1994 State Wage Case. The membership expected that the next round of wage increases be funded by the employers out of increased profitability; and (iv) Although the Union was unwilling to negotiate on award conditions, there was scope to explore other productivity measures, not related to the award which could be used by the companies to offset the claim. For example the introduction of Key Performance Indicators and the utilisation of drivers to perform loading duties when they would be otherwise idle during working time were considered by the Union when proposed by particular companies. (d) The union has not been able to penetrate the transport sector with its 5% plus 5% campaign to the same extent as the 15% campaign. The Union has approximately 16,000 members whose employment is covered by the award. The 5% plus 5% campaign has delivered increases for about 50% of our membership covered by the Award. This contrasts with the 15% fair wages campaign, which had delivered wage increases for about 70% of our membership in the Award area between 1994 and 1996 prior to the Commission varying the award in December 1996. (e) The 5% plus 5% campaign has been less successful because of two factors. Firstly, the massive increase in flexibilities obtained under the 1996 Award has lessened the incentive from the companies to bargain. Secondly, the industry is more intensely competitive than ever before. Clients are expecting operators to cut the real cost in providing transport services. More and more transport contracts are being put out to tender, with the lowest bidder on cost alone winning. Other contracts are performance based "evergreen" contracts where a transport operators (sic) will keep the contract for a long as the transport cost are limited to predetermined levels. Some of these contracts allow for increases capped at CPI inflation. Other transport contracts expect no increases in transport costs and an increasing number are based on actual cost reductions. 15 Examples were given of agreements reached in the field in the five per cent plus five per cent campaign and some of the offsets which had been agreed to in that context. Some of the companies with which the TWU has reached agreement were identified and involve substantial operators with large transport worker numbers. 16 In relation to New Wave Transport he indicated that he had negotiated an agreement with that operator in 1998. The company has approximately 50 employees in a distribution centre whose work includes the loading and unloading of truck and sorting of goods. Two shifts operate there but weekend work is extremely rare. There is no regular Saturday work and when done it is paid as overtime. Another 12 employees operate at a small distribution centre at Chullora. They work similar hours to Wetherill Park. Mr Forno indicated that one of the TWU organisers under his supervision was in negotiations with that operator; they were nearing final agreement on an increase based on a 'three per cent plus three per cent plus three per cent' approach. Mr Forno gave evidence of discussions he had with the General Manager of New Wave who indicated that he was unaware of the Federation's application before this Commission for a reduction in the Saturday work rate. 17 In relation to the Federation's preservation clause which would maintain the 50 per cent Saturday penalty rate for employees who were: (a) employed at the date of the making of the 1996 award; and (b) regularly work Saturday as an ordinary day prior to the making of the 2000 award he said that the provision would become virtually redundant because it was capable of being waived by individual agreement and pressure would be brought to bear on individual employees to do so. 18 In relation to the agreement with the RTA, Mr Forno said: This is the second time in the last few years that the Union has reached agreement with the RTA for award wage increases accompanied by significant offsets to award conditions. On both occasions this has been a very difficult process for the Union's membership as there is a very conservative attitude to tampering with long standing conditions of work. The Union has only been able to obtain the approval of its membership by presenting the agreement as a complete package. If the agreement as a whole was varied this would stymie further reform agreements between the Union and the RTA as the tenuous confidence the reform process has with ordinary transport workers would disappear. 19 Mr. Forno said that since the 1996 award was made two other awards had been altered by consent to allow for Saturday to be worked as an ordinary day at the rate of time and a half. These awards are the Transport Industry - Trade Waste (State) Award and the Transport Industry - Armoured Cars (State) Award. 20 Mr. Forno also dealt with the way in which he believed the agreed offsets would assist the employers but we will deal with that matter in the context of the employer evidence. In subsequent evidence in relation to the achievement of the agreement before the Commission, he referred to a meeting of delegates, held on 3 February 2000, having endorsed the agreement. 21 Warrick Ian Irvine is an organiser of the TWU who, between 1993 and March 1999, was based in Wagga but has since moved to the TWU's Wollongong office. Mr. Irvine dealt in his evidence particularly with the Southern Districts surrounding Albury and Wagga, in which there are 35 companies employing approximately 700 transport workers. Finemores employs about 350 of those with the other companies employing an average of 8-10 employees. His evidence detailed the operators with whom agreement has been reached. In large part the agreement with Finemores leaves the balance of the employees in the Southern Districts without any increases in hourly rates since 31 May 1997. 22 Evidence was also called from John Charles McDougall, who is the senior TWU delegate at 1st Fleet and is the driver trainer for that operator and also Denis Anthony Davies, a semi-trailer tanker driver for McCafferys Transport, a division of E.A. Murphy and Sons. Both of these witnesses dealt in their affidavit evidence with the difficulties involved in achieving any increases in rates in the field independent of the award. They were not cross-examined and we do not find it necessary to detail the extent of their evidence. The TWU also called evidence from Andrew Metcalfe, the Chief Legal Adviser of the TWU, on matters such as the makeup of the industry and some historical wages matters including movements in award rates by comparison with relevant movements in the Consumer Price Index for Sydney, All Groups. 23 In the RTA's case evidence was called from Geoffrey Read Tinney, the Executive Director of the RTA; Lawrence John Brooks, the principal of R J Brooks Pty Ltd T/as Brooks Transport; Reginald Vincent Mills, a director of A.J. Mills & Sons Pty. Ltd; David John Arnel, the General Manager and Company Secretary of 1st Fleet Group, and Declan Byrne, the General Manager Employee Services of Mayne Nickless Express. 24 Mr Tinney has been employed in the transport industry for approximately 25 years, his positions including the role of General Manager, Industrial Relations with TNT Australia. He gave evidence in the proceedings before the Full Bench in 1996, reference to which has already been made. The evidence in these proceedings identified the size and scope of membership of the RTA which consists of approximately 500 companies ranging from very large to medium and smaller transport operators. Approximately 70 per cent of the membership is estimated to operate 10 trucks or less. Members of the RTA employ an estimated 20,000 employees and operate approximately 10,000 trucks. Mr Tinney gave similar evidence to that which he gave in the 1996 special case; in particular the policy of the RTA of achieving, over time, a seven day, 24 hour servicing of customers at reasonable cost. He observed, based on numerous discussions he had had with managers of transport companies, that the variations made to the award to offset costs in the 1996 case have been "of real practical benefit, particularly in the areas of casuals and the more flexible working of ordinary hours, and to a lesser extent shift work". Mr Tinney's evidence dealt with the development of the agreement in the present proceedings and explained the view of the RTA membership to the particular award variations which will achieve suitable flexibilities and efficiencies in operations. In the course of his evidence he expressed the opinion that the agreement "will have real practical benefits for transport operators and, at the same time, provide transport workers with enhanced rates of pay. The phasing in of the proposed increase will also allow both transport operators and their customers to better accommodate the cost increases associated with it". He indicated that the pressure for the provision of a seven day, 24 hour service have increased. He acknowledged that not every transport operator will use every one of the flexibilities provided in the agreement but expressed the belief that there is something in the agreement for the overwhelming majority of transport employers. 25 In cross-examination for the Federation, Mr Tinney agreed that RTA members would benefit from a 25 per cent rate for ordinary hours worked on Saturday. He instanced the transport operators servicing the retail industry; the furniture removal industry, hardware chains, and the whitegoods industry and expected that such a lower rate would be very well utilised in the industry. While the RTA had claimed that rate in its application for variation, which was withdrawn, it had modified the position in order to reach agreement, deciding not to pursue the balance of its claims at this stage. He thought that the present agreement was a significant one; in 1996 the RTA had required flexibility in a changing industry and he viewed the present agreement as continuing on the same path but he would expect the Saturday rate to be examined "next time around". 26 Mr Brooks, who also gave evidence in the 1996 case in support of the special case, is the Managing Director and Chief Executive Officer of R J Brooks Pty Ltd trading as Brooks Transport which employs 50 transport workers in New South Wales under the Award. It also employs approximately 50 persons under the Transport Workers Award 1998 (Federal) in Queensland, where it also has enterprise bargaining agreements in place. 27 He gave evidence of the experience of the company from September 1999 when an approach by the TWU sought increases in rates of pay of five per cent and five per cent and three per cent, three per cent, and three per cent. Stoppages of work took place on 28 January and again on 7 February but no agreement had been reached. Mr Brooks participated in the RTA's reaching agreement in the present proceedings. In relation to that agreement he said: It is my opinion, based on my knowledge and experience of the transport industry over approximately 25 years that the changes proposed provide for significant flexibilities and efficiencies in relation to the working of ordinary hours of work. While Brooks Transport will not take immediate advantage of all of the changes proposed within the current structure of its operations and customer base, there are nevertheless some significant benefits that will be available to Brooks Transport as a result of the agreement. The most significant proposed variation to the award to Brooks Transport is that dealing with the span of daily ordinary hours of work. The Transport Industry is under increasing pressure to provide services early in the morning to its customers. Brooks Transport has experienced this pressure and, as stated previously, a principal benefit to Brooks Transport from the 1996 Special case arrangements was the increase in the spread of hours. Once again, the increase in the spread of hours proposed in the 2000 Agreement will be of immediate benefit to Brooks Transport. The potential cost saving to Brooks Transport in relation to employees commencing their ordinary day at 5.00 am is 2½ hours ordinary pay per week, or in the case of a Transport Worker Grade 7, $35.00 per week. The increase in the spread of hours will also have the effect of allowing many transport workers to avoid the heavy traffic congestion that now occurs, particularly in Sydney, in peak hour. The ability to commence work earlier and avoid this traffic congestion will benefit transport workers, particularly in the summer months when it can become quite hot early. The combination of heat and traffic congestion can place additional stress upon a transport worker which will be avoided in a variety of cases through the increase in the spread of hours as transport operators will be more prepared to fix starting times at an early hour if they do not incur payment of overtime in doing so. The avoidance of peak hour traffic congestion may also result in the actual delivery being performed in a lesser number of hours and also save on fuel cost associated with the constant starting and stopping that occurs in peak hour. 28 A.J. Mills & Sons Pty Ltd is a regionally-based transport operator principally operating in northern New South Wales and into Queensland. The company operates 150 trucks and employs 106 drivers under the Transport Industry (State) Award. Mr Mills, who was a witness in the 1996 case, gave evidence in support of the current agreement. That evidence included the following: The immediate benefit which Mills Transport can obtain is from the new spread of hours. The effect of being able to start my employees at 5.00am will give me a greater flexibility at arriving at customer destinations at their opening time. The effect of being able to arrive at my customer's depots at starting time enables me to avoid the congestion of other trucks and carriers arriving there at different times. That will mean that I can deliver the goods in a more efficient manner and utilise the trucks more efficiently. Further, it will give greater flexibilities in respect of drivers who driver from regional cities to major capital cities by leaving earlier and avoiding traffic congestion and problems associated with those capital cities. In terms of quantifying the benefits to mills Transport in a dollar amount the effect of being able to start at 5.00am means a saving of about 2½ ordinary hours pay per week. If one performs a calculation based on a Grade 7 Transport Worker that equates to approximately $35.00 per week per driver in savings to Mills Transport. Mills Transport currently has a number of employees who start at 5.00am and are paid penalty rates between the hours of 5.00am and 6.00am. If Mills Transport were to work these employees on an early morning shift it would have to pay a 12 ½% loading. That equates approximately an additional hour's pay. By increasing the span of hours it removes the need to start or adopt the option of putting these people on an early morning shift. Mills Transport in the past had not seen benefit in utilising the early morning shift because of the cost restriction. The greater span of hours now proposed in the agreement will also achieve savings for the company in relation to the spread of hours. Mills is also involved in a conglomerate organisation called C.D.M. Logistics, which provides transportation services for the Woolworths Group. There is an ever increasing demand by the retail sector that goods be delivered seven-days per week twenty four hours a day. At the time of making the statement CDM is in discussion with the Woolworths Group regarding this very issue. Woolworths had approached the group to potentially seek the distribution of goods on a seven day twenty four hour basis to relieve pressures on their own warehouses. The proposal to work Sundays as part of the ordinary hours in conjunction with the ability to work Saturday which is already in the award as a result of the Special Case will provide an opportunity for CDM to provide a new service which will result in a greater utilisation of equipment. The obvious result which flows from the greater utilisation of capital equipment is a savings to the company. 29 Mr Arnel gave evidence in re the 1st Fleet Group, which employs 500 transport workers in all states of Australia and the ACT. Approximately 300 of these employees work in New South Wales. 30 Mr Arnel said that based on his knowledge and experience in the transport industry the agreement contains flexibilities and efficiencies that will be of real practical utility. He also said: It is important in my opinion, based on my experience in the transport industry, that any significant increases in rates of pay be staggered over a period of time. The reason that I hold this opinion is that staggering of increases: (a) Allows transport operators to budget for, and take into account, the significant on cost that are incurred when wages move (b) customers are able to budget into the future for increases in transportation costs. Wage costs form a significant component of charges by transport operators and it is difficult for customers to accommodate sudden increases in them. In relation to the effect on transport operators, any sudden increase results in an immediate increase in annual leave liabilities which have not been provided for thereby affecting profitability and the operator's balance sheet. This is particularly relevant to operators seeking finance as the debt equity ratio between assets and liabilities is what is examined in determining whether funds will be provided. 31 Mr Arnel gave particular evidence supporting the increased span of hours, the early morning shift change and the Sunday work changes. In overview, he said: the effect of these changes is not only to moderate the cost to transport operators of the wage increase proposed but also allow transport operators over time to provide their services to industry on a more flexible basis. The trend towards twenty-four hour seven day servicing in transport is increasing due to customer demands and I expect this trend to continue into the future. The agreement reached is consistent with that trend and this is a step towards meeting future demands that will be placed on the transport industry. 32 Mr Byrne is the General Manager Employees Services of Mayne Nickless Express, a business of Mayne Nickless Limited. Approximately 435 persons are employed in Sydney, Newcastle and Wollongong under registered enterprise agreements which are underpinned by the award. The enterprise agreements are not comprehensive with respect to terms and conditions of employment and the award therefore regulates many of those matters. Increases in wage rates of five per cent and five per cent have been provided by enterprise agreements. Mr Byrne expressed the view that any significant improvements in flexibilities and efficiencies are only possible through variations to the award that will apply on an industry basis. This view was based upon his experience of the difficulty obtaining flexibilities in enterprise negotiations within Mayne Nickless and also his belief, again based on his wider experience, that smaller operators would have extreme difficulty in achieving any offsets of significance, particularly if they involve varying conditions provided for in the award. Mr Byrne's view, indeed it might be said his purpose in giving evidence in the proceedings, was that it is of "paramount importance that all operators, including companies such as Mayne Nickless that have entered into enterprise agreements, have access to such award variations. There should not be any discrimination against operators having access to award variations simply on the basis that they have embraced enterprise bargaining in the context of the industrial campaign by the TWU". 33 Mr Byrne considered that the variations negotiated in the present agreement constitute a significant step in the continuation of the process commenced in the 1996 Special Case "of making the award relevant to the reality in which transport operators are now finding themselves . . . .". 34 Before leaving the summary of evidence we refer to evidence essentially of an economic kind called by the TWU and by Australian Business Industrial. John Duncan Anselan Buchanan, the Acting Director of the Australian Centre for Industrial Relations Research and Training (ACIRRT), gave evidence in the TWU's case. Mr Buchanan and others from ACIRRT had in November 1999 produced a report for the TWU entitled 'Background Paper on Economic Conditions', Employment Trends. The report was tendered in evidence and Mr. Buchanan gave oral evidence in relation to it. Australian Business Industrial had intended to answer that evidence with that of its Policy Analyst, Lewis Rangott. In the altered circumstances of the agreement between the major parties and of ABI supporting that agreement, and in the light of the conclusion we have otherwise come to in these proceedings, any contest in that evidence became of no present significance. It is thus unnecessary for us to detail that evidence or deal with it. Conclusions 35 The evidence called in the proceedings supported the agreement between the TWU and the RTA. To the extent that evidence was subjected to cross-examination, its positive impact was not diminished. 36 The agreement represents a further stage in a process of industry and award reform which we consider should not be discouraged. The emphasis upon negotiated outcomes in the statutory scheme under which the Commission functions; in the wage fixing principles, which are concerned, to the relevant extent, with structuring the industrial relationships of parties to awards and agreements and the virtual preponderance of consensual arrangements in industrial relationships generally, entail that the wishes of the parties, where they are demonstrated to be consistent with those principles, should be given full credit. Although it was said in a particular context, the words of the former Commission in Court Session in Re Carpenters and Joiners and Bricklayers, Construction Award [1968] AR (NSW) 32 at 34 seem apposite: In recent years, as awards have expired, there has been a substantial history of conciliation between the union and the M.B.A. and we would certainly be the last to discourage its continuance. 37 The agreement is a proposition that stands on its own or falls; the parties in support of it wish the agreement, for what we consider to be good reason, to be left intact without interference. The difficulty with the Federation's argument is that it pays no regard for that fact but merely asserts the obvious, that the agreement would be better were it to include the reduced Saturday loading of time and a quarter. Although this may well be the case from the perspective of an employer, the effect on an employee affected directly by that reduction alone might be to eliminate any benefit otherwise flowing from the wage increases. To alter the agreement in that way, to the clear benefit of one side and detriment of the other, would create a distortion sufficient to unbalance the present agreement. In any event, a conclusion that the agreement is capable of improvement is not equivalent to, and says nil about, the question for decision; namely whether the agreement itself is in conformity with principle such that it may be approved as an award. True it is that the award provides a rate for Saturday work higher than the rate usually fixed for such work, but the circumstances in which that situation arose are clearly set out in the decision of the Full Bench of 20 December 1996. While the Full Bench was concerned about the 1996 agreement not providing for Saturday work at the 'standard' rate, that decision did not lay down any timetable for some further reduction in that rate. While it may well be appropriate for the parties to turn their minds in due course to the question of the Saturday rate, we consider that the present matter is capable of satisfactory resolution in terms of the agreement. 38 The reality is that no employer in the industry covered by the award opposes the acceptance by this Full Bench of the agreement as a reasonable settlement and its adoption as an award of general application in the industry. This matter raises similar issues to those faced by the Full Bench in the 1996 Special Case. Again there are to be weighed concerns about the earlier invocation of industrial action in support of wage increases; concern about the retention of time and a half for Saturday work. These raise public interest considerations which compete with those which operate in favour of the agreement. However, the agreement we consider has achieved a reasonable balance as between the increases in wage rates and the award variations said to justify them, such that there is no basis on which we could, in fairness or principle, refuse to accept the agreement in the particular and special circumstances of this case. We do not consider that these proceedings raise any issue of principle beyond those dealt with the 1996 Special Case proceedings. Further, but for the opposition of the Federation, the very limited significance of which we have earlier dealt with, the award now sought to be made, essentially by consent, could have been made on a consensual basis in terms of principle 2(e) of the State Wage Case 1999 principles (see (1999) 88 IR 363 at 399). We consider that a special case has been established to grant the application, as amended. 39 We order that an award be made in terms of Exhibit T, the form of award finally tendered for acceptance. The operative date of the award we determine as the beginning of the first pay period to commence on or after 10 April 2000. The award shall, in accordance with the parties' agreement, remain in force for a period of two years. 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.