Barrier Industrial Council v Pasminco Mining

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM : SAMS, DP 17 September 2001

Matter No. IRC00/472 Notification by the Broken Hill Town Employee's Union of a dispute with the Broken Hill Musicians Club Limited re negotiations for a new collective agreement.

1 This notification, filed on 9 February 2000 by the Broken Hill Town Employee's Union ("the Union"), concerns a dispute with the Broken Hill Musicians Club Ltd ("the Club") following the breakdown of negotiations for a collective agreement proposed to cover the Club's employees.

2 In accordance with the usual practice of unregistered organisations in Broken Hill, the Union sought the assistance of the Industrial Relations Commission of New South Wales in respect to the impasse between the Union and the Club.

3 It is to be observed that the Commission attempts to resolve such disputes in the customary way through conciliation, and if necessary, by way of arbitration. Enforceable orders, or awards are not within the Commission's power and proceedings are usually concluded by a recommendation/s of the Commission. It has been the tradition precedent for the industrial parties to accept and abide by any recommendation so given.

4 The matter was first listed before Bishop C on 29 February 2000, at which time Mr B Campbell and Mrs R Greenwood appeared for the Union and Mr N Barry from the Registered Clubs Association represented the Club. It seems plain enough, from these early proceedings, that the Club was proposing changes to it's staffing arrangements in order to make savings in its costs and overheads. Initially, this was to be achieved through offering Australian Workplace Agreements ("AWAs") to employees. All casual employees would be offered part time employment (except those working less than eight hours a week) with a reduction in the hourly rate of $3.65 per hour. The Club argued that part time employment offered pro rata entitlements to annual leave, sick leave and other full time benefits with a guarantee of between eight (8) to thirty two (32) hours of employment per week.

5 In the alternative, the Union proposed a new collective agreement with increased benefits modelled on an agreement negotiated with the Broken Hill Sturt Club. It is relevant to note that for a number of years (since 1992), there had been no formal industrial instrument covering the Musicians Club's employees; rather a practice had developed of individual employment arrangements.

6 During conciliation proceedings before Bishop C, in February 2000, the Club's brief response to the Union's claim was that it "would send the club broke. It's as simple as that" (T. p6).

7 The Commissioner chaired a number of private conferences with the parties and adjourned the matter to allow further discussions to take place. I note that no further communication occurred between the parties until the matter was re-listed in June 2000. Mr Morgan now appeared for the Club. It is apposite to my later conclusions, to note that in June and October 2000, Bishop C conducted detailed and wide ranging conferences with the parties, which included consideration of a KPMG report into the Club's organisational structure and finances. These conferences resulted in the Commissioner issuing the following statement and recommendation which I quote in full: S T A T E M E N T This dispute was notified by the Union in February and has been the subject of extensive conciliation between the parties during the Commission's visits to Broken Hill in February and June with further conciliation between the parties yesterday, Monday 16th October 2000. There have been protracted ongoing discussions between the parties during the intervening period. The competing claims of the parties have been extensively considered and the Commission strongly considers that it is time to resolve this dispute in the interests of the ongoing viability of the Club, the ongoing employment of the Union's members and also most importantly their security of employment. It is vitally important that in the future both sides work co-operatively together, to re-establish a harmonious working relationship. The Commission also notes that there is a separate Organisational Restructure being undertaken by the Club, which will also hopefully impact positively on the Club's future. In light of all the submissions put to me by both sides and being very mindful of the Club's economic position, I issue the following Recommendation:- R E C O M M E N D A T I O N 1. The Commission strongly recommends that members of the Union accept the latest offer made by the Musicians' Club for a new collective agreement to cover full-time, part-time and casual employees to operate until December 2001.

The Commission acknowledges that acceptance of the proposed settlement represents a compromise position for the Union, however, given the circumstances of the Club and the protracted nature of this dispute, the Commission considers the settlement proposed to be appropriate and reasonable. The Commission is also mindful of the standards that have been set in other comparable state awards and agreements in making this recommendation.

It is proposed that the agreement will operate until December 2001. The parties should work co-operatively together to assist in improving the viability of the Club during next year and the parties will be able to re-assess the position when negotiating the agreement to operate from 2002.

I also recommend to the parties that they agree on appropriate procedures to be followed for replacement employees required arising out of absences etc.

The parties should also reach agreement about payment of any increases as soon as possible should the proposed settlement be accepted. The processing of any agreement reached should not delay the implementation of the agreement.

Leave is reserved to either side to seek to have this matter re-listed at short notice on Thursday 19 or Friday 20 October 2000, whilst the Commission is sitting in Broken Hill.

A copy of this Statement and Recommendation shall be made available to all employees. E.A.R. BISHOP Commissioner

8 While the statement was issued on 17 October 2000, it seems a meeting of employees was not held until 18 December 2000. The meeting resolved to neither accept, nor reject, the Club's offer, but sought further negotiations.

9 The matter was re-allocated to me by Wright J, President, on 8 December whereupon the Commission re-listed it for 5 February 2001 in Broken Hill. Despite further attempts at resolution, the matter remained extant. I note however, that some sixty (60) percent of the employees, including union members, had signed off on the Club's proposal and had been working the new roster arrangements since 4 January.

10 On 5 February 2001, after being advised by Mr Campbell that a further meeting of employees would be held, the Commission said: We have a recommendation from the Commission via Commissioner Bishop . I would need much more material before me than what has been put today for me to alter that recommendation, bearing in mind that the Commissioner had more extensive discussions with the parties than I have had. You indicated when the recommendation was last considered, it was neither accepted nor rejected, but further discussions were needed. So in that context the recommendation remains and should either be accepted or rejected - we will see where we go from there. Bearing in mind the position of the Commission, in being able to assist the parties, it's a little difficult, as you would appreciate. But you have had the roster operating for a month or so (T. p9).

11 A paid stop work meeting was held the next day (6 February 2001). On 8 February 2001, the Commission was advised that the meeting carried, the following resolutions: 1. We, the members of the Broken Hill Town Employees' Union, employed at the Broken Hill Musicians Club, reject the Club's offer of October 2000 inclusive of Commissioner Bishop's recommendation of October 2000.

2. We, the members of the Broken Hill Town Employees' Union, employed at the Broken Hill Musicians Club, resolve to receive the state Award plus Broken Hill conditions of the Club Employees (State) Award for all employees noting that eligible employees may enter into Voluntary Exemption Agreements under Clause 11. We believe that there is no classification currently at the Club undertaking duties below that of Level 4 and we shall actively pursue this.

12 The Club's manager, Mr Brown, now appearing for the Club, expressed concern that what was now proposed differed considerably to what had been negotiated over the last twelve (12) months. An adjournment to take advice from the Registered Clubs Association was sought and granted.

13 On 8 May, with very little having transpired since February, Mr Morgan put that the Club's position remained as it was in the proceedings before Bishop C. The Union's claim of 6 February was therefore rejected. Mr Morgan advised that thirty-two (32) employees had now accepted the Club's offer and were working under it's terms; whereas fourteen (14) employees had not, and were working under the terms of the former agreement.

14 The Club's final offer was: 1. An hourly rate of $19.20 for full time and part time employees (the Union originally claimed $20.65);

2. Part time employees to receive between eight (8) and thirty-two (32) hours per week with a minimum three (3) hours engagement;

3. An hourly rate of $21.80 for casual employees (the Union originally claimed a 25 percent loading on the full time rate);

4. Casual employees to receive between zero (0) and twenty-five (25) hours per week with a minimum three (3) hours engagement.

15 After further submissions, both parties agreed to accept a recommendation of the Commission as a means of finally resolving the matter. Directions were issued accordingly. It is on this undertaking and, only because it was given without qualification, that I have proceeded to determine this matter.

16 The Union traced the history of negotiations since late 1999 for a collective agreement with the Club. It was critical of the Club's initial offer of AWAs to employees in 1999. These offers were subsequently withdrawn, in favour of individual contracts. The Union claimed the Club pressured employees to accept such contracts by threatening to reduce their hours of work. The evidence was that a number of casual employees had suffered reduced hours.

17 The Union submitted that it had proposed an alternative roster, which it believed to be fair. The Club refused to consider the proposal.

18 The Union said that employees should be covered by the Club Employees (State) Award plus Broken Hill conditions. These conditions were:

· thirteen (13) weeks long service leave after ten (10) years service;

19 The Union provided a comparison of the state Award, plus Broken Hill conditions, to the Club's offer and concluded that the offer "severely disadvantaged" employees.

20 For the Club, Mr Morgan submitted that the Club Employees (State) Award has an exclusion for the County of Yancowinna (Broken Hill) and the award therefore, cannot legally apply to the Club.

21 He said it was wrong to suggest that there are common rates of pay and conditions of employment applicable to all clubs in Broken Hill. Since 1992, the Club's employees have been covered by individual agreements negotiated directly with the employees. The last collective agreement between the Club and the Union had expired in 1992.

22 The Club had agreed to drop the original proposal for AWAs and was willing to negotiate a collective agreement with the Union. However, the negotiations had proceeded in the context of a contraction of the Broken Hill economy, directly affecting the Club's financial position. It was pointed out that the Club's losses in 1999, 2000 and 2001 were $527,672, $475,192 and $331,005 respectively. As a result, the Club's bankers had required it to demonstrate it's future viability. In doing so, the Club had engaged KPMG to review its operations in order to effect cost savings. It was in this financial environment, that Bishop C had issued a recommendation that employees should accept the Club's final offer. Indeed, the offer, it submitted, met a number of the Union's demands such as: · payment for overtime; · thirteen (13) weeks long service leave after ten (10) years service; · seven (7) weeks annual leave; · paid thirty (30) minutes crib break; · sick leave entitlements in excess of the union's claim.

23 The Club said it had never used a classification system to that found in the state Award and it would continue to pay a penalty rate for weekend work. As of today (August 2001), 66 percent of employees had accepted the Club's offer and are working under it's terms. It denied applying any pressure to employees and said the agreements were signed in good faith, without any duress. No preference was given to those employees who had signed the agreement, against those who hadn't.

24 The Club accepted there had been a reduction in working hours. However, it claimed this reflected low turnover and more effective rostering. Available work was offered equitably. The Union's proposed roster offered no demonstrable savings and was rejected for this reason.

25 Finally, the Club submitted that the Union's claim was inconsistent with the State Wage Fixing Principles of the Commission.

26 In reply, the Union submitted that the proposed collective agreement would provide a "level playing field" for all local clubs. It pointed to the agreement negotiated with the Broken Hill Sturt Club. The Union had made numerous attempts to assist the Musicians Club to manage it's staff and rostering requirements. The Club had been dismissive of these offers.

27 The Union said in early 2000 the Club employed fifteen (15) full time employees and thirty-nine (39) rostered casual employees. Currently, it employs thirteen (13) full time, six (6) part time and seventeen (17) casual employees.

28 The Union believed that Bishop C's recommendation was premature in that the Union had not been in a position to make an informed decision on rosters and casual hours. The Club had misrepresented the Union's position by including the Union's name on the employee contracts and offering a higher casual hourly rate ($22.10) as an incentive to employees to accept the offer.

29 The Union submitted that the state Award does not contain any conditions above the Broken Hill club industry standard. The Union refuted the Club's assertion that it had never used a classification system similar to that in the Award and refuted a claim that it pays a weekend rate.

30 As to the level of employee acceptance, the Union submitted that casual employees had been forced to resign because of drastically reduced hours. The Union claimed employees had been penalised for union membership and that employees had been subject to management pressure. Adoption of the Union proposal would improve employee morale and reduce future disputation.

31 As a compromise, the Union now proposed to allow the current agreements to run until their expiry on 31 December 2001, subject to: (a) a new collective agreement including the state Award plus Broken Hill conditions to apply from 1 January 2002;

(b) the Club not offering any individual contracts without a witness for the employee being present;

(c) the employees being able to chose the collective agreement or an individual contract which clearly demonstrates it is more advantageous than the agreement. CONSIDERATION

32 It appears to me that the Union's claim for the Club Industry (State) Award entitlements plus Broken Hill conditions is little more than an attempt to secure the best of both worlds. The Commission does not find this proposition particularly persuasive.

33 It is relevant to note that the unique industrial history of Broken Hill has been predicated on a distinction between conditions applying in Broken Hill and common rule conditions applying under state awards. If there is any desire by individual parties to alter this historic precedent then an appropriate application should be filed with the Commission. It will then be tested according to the provisions of the Act and the requirements of the State Wage Fixing Principles.

34 It is of further note that the Union itself has not sought to have standard conditions applying throughout the Club sector in Broken Hill, either through the Broken Hill Commerce and Industry Consent Award (324 IG 248), or any other industrial instrument. The Union's submission observes that it has an agreement with the Sturt Club and it is seeking negotiations for an agreement with the Social and Democratic Club. In other words, it is negotiating industrial arrangements on a club-by-club basis. In any event, I am not at all comfortable with imposing a set of conditions on one club in the same terms as was negotiated with another club.

35 It seems appropriate to remind the parties of what His Honour Cahill J said in Barrier Industrial Council v Pasminco Mining (unreported, Cahill VP, IRC301 of 1996, 29 March 1996): The unions well know that it is quite inappropriate to select one out of many conditions of employment referable to staff employees and, merely because it is more beneficial, seek to apply it to a group of employees to whom the condition has never applied, particularly when the record shows a history of negotiation and agreement with the company over a period of years on the relevant subject matter in regards to wages employees. The principle his Honour there expressed, while in a slightly different context, is that it is inappropriate to make comparisons between groups of employees where the circumstances are not like for like. I respectfully concur with his Honour's views.

36 The Commission observes that, at no stage did the Union challenge the Club's assertion of it's financial predicament. That being so, and having regard for the Commission's own knowledge of the difficulties being experienced by licensed premises (including hotels) in Broken Hill, I accept that financial imperatives must influence the Commission's deliberations in this matter. Moreover, I am of the view that this is hardly the time to be seeking improved conditions modelled on benefits that apply to other clubs. Although the state Award is a minimum rates award underpinning award conditions for all clubs in New South Wales, each club, be it within Broken Hill, or elsewhere in New South Wales, will have been exposed to a range of factors affecting financial performance and viability. Negotiations above minimum conditions should therefore be predicated on each club's particular and relevant circumstances. In my opinion, comparisons of the kind proposed by the Union have little probative value or objective merit.

37 In deciding this matter, the Commission has taken into account the following:

1. Thirty-two (32) employees (including union members) are working according to the Club's offer and have been since at least May 2001. Fourteen (14) employees have not accepted the Club's proposal. Thus, an overwhelming majority - 2:1 - have " voted with their feet ". It seems incredible to me, that fourteen (14) employees would continue to work for lesser wages than the majority of their fellow employees. Despite Mr Campbell's assertion that employees were pressured, or coerced into signing up to the offer, no evidence was adduced to this effect. I cannot be satisfied that this is so.

2. All the individual contracts have a common expiry date of 31 December. The Club is not opposed to negotiating a collective agreement for some, or all of its employees. In view of the very short period before the contracts' expiry, it seems eminently sensible for the Union to renew it's request for a collective agreement in the new year and make such claims as are reasonable and practical. Recourse to the Commission is available should any dispute arise.

3. It is bewildering that a Union would be critical of a proposal which emphasises part time employment over casual employment. Seen in the context of the uncertain economic environment in Broken Hill, the benefits of part time employment are obvious. Such benefits not only relate to a range of pro rata full time entitlements but, on any view of it, part time employees enjoy far greater protection in terms of job security and rights to unfair dismissal.

4. It is not open to the Union to demand what hours can be worked by casual employees; save for insisting on a reasonable minimum engagement. Nor is it the role of the Union to dictate the terms of the Club's roster. Such matters are properly within the rights of management to manage it's own affairs as it sees fit; subject of course, to fairness and equity. Murphy C neatly put the role of the Commission and management prerogative this way in Australian Liquor, Hospitality and Miscellaneous Workers Union and Bellambi Bowling Recreation and Sports Club Limited (unreported, Murphy C, IRC1717 of 2000, 21 December 2000): The role of this Commission has been held over and again to be fettered by the broad recognition that it's intervention in matters affecting the running of businesses should be limited. The Commission's interference in matters of rostering for instance, should be focussed towards the recognition and the rectification of injustices visited upon individuals by the identification of mala fides and even perhaps unnecessary adverse and unilateral changes to an employee's contract of employment.

That is not to say that unions and employees shouldn't be consulted or offer opinions on such matters. Indeed, a reasonable employer would welcome such input. However, a union cannot veto the employer's legitimate right to manage. 5. The very nature of casual employment, particularly where, as here, there is a pool of casual employees, is that employees are engaged according to the employer's business needs. For this uncertainty and irregularity of employment, employees receive a penalty loading. Employees have a choice of whether to accept, or refuse such engagement. There is nothing remarkable about these observations. 6. To my mind, the Union's submission is not based on the merits of the claim, but rather, it criticises the Club for refusing to agree to what it wants. The Union asserts that it seeks collective industrial protection by implementing the provisions of the state Award with Broken Hill conditions. Of course, it can secure a collective industrial agreement on some other basis. If the real objective is for a collective agreement, it could have been achieved long ago. 7. The Union proposed a counter offer in it's reply submissions (see para 32). It seeks negotiations for a new collective agreement to apply from 1 January 2002 based on the state Award and Broken Hill conditions. In other words, an insistence on a predetermined outcome, which it well knows, has already been rejected. If this is meant to be a sign of good faith or an offer of compromise, it falls a long way short of either. It is mischievous and disingenuous. At the risk of stating the bleeding obvious, good faith bargaining cannot be undertaken where one party insists on a pre-determined result. 8. Moreover, I am troubled that the counter offer does little more than preserve the status quo until a collective agreement is negotiated. Bearing in mind that this dispute has been on foot for almost two years, I have no confidence that a new collective agreement will be in place by 1 January 2002. The effect of the status quo is that a minority of employees will be paid less than their fellow workers and may be for a considerable period of time. I regard this outcome to be most unsatisfactory and unjust. The status quo should not be allowed to continue, even for a short time. 9. The Union claims the existence of a Broken Hill club industry standard in which there is no benefit or condition in excess of those contained in the state Award. The Union seems to rely on one agreement negotiated with the Sturt Club as evidence of such a standard. It hardly needs to be said that one agreement, with one club, is a long way short of substantiating a club industry standard in Broken Hill. 10. Finally, the Commission expresses it's disappointment that a recommendation made by Bishop C on 17 October 2000 was not accepted by the Club's employees. This is contrary to the traditional, and hitherto accepted practice of the industrial parties in Broken Hill, to accept recommendations of this Commission - warts and all. I am concerned that the integrity of this practice has been compromised by a rejection of the Commissioner's recommendation. Such conduct threatens the orderly and responsible approach to resolving disputation in the unique environment of Broken Hill.

Ms Greenwood rationalised the rejection of Bishop C's recommendation by submitting it was premature. However, it is not evident from the record of proceedings at the time that this view was ever expressed as a reason why the Commission should refrain from issuing the recommendation. It is disingenuous to now offer excuses for rejecting the Commission's recommendation. In any event, it seems to me that Bishop C was well placed to make the recommendation she did. The Commissioner had chaired a number of conferences with the parties and was well acquainted with their respective claims. The Commissioner was appraised of the Club's financial difficulties and, in my opinion, was perfectly entitled to take such evidence into account in arriving at the view she did.

Nothing was put to me in this case which would justify disturbing Bishop C's recommendation. Moreover, I would expressly reaffirm the recommendation as being apposite to the present circumstances.

1. The employees accept the final proposal of the Club for a collective agreement for full time, part time and casual employees of the Musicians Club to operate until 31 December 2001.

2. Employees shall have the choice of remaining on their individual contracts, or being covered by a collective agreement.

3. Negotiations for a new collective agreement to take effect on 1 January 2002 shall commence no later than November this year.

4. These negotiations should proceed with neither party having a predetermined view of the outcome and in a spirit of compromise and good faith bargaining. 5. These proceedings are concluded accordingly.

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