Elura Mine Enterprise (Consent) Award 2001 [2003] NSWIRComm 218

MATTER IRC1917 of 2003 APPLICANT: Mr S Rothman of Senior Counsel SOLICITOR Ms K Parker, Maurice Blackburn Cashman

RESPONDENT: Mr R Goot AM of Senior Counsel SOLICITORS Minter Ellison

INTERVENER Ms H McKenzie, Solicitor, Blake Dawson Waldron

MATTER IRC2410 of 2003 LEGAL REPRESENTATIVES: APPLICANT Ms H McKenzie, Solicitor, Blake Dawson Waldron

RESPONDENTS Mr S Rothman of Senior Counsel SOLICITOR Ms K Parker, Maurice Blackburn Cashman, for the Australian Workers' Union, Greater New South Wales Branch Mr S Robinson for the Electrical Trades Union of Australia, New South Wales Branch Mr A Neilson for the Australian Manufacturing Workers' Union, New South Wales Branch Mr R Goot AM Senior Counsel for Pasminco Australia Limited (subject to a Deed of Company Arrangement) SOLICITORS Minter Ellison

JUDGMENT: - 48 - .INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM : SAMS, DP 17 July 2003

Matter No. IRC03/1917 THE ELURA MINE ENTERPRISE (CONSENT) AWARD 2001 Application by the Australian Workers' Union, New South Wales for variation of an enterprise award

Matter No. IRC03/2410 ELURA MINE ENTERPRISE (CONSENT) AWARD 2001 Application by Elura Mines Pty Ltd for rescission of award DECISION [2003] NSWIRComm 218 1 This decision arises from two applications made pursuant to s17 of the Industrial Relations Act 1996 ("the Act"). The first, an application filed on 4 April 2003 by the Australian Workers' Union ('AWU') seeks to vary the Elura Mine Enterprise (Consent) Award 2001, 339 IG 718 ('the consent Award'). The second, filed by Elura Mines Pty Ltd ('Elura Mines') on 6 May 2003, seeks to rescind the aforementioned Award.

2 The application to vary the consent Award was first listed on 8 April 2003 together with three dispute notifications, IRC1151, 1836 and 1838 of 2003. The disputes related to industrial action taken by employees of Pasminco Australia Limited (subject to Deed of Company Arrangement) ('Pasminco') at its Elura Mine near Cobar, New South Wales. The dispute notifications were listed for arbitration and are subject to a reserved decision of the Commission. 3 The application to rescind the consent Award was listed for mention before Ritchie C on 14 May 2003. However, on 9 May in proceedings before myself in the AWU application, Ms H McKenzie, Solicitor, appearing for Consolidated Broken Hill Co Ltd ('CBH') and associated companies and Elura Mines Pty Ltd, intervened in the proceedings. Intervention was granted and Ms McKenzie submitted that the application to rescind the consent Award should be re-allocated to me and joined for hearing with the AWU application. This course was not objected to by the other parties.

4 After consulting with his Honour the President and Ritchie C, the application to rescind the consent Award was re-allocated to the Commission as presently constituted and directions were issued in both matters in order that the two applications be listed and heard together.

5 Substantive proceedings in both matters took place on 30 June, 1 and 3 July, 2003 and written submissions in reply were received the following day. Mr S Rothman of Senior Counsel represented the AWU, Mr R Goot AM of Senior Counsel represented Pasminco, Ms H McKenzie continued her appearance for Elura Mines Pty Ltd, Mr S Robinson appeared for the Electrical Trades Union of Australia, New South Wales Branch and Mr A Nielson appeared for the Australian Manufacturing Workers' Union, New South Wales Branch.

6 The Elura mine is an underground zinc/lead/silver mining operation in central New South Wales. It is forty-seven kilometres north west of the town of Cobar. It commenced production of lead and zinc concentrates in 1983. It was built at a cost of more than $200 million and comprises an underground mine accessed by both a decline and a haulage shaft, concentrator, drying, storage and rail facilities. In 2002, the mine treated 1.18 million tonnes of ore and produced 170,666 tonnes of zinc concentrate and 80,490 tonnes of lead concentrate. The aggregate contained metal in concentrates in 2002 was 85,364 tonnes zinc, 45,146 tonnes lead and 30,154 kilograms silver (see Ex"3"). Zinc ore is processed primarily at the Cockle Creek Smelter (set for closure in September 2003) and lead concentrate at the Port Pirie smelter.

7 The operation currently has a workforce of some 240 employees, including contractors. There are 114 employees covered by the consent Award who are members of the three Unions.

8 The present applications arise as a consequence of a decision by Pasminco to enter into a conditional sales agreement with CBH to purchase the Elura mine and Newcastle port facility. The sales agreement was signed on 8 April 2003 and requires certain conditions to be met before 18 July 2003. Eight weeks is to elapse from that time before the sale process is completed. This will serve as notice to all Pasminco employees of the termination of their employment. Pasminco has given an undertaking that all of its employees will be made redundant and be paid all outstanding entitlements, including severance pay and other related payments. Details of these payments are not materially relevant for present purposes. 9 On completion of the sale Pasminco will no longer have any involvement at the mine and shall receive: i) $2.2 million cash;

ii) a further $3.2 million cash (9 months after completion);

iii) up to $5 million in price linked payments if the zinc price exceeds AUD$2,000 per tonne;

iv) a refund of $2.8 million on account of an environmental bond previously paid to the NSW Department of Minerals and Resources by the Pasminco Group;

v) release from a $1.8 million bank guarantee securing the balance of the environmental bond; and

vi) release from its obligations under the lease for the Newcastle shiploader, as CBH will take over the lease in respect of the ship loader.

10 Elura Mines has foreshadowed that it intends to operate the mine under different terms and conditions than currently apply under the consent Award. It is obvious that the primary objectives of the AWU application are to have the existing terms and conditions of the consent Award apply to future employees of Elura Mines and for preference to be given to existing Pasminco employees should they apply for positions at the mine with the new owner.

11 To achieve these objectives the AWU application is expressed in the following terms: A. The applicant claims a variation to the Elura Mines Enterprise (Consent) Award 2001 as follows: a) In clause 3(i) delete the words "Pasminco Australia Limited (hereinafter referred to as 'the Company')" and insert in lieu thereof the words "any employer (hereinafter referred to as 'the Company') of employees employed in classifications covered by this Award engaged in or associated with mining activities and metallurgical plant operations at the Elura Mine in the State of New South Wales." b) By inserting a new clause in the following terms: "The Company, or any employer, shall, in relation to any employment at the mine, in addition to any other provision or obligation, grant absolute preference of employment to persons employed by the operator of the Mine as at 4 April 2003."

12 There is a long history of agreements and consent awards applying at the Elura Mine. This history is to be found in the evidence advanced by both the AWU and Pasminco (see evidence below). 13 The current Award took effect on 24 September 2001 and remains in force for a period of two years, ie until 24 September 2003. It is a consent award binding on the Australian Workers' Union, New South Wales; the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch; the Electrical Trades Union of Australia, New South Wales Branch and Pasminco and is expressed to apply only at the Elura Mine.

14 The Metalliferous Mining Industry (State) Consolidated Award 1995 (291 IG 1) ('the industry award') is a common rule award applying to metalliferous mining in New South Wales. The evidence is that most of the major metalliferous mining operations are regulated by their own discrete enterprise arrangements. Clause 29 of the Award exempts any mining operation from its terms and conditions where the operation has its own specific industrial regulation: This award shall not apply to persons covered by other awards or industrial agreements covering metalliferous mines in New South Wales as ratified by the Industrial Relations Commission of New South Wales from time to time.

15 The rates of pay under the consent Award were compared to rates applying at two other mines in the Cobar region, the Broken Hill mine and the industry award:

ELURA CSA PEAK PERILYA METALLIFEROUS MINING STATE AWARD HOURS OF 42 44 42 42 42 WORK CLASSIFICATION Miner 90,308 92,000 83,500 93,210 50,524.73 Production Driller 79,913 75,000 77,000 72,853 48,611.56 Rock Handler 75,326 55,000 68,000 54,654 45,543.30 Services 59,536 60,000 65,000 62,000 Nipper 45,886 N/A N/A 49,686 40,121.09 U/G Tradesperson 81,048 68,000 73,000 63,882 SurfaceTradesperson 66,656 55,000 57,800 57,948 54,217.43 Mill Operator 57,199 52,000 60,900 57,976 48,611.56

16 After agreement and determination of a number of objections, affidavits were tendered in evidence from Darren Michael Cameron, a former local official of the AWU and Steven Manns, an underground miner at the Elura mine and AWU delegate.

17 Mr Cameron deposed to his involvement in the negotiations leading to the making of the 1996, 1999 and 2001 enterprise awards at the Elura mine. He was familiar with the metalliferous mining industry and award regulation generally and specifically at Elura mine.

18 Mr Cameron said that the industry award had never applied at the Elura mine. Since commencement of operations in 1982 the mine has been regulated by its own specific award or agreement. He believed that all the major metalliferous mining operations in New South Wales have their own discrete arrangements, with the exception of some smaller mines where the industry award would apply.

19 Annexed to Mr Cameron's affidavit were all the industrial instruments which have applied at the mine since 1982. Mr Cameron referred to the history of both awards and the exemptions which have applied in the industry award to operators with their own enterprise specific awards or agreements (cl 29). This was so, Mr Cameron said, because awards and agreements in the industry operate as paid rates awards with the method of payment based on the contract mining system. He defined this system as "payment of remuneration to miners by shift (or panel) as a whole based on an agreed rate per tonne". The calculation applied to all leave taken by the employees.

20 Mr Cameron's evidence was that in the late 1980's or early 1990's Electrolytic Zinc Co of Australasia sold the Elura mine to Pasminco. It was agreed by the parties that the new arrangements related to a change in the shareholding of the employer, and not a change in the employer as a legal entity (T.p14).

21 The 1992 Agreement continued the contract mining system and introduced significant structural change, including a seven day operation. In the 1996 Award, the contract mining system was converted to a system of base rate and proficiency allowance (the contract average). This system was continued in the 1999 enterprise award.

22 Mr Cameron deposed that in the current industry award, rates of pay may be paid on a daily or shift basis. These rates are similar to the base rates in the consent award at Elura. Mr Cameron said the industry award was never designed to operate as a paid rates award as the award provides at cl 28: .. the employer shall pay each individual engaged in a contract team their share of the earnings and shall render to each worker a statement setting out costs and allocations one day prior to payment.

23 Mr Cameron concluded his first affidavit with this observation: At the Elura mine near Cobar preference of employment for the current workforce and maintaining current rates and conditions is of great importance to the economy of the area and the livelihood and well-being of the current employees, their families and the general community in Cobar. This because it is the only real industry near Cobar. If an employee loses work in the Cobar region there is virtually no other work available. That employee and their family will have to travel thousands of miles to find another job. If the current rates and conditions of employees are detrimentally affected by the change in employment this would affect the standard of living of employees and their dependents.

24 Mr Manns has been an employee of Pasminco for around ten years. He was aware of the sale of the mine and of the matters presently before the Commission.

25 Mr Manns believed that as the sale of the mine had been an issue dragging on for four to five years, it had created uncertainty for the employees over their future and that of their families in Cobar. Mr Manns has three school age children. His family has lived in Cobar all their lives and have enjoyed the activities in the town and the friendships they have formed in the community. Mr Manns was worried that he may be forced to leave the town in the hope of finding work. He believed that retaining the benefits under the consent Award was important to his family's quality of life.

26 Mr Manns said that his employment prospects in Cobar were bleak if he was not offered employment by the new mine operator. He had heard that some of Pasminco's former employees might be re hired on lesser conditions. He estimated that about 40 per cent of the former employees would not be interested in working under AWAs based on the industry award. He believed there was concern amongst the present workforce about moving away from collective regulation. He feared AWAs would cause disharmony in the workforce.

27 The case for Pasminco rested on the evidence of Mr Stewart Fraser Howe, General Manager, Strategic Planning and Development, Pasminco and Mr Peter Martin, Manager, Human Resources, New South Wales.

28 Mr Howe is responsible for conducting the sale process of the Elura Mine. In his affidavit Mr Howe detailed the background to the Pasminco Group's worsening financial position which resulted in the appointment of administrators in September 2001. Mr Howe stated the major reasons for the Group's collapse included: a) the decline in world zinc prices;

e) the information systems deployed under the former management of the Pasminco Group.

He also referred to the redevelopment of the Century mine in Queensland.

29 Mr Howe said the ultimate cause of the Group's collapse were external economic factors beyond it's control relating to the fall in zinc prices to historic lows and the decline in the value of the Australian dollar, during the period 2000 and 2001. These factors meant that the Pasminco Group could not overcome its financial stresses and remain financially viable in the form it then existed.

30 Mr Howe provided details of Pasminco's overall financial position. At the time of voluntary administration Pasminco's financier creditors were owed $1,891 million with a further $850 million in the hedging exposure. These were secured creditors which have priority over the assets of Pasminco. Total creditor claims were $2,812,485,227. The annual loss for the year ended 30 June 2001 was $2,418.3 million. Liabilities exceeded the value of assets by $856 million.

31 The 2002 annual result disclosed a consolidated loss of $411 million and liabilities exceeding the value of assets by $1,261 million. Mr Howe said that the Company has a working capital facility from which provision has been made for the payment of all the entitlements of the Elura mine employees.

32 Mr Howe described the "Equity and Float" option under which the financier creditors have agreed to swap their combined debt of $2.8 billion for equity in a new company, Pasminco Resources Ltd. An important element with this option is the sale of the Elura mine and the sale or closure of all other mining assets (except Century and Roseberry (Tasmania) mines). If this option fails a number of "fall back" options have been identified, including the liquidation of the Pasminco Group.

33 Mr Howe gave details of the proposed sale of the Elura Mine. Mr Howe said the mine had been incurring substantial financial losses - the after tax loss for the year ended 30 June 2002 was $17.1 million. Without major investment the life of the mine was about three years. Mr Howe said Pasminco could not afford substantial investment in the mine.

34 Mr Howe gave oral evidence of the price paid for the ore which is shipped to Pasminco smelters as against third party smelters. He described the relationship as "broadly equivalent" depending on distance costs. The mine is paid 85 per cent of the international zinc price.

35 Mr Howe deposed that on 8 April 2003 Pasminco signed a conditional sale and purchase agreement with CBH for the sale of the mine and shiploader at Newcastle. Mr Howe emphasised that this was a conditional sale that still might not happen.

36 All employees of Pasminco will be terminated at completion of the sale and Pasminco will not have any involvement or interest in the Elura mine once the sale is completed. Mr Howe gave evidence that eight weeks' actual notice will be given to all employees.

37 Mr Howe added that the cash proceeds of the sale would be insufficient to cover the liability for severance payments to employees of Pasminco. The liability is estimated to be at least $10.7 million.

38 Mr Howe deposed that it had been difficult for Pasminco to attract a suitable purchaser of the mine. It had taken six months to attract CBH as a potential purchaser and negotiations commenced on 4 October 2002.

39 It was Mr Howe's belief that in order for CBH to run an economically viable business it intended to operate the mine differently to how Pasminco did. He understood the method of mining proposed by the new owner was to obtain a greater percentage of the ore in the deposit (from 40 per cent to 97 per cent). He understood the terms of the consent Award were not suitable in these circumstances. Mr Howe did not know what rates of pay or conditions of employment CBH intended to apply at the mine.

40 He further believed that given the financial state of the mine any other potential purchaser of the mine would have the same or similar concerns.

41 Mr Howe identified three options if the sale of the mine does not proceed: a) to continue the mine in the current fashion while pursuing further operating productivity improvements, bearing in mind that the ore reserves at the mine are likely to be exhausted within two to three years;

b) to try to identify another purchaser of the mine. He was not optimistic about identifying another purchaser given the difficulties Pasminco has had to date in attracting CBH and negotiating terms of a sale agreement; or

42 Mr Martin has worked in the industry since February 1975. He has held his current position for approximately six years. Mr Martin referred to the history of the mine and the changed shareholding arrangements since 1985. He agreed that Pasminco Cockle Creek Smelter became the employer in 1993. The reason for this had to do with a single workers' compensation licence. However, he said the present sales proposal was the first occasion the mine was to be sold to a third party. He referred to the circumstances of the sale of the mine. As this evidence is corroborative of Mr Howe's evidence, I do not repeat it. 43 Mr Martin rejected Mr Mann's evidence that the planned sale of the mine had been "dragging on for four or five years". He first heard of it in July 2001. Employees were formally advised earlier this year.

44 Mr Martin confirmed that on completion of the sale, all Pasminco employees will be paid outstanding entitlements and severance pay. The cost of these payments was at least $6.8 million. Rent free accommodation will continue to apply for four months after the employees' termination.

45 Mr Martin detailed the history of industrial regulation at the mine. He had been involved in the 1999 and 2001 Award negotiations. Mr Martin believed that the consent Award represented a number of constraints on the efficiency and productivity of the mine. He described these constraints as: i) restrictions on the use of contractors under the award provision (cl 27);

ii) rosters can only be altered with the agreement of 65 per cent of employees;

iii) rates of pay are 17 per cent higher than other mining rates in Cobar (see table in para 15); Mr Martin agreed that no applications had been made to alter any of these conditions. Mr Martin was asked about safety incentives and he agreed the issue was not raised in the 1999 or 2001 negotiations.

46 Mr Martin was questioned about the table of pay rates. He agreed he wasn't aware of anyone covered by the industry award in the area. Mr Martin wasn't aware of the duties of the classifications or percentage of employees referred to in the table.

47 Mr Martin had not been involved in the Purchase Agreement. Nor was he involved with CBH in relation to future wage regulation at the mine. He was aware however that CBH intends to operate the mine differently. He understood that rates of pay or conditions were not a requirement in the conditional sales agreement.

48 In oral evidence, Mr Martin said he was unaware of the rates of pay paid by contractors to their employees at the mine. Mr Martin did not know whether local contractors would be used by CBH. Mr Martin said that the use of contractors at the mine has not resulted in any redundancies or any decrease in the number of permanent employees. However, in recent years, there had been an increasing number of work stoppages, threats of industrial action and union obstruction over the use of contractors. Pasminco had applied to vary the contractor's clause in the consent Award in 2001. Mr Martin agreed this was the first time such an application had been made. It was subsequently withdrawn because of the proposed sale of the mine.

49 Mr Martin gave detailed examples of other disputes over contractors (see the table on p20 of his affidavit). The consent Award had never applied to contractors at the mine, but would if the AWU's application was successful. He believed this would be inappropriate.

50 Mr Martin referred to the high levels of absenteeism amongst award employees - an average of 1,000 hours per month or 5 per cent of the workforce absent on any given day. (Roseberry's mine was 2.85 per cent). This level of absenteeism had contributed to disputes over contractors. Mr Martin said it was preferable not to use contractors at all, but the high levels of absenteeism made it necessary.

51 Mr Martin rejected the AWU evidence that the Dispute Handling Procedure had been an effective mechanism in resolving disputes. He cited the most recent example of industrial action over the proposed sale of the mine and gave details of the events related thereto. The industrial action continued for nearly ten days. Four other examples were provided in which Mr Martin said the disputes procedure was not followed by the employees. Reasons for the disputes were not elaborated upon. Since 1995, 8,539 working hours have been lost due to industrial action. This figure included unpaid stop work meetings and strike action.

52 Mr Martin did not believe it was appropriate to give preference to existing award employees as all Pasminco employees will receive termination and severance payments. Other unemployed persons in Cobar may wish to apply for employment with the new operator and would be denied the opportunity if the preference clause was granted. For Elura Mines

53 Mr James Arthur Wall is the Executive Chairman of Consolidated Broken Hill Ltd and has been a director of CBH since September 2000. He is a qualified mining engineer and has been involved in the international mining industry for more than thirty years. He detailed his past experience and current duties at CBH. He is responsible for the business development/strategies of CBH including all aspects of acquisition, improvement and profitable operation of the Elura mine.

54 Mr Wall described the main activity of CBH as mineral exploration. It is a publicly listed company first floated on the Australian Stock Exchange in 1992. It has no relationship to Pasminco, or any of its entities, and has no other metalliferous mining operations in New South Wales. Mr Wall and the company had no experience with the AWU and had not sought to engage the AWU in discussions about rates of pay and conditions (at Elura).

55 Mr Wall referred to the proposed acquisition of the Elura Mine. CBH and it's subsidiary companies signed a conditional agreement on 8 April 2003 to purchase the Elura Mine assets. The agreement is subject to conditions including the ability to obtain debt funding. In securing funding, Mr Wall said that the bankers will need to be satisfied that the mine is a good profitable investment. Mr Wall agreed that there was no condition in the Purchase Agreement requiring any change in the terms and conditions of employment. The Purchase Agreement will become effective on 18 July 2003.

56 Mr Wall referred to the history of the Elura mine from when the Electrolytic Zinc Co of Australasia ('EZ') first applied for an exploration licence in 1970. Mr Wall said that in 1985 North Broken Hill Holding Ltd ('NBH') acquired all the shares of EZ and consequently owned the Elura Mine. NBH merged with Peko Wallsend in 1986 and with CRA in 1988 to form Pasminco Australia Ltd.

57 Mr Wall deposed that from his knowledge, the Elura mine was running at a loss after only two years of operation. In 1991 production dropped dramatically from 1.2 million tonnes per annum to 400,000 tonnes and half the workforce was retrenched. In 1995 production increased to its pre-1991 levels. Mr Wall referred to the current operation of the mine. His evidence corroborated that of Mr Howe and I do not repeat it.

58 At the time of the Purchase Agreement, 90 per cent of the ore feed from Elura went to the Pasminco Cockle Creek Smelter. Pasminco has now announced that this smelter will close on 30 September 2003 resulting in additional costs for Elura of $4 million per annum.

59 Mr Wall referred to the Elura Mine Improvement Plan; a plan developed by the joint venture between CBH and Clough Engineering Ltd ('CEL') set up to manage the mine - Elura Mines Pty Ltd. The Improvement Plan requires a capital investment of $13 million. It is proposed to: i) construct a pastefill plant which will extend the mine's life by about seven years with 94 per cent of the ore body able to be mined. (The unions support this proposal);

iii) outsource all ore transportation to a contractor;

iv) outsource all specialised engineering/service and maintenance functions;

v) utilise contractors for the first 18 to 24 months after acquisition. Thereafter there will be a progressive movement to an employee based workforce.

60 Mr Wall said that an information memorandum of February 2003 (Confidential Ex"2") did not reflect the Company's intentions in relation to employment at the Mine.

61 Mr Wall gave evidence that there was no single document known as the Improvement Plan. The Plan has been evolving as the economic scenario has changed. A company known as Behre Dolbear had independently audited the Plan in January 2003. However, Mr Wall said it was no longer relevant, as significant changes had occurred (including the early closure of the Cockle Creek smelter).

62 Mr Wall dealt with the proposals for labour efficiency. This would involve offering employees individual agreements comprising a base wage of 60 per cent of the total remuneration and 40 per cent based on attaining agreed efficiency and production objectives, including providing financial incentives to improve safety.

63 Elura Mines intends to invite expressions of interest from existing Pasminco employees at Elura Mine and externally from the broader Cobar community. All prospective employees will be given an interview. Mr Wall foreshadowed a reduction in the workforce (including contractors) from 240 to155.

64 Mr Wall stated that CBH wished to provide a "clean slate" for negotiating appropriate employment arrangements with its employees. This was the reason it has sought to rescind the consent Award. Mr Wall understood that while the industry award would operate as a "safety net", it was not intended that that award would prescribe the actual rates of pay and conditions. Like Pasminco, Elura Mines wanted the ability to negotiate its own arrangements with its employees or their representatives.

65 Pasminco has agreed to terminate the employment of all its employees and pay all outstanding entitlements. The rent free accommodation obligation after retrenchment will be honoured by CBH.

66 Mr Wall did not believe the consent Award or its classification structure was appropriate for the new mine operation. He believed that the consent Award would frustrate, or impede the ability of CBH to implement the Improvement Plan, particularly in respect to the use of contractors, the rates of pay and the introduction of a program targeting workplace safety. Financial institutions had expressed concern with the labour costs. Mr Wall did not believe the mine could remain open with its current mode of operation.

67 Mr Wall deposed that it would not be practical or fair to exclude the best persons from employment at the mine by affording preference to Pasminco employees.

68 Mr Cameron replied to Mr Martin's evidence as follows: i) the conditions of the consent award had applied to a contractor at the mine (CCI);

ii) the AWU had negotiated with several contractors outside the strict terms of cl 27 of the Award;

iii) Mr Martin's table of comparable pay rates confirms that the Elura rates are "ballpark";

iv) Pasminco had continually failed to offer overtime to employees to cover absenteeism;

vi) the list of contractors (p78) demonstrates the accommodation of contractors by the Union;

vii) some of the disputes before the Commission involved no lost time. Mr Martin's calculation of lost time was excessive and included unpaid union meetings, not objected to by the Company.

69 In specifically responding to the respondent's affidavit evidence Mr Manns put the following evidence in reply. a) the current workforce would support the introduction of paste fill plant as proposed by Elura Mines; b) he was aware that some of the ore concentrates from the Elura mine and Broken Hill mine will go to smelters in Port Pirie and Roseberry in Tasmania; c) the Elure mine is the workplace of choice in Cobar. Employees have come from the CSA and Peak mines. Elura mine employees enjoy hard fought industrial entitlements, negotiated between Unions and the employer over a long period; d) the award's proficiency allowance represents agreed efficiency and productivity objectives. He believed similar arrangements could be reached with Elura Mines; e) the proposal of providing incentives for employees to improve safety suggests a past practice which was abandoned because it was seen to be a financial incentive for employees not to report injuries; f) the Unions and the employees accept that all existing Pasminco employees will be made redundant by Pasminco. He did not accept that existing employees will not work for Elura Mines; g) he was concerned at the proposal to invite expressions of interest for work at the mine from other people in the Cobar community. The existing employees understand the mine and its work practices; h) appropriate terms and conditions will able to be negotiated when the consent Award expires on 24 September 2003. A new classification structure could be negotiated in the future; i) the Dispute Handling Procedure has resolved problems at the mine for years, including safety issues. There has been no application to vary this clause, even as recently as the present consent Award made in 2001; j) no employee is familiar with the industry award. It had never had any relevance at the Elura Mine; k) the consent award would not impede or frustrate the ability of Elura Mines to successfully implement the Improvement Plan; l) there is no reason why Elura Mines could not reach agreement (with the Union) in relation to the use of specific contractors. There were concerns with the longer term use of contractors;

m) he believed the respondent's evidence about restrictions on efficiency were exaggerated. He rejected the evidence that the restrictions on contractors had impeded productivity;

n) at present there was insufficient personnel to cover all the work areas. The policy of "hotseating" (taking one employee from one area to cover another) undermined the workforce and explains absenteeism. More permanent employees were needed, but Pasminco had refused;

o) he could not recall management ever raising inflexibility with rostering arrangements;

p) the respondent's comparison of wage rates is not a proper comparison of the conditions or classifications at the other sites. Even so, all the rates are higher than the industry award;

q) lost production due to disputes over contractors may have been higher without the contractor's clause. The causes of the disputes may rest with either of the parties;

r) the workforce at Elura has sought for many years to have employees of contractors receive the rates and conditions under the consent Award. The respondent's evidence that it is highly likely that, for the first 18 to 24 months after the sale, contractors will undertake most work, highlights the importance of securing decent conditions for contractor employees; s) the genesis of recent industrial action at the site was Pasminco's refusal to answer questions abut the employees' entitlements when the mine is sold. There would have been far greater disputation without the use of the Dispute Handling Procedure. Industrial action had included stop work meetings, expressly dealt with in the award.

70 The AWU contended that the relevant provisions of the Act to be applied in these matters were s3 - Objects of the Act and ss10, 12(1) and 17(3).

71 In respect to s10, the AWU submitted that the Commission can make or vary an award setting fair and reasonable conditions of employment for employees where changed circumstances can be demonstrated. These circumstances were Pasminco's voluntary administration and the sale of the Elura mine: see Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156 and Pastoral Industry (State) Award Re (2001) 104 IR 168.

72 The AWU claimed that while there was no proper basis for the AWU application to be regarded as a special case, the relevant tests had, nevertheless been met: See Operational Ambulance Officers (State) Award, Re [2001] NSWIRComm 331.

73 The AWU's primary contention was that the application to vary the Award sought to do no more than protect the employees' current entitlements. Elura Mines had asserted that it had no obligation to continue the employment of existing employees or be bound by the terms and conditions of the consent Award. This would result in the unfair and unreasonable treatment of the employees by the new employer.

74 The AWU put that the existing employees work in a unique environment and it was important to protect them so as to avoid the otherwise devastating affect the proposed sale of the mine will have on them and their families. There was also potential for serious industrial unrest if the application to rescind the consent Award is granted.

75 It was observed that transferring conditions of employment from one employer to another was not a novel concept. See Workplace Relations Act 1996 and Labour Relations Act 1995 (South Africa).

76 Senior Counsel for the AWU, Mr Rothman submitted that the AWU proposal was not dissimilar to situations where contractors working on a building site are bound to the terms and conditions applied to other employees on the site or where employers are roped into Federal consent awards. It was not proposed to make the consent Award a common rule award across the State, but only for a specific enterprise.

77 Mr Rothman put that the Commission can be satisfied that the AWU application would have no impact on existing employees of Pasminco. Further, it was apparent that the existing contractors, some of whom might be employed on the mine, are aware of these proceedings and do not wish to be heard in opposition to the AWU application.

78 The evidence of Mr Martin contained a table of comparable rates of pay. Mr Rothman said it was accepted that the Elura mine rates were within the market range. Moreover, Mr Wall's evidence was that CBH had not factored the rates of pay into the conditional sales agreement. Further, the confidential exhibits (executive summaries concerning the proposed sale) disclosed no specific reference to proposed rates of pay. Therefore, there was nothing in the evidence which would enable an inference that the existing rates of pay are a deterrent to CBH or any other purchaser of the mine.

79 As to the coverage of the industry award, Mr Rothman submitted that the evidence was that no one was aware of any employees bound to it. Notwithstanding the employing entity had changed a number of times over the years, there was a long history of consent arrangements applying at the mine. The employer had only once sought to vary the consent Award in respect to cl.27 - Use of Contractors.

80 It was the AWU's evidence that the employees and the unions would co-operate in the negotiation of a new award to increase efficiency and productivity at the mine. 81 Mr Rothman referred to the evidence of Mr Manns concerning low employee morale. He cited Re Aluminium Industry (Comalco Bell Bay Companies) Award 1983 (1994) 56 IR 403 to the effect that it was contrary to the public interest to reduce the wages of employees. He asked, if AWA's are offered by the employer, will the no disadvantage test be applied against the industry award or the consent Award? He said the public interest is best upheld by setting fair and reasonable rates of pay and involving the unions in the negotiation of collective arrangements.

82 Mr Rothman commented on the financial reports and economic evidence. He put that there was no evidence that wage costs were a factor for Pasminco's difficulties, or particularly for the Elura Mine. Despite losses of $17 million at Elura, there was no evidence that, [as a stand alone operation] the mine was cash flow negative or making losses.

83 As to the preference clause application, Mr Rothman submitted that what was sought was not a prohibition on employment. He explained that where two people are applying for a job, preference would only apply if the employee was otherwise competent to do the work and met the criteria for appointment.

84 As to the rescission application, Mr Rothman submitted that Elura Mines is not an employer, does not employ anyone and yet it seeks to rescind an award that does not bind it. It cannot make such an application, as it is not a party to the consent Award and not an employer for the purposes of the Act. It can have no interest in the proceedings.

85 Mr Robinson and Mr Neilson supported and adopted the AWU submissions.

86 Elura Mines contended that the provisions in the consent Award were only directed to those parties bound to the Award and should not be regarded as having general application or precedent for other parties. CBH is not related, in any way to Pasminco. It was in the public interest for CBH to have an opportunity to determine its own industrial arrangements which best suited its operational requirements.

87 The industry award, as an award of the Commission containing appropriate terms and conditions for employees was capable of applying in the event the consent Award is rescinded. It was not appropriate to visit consent arrangements on a new operator where the industry award can, and will apply.

88 It was contended that the Elura mine was a marginal economic proposition, requiring significant capital investment to extend the mine's life. Investors must be satisfied that the mine will be operated in an efficient and profitable manner and that labour will be engaged under flexible and comparable conditions. It followed that the consent Award was not appropriate to CBH's proposed method of operating the mine.

89 Ms McKenzie submitted that it was in the public interest to rescind the award so as to remove uncertainty between s12 of the Act and the definition of a party in the Dictionary to the Act. The rescission will not affect the rights of existing Pasminco employees.

90 Ms McKenzie put that the AWU denied the financial and industrial realities facing the Elura mine and ignored the legitimate interests of the prospective purchaser of the mine. Section 3(c) of the Act seeks "to promote participation in industrial relations by employees and employers at an enterprise or workplace level." Like Pasminco, this was what CBH sought for its own employees.

91 Ms McKenzie argued that the AWU application seeks to fundamentally change the scope and nature of the current consent Award such as to bind to it, a party that has never been bound to it and impose conditions on it without any involvement or agreement. It would fundamentally change the consent Award to an arbitrated one; (see Notification under s130 by Kellogg (Aust) Pty Ltd of a dispute with the National Union of Workers, New South Wales re alleged breach of Award and other matters [2003] NSWIRComm 167). 92 Ms McKenzie said it was not the case that her client has taken an absolute position that it would not negotiate with the Unions. Two meetings have already taken place. It was somewhat curious, Ms McKenzie noted, that not only was CBH not served with the AWU application, but the AWU had sought to object to its appearance in the proceedings. The application was "absolutely all about" binding CBH to the Award.

93 Ms McKenzie referred to the legislative provisions dealing with the rescission of awards in the public interest. She referred to the history of the consent arrangements applying at the mine and the exemption clause (cl 29) in the industry award. There was nothing in the industry award which disclosed an intention to exclude major mining entities. The exemption related to the existence of specific or discrete arrangements, regardless of the size of the mining operation.

94 It was said that ss101 and 102 of the Act do not apply because employees are not to be transferred to the new employer. They will, if engaged by the new employer, enter into new contracts of employment. The provisions in ss101 and 102, unlike similar provisions in the Federal Act, are directed towards preserving the entitlements of employees. The sections do not apply in these circumstances, where all the employees' entitlements are to be paid out.

95 Ms McKenzie submitted that her client's rescission application was made in its capacity as a future employer and as a party with a sufficient interest to make the application. The Commission had been faced with similar circumstances in the past: see Cobar Mines Pty Ltd Consent Award 1995, (unreported) Cahill, VP. IRC No. 3305 of 1998, 21 August 1998 and Southern Copper Limited Award and Others Awards (unreported) Hungerford, J, IRC No. 899 of 1999, 5 May 1999. In both cases, the Unions had consented to the rescission applications. 96 Turning to the public interest test, Ms McKenzie said the test extends beyond the private and partisan interests of the parties to a dispute, to the broader interests of the community and society; See In re Butchery (Wholesale) Award [1911] AR 245, O'Sullivan v Farrer and Anor (1989) 168 CLR 210.

97 It was argued that the rescission application was not contrary to the public interest for the following reasons: a) the consent Award does not apply to Elura Mines;

b) Pasminco will have no role after the sale of the mine;

c) the consent Award will not apply after the sale;

d) all existing employee entitlements are protected;

e) no employees will be covered by the consent Award after the sale;

f) the consent Award should not be used as a starting point for negotiations with Elura Mines;

g) consent arrangements should not be imposed on non consenting parties; see s47 of the Act and Re Equal Remuneration Principle [2000] NSWIRComm 113, para 149;

h) the unchallenged evidence of Mr Wall was that the terms of the consent Award were not appropriate for the proposed method of mining. It contained obstacles and impediments to efficiency;

l) provide for significant capital investment. 98 Ms McKenzie dealt with Mr Wall's evidence about the proposed mining methods and noted that contractors would be initially used. She said if the sale was not completed, the mine might close immediately.

99 Finally Ms McKenzie put that the AWU's case in support of its application, had failed to meet the evidentiary test and failed to satisfy the tests in s17(3)(c). There was very little evidence in support of the preference clause proposal and no precedent could be found for it. Further the AWU's application constituted an unwarranted interference in the ability of the employer to run its business as it sees fit. There was a long recognised principle in industrial law that the Commission would not intervene in such circumstances (see Re Cram and others, ex parte the Newcastle Wallsend Coal Company Pty Ltd (1987) 163 CLR 117).

100 Senior Counsel for Pasminco, Mr Goot generally supported Ms McKenzie's submissions. 101 Pasminco contended that the AWU bears the onus of establishing a special case. The AWU application does not seek to maintain the status quo, but to significantly alter it. It was not merely an extension of the consent Award. In opposing the application, Pasminco said the consent Award was an enterprise arrangement specific to Pasminco and the Unions. It was inappropriate to apply it to another employer.

102 It was said that the consent Award was a barrier to promoting efficiency and productivity. Any new operator should have the opportunity to negotiate its own arrangements under the safety net of the industry award. Moreover, all existing Pasminco employee entitlements are protected.

103 The AWU preference application will provide automatic preference to former employees, regardless of merit and in circumstances where they will have received generous redundancy benefits and rental assistance. Mr Goot submitted that the AWU's preference clause was an absolute preference clause, not a preference based on "all other things being equal."

104 Mr Goot said there was a public interest in enabling the mine to be sold in order for it to operate for another nine years, rather than putting it at risk of closure now, or in two to three years. The industry award fulfils the purpose of protecting the employees' rates and conditions. Mr Goot put that the AWU application will significantly alter the status quo, making it highly unlikely the sale of the mine will proceed.

105 In dealing with s 12(1) of the Act, Mr Goot said the Award was only binding on Pasminco, because it is the only employer to whom the consent Award relates. Absent the variations sought, any future employer or contractor will be bound to the industry award. That award must be taken to contain fair and reasonable minimum conditions of employment. He added that it is not the point that no one might be employed under the industry award. Mr Goot added that it would not be in the public interest for the industry award to be displaced and the consent Award imposed on an entity, be it purchaser or contractor, who was never bound to the Award and did not agree with its terms. Such an outcome would negate the objects of the Act, particularly object (3)(c).

106 The AWU cannot rely on the non appearance of the contractors because they had not been served with the application. The evidence about the contractors is, in any event, equivocal.

107 Mr Goot referred to Pasminco's financial position as in "a state of financial collapse." The reasons were complex and were dealt with in the evidence of Mr Howe and Mr Martin. Elura Mines' financial position revealed that it was incurring substantial losses ($17m). There was a nexus between the non viability of the mine and Pasminco's ability to operate it efficiently having regard for the following constraints in the consent Award: a) rates of pay b) use of contractors c) hours and rosters d) absenteeism e) lack of flexibility f) industrial disputation The evidence of Mr Wall was that the consent Award was a deterrent to CBH as a potential purchaser of the mine and for other purchasers.

108 Mr Goot said the AWU will be able to discharge its willingness to negotiate new arrangements based on the underpinning industry award.

In Reply 109 In dealing with ss101 and 102 of the Act, Mr Rothman said there was work for s102 to do. He also referred to s12 of the Act and the definition of a party in the Dictionary as a successor to a business. He agreed there was at least some doubt about the present position.

110 Mr Rothman questioned Elura Mine's capacity to bring the rescission application by submitting that there was no certainty that it will be the employer. He noted that the authorities relied upon by Ms McKenzie involved applications by employers who already employed employees. Elura Mines had not established a sufficient interest in the proceedings. Mr Rothman further distinguished the Cobar Mines Case and the Southern Copper Case by observing that they both involved the consent of all parties. 111 Responding to the reliance on s47 of the Act, Mr Rothman said this was a discrete provision relevant only to enterprise agreements. It was therefore irrelevant to these proceedings.

112 Mr Rothman submitted that the status quo must be the existing terms and conditions at the mine and not some minimum rates award, under which no one is employed. He said that fair and reasonable conditions of employment cannot be taken out of the context of the employment. The industry award does not set fair and reasonable conditions at the Elura mine, or anywhere else.

113 Mr Rothman put that the inequality of bargaining power was relevant in this case - particularly where individual contracts of employment are proposed to be offered to employees, see: Federated Engine-Drivers and Firemen's Association of Australasia v The Broken Hill Proprietary Co Ltd (1911) 5 CAR 9. He stressed that the AWU was more than willing to look at, and negotiate pay and conditions which reflect the need for efficiency and improved productivity. Contrary to the submission that there had been two meetings with the Unions, Mr Rothman referred to Mr Wall's evidence of CBH having not sought to engage the AWU in discussion about the mine's future.

114 As to the public interest, Mr Rothman accepted that the proper statement of the law is that found in the O'Sullivan case. He submitted that the rescission application was contrary to s10 of the Act, the objects of the Act and the public interest. Moreover, Mr Wall's evidence in no way suggested that the sale of the mine was dependent upon the rescission of the Award.

115 Finally, Mr Rothman cited authority in relation to preference clauses - Preference of Employment Case [1977] AR 458 and Davis v Western Suburbs Hospital [1942] SR 26. He put that the AWU's claim was not a prohibition on employment. It referred only to two persons applying for a job, both of whom are suitable and competent. CONSIDERATION

116 It is patently clear that an award made by the Commission, pursuant to s10 of the Act, is presumed to set fair and reasonable conditions of employment for employees. This must be so because the Commission must not make an award unless the statutory instruction in s10 is satisfied. See Pastoral Industry (State) Award (2001) and Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002.

117 This presumption applies whether the Commission makes a consent award, arbitrated award, common rule award or enterprise award. In other words, the statute makes no distinction as to the type of award that must meet the mandatory test of providing fair and reasonable conditions of employment for employees.

118 On the other hand, the fact that an award is presumed to set fair and reasonable conditions for employees when it is made (my emphasis) cannot mean, that in all cases, fair and reasonable conditions will apply for the duration of the Award. That this must be so, is obvious from the ability to vary or rescind an award under s17 during its nominal term, subject to the tests outlined therein.

119 Circumstances may well change - and dramatically so - such as to require a reassessment of whether the test of fair and reasonable conditions is still relevant or appropriate. These occasions will be rare, but that doesn't mean it won't be necessary from time to time for parties, by consent or otherwise, to rely on s17(3) of the Act to respond to changed circumstances. In this regard I refer to what was said by the Full Bench in Storeworkers at para 44: It may be also demonstrated that the conditions are no longer fair and reasonable having regard to changed circumstances, including changes in the respective positions or conduct of the parties, developments in a business, industry or the economy generally and changes in the factors which had underpinned the particular condition or conditions in question at the time of the making of an award. See also Pastoral Industry (State) Award at paras 76 and 77.

120 I note also that s18 of the Act is designed to accommodate the industrial circumstances of an employer or employers who may seek to be exempt from any, or all of the terms of a particular award, subject again to specific tests. See s18(1)(a) and (b).

121 The meaning of s12(1) of the Act and its interaction with the definition of a party in the Dictionary was an issue in the proceedings. Section 12(1) is expressed as follows: 12(1) An award is binding on all employers to which it relates, whether or not they were a party to the making of the award. A party is defined as including " the successor of a party to the instrument ".

122 Turning then to the present applications, both are brought pursuant to s17 of the Act. The section provides as follows: 17(1) The Commission may vary or rescind an award: 17(2) Sections 11, 13 and 15 apply to any such variation or rescission. The other provisions of this Division continue to apply to the award as varied. 17(3) An award may be varied or rescinded in any of the following circumstances only: a) at any time with the mutual consent of all the parties to the making of the original award, b) at any time to give effect to a decision of the Full Bench of the Commission under s50 or 51 (National and State decisions), c) during its nominal term if the Commission considers that it is not contrary to the public interest to do so and that there is a substantial reason to do so, d) after its nominal term if the Commission considers that it is not contrary to the public interest to do so. 17(4) This section extends to a variation or rescission of an award in the course of an arbitration by the Commission under Chapter 3 to resolve an industrial dispute. 123 It was accepted by the parties that the relevant tests for determining both applications are those applying in s17(3)(c). This provision requires the Commission, in varying or rescinding an award during its nominal term, to firstly consider that it would not be contrary to the public interest to do so and, secondly, that there is a substantial reason to do so.

124 Section 17 is to be read in conjunction with s11: 11(1) An award may be made: a) On application to the Commission or on the Commission's own initiative, or b) in the course of an arbitration by the Commission under Chapter 3 to resolve an industrial dispute. 11(2) An application for an award may be made only by: a) an employer, or b) an industrial organisation of employers or employees, or c) a State peak council. 11(3) Anyone who can apply for an award may become a party to any proceedings for making an award. 11(4) An applicant for an award, or to become a party to the making of an award, is required to satisfy the Commission that it or any one or more of its members has a sufficient interest in the proposed award.

125 It is appropriate, at this juncture, to observe that like s10, neither s17 or s11 makes a distinction between consent awards and arbitrated awards. It must follow, I think, that the fact that this Award is a consent award is not materially relevant for the purposes of the Commission's express statutory duty under both sections.

126 For reasons which will shortly become clear, the Commission proposes to determine these matters by initially considering the application by Elura Mines to rescind the Award. In so doing, it is necessary to rule on whether Elura Mines has standing to bring such an application.

127 Mr Rothman submitted that the application to rescind the Award was not competent as the applicant, Elura Mines, had no standing to bring the rescission application, or indeed any application. This was so, it was said, because Elura Mines was not a party to the Award. It was not even an employer at this point and, in fact, had no employees. Further, it had not established a sufficient interest in the proceedings for the purposes of s11(4) of the Act.

128 Ms McKenzie replied that it could hardly be said that Elura Mines did not have a sufficient interest in the proceedings in circumstances where the AWU was seeking to bind it to the terms of a consent Award to which it had had no involvement and which it had not, and does not agree to. Elura Mines was a prospective employer and as such it must have a right to put a view as to the terms and conditions applying at its workplace.

129 The Commission finds Ms McKenzie's submissions and her reliance on the authorities cited to be most persuasive. In Southern Copper Limited Award and Other Awards, Hungerford J found that a prospective employer, Port Kembla Copper Pty Ltd, had established a sufficient interest to make application to rescind three awards operating at a site it was soon to take over. His Honour said: The applicant is not a party to the awards concerned. However, I am satisfied it has sufficient interest to bring the present application on the basis that it will shortly commence operations at the same site at Port Kembla previously utilised by Southern Copper Limited in its operations in the smelting of copper and in respect of which the three subject awards had application: see s11(2) and (4) and s17(2) of the Industrial Relations Act 1996.

and at p3: Having heard the submissions put by the parties in today's proceedings and in light of the evidence, I am satisfied that the grounds for the application have been established. Indeed, insofar as the Industrial Relations Act is concerned, I am satisfied the circumstances contained in paragraphs (a) and (d) of sub-s.(3) of s17 to support the rescission of the awards have been met. Likewise, I am satisfied that the Commission's principles in relation to the review of awards pursuant to s19 of the Industrial Relations Act as to obsolete awards have also been satisfied.

130 I do not glean from his Honour's decision that he relied on, or even considered, whether the employer was an employer of labour at the relevant time. He found that the employer had established a sufficient interest as a prospective employer. Whether Port Kembla Copper employed labour at the time, to my mind, is not the point. The employer was a party having a sufficient interest to bring the application. It seems to me that the circumstances in this case are not dissimilar to those before Hungerford J and I would respectfully adopt his Honour's approach to these circumstances.

131 Further, I do not agree with Mr Rothman's submission that this decision (and indeed that of Cahill J, Vice President in Cobar Mines Pty Ltd Consent Award 1995) are not relevant because the applications proceeded by consent of the parties. Consent is relevant, of course, in an application under s17(3)(a). But here there is no consent and Elura Mines was not a party "to the making of the original award". The consent or otherwise is not the test to be found in s17(3)(c) or s11.

132 On the other hand there are some uncanny similarities between what Cahill J, dealt with in the Cobar Mines case and the circumstances here. His Honour's conclusions were: Having given serious consideration to the submissions of the parties I find that, on balance, the applicant has made out a case for rescission and that its application should be granted. The matters leading to that conclusion have already been referred to, and I attempt to summarise them as follows: The present award is restricted to companies operating on leases of Cobar Mines Pty Ltd and employees of such companies coming within the Metalliferous Mining (State) Conciliation Committee. Mining operations ceased on those leases in early 1998 and no work is now being performed thereon except for maintenance duties performed by a small number of employees. The award now has no practical application except in regard to those persons. The expectation is that another company will take over that mining leases, seek to re-open the mine and to employ labour. If that occurs, the award, having regard to its Incidence clause, will not apply to that company or its employees. The present negotiations regarding the sale of the mine are likely to be advantaged if the award is rescinded. The re-opening of the mine will afford employment opportunities for the Cobar community. It is possible that it may result in the payment of some outstanding award entitlements to former employees of the company. The rescission of the award will have no detrimental consequences on the legal entitlements of former employees to award benefits outstanding. If the mine re-opens without a site award or agreement in place, the provisions of the Metalliferous Mining Industry (State) Award (An award which is presently the subject of an application to the Commission by the AWU for variation) will be at least a safety net for employees pending the making of any such site award or agreement. The parties representing employees involved in the negotiations for any such site award or agreement will be able to draw on the provisions of the present enterprise award to support their proposals to the extent desired, notwithstanding its rescission. There will be no bar to submissions being made by them that the provisions of the present award, or some of them, should be considered in a "no net detriment" context. The applicant has a legal right to apply for rescission having regard to s17 of the Act. The position of the care and maintenance employees will be protected having regard to the undertaking given by the applicant in these proceedings. The Commission accordingly make an order pursuant to s17 of the Act that the Cobar Mines Pty Ltd Consent Award 1995 be rescinded, effective as of today's date. 133 In my view, it would be a manifest absurdity and a denial of natural justice to reject Elura Mines' interests in these proceedings in circumstances where it is the prospective operator of, and employer of employees at the mine. One could hardly find a more obvious example of a party which had established a "sufficient interest" in proceedings both to make applications in its own right and appear in proceedings designed to bind it to the terms of an industrial instrument. I find accordingly.

134 As to any uncertainty or ambiguity created by s12 of the Act and the definition of a party in the Dictionary I am of the view that s12 cannot apply in these circumstances because the employer to which the award "relates" can only be Pasminco. This must be so, particularly as the Award is a consent Award binding only Pasminco and the Unions named in cl 3 - Parties Bound. The Award does not, and cannot relate to any other parties. Indeed, binding Elura Mines Pty Ltd is precisely what is sought to be achieved by the AWU application.

135 Moreover, if s12(1) was applicable it would mean that any past contractor at the mine would have been bound by the consent Award. Clearly, that has never been the case, notwithstanding the Union's fervent desire for such a result.

136 I hasten to add that as at the date of this decision there is no absolute certainty that Elura Mines Pty Ltd will purchase the mine. The present sales agreement is conditional. My decision in this matter will be subject to the sale of the mine being completed.

137 I shall now deal with each of the two arms of s17(3)(c).

138 Historically, it has been a fundamental duty of this Commission (and its predecessors) to have regard for the public interest in the exercise of its functions and responsibilities under industrial law. In the present Act, this statutory instruction arises both generally under s146(2), and more particularly, as in this case in s17(3). Section 146(2) is expressed as follows: The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to: a) the objects of this Act, and b) the state of the economy in New South Wales and the likely effect of its decisions on that economy. This subsection does not apply to proceedings before the Commission in Court Session that are criminal proceedings or that it determines are not appropriate.

139 As to what constitutes the relevant tests of the public interest, I refer to a number of High Court authorities.

140 In O'Sullivan v Farrer (1989) 168 CLR 210, the High Court (Mason CJ, Brennan, Dawson and Gaudron JJ, said at p216: Indeed, the expression "in the public interest", when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only "in so far as the subject matter and the scope and purpose of the statutory enactments may enable … given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view": Water Conservation and Irrigation Commission (NSW) v Brwning (13), per Dixon J.

141 In Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 21 IR 151, it was said that: Ascertainment in any particular case of where the public interest lies will often depend on a balancing of interests, including competing public interests, and be very much a question of fact and degree.

142 In Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd (1988) 78 ALR 466, Dawson J said it is the whole of the circumstances which must be weighed in order to determine where the public interest lies in the particular matter (at 467).

143 Further, in re Butchering (Wholesale) Award, 1911 AR 245, his Honour, Heydon J, the then President of the Industrial Court said at p247: Under these circumstances this Court has laid it down that one of its functions is to protect the public, which is to be regarded as a silent party in every dispute. The Court and the Boards having been created by the public at the public expense, and the very efficient protection afforded to the public by free competition being thereby given up, it becomes one of their duties to supply its place as far as is in their power - which, it may be at once admitted, is only imperfectly. This view, that the interest of the public, and not merely that of the parties, has to be considered, is recognised very explicitly by Mr Justice Higgins in his judgment of the 5th August last in the Boot Trade case. After referring to "the public, for whose benefit this Court has been created", he considers the nature of the jurisdiction of his Court, and says: - "The nearest analogy that I can think of in ordinary litigation is that of an action brought in order to have a scheme settled for a charity. The plaintiff usually suggests a scheme; and the defendant other schemes. But the Court is not bound to accept any of the schemes. It has to consider the interests of the public, and of those not before the Court, as well as the wishes of the parties. Owing to the nature of the subjects which come before common law courts, this broad issue, what is the proper scheme to be adopted, is not presented. Such courts confine themselves narrowly to the issues between the parties… The parties alone are interested. It is not so with industrial disputes, for in these the public are interested as well as the parties.

144 There was detailed evidence advanced as to the reasons for Pasminco's decision to sell its mining assets and, in particular, the sale of the Elura mine.

145 I do not believe that it could seriously be argued that this decision was unrelated to the grave financial state of the Pasminco Group of Companies. The fact that Pasminco was placed in voluntary administration in September 2001 with debts in the order of $2.9 billion is sure testimony to the dire financial situation Pasminco was, and continues to be in.

146 Nor do I think it could be seriously contested that the fall in world zinc prices accompanied by a deteriorating exchange rate (a rise in the value of the Australian dollar) has led to financial difficulties for the Elura mine itself. Moreover, it is axiomatic that the recent five year highs in the value of the Australian dollar will only exacerbate these difficulties.

147 The evidence that the mine has a present life of two to three years and a nine year life under the Elura Mine proposal was not, as I apprehend, in dispute between the parties.

148 In my judgement, the overwhelming and fundamental imperative for the Commission in discharging its obligations under the Act, is to ensure that the Elura Mine continues to operate for as long as possible. The reasons for doing so are self evident - ongoing employment opportunities and economic sustainability for the Cobar community.

149 I have not overlooked and do not underestimate the genuine concerns of the existing employees for their future and that of their families when the mine is sold. I accept the evidence of Mr Manns as being representative of the views of most, if not all employees in this regard. On the other hand, the alternatives, as I understand them, are far more devastating than what currently is proposed - including complete closure of the mine. I have balanced the perceived, but genuine concerns of employees with the public interest considerations to which I earlier referred.

150 That being so, I find that there are major public interest considerations in ensuring that the mine's life be extended for the period contemplated by Elura Mines.

151 It seems to me that it is unrealistic for the Unions to expect that the new operator of the mine should be bound to the terms and conditions of a consent Award which it has had no involvement in framing and which it believes is inappropriate for its proposals to significantly extend the life of the mine. Whether the existing terms and conditions are appropriate, or whether such terms are an impediment to productivity and efficiency, is really not the issue at this time.

152 There may well be good and cogent economic reasons for major changes to occur in respect to the conditions to apply at the mine in the longer term. However, I emphasise that, at this point and in the absence of more detailed material, I would make no observations or comment on the contested proposals to improve the mine's productivity and efficiency.

153 There is abundant authority of this Commission which makes plain, that arrangements entered into between consenting parties should not be imposed on non consenting parties, unless a sufficient reason exists for doing so. In this regard, I need only refer to the comments expressed by the Full Bench in Equal Remuneration Test Case [2000] NSWIRComm 113: Care will also need to be taken that the requirements of s47 of the Act are not overlooked. It requires: When making awards or exercising its other arbitral functions under this Act, the Commission is not to regard conditions of employment set by enterprise agreements as standard conditions of employment for other employees. This provision is reflective of a long-standing principle applied by the Commission that it will not impose terms of agreements on others unless good reason therefor be established.

154 This passage in Equal Remuneration Test Case is, in my opinion, a pronouncement of a principle, not merely an observation pertaining to s47 dealing with enterprise agreements.

155 I also regard as apposite the comments of the Full Bench in Re Charitable Sector Aged and Disability Services (State) Award [2000] NSWIRComm 217 at para 3 : The consent of the parties to an application for the making of an award is a relevant and often important matter in considering the application. However, consent is not determinative of an application and should be treated with caution where the consent award has the effect of varying another award affecting persons or organisations other than the consenting parties. This is particularly so where, as in this case, an affected organisation or person intervenes to oppose the new award. It should not be assumed that the opposing party or intervener in those circumstances bears any greater onus in the proceedings due to the existence of consent arrangements. Here I note that the Full Bench referred to the award affecting other " persons or organisations other than the consenting parties ". In other words, a party need not be an employer as expressed in s11 and defined in the Dictionary.

156 There was some discussion concerning the change in shareholding arrangements at the mine since 1982 and the fact that the terms and conditions of the consent award or agreement were accepted by the new shareholding entity. To my mind, even if there was an effective change in the true employer (which there wasn't), it demonstrates no more than the new entity consented to the prevailing consent arrangements. I do not see how this point advances the AWU case beyond that conclusion.

157 The principle I have just described would, in my judgement, be a sufficient reason of itself for the requirement in s17(3)(c) to be satisfied. However, I consider there are a number of other reasons which would justify a finding of sufficient reasons being established in this case.

158 Firstly, the rescission of the Award will provide an opportunity, consistent with Object 3 of the Act, for the parties to enter into negotiations for a new industrial instrument reflecting the interests of the parties and new operational imperatives at the mine. As Cahill J, Vice President said in Cobar Mines Pty Ltd Consent Award 1995: The parties representing employees involved in the negotiations for any such site award or agreement will be able to draw on the provisions of the present enterprise award to support their proposals to the extent desired, notwithstanding its rescission. There will be no bar to submissions being made by them that the provisions of the present award, or some of them, should be considered in a "no net detriment" context.

159 Secondly, there is a reasonable "window of opportunity" for negotiations to occur pending full resumption of activities at the mine. This opportunity should not be squandered.

160 Thirdly, the provisions of the industry award will apply as a safety net for any employees pending the negotiation of a new industrial instrument.

161 Fourthly, Mr Walls' evidence was that the new employer "wants to attract the best workers in Cobar to work at the Elura mine". It seems a logical conclusion that it will be necessary to offer competitive wages and conditions, which will attract and retain such employees.

162 Fifthly, the parties will continue to have their rights available under the provisions of the Industrial Relations Act 1996 and the Commission stands willing to assist the parties during the negotiation process for a new industrial instrument.

163 Sixthly, the rescission of the Award will have no detrimental consequences (or any at all) on the entitlements of the former employees of Pasminco who have all been guaranteed their outstanding entitlements and redundancy benefits.

164 During these proceedings, I expressed my disappointment that the situation at Cobar was not handled in a similar fashion to when Pasminco sold its Broken Hill mine to Perilya Pty Ltd in 2002. There, the prospective employer entered into negotiations for a new industrial instrument prior to the sale of the mine and lodged an enterprise agreement with the Commission which was approved on 19 April 2002 in Matter IRC2172 of 2002.

165 This agreement did not reflect the terms and conditions which applied when Pasminco owned and operated the Broken Hill mine, nor was the number of employees anything like what existed prior to the sale. Major changes were negotiated without industrial action. Many of Pasminco's former employees were re-engaged by Perilya. While I do not feel inclined to comment on the reasons why the Broken Hill experience was not replicated here, I feel it is incumbent on the parties to commence negotiations as soon as possible for a new industrial instrument to apply at the Elura mine. I note, from the evidence, the Union's willingness to do so.

166 Finally, I do not accept that there is a potential for serious industrial unrest if the application to rescind the Award is granted. In my view, that would be a most unwise and irresponsible response in view of the Commission's willingness to assist the parties through the difficult days ahead.

167 It follows from the foregoing consideration that the Commission finds that firstly, Elura Mines is competent to bring the application to rescind the Award; secondly, that it would be in the public interest to grant the application and, thirdly, there are substantial reasons to do so.

168 Accordingly, I am satisfied that the requirements of s17(3)(c) are met and the Award will be rescinded effective from the completion of the sale process. As a matter of sequential logic, it is unnecessary for the Commission to consider, or determine the AWU's application, both as to its merits or whether it constitutes a special case for the purposes of the State Wage Case Principles (State Wage Case 2002 [2002] NSWIRComm 118).

169 I would make the following orders: ORDERS 1) Pursuant to s17 of the Industrial Relations Act 1996, the Commission orders that the Elura Mine Enterprise (Consent) Award 2001 , as varied, be rescinded.

2. The above order shall take effect on the completion of the sale of the Elura mine by Pasminco Australia Limited (subject to Deed of Company Arrangement) to Consolidated Broken Hill Ltd.

3. Application IRC1917 of 2003 is dismissed. 5) The notice of motion filed by Elura Mines Pty Ltd on 23 June 2003 is dismissed. 4) Subject to further order of the Commission these proceedings are concluded.

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