Notification by Construction, Forestry, Mining and Energy Union (New South Wales Branch) of a dispute with Pasminco Broken Hill Mine re Enterprise Agreement; Notification by Construction, Forestry, Mining and Energy Union (New South Wales Branch) of a dispute with Pasminco Broken Hill Mine re different redundancy payments at the Broken Hill site; The Pasminco Broken Hill Anti-Discrimination Redundancy Award 2001; The Pasminco Broken Hill (Terms and Conditions) Award 2001 [2001] NSWIRComm 215

NOTIFIER/APPLICANT Mr B Docking of Counsel (appeared 7/2/01, 8/2/01 and 9/2/01) UNION Ms L Doust, Legal Officer Construction, Forestry, Mining and Energy Union (New South Wales Branch)

RESPONDENT LEGAL REPRESENTATIVES: Mr P Edwards, Group Manager Employee Relations Pasminco Group (appeared 7/2/01, 8/2/01, 9/2/01) SOLICITOR Mr A Davies, Blake Dawson Waldron (appeared 9/5/01) COUNSEL Mr R Buchanan of Queen's Counsel, with Mr S Prince of Counsel

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 11 September 2001 Matter IRC00/6219 NOTIFICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH) OF A DISPUTE WITH PASMINCO BROKEN HILL MINE RE ENTERPRISE AGREEMENT

Matter IRC00/2772 NOTIFICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH) OF A DISPUTE WITH PASMINCO BROKEN HILL MINE RE DIFFERENT REDUNDANCY PAYMENTS AT THE BROKEN HILL SITE

Matter IRC01/742 THE PASMINCO BROKEN HILL ANTI-DISCRIMINATION REDUNDANCY AWARD 2001 Application by Construction, Forestry, Mining & Energy Union, New South Wales Branch, for a new award

Matter IRC01/743 THE PASMINCO BROKEN HILL (TERMS & CONDITIONS) AWARD 2001 Application by Construction, Forestry, Mining & Energy Union, New South Wales Branch, for a new award DECISION

1 For over a century, the economic prosperity of Broken Hill has been dependent on the ongoing viability of the local mining industry. A not uncommon view is that, without mining, the city of Broken Hill would not survive. At its peak in the 1950s, over six thousand employees were employed at various mine sites. In the 1970s, mining and related employment accounted for 43 per cent of the local workforce. By the late 1990s this percentage had fallen to 12 per cent. Today, only one mine, owned and operated by Pasminco Pty Ltd, remains. Five hundred employees and their families depend directly on its continued existence.

2 In a book published in 1948, titled "Down Argent Street" the author had this to say about the future of Broken Hill: The Line of Lode has been producing incessantly for over sixty years, the richest silver-lead-zinc field for its size in the world. Already it has yielded some 65,000,000 tons of ore, with a total value of close on £250,000,000 and more than fifty million paid in dividends. There is no prospect of its exhaustion within another century, perhaps more.

3 The book later records this conversation between two retired miners: "You'd never know it for the same place" said an old miner, pointing up from the post office steps. "The Big Mine used to stand up there, blocking the sky. Two million ton they pulled out of that Open Cut. That's shifting things. They tore the guts right out of the hill. I recall when there was stacks up there … smelters an' that - all going full blast. She was a great sight, I can tell you". "Plenty o' life yet, don't worry", said his mate, a pensioner who had long talked of ending his days in Sydney, but somehow could never bring himself to leave. "The old Hill's going to see you out - and your sons and grandsons …". "Well, you can't ever tell …". "Look, old son, ten year ago - when the BHP closed down - some joker said to me, he said: 'twenty years from now there'll be nought but kangaroos jumping through the city'. Look, I says, don't give me that. I says to him just what I've told you now".

4 In evidence in these proceedings, over half a century later, forty-eight year old mine worker, Chris Barrett, said this about the life of the mine: Q. You say you didn't realise before then that the life of the mine was limited? A. When I was a boy it was always ten years to go, ten years to go, ten years to go. Q. So whatever was said you just didn't believe it? A. No.

5 Sadly, these predictions of faith in a bright future are to be contrasted with the gloomy reality that mining in Broken Hill will come to a complete end when Pasminco's ore body is exhausted in five years. So much so is evident from this terse and succinct statement in Pasminco's 2000 Annual Report - "Pasminco expects to close mining operations in 2006, when the ore body is exhausted" (p2). Clearly, the process of wind down has already commenced.

6 Compounding the current difficulties has been Pasminco's poor profit returns, record low share price and a slump in world zinc and lead prices (Ex'G').

7 Moreover, since the conclusion of this case, a heightened sense of concern has been aroused by Pasminco's announcement on 20 July 2001, that it intends to withdraw from all of its mining operations Australia wide to concentrate on its smelting interests. The Company has confirmed that discussions with prospective buyers of the Broken Hill site are now well advanced, involving due diligence inquiries and site inspections.

8 One cannot overstate the seriousness of the mine's shutdown, nor its grave implications for the employees, their families and wider community of Broken Hill. It is against this background that this case is set.

9 These proceedings originated in a dispute notification lodged on 19 June 2000, by the Construction, Forestry, Mining, and Energy Union ("the Union"). The notification was expressed in the following brief terms: The dispute involves Pasminco Broken Hill Mine paying different redundancy payments at the Broken Hill site. 10 Compulsory conference proceedings were listed in Broken Hill before Bishop C in July and October 2000. In a statement issued by the Commission on 27 July, Bishop C recommended, inter alia, that the issue of redundancy be negotiated in conjunction with negotiations for a new Broken Hill Mines Agreement ("the Agreement") - the Agreement having expired on 8 March 2000 and a log of claims having been served in May 2000, which included a claim for redundancy.

11 When the matter was reallocated to me by Wright J, President, in December 2000, both the dispute and the log of claims for a new agreement remained unresolved.

12 The Union lodged a further dispute notification (IRC6219 of 2000) on 20 December 2000. It was listed before Wright J, President, on 22 December 2000. This dispute concerned the deadlock in negotiations for a new agreement and the Company's intention to give notice to terminate the existing unregistered Agreement, effective from 8 January 2001. During these proceedings the Company gave an undertaking, that despite the notice to terminate the Agreement, no changes would be introduced at the site which were inconsistent with the Agreement until at least 30 January 2001.

13 Both dispute notifications were listed before the Commission, as presently constituted, on 7 February 2001. Mr Docking of Counsel sought leave to appear for the Union. Mr Edwards, for the Company, objected to leave being granted. After some debate, the Commission granted leave for Mr Docking to appear. Further proceedings involved argument as to access to certain documents and summonses to produce. The Company sought to have the summonses set aside in the context of compulsory conference proceedings. For present purposes, it is unnecessary to detail the extent and nature of the documents sought under summons.

14 The following day, in issuing a certificate of attempted conciliation, pursuant to s135(3) of the Act, the Commission made the following observations and directions: 1) The summonses were all served according to the requirements of the Act and the Commission's Rules.

2. The respondent was on notice as to the vast quantity of material sought, unyet made no application by way of notice of motion, pursuant to Rule 94(2), nor did it seek to engage legal representation to argue issues of confidentiality, privilege, or scope.

3. Material has been produced at the Registry in Sydney and the respondent has other material in Broken Hill.

4. The material sought may, or may not, be relevant to the arbitral proceedings which are yet to be programmed.

5. Mr Docking wishes to take advantage of his time in Broken Hill to review the material in consultation with the Union and the delegates so as to assess its relevance to the arbitration.

6. The Company claims that some of the material may be confidential and it simply hasn't had time to take proper advice about what can, or should, be provided.

7. The reasons for setting aside the summons were not put with any specificity. The objection therefore was, in my view, too general as to be certain as to its scope and intent. 8) Mr Docking referred me to WorkCover Authority of New South Wales (Inspector Keelty) v The Crown in the Right of the State of New South Wales (Police Service of New South Wales) , Hungerford J, Matter IRC 5721 of 1997, 16 November 2000. In para 29, his Honour said: The documents and things sought by the prosecutor to be produced by the defendant have been detailed earlier. A reading of them shows that they were certainly cast in somewhat general and wide terms, including by reference to time periods of up to 15 years both before and after the commission of the alleged offence. The result is that the process of determining the apparent relevance, not that they are relevant or admissible into evidence, of the documents to a subject matter in the proceedings is made more difficult. Nevertheless, the very width of the documents may be no more than an indication of the nature and scope of the issues to be decided. After all, as Smithers J (with whom Bowen CJ and Nimmo J agreed) commented in Lucas Industries Ltd v Hewitt [1978] 45 FLR 174 at pp188-189 ".. a degree of generality in the description of the documents may according to circumstances be compatible with reasonableness ... The purpose of the process of subpoena is to facilitate the proper administration of justice between parties." It is timely also in this respect to repeat what was said by Moffitt P, with whom Hutley JA and Glass JA agreed, in National Employers' Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 at p382, as follows:

It does not follow, however, that because the party who issues a subpoena is unaware of the precise description of a particular document, or whether a particular document or documents is in the possession of the witness, or even whether it exists, or is unaware of its contents, that the subpoena, or even a subpoena in general terms, amounts to the use of the subpoena for the purpose of 'discovery'. While this was a matter involving a criminal prosecution under s15 of the Occupational Health and Safety Act, the sections of the Industrial Relations Act and the Commission's Rules dealing with Summonses to Produce and Setting Aside of Summonses, (s165 and Rule 94 respectively), are applicable irrespective of whether the Commission is sitting in Court Session or otherwise.

9. I have also taken into account the Commission's powers under ss 162 and 163 of the Act and my general obligations to have regard for the public interest. 10) In my view, the proper administration of justice between the parties will be served by the directions I now make. Accordingly, the Commission:

1. Directs by 4.00pm today, 8 February 2001, the production of all material identified in the summonses to produce, of 31 January 2001, served on:

Blake Dawson Waldron Lawyers Pasminco Broken Hill Mine Pty Ltd Pasminco Cockle Creek Smelter Pty Ltd

which is available in Broken Hill - save for such material which the respondent may regard as confidential or privileged.

2. In respect to this material, I propose to defer consideration of its production and under what conditions, until further argument is put by both parties at a hearing on Friday, 23 February, 2001 at 11.00am in Sydney.

3. At this time, the Commission will consider further programming of the arbitration and issue such further directions as may be appropriate.

15 Mr Docking immediately sought recommendations from the Commission - the nub of which were firstly, to preserve the existing status quo in respect to the Agreement until a foreshadowed award application had been determined by the Commission; and secondly, to restrain the Company from offering to any employee, the terms of the alternative agreement it (the Company) was proposing.

16 Mr Edwards opposed the recommendations sought by the Union and, after some detailed argument, the Commission recommended, pursuant to s136(1) of the Act that: 1. The terms and conditions of the Pasminco Broken Hill Mine 1998 Agreement are to apply, in their entirety, and should be honoured by both parties.

2. The document, MFI '4', styled Draft Company Proposals Conditions of Employment, not be offered to any employee.

3. These recommendations to remain in force until 23 February 2001, or until such further recommendation or order of the Commission.

17 The Union subsequently filed two award applications (IRC742 and 743 of 2001) which were listed for mention, with the two dispute notifications, on 23 February 2001. Ms L Doust now appeared for the Union and Mr R J Buchanan of Queen's Counsel, with Mr Prince of Counsel, for the Company.

18 Mr Buchanan sought the joinder and concurrent hearing of all four matters. Ms Doust submitted that the dispute notifications be joined to their relative award application. She argued that the redundancy award matters be programmed on an urgent basis.

19 The Commission joined all four matters, issued directions for the filing and service of evidentiary material and set a special week of hearing in Broken Hill for the taking of evidence.

20 At a pre-hearing listing in Broken Hill on 9 May, consideration was given to whether the Award applications constituted a special case. The Commission subsequently referred the matters to his Honour the President for determination as to whether the claims should be dealt with as a special case. On 16 May 2001, his Honour determined, pursuant to s193 of the Act and Principle 10 of the State Wage Case Principles (State Wage Case 2000, 97 IR 93) that "the proceedings, including any special case aspect of them, are to be dealt with by Sams DP".

21 The parties were advised of his Honour's decision and the hearing proceeded, as earlier directed with the taking of evidence in Broken Hill between 4 - 8 June 2001.

22 As a preliminary matter, Mr Buchanan, sought to have the hearing deal firstly with the redundancy claim and defer the other matters relating to the Agreement and its terms and conditions. He announced that discussions were taking place between the Company and interested purchasers of the Broken Hill Mine which could well result in the mine's imminent sale. In light of these developments, the changes in working conditions which the Company seeks would have little, or no value, to it. He submitted that it would be in everybody's interest if the focus was on the level of redundancy payments with the general award application being deferred. He also proposed private conferences between the Commission and the parties to discuss these dramatic developments.

23 Ms Doust did not oppose further private conferences. She did, however, oppose deferring the Award application. She said the possible sale of the mine brought into clearer focus the importance of securing enforceable terms and conditions for employees through an award of the Commission.

24 The Commission adjourned into private conference and discussions took place between the parties overnight. No settlement was reached. After considering further submissions as to the conduct of the proceedings, the Commission issued the following statement and decision: The Commission has been moved by an application from the Company that I separate the two joint award applications sought by the CFMEU, such as to give priority to matter number 01/242, the proposed redundancy award, and stand over matter 01/743, the proposed terms and conditions award. Mr Buchanan makes the application based on what he claims to be significant changes in the circumstances affecting the Company and these proceedings, namely discussions which are being presently conducted which may result in the mine being sold or otherwise taken over by a new operator. For obvious reasons those discussions are confidential and the details have not been disclosed. I am satisfied nevertheless that the very real prospect of a major change of this magnitude has significantly altered the current industrial environment and likely will have the result of creating a heightened level of uncertainty for the employees and their families. Moreover, these circumstances have dramatically altered the Company's long stated objective of securing major alterations to the existing working conditions at the mine. It simply sees no purpose or utility in pursuing such changes in the current uncertain environment with the prospect of achieving little or no benefit by doing so. The Union opposes the Company's application, although ironically it was the same application the Union pressed on the Commission in February. It was the Company that opposed the application at that time. Thus the parties' positions are completely reversed. In deciding this procedural application I have taken into account the following matters: 1. The full hearing of both applications has been allocated over the next two weeks.

2. Directions for the filing and service of evidentiary material have been complied with, such as the evidence in both matters has now been filed and is ready to be tested.

3. There is no practical reason why the matters cannot be heard concurrently. Witnesses are available for cross examination.

4. The Commission as presently constituted has already ruled, on 23 February, on the question of joinder of the applications.

5. Commissioner Bishop, in much earlier conciliation proceedings, held the claim for improved redundancy arrangements should be negotiated in the context of the negotiations for a new agreement. 6. The 1998 industrial agreement expired on 8 March 2000 but contains a provision at 2.1(i) that it will continue beyond 8 March 2000 subject to the negotiation of a new agreement.

7. The Commission has applications before it which must be processed according to the objects of the Act and the Commission's obligations to discharge its statutory functions according to equity and good conscience and the substantial merits of the case and, in particular, to make awards which set fair and reasonable conditions of employment.

8. The Commission cannot operate, let alone effectively discharge its duties on the basis of assumptions as to what might or might not happen such as to effect the conduct of properly constituted proceedings. However, the change in the circumstances, in my opinion, is neither a sham or a divergence nor an attempt to frustrate the proceedings. There is a real prospect of a change in the mine's ownership such as to seriously impact on these proceedings and their practical effect on the employees concerned. 9. Traditionally the industrial arrangements between the parties have been regulated by unregistered agreements enforceable at common law. This is the first occasion an award has been sought to govern the regulation of the parties' relationships. This is unique and unfamiliar territory for the parties. 10. There must logically be a heightened degree of anxiety and uncertainty as to the job prospects of all of the employees in the short term. 11. The Company has given undertakings that the terms of the expired 1998 Agreement will continue to apply save for the capacity to give seven days notice of any changes. These assurances were given in good faith - and there is no evidence of any breach of those assurances nor any example of the company giving seven days notice of any proposed change. In any event, liberty to apply is available on short notice should either party renege on undertakings given before this Commission and placed on public record. 12. It was the Company's original preferred course to substantially alter the working conditions which served as a catalyst for the Union's award application. These demands are not pressed at the present time. Indeed, the Union's very application seeks to incorporate the bulk of the terms and conditions in the 1998 agreement into an award. In other words, it seems unarguable to me that the status quo will remain in force, despite the suspicions of the Union. In balancing the various considerations I have formed the view that it would be in the interests of both parties, but most particularly the Union and it's members, to finalise as expeditiously as is practical and reasonable the terms and conditions of the redundancy award and for the Commission to issue a decision on this matter first. This course would at least give some certainty as to what might happen in the event of an accelerated redundancy programme for the majority of all the employees caught up in the present circumstances. I have been particularly influenced by the fact that the status quo as to the Agreement is to be retained; however, should that position alter, I grant liberty to apply at short notice to either party. I do not intend to stand the Award application over indefinitely and apprehend no necessity to formally unjoin the applications. The proceedings will simply be focused at this time on the redundancy matter as distinct from the Award application generally. Accordingly, the Award for terms and conditions will be deferred until further direction of the Commission. For practical purposes this means that on each occasion the four matters are listed in the next short period of time, either party may re-activate the terms and conditions award proceedings and the Commission would give such directions as it considers appropriate and necessary.

25 To describe the current redundancy package for wages employees as unique is, in my opinion, to seriously understate the position. The Commission is not aware of any similar set of arrangements applying elsewhere in any industry.

26 There are a number of components of the package; each displaying distinctive features and a peculiar history.

27 All employees receive thirteen weeks' pay in lieu of notice. This benefit is calculated on the lowest mineworker rate plus lead bonus and applies to all employees, irrespective of service, age or classification. Thus, all employees receive the same amount under this component, currently $12,329. The evidence is that no employee is, or would be, employed on this rate. This payment seems to have its origin in a statement and recommendation made in July 1967 by Beattie J, concerning the introduction of severance payments at the Broken Hill mines.

28 Following this recommendation, the 1971 Broken Hill Mining Industry Agreement (s46) provided a comprehensive and complex set of redundancy benefits and conditions in the event of the retrenchment of employees and imposed certain other obligations on the employer. The 1971 Agreement provided for three months notice of redundancy and severance payments of $100 per year of service to a maximum of $2,500. Other benefits included, inter alia , removal assistance, compensation for the loss of equity in a home, time off to attend interviews and obligations on the employer to find alternative employment for redundant employees.

29 In 1974 and 1975, the Unions sought an improvement in severance payments. It was proposed, and agreed, that the existing redundancy benefits be transferred from the industrial agreement to the Broken Hill Mine Employees Pension Fund ("the Pension Fund"). This was suggested as a means of achieving more favourable tax treatment of the benefits through the Fund. The transferred benefits became Part D of the Pension Fund. Reference was made to the thirteen weeks' notice payment as part of the redundancy policy to be read in conjunction with Part D of the Fund.

30 Part C of the Pension Fund is also relevant. It provides for weekly contributions by members on a base rate (Mineworker Grade I), increased by 7¢ for every dollar increase in the rate. The employee's contribution is matched by the employer. Additional payments are also paid by the employer in Part C of a further 25% of the member's contribution, a productivity payment and a supplementary contribution. This latter amount was as a result of the negotiated settlement for the 1998 Pasminco Mines Agreement. Thus, the current Part C components are: Per Week Member Standard $31.07

Company Standard $31.07 Special $ 6.92 Productivity $32.87 Supplementary Contribution $21.44

Company Total Payment $92.30 Upon redundancy, the benefit payable comprises a member's full Part C Members Account Balance at the date of cessation of employment. 31 During this case, the Union's main focus was on the Part D benefits which specify payments to be made in the eventuality of redundancy. The payment is a lump sum amount funded solely by the Company. The payment is calculated on years of service, from one to a maximum of twenty-five years, and makes no distinction as to the age or classification of the employee. The current first year benefit is $3,481.95 rising by reference to each year of service up to twenty-five years or more to $31,337.55. These amounts are automatically adjusted with annual movements in the Consumer Price Index (the last adjustment applying from 31 March 2001 to 31 March 2002).

32 Both Part C and Part D contributions are subject to the 15% Contribution Tax according to Federal Superannuation legislation.

Redundancy Provisions for Staff and Single Status Employees

33 Present redundancy provisions for staff and single status employees are comprised as follows: Members Account Balance of the Accumulation Section of the Pasminco Superannuation Scheme. Company Retrenchment Benefit calculated on the number of weeks salary for each completed year of continuous service, and in accordance with the following scale: Minimum Payment 13 weeks' salary 44 years and under 2.40 weeks' salary 45 years 2.75 weeks' salary 46 years 3.00 weeks' salary 47 years 3.25 weeks' salary 48 years 3.50 weeks' salary 49 years and above 3.75 weeks' salary Maximum Payment 78 weeks' salary Ex gratia payment comprising one months' salary. Untaken annual leave entitlements. Untaken long service leave entitlement, or ex gratia pro rata, if less than five years' service. Limited assistance towards reimbursement of costs associated with permanent relocation out of Broken Hill within three months of termination. Redundancy Provisions for Contractors

34 Employees of contractors working on the mine site are covered by the terms and conditions of the Broken Hill Commerce and Industry Agreement Consent Award 1998 (324 IG 248). This award provides for the Commission's minimum redundancy benefits in Re Application for Redundancy Awards, 53 IR 419. Period of continuous service:

Employees under Employees over 45 years of age 45 years of age

Less than one year nil nil One year but less than two years 4 weeks' pay 5 weeks' pay Two years but less than three years 7 weeks' pay 8.75 weeks' pay Three years but less than four years 10 weeks' pay 12.5 weeks' pay Four years but less than five years 12 weeks' pay 15 weeks' pay Five years but less than six years 14 weeks' pay 17.5 weeks' pay Six years but less than seven years 16 weeks' pay 20 weeks' pay

35 The Union's claim seeks an award which includes the following entitlements to be paid to an employee, who is terminated as a result of voluntary or selective redundancy. Redundancy Benefi t Minimum payment of 13 weeks but maximum of 78 weeks: i) 44 years of age and under - 2.5 weeks per year of service and pro-rata for part years completed; ii) 45 years of age - 2.75 weeks per year of service and pro-rata for part years completed; iii) 46 years of age - 3.00 weeks per years of service and pro-rata for part years completed; iv) 47 years of age - 3.25 weeks per year of service and pro-rata for part years completed; v) 48 years of age - 3.50 weeks per year of service and pro-rata for part years completed; vi) 49 years of age and over - 3.75 weeks per year of service and pro-rata for part years completed. The employer shall pay the redundancy benefit to an employee at the rate of the individual employee's average weekly earnings as calculated according to the shifts actually worked by the employee in the preceding 12 months. Alternatively, the redundancy benefits shall be calculated using an employee's ordinary time earnings. In the further alternative, the redundancy benefit shall be calculated using the C1 rate of pay plus lead bonus.

Notice Payment An employee terminated either as a result of a voluntary redundancy or selective redundancy shall receive a notice payment from the employer calculated: According to the following scale: i) 4 weeks ii) 5 weeks (45+ years of age) The employer shall pay the notice payment to the employee at the rate of the individual employee's average weekly earnings as calculated according to the shifts actually worked by the employee in the preceding 12 months. Alternatively, the notice payment shall be calculated using the employee's ordinary time earnings. In the further alternative, the notice payment shall be calculated using the C1 rate of pay plus lead bonus. Ex Gratia Payment An employee terminated either as a result of a voluntary redundancy or selective redundancy shall receive an ex gratia payment from the employer: i) Calculated according to the scale applied to single status employees and/or salaried staff employees, namely, 4 weeks. ii) The employer shall pay the ex gratia payment to an employee at the rate of the individual employee's average weekly earnings as calculated according to the shifts actually worked by the employee in the preceding 12 months. Alternatively, the ex-gratia payment shall be calculated using an employee's ordinary time earnings. In the further alternative, the ex gratia payment shall be calculated using the C1 rate of pay plus lead bonus. Relocation allowance An employee terminated either as a result of a voluntary redundancy or selective redundancy shall receive a relocation expense from the employer calculated according to the scale applied to single status employees and/or salaried staff employees, namely, $3,000.00 per employee (and indexed annually by the CPI).

36 In 1981 a claim was made for an increase in Part D benefits in the context of negotiations for a new mine agreement. The Commission declined to do so (13 March 1981). However, when a number of employees were retrenched at the North Mine in 1982, rates were increased to reflect a change in monetary values. In 1984, the Commission again declined to increase overall benefits, but recommended employees with less than five years' service should be paid 100 per cent of the rate, and not the 50 per cent then applying (9 May 1984).

37 In 1987, the Commission (Cahill J) reconstructed the Part D scale to more closely reflect the Employment Protection Act scale. The result was an increase in the amounts in each level of $945. Improvements were also made to the minimum retirement benefit in Part C of the Pension Fund (Matter IRC196 of 1987).

38 Significant improvements were made to Part C and Part D of the Pension Fund as a result of negotiations between the parties for a new agreement in 1991. These negotiations resulted in a 2.5 per cent increase in wages and two further 2.5 per cent increases being applied to the productivity component of the Pension Fund.

39 In 1992, Cahill J, Vice President, determined a dispute following the retrenchment of over one hundred employees in Broken Hill Barrier Industrial Council and Ors: Re dispute with Pasminco Mining (1992) 42 IR 92. After considering the "very substantial" improvements made to the Fund in 1991, he declined to make any recommendation in respect to Part D. In the decision at p98, his Honour commented on the claim for parity between wages and salaried staff: 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 regard to wages employees.

40 In early 1993 the Company announced the closure of the North Mine as a result of unfavourable market conditions and significant company losses. Five hundred employees were retrenched. In a decision arising from negotiations for a new agreement (Matters IRC775 and 782 of 1993, 22 April 1993), Cahill J approved changes in work practices and wage increases over three years of 3 per cent, 3 per cent and 4 per cent respectively. Certain beneficial technical changes were agreed to in the negotiations in respect to redundancy benefits. However, Cahill J expressly rejected an improvement, or extension in the redundancy benefits under Part C and Part D of the Fund and reaffirmed his comments expressed in 1992 as to parity between groups of employees. From 1992 Part D benefits have been annually adjusted for movements in the CPI.

41 In Barrier Industrial Council v Pasminco Mining (unreported) IRC301 of 1996, 29 March 1996, Cahill J was again asked to consider improvements in redundancy benefits under Parts C and D of the Fund. After referring to the scale of payments awarded in Re Application for Redundancy Awards (53 IR 419) his Honour noted that the Part D scale is constructed "quite differently. He declined to make any changes to Part D and reaffirmed his 1992 statement on parity. In respect to Part C, his Honour recommended an increase of $6.47 in the Company's contribution raising it from $59.31 to $65.78. He noted the additional increase was a "significant" cost to the Company ($175,000pa).

42 The current, although expired, industrial agreement was negotiated, and agreed, in 1998. It was approved by Bishop C on 15 May 1998 in matter 6086 of 1997.

43 It is to be observed that the Award claim presently before the Commission, mirrors the claim made in 1996 and rejected by Cahill J at that time.

THE EVIDENCE 44 I turn now to summarise the evidence adduced by the parties.

45 Mr Butcher is Vice President of the Construction, Forestry, Mining and Energy Union and has been a full time union official for over twenty-one years. Prior to becoming a union official, he worked as a miner in Broken Hill for fourteen years. The Union has around three hundred members employed by Pasminco as miners and tradespersons and other members employed by contractors engaged on the site.

46 Mr Butcher described the operations of the mine. It operates seven days a week, twenty-four hours a day. Underground mineworkers work an 11 hour, 15 minute shift in two shifts a day with changeover of shifts between 7.00 and 8.00am and 7.00 and 8.00pm. Prior to the 1998 Agreement, employees worked a thirty-five hour week of five seven-hour shifts with compulsory overtime of thirty-six minutes each day. New payment arrangements were also introduced at this time. The 1998 Agreement continues to operate. This has been the practice when previous agreements had expired and new agreements were being negotiated. Mr Butcher said that there has been no increase in wages for his members since July 1999.

47 Mr Butcher gave evidence of the industrial history of the mining industry in Broken Hill. Pasminco commenced operations in 1988, taking over mining leases at that time operated by Conzinc Rio Tinto and North Broken Hill. Industrial regulation was traditionally through a three year unregistered industrial agreement.

48 Mr Butcher deposed that since 1967, in every negotiation for a new agreement, a claim had been made for improvements in redundancy benefits. In recent times, redundancy claims have been based on achieving parity between wages employees and single status employees. The 1998 Agreement was, however, a package that did not increase any redundancy benefits. Mr Butcher did not dispute Mr Edwards' history of the negotiations for the various agreements, which included the specific matters relating to redundancy. However, he believed that the redundancy claims were not tied to the agreement negotiations and the issue could be raised at any time. He believed Mr Edwards accepted this position.

49 Mr Butcher gave evidence of the Company's offers of single status contracts to employees in 1995. He was opposed to such contracts and believed they were being introduced to de-unionise the workforce. He acknowledged that acceptance was voluntary, but referred to the comments of the then mine manager, Mr Dini, that you "can't serve two masters". Mr Butcher believed there was "a bit of arm twisting going on" by the Company. In cross examination, Mr Butcher accepted that employees could refuse single status contracts and the majority of employees had done so.

50 Mr Butcher was taken to a notice published in the local press on 31 July 1995 (Annexure 16) which disclosed that employees who signed single status contracts could stay in the Union. He said, however, they could not follow union rules as to directives to participate in strikes, stop work meetings or negotiate collective bargains. Those who took up the contracts had resigned their union membership. He acknowledged that, despite the Union actively publicising the disadvantages of the contracts, employees who signed them were aware that there were "pluses and minuses". Mr Butcher believed employees would lose entitlements and the right to bargain collectively. In re examination, Mr Butcher deposed that some employees on fixed term contracts were told there was no positions available for them unless they signed single status contracts. Nevertheless, he believed the employees had a right to accept or reject such contracts.

51 Mr Butcher acknowledged that the Company had not offered any single status contracts since 1995; accepting the Union movement had successfully won their campaign against them.

52 In re examination, Mr Butcher gave evidence of the recent negotiations for a new agreement and referred to exchanges of correspondence between the parties, dispute proceedings in the Commission and various offers and counter proposals exchanged. (It is relevant to note that certain offers of improvements to redundancy conditions were made, but ultimately rejected - see para 235). He acknowledged that the Company had made its position clear from the outset, that improvements in redundancy benefits would require trade offs.

53 Mr Butcher conceded that an agreement he negotiated for employees of the contractor, Sanstowe Pty Ltd, included redundancy benefits based on the Employment Protection Act and that this standard was below that for mine employees working side by side with contractors doing similar work.

54 Mr Butcher identified a number of issues which concerned his members about the existing redundancy benefits: 1) The mine is to close in 2005 or 2006. 2) Many employees have no transferable skills. 3) There are few job opportunities in Broken Hill and nearby towns. 4) There is an oversupply of housing, making it difficult for employees to sell their homes and relocate.

5. Union members receive considerably less in redundancy benefits than those offered to single status employees.

55 The following employees gave evidence in the case: Peter James Pascoe - Boilermaker, Mineworker C. Age 49, 32 years' service

Richard Bernard Harvey - Mill Operator, Grade 10 Age 51, 34 years' service Director, Broken Hill Mine Employees' Pension Fund

Gary Frederick Dolan - Mill Operator, Grade 3 Age 47, 27 years' service

Stephen Charles Lawrence - Boilermaker, Grade 8 Age 51, 25 years' service

Christopher Ian Barrett - Mineworker, Grade D Aged 48, 30 years' service Peter Barry Johns - Development mineworker Aged 52, 33 years' service John Vincent Nadge - Mineworker, Grade C Aged 53, 33 years' service Gregory John Lively - Electrical Fitter Aged 43, 11 years' service

56 Much of the employees' evidence was consistent and repetitive. I shall summarise the pertinent evidence and omit that which relates to the application for an award covering terms and conditions.

57 For convenience, I shall refer to any matter which is relevantly responded to by Mr Edwards in his evidence.

58 Mr Pascoe's grandfather, father, two brothers and a son have all worked at the Broken Hill mines. His son and one of his brothers have left Broken Hill to work in the mining industry at Mt Isa.

59 Mr Pascoe owns his own house. He said that if he was made redundant and had to sell his home, it would be for a reduced price.

60 He deposed that employment prospects for tradesmen in Broken Hill was limited with the town "shrinking rather than expanding" and many redundant tradespersons must compete for limited work.

61 Mr Pascoe has been a union member since 1969 and is a member of the Union Negotiating Committee. His preference was to bargain collectively and he believed that single status contracts were introduced to take this right away and "break the Union". He deposed that if an employee signed such a contract, he could not remain a union member, or participate in union directed action. He believed that overall, he was better off to reject a single status contract. He accepted that non-union membership was not a condition of single status contracts, but couldn't see the point of being in the Union if you couldn't participate in its activities.

62 In oral evidence, he said that stop work meetings were usually two to three hours. He accepted that some meetings went beyond three hours and that there had been eighteen stop work meetings earlier this year. Members were obliged to attend and were docked accordingly. If extra time was required to meet operational requirements, or to catch up, such time would be worked until completed.

63 Mr Pascoe works with two other riggers in a team of three, one of whom is on a single status contract. He said there was no difference in how each of them performed the work. He believed that in his work group there were no demarcations or restrictive work practices.

64 Mr Pascoe compared the redundancy benefits he would receive compared to another tradesman, on a single status contract, with the same service. He calculated the difference at about $65,000 ($105,000 compared to his $41,895). He described this result as unfair and discriminatory.

· The single status strategy was not designed to "break the Union", but rather strengthen relations between the Company and its employees.

· While single status employees agreed not to engage in industrial action, they could remain in the Union and be assisted by it.

66 Mr Harvey is a single man who cares for his elderly father (who also worked in the mining industry at Broken Hill). He believed it would be "virtually impossible" to find alternative employment in Broken Hill, if he was retrenched.

67 Mr Harvey gave evidence that although the house he owns is insured for $107,000, he would be lucky to sell it for $65,000 because of the depressed state of the real estate market in Broken Hill. This situation would get worse with more redundancies. In any event, it would be impossible for him to relocate his father.

68 Since preparing his affidavit, and speaking to a local real estate agent, he now believed the value of his house to be between $43,000 and $48,000.

69 Mr Harvey is a member of the Union and believed that individuals have no bargaining power. He said the introduction of single status contracts was an attack on the Union and an attempt to de-unionise the workforce. His supervisor had said at the time, words to the effect "the introduction of single status is designed to break the Unions" and the general manager, Mr Dini, had said "you can't serve two masters". He took this to mean, if a person signed a single status contract, there was no point belonging to the Union, because you could not participate in its activities. He accepted that he had made a choice because of his preference for collective bargaining.

70 Mr Harvey works at the mine concentrator on a twelve hour, continuous, four panel roster. Of ten employees on his panel, three are on single status contracts and, in his view, they perform no more efficiently than any other employees. He was unaware of any inefficiencies, or restrictive work practices in the concentrator area.

71 He deposed that, in respect to stop work meetings, arrangements had been made to keep the concentrator operating, or to catch up with any production delays.

72 Mr Harvey said, under a single status contract, he would be entitled to seventy-eight weeks pay on his actual rate of pay and three months notice. He believed he was being treated unfairly and discriminated against as he was working alongside single status employees doing exactly the same job. This discrimination also went to his total remuneration where he claimed a difference of about $5,000 with a single status employee. He became aware of these differences after talking to his fellow employees.

73 In oral evidence, Mr Harvey described the structure of contributions required under the Pension Fund. This is not in dispute and was detailed earlier.

74 Mr Harvey, as a member of the Negotiating Committee for ten years, had been in four negotiations for the general agreement. He acknowledged that over this period, there had been periodic improvements to Part D of the Pension Fund in the context of collective bargaining. He conceded that the present redundancy claim is the same as that made in 1996 which was rejected by Cahill J at the time. He added that the claim for the same redundancy benefits as single status employees had not been pressed in negotiations for the 1998 Agreement.

· Single status contracts were not designed to "break the Union" but rather to reduce problems and issues and limit the need for outside involvement of other parties.

· He had criticised unions for not appreciating the difficulties facing the mine. This did not mean that the Unions would cease to have a role. The Company continued to deal with unions.

· Single status employees did not receive an ex gratia payment of three months pay on retrenchment.

76 Mr Dolan was born in Broken Hill and is married with two children. He and his wife own their own home and would not want to move away. Even if they could, it would be difficult to sell up. He said, at his age if he was retrenched, he would have "Buckley's chance" of getting another job.

77 Since commencing work, Mr Dolan had always been a member of the Union. He believed that he would be "brow beaten by Pasminco" if he had to negotiate his own wages and conditions. He also referred to Mr Dini's comment "you can't serve two masters" and understood that you would have to make a choice between the Company and the Union if you signed a single status contract. He said that single status contracts were introduced to "break the Union". He added that, if all employees were on single status contracts, it would be "dog eat dog".

78 Mr Dolan deposed that the Company had said in 1995 that an employee did not have to leave the Union to take up a single status contract. He had made the choice, knowing this to be the position. However, Mr Dolan said, as a union member, there is an obligation to go to stop work meetings called by the Union and this would be in breach of the contract.

79 Mr Dolan's work mainly involved sand filling and he works underground, side by side, with two single status employees. There are no demarcations, or restrictive work practices. He said there was no difference in the work each of them performed. He believed his hourly rate of pay was less than single status employees, and understood that single status employees are required to work two hours' unpaid overtime. However, he said this condition had never been enforced.

80 Mr Dolan said the difference in his redundancy benefit to a comparable single status employee, was about $60,000. He described this as unfair.

· Mr Dolan's rate of pay is $36.14 whereas Mr Farquharson's is $33.46 and Mr Coombe is $34.00.

· The Union and its members have objected to the use of contractors, which is a restrictive work practice.

· Single status employees have worked single time overtime and can take time off in lieu.

· The Company intended to create a cooperative work environment when it introduced single status contracts.

82 Mr Lawrence's father was a miner for thirty years and all his brothers have worked in the mines. He has three children, aged twenty-six, twenty-three and twenty. He owns a four bedroom home with his wife. He believed that if he had to sell his home, he would not get what it was worth, or enough money to re-establish somewhere else.

83 He believed, if he was retrenched, it would be very doubtful he could find work in his trade. His redundant boilermaker brother had found it very difficult to find work.

84 Mr Lawrence deposed that when he was shown a single status contract, it was clear, that if he signed it, he could no longer be a member of the Union. In cross examination, he said he formed this view after hearing Mr Dini say "you couldn't serve two masters". He wished to remain a union member for "protection".

85 Mr Laurence said that, since 1993, employees had agreed to every flexibility required by the Company, including working through crib, on public holidays and working additional hours. He currently works a twelve hour, continuous roster on panel 1 at the concentrator. Of twenty-two tradesmen, four are on single status contracts. He did not accept that they work any more efficiently, effectively or productively. Mr Laurence rejected a suggestion that they are more loyal to the Company.

86 Mr Lawrence said there was no difference between wages employees and single status employees in terms of skills, experience, workload, application, commitment or efficiency. Yet, for him, there is a difference of about $60,000 in redundancy benefits with a single status employee of equivalent age and service. After being shown other employees' pay advices, he believed there was a difference in his salary of $68,000 to $72,000 with a single status employee. He conceded however, that he was not concerned about his rate of pay.

87 Mr Lawrence gave evidence of alleged inefficiencies in the single status system: employees taking advantage of unlimited sick leave, refusing to work unpaid overtime and rarely working on public holidays.

· He (Mr Edwards) repeatedly informed employees that union membership was a matter of individual choice.

· Restrictions still exist on the use of contractors and this is an inefficiency.

· Culture and attitude has a significant bearing on productivity. At the Company's now closed open cut mine known as Potosi, operators were all single contract and it had worked very efficiently with minimum disruption or difficulty.

· The salary of $72,000 referred to by Mr Lawrence is inclusive of 8% superannuation, ie the base salary is $66,667.

· Due to the roster, not all employees would work public holidays. Christopher Ian Barrett

89 Mr Barrett was born in Broken Hill. His father worked for over thirty years in the mines at Broken Hill. He regards his prospects of alternative employment as "zero" because of his level of education and skills.

90 He wouldn't wish to leave Broken Hill because his family resides there and even if he did, his home was only worth about $65,000. The chance of selling his house, with so many homes on the market, and more to come, was poor.

91 Mr Barrett had always been a union member, believing in "safety in numbers" and that negotiating "one to one" would not be fair or reasonable. He said that he was not paid for attending union meetings.

92 Mr Barrett works a twelve hour shift system, performing underground work involved in sand filling, pipe fitting and other labouring jobs. He said for about 70 per cent of his time, he works with a single status employee who is now salaried staff, but performs exactly the same work as he does. He also works with other single status employees. He said these employees are no more flexible, cooperative or productive in the work they perform compared to union members. He believed that single status contracts provide for unpaid overtime but, to his knowledge, no one has ever been called upon to work it. He also believed that single status employees are preferred by the Company. In oral evidence, he said that he was not offered a single status contract because he hadn't asked and didn't want one.

93 Mr Barrett would receive redundancy benefits of $41,895. He said this was much less than a single status employee with the same years of service.

94 He said that since 1998, he had been aware that the mine's life was limited. However, he didn't believe it, as he had been told the same thing since he was a boy.

· Mr Barrett would never be prohibited from attending a union meeting, but he would be required not to stop work. · Mr Coombe is paid an hourly rate of $34.00 whereas Mr Barrett's rate is $36.14.

· Single status employees had been required to work unpaid overtime from time to time.

· The Company does not have a preference for contractors; indeed contractor numbers have been reduced.

· The 1998 Mines Agreement did introduce flexibilities, but they were not identical to those secured from single status employees.

96 Mr Johns was born in Broken Hill and lives in his own home with his wife. He has two grown up children, who also live in Broken Hill. He estimates the value of his home at $80,000, but would have to accept less if he was forced to sell. If he had to relocate, the sale proceeds would be insufficient to do so, to a city such as Adelaide.

97 At his age, he cannot see himself with any reasonable alternative employment prospects.

98 Mr Johns is a member of the Union Negotiating Committee and had always been a union member, believing in collective bargaining. He believed, in a one to one situation, Pasminco would offer conditions on a "take it or leave it" basis. This would make it extremely difficult to negotiate fair and reasonable conditions.

99 Mr Johns deposed that he believed single status contracts were introduced to "split the back of the Unions". If you signed such a contract you had to leave the Union and could no longer bargain collectively, he said. He gave oral evidence that he was never offered a single status contract and was not interested in seeing one. He was concerned with benefits from the sickness fund (which would be lost) and being denied the right to collectively bargain. He had not seen any document which said a single status employee was required to leave the Union. It was, however, the general opinion going around the mine that you could not remain a union member on a single status contract.

100 Mr Johns is employed as a development miner working 11¼ hour shifts in a panel of forty employees. There are no single status employees in the development group, but two in the production group, who had transferred from the Potosi open cut operation. Mr Johns deposed that in the last fifteen years, there had been increasing flexibility, no demarcations and all employees perform whatever jobs are asked, as long as they have the necessary skills.

101 Mr Johns believed that single status employees receive redundancy benefits in excess of $20,000 to $30,000 more for the same work, experience and hours worked by wages employees. He believed this to be discrimination.

102 Mr Johns accepted that redundancy benefits have been negotiated collectively at Broken Hill, since about 1949. The present arrangements had been the result of collective bargaining.

· There are a number of proposals for new developments at Broken Hill which would open up employment opportunities (see para 172 - Mr Hines' evidence).

104 Mr Nadge was born in Broken Hill and is married with two grown up children. Because of his age he believed he had no real prospects of finding alternative employment in Broken Hill. He owns a house, recently valued at between $110,000 and $120,000. He cannot see how he will be able to afford real estate away from Broken Hill and gave, as an example, the sale of his son's house for 15% below market value.

105 Mr Nadge had always been a union member, preferring to negotiate his terms and conditions through the Union. He believed he cannot match the resources Pasminco has available to it. He stated that Pasminco did not enjoy a good reputation.

106 Mr Nadge believed that the opening of the Potosi open cut operation was an example of Pasminco working towards de-unionising Broken Hill through single status contracts. He said Mr Dini had said "you can't serve two masters" and took this to mean you couldn't be a union member and sign a single status contract.

107 Mr Nadge conceded that as a result of pressure from the Union in June 1995, no employee had since been offered a single status contract. The Company would only respond to an approach from individual employees.

108 Mr Nadge deposed that he had never been given a presentation on single status contracts, and believed they were targeted to tradesmen, not labourers. He remembered presentations at a later date, in which the underground workforce were told that single status contracts wouldn't work for them.

109 In cross examination Mr Nadge agreed that, in 1995, both the Union and the Company had said that an employee did not have to resign union membership if a single status contract was taken up.

110 Mr Nadge gave evidence that he was against single status contracts "in principle". He believed he would be better off on existing conditions, including benefits from the Sickness Fund.

111 As a local check inspector, Mr Nadge said he had not seen any differences in the work performed by single status employees compared to wages employees who work side by side, performing exactly the same work.

112 He regarded the differences in redundancy pay for the same work and experience, as an "insult", particularly considering the dangers of underground mining.

113 Mr Nadge accepted that the redundancy claim in 1998, sought the same benefits as were available to single status employees; but ultimately, this claim was not pressed.

114 Mr Nadge gave particular evidence in his role as Secretary of the Sickness Fund. He said the Company subsidises the Fund to approximately $50 per fortnight per employee. The money is invested and dispensed to sick employees, upon production of a doctor's certificate, at a rate of $20 an hour for a twelve hour shift. A person can be carried by the Fund for up to 2.5 years. Employees also make contributions. The Fund has assets of $7,000,000. The Fund is a registered health fund which pays benefits for dental, optical and other health claims. In cross examination, Mr Nadge said the Sickness Fund was " treasured " by employees. The Fund makes payments, as it sees fit, including a payment upon redundancy of about $900. 115 Finally, Mr Nadge said he did not know his hourly rate was higher than the rate for single status employees with whom he worked. What's more, he said, he didn't care.

· Mr Dinis' statement cannot be taken as insisting that employees resign from the Union. He (Mr Edwards) had made it clear on many occasions that union membership was a matter of individual choice.

· All groups of employees were given a presentation on single status contracts and any employee could approach the Company to take up such a contract.

· Mr Nadge's hourly rate is $36.14 whereas the other two employees mentioned by him earn $34.37 an hour.

117 Mr Lively is married with two teenage children and has lived in Broken Hill all his life. He believed it would be very difficult to find work as a tradesman in Broken Hill if he was retrenched.

118 Mr Lively said there was an oversupply of real estate in town which would make it difficult to sell his home. In any event, his wife works in town and his elderly mother and wife's parents live in Broken Hill. They depend on the family for care and support.

119 Mr Lively deposed that there was no prospect of him being able to negotiate his own terms and conditions. For one hundred years it had been a tradition for unionists to combine together and negotiate an agreement. It had been made clear to him when working on Pasminco projects that it was a "take it or leave it" situation.

120 Around 1995, Mr Lively was injured and was moved from underground to surface work. He recalled at this time, when single status contracts were introduced, Mr Dini saying "you can't serve two masters". He understood this to mean that to sign a contract meant being out of the Union. However, he later gave evidence that, in presentations made by Mr Dini, he had said you could stay in the Union. However, it was made clear that single status employees could take no industrial action, or participate in stop work meetings.

121 In oral evidence, he said no one offered him a contract with his name on it. He knew that the Company was not offering the contracts, but employees could express an interest. He said there was no reason why he couldn't look at one, if he wanted to - but he didn't want to.

122 Mr Lively works a twelve hour, four panel shift system on the surface. There are three tradesmen and two apprentices on his panel. He compared his work to that of an employee on a single status contract, and said that it was exactly the same. He believed that there were no efficiencies, or work improvements arising from single status employees.

123 Mr Lively compared his redundancy benefits of $23,474 to that of an equivalent single status employee of about $33,000, plus $18,000 for notice. Under the Company's most recent offer he would receive $36,518 - still well short of the amount for a single status employee.

· Employees are not prevented from seeking the assistance of the Union to resolve their grievances.

· Single status employees had a choice of remaining in the Union.

For the Respondent 125 The Company's principal witness was Mr Paul Edwards, Group Manager Employee Relations, Pasminco Australia Ltd. Between 1988 and 1996, Mr Edwards was Manager, Human Resources at Broken Hill.

126 The bulk of Mr Edwards' affidavit (Ex'F') contains historic background and is largely uncontroversial. It deals with the following matters which are detailed elsewhere in this decision: i) Pasminco's mining operations in Broken Hill; ii) Industrial Regulation; iii) Union coverage at the Pasminco Broken Hill Mine; iv) History of Redundancy Benefits; v) History of Commission involvement in redundancy issues; vi) Negotiations for a new industrial agreement.

127 To the extent the evidence traverses matters relating to the negotiations for a new agreement, it is unnecessary to refer to such evidence for the purposes of this decision.

128 Mr Edwards was closely cross examined over two days. I summarise his evidence.

129 He was asked about the then General Manager's (Mr Dini) view in 1995, that the Broken Hill mines were at the forefront of the resources industry in terms of no demarcations, flexibility, twelve hour shifts and annualised salaries. Mr Edwards agreed that these changes were "substantial gains", but could not agree that the mine was at the forefront of the industry. He agreed that other Pasminco sites had sent work teams to Broken Hill to observe the process, but these related more to technical, rather than industrial relations issues. He would not describe Broken Hill as a role model, nor had he expressed such a view in 1995.

130 Mr Edwards identified a number of changes made in the 1998 Agreement which were of benefit to the Company: a reduction in the number of official holidays, removal of restrictions on casual labour, changes to working hours, changes to start and finish times, removal of double time for overtime, crib break flexibility, roll up of allowances, simplifying administration and use of contractors. He added that these changes were also "paid for" by wage increases.

131 Mr Edwards was asked about the intent of the following clause in the 1998 Agreement: It is understood by both parties that this Agreement does not prohibit the variation of practice or custom by the Company in methods of doing work or arranging contracts in cases where specific arrangements have not been made. It was his understanding that, in twenty years, this clause had not been invoked. He accepted however, it was available to be used by the Company.

132 Mr Edwards was questioned on the mine's production levels from 1996. He agreed the Company was mining more ore, with fewer employees. However, he said, the problem was the lower concentration of lead and zinc concentrate in the ore.

133 He was also referred to lost time figures from 1989-1994 which disclosed five days lost. He agreed this result was at the lower end of the scale. He also conceded that in 1995 the Company had a "reasonably good" industrial relations record in terms of work stoppages. Mr Edwards was asked about his reference to eighteen stoppages from May 1996 to January 2001. He accepted they were not eighteen full day stoppages, and the majority occurred at the time of the introduction of single status contracts and the more recent offers and counter offers put by the Company for a new agreement.

134 Mr Edwards was referred to the Company's "Fair Treatment Policy" (Ex'26'). The policy, he said, was part of the cultural change the Company was hoping for. He denied that in the grievance procedure, employees were prevented from having a union representative present. While it must be another employee, it may be a union delegate.

135 Mr Edwards deposed that single status contracts were not a central concern for Pasminco. Rather the concern was to focus on productivity. He said, if productivity couldn't be achieved through the Unions "then maybe you have to bypass it" (the Union).

136 Mr Edwards deposed that from about 1994 there had been discussions with employees and unions about staff/single status contracts. Mr Edwards maintained that approaches for a form of incentive scheme had first come from tradesmen in the Surface Roadworks Earthmoving Gang. He said union membership had not been a consideration for the Company. About the same time, the Company had begun developing draft single status contracts, based on annualised salaries with single rate overtime. Compensatory amounts and a wage increase of 3.5% were to be built into the contracts.

137 Mr Edwards expected the following benefits from single status contracts: i) fewer overtime hours because of less incentive to take up overtime; ii) co-operation from employees; iii) a fall in total overtime costs; iv) lower costs where overtime was necessary; v) salary increases would reflect individual performance; vi) employees would be required to work on public holidays; vii) administrative savings; viii) employees could not take strike action.

Mr Edwards said that the benefits he had originally envisaged, were not fully realised, because the contracts were not taken up by the entire workforce.

138 Presentations were made to employees in which they were told they could request an offer of a single status contract. Despite vigorous opposition from the Unions, some did. He gave evidence that the Company's preferred approach was to have discussions with the Union, but if this proved fruitless, the strategy was to adopt an individual approach.

139 Mr Edwards said as a result of representations from the Union, employees who had been offered single status contracts were given an opportunity to reverse their decision.

140 In mid June 1995, the Company agreed to give assurances that it would not offer any more single status contracts. Despite this, the Unions continued to make public comments opposed to the contracts.

141 Mr Edwards provided details of the employees who had requested an offer (Ex'F' p89), the numbers of contracts accepted (Ex'F' p94) and a representative example of the contracts. He conceded that the contracts were all in exactly the same terms.

142 Mr Edwards said a large majority of employees did not take up the contracts: at least partly as a result of the Union's campaign against them. He said employees who did not take up a contract, did not suffer any reduction in their terms and conditions and remained protected by the collectively negotiated agreement.

143 He gave evidence that no employee would be "out of pocket" as a result of the package, but some would have less direct wages. Different employees had a range of reasons why they accepted, or rejected, single status contracts, including some who would lose income by the loss of overtime benefits. To meet this factor, compensation of $4,000 was paid for loss of overtime, representing half the average overtime for all employees. Mr Edwards conceded if an employee didn't work overtime, this was an extra benefit in favour of those who did.

144 Mr Edwards deposed that with about seventy employees on single status contracts; the Company derived the following benefits:

· Continued production during stoppages or stop work meetings. He said that between May 1996 and January 2001, there had been eighteen occasions where a section of wages employees had been involved in industrial action.

· The Potosi operation (now closed) was fully single status and worked efficiently and productively.

· Wage outcomes relate to performance and result in less real overtime costs.

· Single time for callouts, rather than a minimum of four hours at overtime rates.

· Flexibility of completing jobs after the end of a shift.

145 In respect to the Potosi operation, Mr Edwards deposed that the employees there were trialled for single status contracts for a number of reasons, including that they had worked in contravention of union rules, worked through stop work meetings and the majority of the employees were not union members. He said that, while union membership was a matter he was interested in, it was not of utmost importance. He denied handpicking these employees because of non-union membership. However, he conceded that, as a consequence of single status contracts, there would be an erosion of the Union's influence.

146 Mr Edwards was questioned on the role of Unions in this new environment.

147 He accepted that one of the benefits of the contracts was a non-union site. He was asked about his own comment (Ex'20') "to reduce the effectiveness for the Union movement as a contact point for the workforce". He said this comment meant that there were employee issues which were better addressed, and should be addressed, by management.

148 Mr Edwards clarified his statement in 1994 that "there was no role for unions" with single status contracts by saying "no role for unions as we know them", meaning their (the Union's) role had to change. He accepted that in 1994 he was "continuing to chip away on the role of the Union" (T.p228).

149 Mr Edwards believed that being a union member did not require you to attend stop work meetings. This was what he meant by unions changing their traditional role. Members could participate, and take part in the Union's activities in other ways, without disrupting production at the mine.

150 Mr Edwards insisted that the single status strategy was not directed at "breaking the Unions". On the contrary, he said that in 1994 and 1995 there were numerous meetings with the CFMEU and Barrier Industrial Council about the issue. He had consistently told the Unions that union membership was a matter for each individual employee, and he had never changed this view.

151 Mr Edwards was questioned about a 1993 company document on Pasminco's employee relations. He accepted the document said it was necessary to eliminate third parties from the employment relationship and seek to reduce the number of unions at each site. His experience, however, was that simply reducing union numbers would not automatically lead to a more flexible workforce. He said, one of the possibilities expressed in the document, was zero unions on site. Mr Edwards agreed he was obligated to give effect to the policy, but said it was up to him how it was applied. He rejected a link between this policy in 1993 and the concept of single status contracts in 1994-95. He agreed such a policy might be adopted for some companies, but he didn't agree with it. In any event, he said, no Pasminco site had eliminated the Unions.

152 Mr Edwards was shown another document, authored by Mr Dini in 1993, in which he said "we must not declare that we want a non-union site" and "we have enormous leverage at the moment and although we must use this to our advantage it would be a mistake to try to bash its members out of a union". Mr Edwards did not understand this to be an instruction to him, but to be Mr Dini's views which were communicated to his managers. Mr Dini also had an opinion that employees should be "coaxed out of the Union". Mr Edwards rejected these views as having anything to do with single status contracts.

153 Mr Edwards' evidence on redundancy benefits was that these benefits were part of an overall package employees signed up to. He accepted that the difference between wages and single status employees, depending on occupation, could be more than $60,000. He acknowledged that in every case, single status employees would receive more than wages employees of the same age and with the same experience. The difference was about half in most cases.

154 Mr Edwards was asked about the various scenarios of costs of the introduction of single status contracts and accepted that liabilities for redundancy significantly increased costs. What wasn't costed, he said, were productivity improvements. Overall, he accepted that direct and on costs were greater. He had not suggested employees had bought, and paid for their redundancy, through their salary. Other flexibilities were taken into account. He was asked about each of these flexibilities and acknowledged that wages employees had also agreed to certain flexibilities in the 1998 Agreement, including single time overtime.

155 Mr Edwards said that differences in redundancy pay were warranted because wages employees had not delivered on all flexibilities. He cited issues such as use of contractors and ability to change shifts, which were still not agreed to. For the past two years, the Company had been trying to negotiate improved redundancy benefits for productivity trade offs; but without success.

156 Mr Edwards was asked about the different redundancy arrangements for staff and wages employees in 1992-94, about the time of the closure of the North Mine. He said staff employees received two to four months salary as an ex gratia payment. This benefit, he said, was no longer paid.

157 Mr Edwards was taken to a number of documents concerning employee superannuation and accepted the documents demonstrated, that employees moving to single status contracts, became entitled to substantial benefits in superannuation. He said, this was a factor the employees weighed up when considering whether to take up a contract.

158 Salary sacrifice and unlimited sick leave was also available for single status employees, but not wages employees. He denied there was a problem with absenteeism when unlimited sick leave was introduced.

159 Mr Edwards accepted that single status employees have access to annual salary reviews, but the last wage increase for wages employees had been in May 1999.

160 Mr Mark Hine is Pasminco's General Manager, NSW Mines, with responsibility for the management and control of Broken Hill and Elura Mines. He has held this position since October 1999. From July 1997 to October 1999 he was the General Manager of the Broken Hill Mine. Mr Hine confirmed that, based on current known ore reserves and production rates, the Broken Hill mine would be closed in 2005-2006. Mr Hine was questioned as to projections that zinc prices would rise. He said that even if this was the case, it would not affect Broken Hill.

161 He deposed that extraction from the mine is limited to production of 2.9 million tonnes per annum. This is due to the maximum throughput of the concentrator. Additionally, the grade of ore is falling. This means that the focus must be on cost reductions and improving efficiency.

162 Mr Hine provided details of the financial affairs of the Pasminco Group and the Broken Hill mine specifically. He said in the six months to December 2000, the Group had lost $37.3 million and the mine's loss for the same period was $600,000. He attributed the results to declining grades of ore and metal, lower production and higher costs. He acknowledged the loss of $40.4 million was a result of foreign currency options and said he was unaware of a Group net profit in 2000 of $23.4 million after tax.

163 Mr Hine was questioned on a deed of cross guarantee across the Pasminco Group which makes all the operations liable for making up the losses of others in the Group. He was unaware of such arrangements. He agreed the Group's corporate services are shared across the Group.

164 Mr Hine dealt with the specific position of the Broken Hill mine. He conceded that Broken Hill had experienced record mining rates, but this did not reflect in the quality of the ore extracted and the direct cost per tonne of metal extracted.

165 Mr Hine deposed that the performance of the mine was of great concern, even before the recent half yearly results. In October 1999, the management structures of the Broken Hill and Elura Mines were amalgamated to reduce costs by consolidating service support functions. In late 2000/early 2001 the Group initiated a Business Improvement Program in an effort to improve the performance of all of it's businesses.

166 Mr Hine discussed the cost reductions involving major redundancy programs at Broken Hill which occurred in 1992, 1993, 1996 and in March/April 2000. In the last program, thirty staff and sixteen wages employees were made redundant. Mr Hine accepted that in the existing workforce, over half had twenty years or more service.

167 Mr Hine said cost reductions would continue in 2001, resulting in further direct redundancies and reduced contractor costs. He said to achieve further savings, the Company must better utilise its existing infrastructure, equipment and workforce. He identified proposals to operate underground on a twelve hour shift system, to work on public holidays and for better utilisation of contractors. These changes, he said, were necessary if the Company is to return to profitability and pay for improved benefits for employees.

168 Mr Hine was involved in the negotiations for the 1998 Agreement. The Agreement resulted in benefits being offset by improvements in productivity. There was no change to redundancy benefits. He said improvements in the future would require the costs being offset by other savings.

169 Mr Hine referred to the recent round of negotiations outlined in Mr Edward's evidence. He deposed that any significant additional costs by way of improved redundancy benefits, without cost savings, would accelerate the closure of the mine.

170 Mr Hine gave evidence of his knowledge of two projects planned for Broken Hill; a plan to recommence operations at the South Mine employing about eighty workers for five years and a mineral sands business to initially employ about one hundred people. He said the New South Wales Government was also committed to further exploration and development in Broken Hill.

171 In a second affidavit, dated 8 May 2001, Mr Hine deposed that expressions of interest had been received for the purchase of the Broken Hill Mine. Discussions were only of a preliminary nature. However, some inspections of the mine by prospective buyers had been undertaken. For reasons of confidentiality, names could not be revealed. However, one company had undertaken a very extensive due diligence process, and two others had expressed interest. He said no discussion had occurred as to what industrial instrument should apply in the future. However, discussions had involved transferring all existing employees on no less favourable terms than currently enjoyed.

172 Ms Doust submitted that the Award sought by the Union was designed to ensure that redundancy benefits available to wages employees would be equivalent to benefits available to single status employees. In highlighting the differences between the two, she said that, in every example, a wages employee would receive substantially less than a single status employee of the same age, experience and classification. This, it was claimed, was unfair and unreasonable.

173 It was contended that an award was necessary for the following reasons: 1) The lack of employment prospects for redundant employees.

2. The difficulty of relocating elsewhere because of poor residential sales and Broken Hill's remoteness.

3. The age profile of the workforce. Of 313 employees, 174 have twenty years or more service and 289 have ten years or more. 4) Community standards within the coal industry is three weeks' pay per year of service with no cap.

174 Ms Doust argued the award was justified in order to address an issue of discrimination in the workplace and to provide equal pay for work of equal value, consistent with Australian Manufacturing Workers' Union and Others v Alcoa of Australia Limited and Others ("the Weipa case") (63 IR 138). She highlighted the other differences between the conditions available for wages employees in comparison to single status employees. These included extra annual leave, substantial improvement in superannuation benefits, unlimited sick leave and salary reviews. There was no evidence, Ms Doust said, that wages employees worked less efficiently, or less flexibly than single status employees. There was little evidence that industrial stoppages were a major concern and, in any event, employees are not paid for any stoppages.

175 Ms Doust referred to documentation which, she claimed, revealed a company strategy of seeking to eliminate unions at the Broken Hill site through a single status strategy. Comments by senior management persons demonstrated this was company policy. For example: " we must not declare that we want a non-union site " (Mr Dini, 26 January 1993); " identify opportunities to sensibly disconnect from the formal conciliation and arbitration system" and, " to reduce union influence of the workplace through a program of direct dialogue " (Ex'F' Annexure 3); " the benefits of a non-union site " (Ex'19'); " the Company's strategy it provides the Company with the ability to eliminate the Unions by a natural erosion of their influence, rather than by direct confrontation " (Ex'22'); " I think there is a role for unions in some areas, but if the concept of individual contracts or single status is totally embraced, then there's not a role for unions .. well, not as we know it " Mr Edwards (Ex'23').

176 Ms Doust submitted that higher redundancy benefits for single status employees was a key element in a strategy designed to eliminate the Unions.

177 She said that when the Company claimed that union membership was a matter of individual choice, this was nothing more than a platitude. The reality was expressed by Mr Dini who said "you can't serve two masters". She said being a union member was of little consequence if a member was unable to support collective bargaining. The Company also wished to eliminate the role of third parties such as the Commission.

178 Ms Doust submitted that the Company's financial position was no defence to the award claim, as the mines are profitable. In any event, she said, the award is consistent with the Company's Group wide redundancy policy.

179 Mr Buchanan put that there were two primary questions raised by this application; firstly, whether wages employees should receive the same redundancy benefits as staff and single status employees and, secondly, whether there is an independent foundation to increase redundancy benefits for wages employees?

180 In answering the first question, Mr Buchanan detailed the differences between the conditions applicable to single status and wages employees. He said that despite the Union's assertion that the Company wished to eliminate unions, the evidence is clear that it was never a company requirement for employees to resign their union membership, if they accepted a single status contract.

181 He traced the history of single status contracts from 1994, when the Barrier Industrial Council and Mr Butcher had been involved in negotiations with the Company, at least six months before any specific offers were made. Single status contracts were voluntary and union membership was a matter for the individual employee (Ex'A' Annexure 9). He said, single status contracts have been limited to employees who had accepted them in the initial period of 1994-95. Mr Buchanan acknowledged that, the Union's vigorous campaign in opposition to such contracts, had been largely successful, as proven by the fact that no single status contracts had been taken up in the last six years.

182 Mr Buchanan referred to the decision of Cahill J in 1996 in which his Honour rejected a claim for parity of redundancy benefits between wages and salaried staff and made observations as to redundancy standards set under the Employment Protection Act. Mr Buchanan submitted that his Honour's findings were appropriate to be followed in this case. Cahill J did make changes to Part C of the Fund, the effect of which was to increase benefits on redundancy. The two parts of the Fund are different and were introduced and maintained by the parties by agreement.

183 Mr Buchanan said, despite the novelty of the current arrangements, and having regard for the fact they are more generous than the Commission's standards, there is no basis to depart from the structure of the Fund, or the benefits which are provided by it. He submitted, Cahill J was not wrong, on either principle, or on the facts of the 1996 case.

184 Mr Buchanan dealt with the allegation of discriminatory treatment and Ms Doust's references to the decision of the Australian Industrial Relations Commission in the Weipa case. He said Weipa was distinguishable from this case because staff remuneration and conditions at Weipa had to be accepted as a total package; there could be no picking or choosing which conditions an employee would accept. What is being sought in this case, he said, were single status redundancy benefits without accepting other single status conditions. The evidence confirms that Cahill J was absolutely correct when he said you can't pick and choose, out of a total package, conditions you will accept and others you will not.

185 Mr Buchanan addressed the issue of the alleged inconsistency between union membership and single status contracts which barred industrial action. He said an employee had three choices; one, remain a union member and participate in industrial action and be exposed to disciplinary action; two, remain a member, but not participate in industrial action; or three, resign union membership. He said this was a personal choice. There was no evidence that all single status employees were non-union. The evidence was, however that employees who rejected the single status contracts were not interested in the salary rate as the hourly rate was less than the Agreement. There was no evidence that wages employees and single status employees could not work comfortably, side by side. Indeed, the evidence was that they had.

186 All of the Union witnesses offered what, for them, seemed to be good and valid reasons why they would not sign single status contracts. Each had made a choice based on principle, or on an assessment that it was more beneficial to be under the existing terms and conditions.

187 However, Mr Buchanan said for six years the Union and its members, either individually or collectively, had consistently refused to accept the flexibilities of single status contracts. This was despite the Company's indifference as to whether employees signed a contract or not.

188 Mr Buchanan turned to the second primary question. He said that nothing has been put in this case which would warrant a departure from Cahill J's findings in 1996. Despite his Honour's hopes that the changes then made would settle Pension Fund claims for the foreseeable future, within a matter of months, the same claim his Honour had rejected, was made in the context of the general agreement negotiations. In the result, the claim was not pressed, and the 1998 Agreement was finalised. Mr Buchanan submitted that if the Union was seriously aggrieved with the 1996 ruling, it could have pressed the claim on a collective basis in 1998, but hadn't done so. There were even leave reserved matters in the 1998 Agreement of which redundancy was not one.

189 Thus, Mr Buchanan submitted, not only had Cahill J specifically rejected the claim, the Unions had allowed it to lapse for years, only to have it re-activated in 2000 in the collective negotiations. However, on four occasions there was a blanket refusal to discuss any offsets. He said the Union cannot now complain as all opportunities it had to negotiate a collective outcome had now been lost.

190 Mr Buchanan identified the four components of redundancy benefits and said, each one had its own peculiar history and basis - the Sickness Fund, Parts C and D of the Pension Fund and thirteen weeks' notice. He submitted, it would be inappropriate to change the traditional systems that have worked at Broken Hill, and which have been expressly accepted by the parties.

191 Mr Buchanan referred the Commission to the Wage Fixing Principles and, in particular, the First Awards Principle, (Principle 13 of the State Wage Case Principles) which provides for the prima facie starting point for a first award to be the existing conditions. Taken together with the Commission's own standards on redundancy and the long history of a different approach to the same subject matter, it would be inappropriate to make the award sought by the Union. Mr Buchanan also referred to the redundancy benefits in the Broken Hill Commerce and Industry Agreement (Consent) Award 1998 and for contractors at the mine site; neither of these arrangements go beyond the Commission's minimum standards.

192 Ms Doust said there was clear evidence, as early as February 1993, that single status contracts were part of a broader company strategy to reduce the influence of, or eliminate Unions, from Pasminco sites. The suggestion that they emerged from the "will of the workforce" was incorrect.

193 She said the Commission should reject the submission that years of bargaining should be left untouched, particularly having regard for the Company's "repugnant agenda" and its discrimination and victimisation of Union members simply because of their desire to retain union membership and bargain collectively.

194 Ms Doust distinguished Cahill J's decision by submitting his Honour did not have the benefit at the time, of knowing what would be the impact of single status contracts as revealed by the evidence in this case.

195 Ms Doust took issue with Mr Buchanan's interpretation of the Weipa case. She said that this was not a case which concerned what employees are paid and under what conditions they work, but rather concerned the discrete issue of unfair treatment and redundancy. All of the Union witnesses, she said, gave undisputed evidence that they perform the same work as single status employees.

196 Finally, she said the award application is consistent with the objects of the Act and would ensure industrial equity.

197 The Commission has been asked to make an award pursuant to Pt 1 ch 2 of the Act, setting fair and reasonable conditions of employment for employees (s10) at Pasminco's Broken Hill Mine. The proposed award is specifically directed towards increasing redundancy benefits for over three hundred wages employees. Thus, it may be characterised as a discrete single issue award.

198 As is apparent from the draft award's title - Pasminco Broken Hill Mine Anti Discrimination Redundancy Award - and the grounds and reasons outlined in the application, the proposed award is directed to removing what is alleged to be the discriminatory treatment of wages employees in respect to redundancy benefits by the Company. The Union relied on the objects of the Act, in particular object 3(f). To prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value. Attention was also drawn to the references to discrimination elsewhere in the Act, eg s19(3)(e) and s169.

199 In exercising its statutory award making powers, the Commission must also have regard for the State Wage Case Principles (see State Wage Case 2001, 104 IR 438). In this case, two principles are particularly relevant, those relating to the making of First Awards (Principle 13) and Special Cases (Principle 10).

200 From the history earlier referred to, it is perfectly plain that this is an application for a first award. It follows that it must be considered under Principle 13 of the State Wage Fixing Principles: Any first award or an extension to an existing award must be consistent with the Commission's obligations under Part 1 Chapter 2 of the Act. In determining the content of a first award the Commission will have particular regard to: a) relevant wage rates in other awards, provided the rates have been adjusted for previous State Wage Case decisions and are consistent with the decision of the State Wage Case 1989; b) the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which the work is performed; c) for conditions of employment, other than wage rates, prima facie the existing conditions of employment; d) that the Award would comply with the requirements of section 19 of the Act.

201 It is also obvious that the application seeks redundancy benefits which are in excess of the Commission's test case standards. In my view, if the application for a first award is to succeed beyond these standards, and warrants a departure from the prima facie position of existing conditions in Principle 13(c), it must also be considered concurrently under the Special Case Principle to which I now turn.

202 As earlier mentioned, his Honour the President had allocated these matters, and any special case issues relevant to the applications to the Commission as presently constituted. The Special Case Principle is expressed as follows: 10 Special Case Except for the flow on of test case provisions, any claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the principles, will be processed as a special case before a Full Bench of the Commission, unless otherwise allocated by the President. This principle does not apply to applications for awards consented to by the parties, which will be dealt with in the terms of the Act, or to enterprise agreements, which will be dealt with in accordance with the Enterprise Arrangements principle.

203 It is appropriate to refer to the authorities which have considered the principles to be applied in Special Case applications. See Occupational Health Nurses' Superannuation (State) Award (unreported) Bauer, Schmidt JJ, French C, 6 November 1996; Teachers (Non Government) (Schools) (State) Award and other Awards (unreported) Fisher P, Sweeney J, Varnum DP, 17 August 1990 and Pastoral Industry (State) Award, 104 IR 268.

204 The word "special", in this context, has been variously defined as "exceptional", "unusual" or "out of the ordinary".

205 The authorities make clear that the onus rests upon an applicant to make out a special case, based on the evidence advanced in the proceedings.

206 In determining a special case application, the Commission is obliged to take into account, in addition to the industrial merits of the claim, its cost, potential for flow on and the public interest.

207 The Award applications were filed before the decision of the Full Bench of the Commission in the State Wage Case 2001 on 31 May 2001 (104 IR 438). This decision did not alter the Special Case Principle, but did make substantial alterations to the First Award Principle. These alterations however, were matters of form, not substance and did not alter the relevant provision at 13(c).The hearing of these applications commenced formally on 4 June 2001. I propose therefore to deal with the applications under the State Wage Case 2001 Principles as the matters were plainly not substantially part heard under the former principles (see State Wage Case 1994 57 IR 1 at 39).

History of Redundancy Provisions in New South Wales

208 The history of general redundancy provisions in New South Wales commenced with the enactment of the Employment Protection Act in 1982. Prior to this time, redundancy awards or orders were made on an ad hoc basis, according to the specific circumstances of a particular case. This was observed in Re Steel Works Employees' (BHP Co Ltd) Award & Other Awards (4 IR 56) by Fisher J, President, when his Honour said at p59-60: All parties except the steel companies were unanimous in asking the Commission to rule that its decision on this application was not a test case, but an ad hoc decision applying to the circumstances of this case only. In so doing, it would be following a long line of cases which have in general noted that each case should not be read as a precedent for other cases. The difficulty I find with the submission is that viewed as an industrial phenomenon in contemporary Australian society almost all past cases about redundancy and collective dismissals related to isolated closures caused by superseded markets, replacement technology, mergers or geographic relocation. The decisions were "one off" because case by case the industrial problem was "one off". Apart from the occasional situation where a shutdown left redundant a local and remote work force, most cases were heard within a context of full or even over full employment. Today the collective dismissal has become a commonplace of industrial life and seems likely to continue to be so. Under such altered circumstances the view that industrial tribunals are dealing in an ad hoc manner with isolated problems amounts to a fiction which can profitably be abandoned. This does not mean that either this case or other cases should be decided on evidence and circumstances other than those before the tribunal or that one case should dictate the result of another. What it does mean is that while the evidence in each case must dictate the result that decisions on a now common phenomenon of collective dismissals can over time generate a consistent body of principles with enough flexibility to apply to the varying circumstances of separate cases. Since 1983 there have been a number of seminal test case decisions which have now established minimum redundancy provisions and, which must, by virtue of s19 of the Act, and the Commission's Principles for Review of Awards , 85 IR 38, be included within all awards in New South Wales.

209 The current minimum provisions in respect to severance pay standards was determined in Re Application for Redundancy Awards 1994 Case. It provides as follows: Years of Service Entitlement Less than 1 year nil 1 year and less than 2 years 4 weeks 2 years and less than 3 years 7 weeks 3 years and less than 4 years 10 weeks 4 years and less than 5 years 12 weeks 5 years and less than 6 years 14 weeks 6 years and over 16 weeks Where employees are 45 years of age or over, payments are increased by 25 per cent. It is this scale of payments which must be included in awards pursuant to s19 of the Act and the Commission's Principles for Review of Awards .

210 It must be emphasised that this scale of payments is a minimum scale and has always been regarded as such. When the scale's predecessor was first established (the "Fisher" formula) by Fisher J, President, in Shop Distributive and Allied Employees' Association (NSW) and Ors v Countdown, 7 IR 273, his Honour said: In relation to the submissions that all severance however caused should receive a common recommended level of severance pay, I find: The Commission should separately consider awards of severance pay upon retrenchment in relation to three different areas - i. in the case of collective retrenchments on economic grounds due to the present recession; ii. in the case of retrenchment due to technological change; iii. in the case of retrenchments due to company reconstruction, mergers and takeovers. Each of these categories may display different characteristics. His Honour then recommended a scale of severance payments as being appropriate: … in conventional cases of collective retrenchment not relating to any fault on the part of the employee and due to economic recession whether the dismissals are at one time or over a period of time.

211 That the recommended scale might be departed from in a particular case, is plainly evident from subsequent decisions of the Commission, including those of the Full Bench.

212 In Peter Pellegrini Motors Pty Ltd v Lisa Notley, 7 IR 453, an appeal bench said at p454: In prescribing the general scale referred to in the Crocker case, his Honour adopted an averaging approach to the very difficult problem of retrenchment benefits for employees having regard to the fact that period of unemployment following retrenchment might be of a short-term, medium-term or long-term nature . While it is no doubt true that jurisdiction exists to depart from that averaging approach, and that it may be appropriate to depart from it in certain cases , (my emphasis) we do not see the present case, in which his Honour, in his discretion, decided to follow the general approach, and where one employee only is involved as possessing the necessary importance under s14(8)(b)(ii) of the Industrial Arbitration Act 1940 (which is here applicable by virtue of s15(2) of the Employment Protection Act ) to justify the granting of leave to appeal.

213 An appeal bench in PDS Rural Products Ltd v Corthorn, 19 IR 153, ruled against a claim that the Myer case (7 IR 300) established a prescriptive scale of severance payments. The Bench said at p156: Counsel for the employers submitted that the decision in the Myer case (1983) 7 IR 300, was a specific decision relating to the facts of that case which at no time purported to establish a scale and did not bear the characteristics of a test case such as Crocker's case (1983) 7 IR 273 specifically sough to do cannot be substantiated. In short, there is no such thing as a "Myer scale".

214 In the 1994 re Redundancy Award case, the Full Commission, after reviewing the history of redundancy provisions in New South Wales, observed at 441: It is also to be noted that "the scale of compensation" was a recommendation not a prescription and it was possible to move away from the standards set if in the circumstances a persuasive case was made out (see the Myer case).

The Full Commission described the scale, recommended by Fisher J in 1983, as a "true minima" and reaffirmed the safety net approach: Accepting the safety net approach, there still arises the question of what that should be. In our view it should be significantly above the level in Crocker . We dismiss as a guide subsequent awards at the Crocker level for the same reasons that we decline to follow Crocker. The 1987 Clerks case does provide in this context a more relevant example but relates only to retrenchment in circumstances exhibiting technological change.

215 It follows from this brief history that the Commission is not bound to the minimum safety net provisions. Particular circumstances might warrant an alternative set of arrangements, including of course, an award or order for a higher scale of severance benefits should a persuasive case be made out.

216 One hardly needs to observe that the redundancy benefits available to Pasminco employees are well in excess of those proscribed by the minimum standards in Awards. This is hardly remarkable having regard for conditions in the mining industry generally and, more particularly, in light of the long history of how redundancy benefits have increased for employees at the Broken Hill mines.

217 However, it is moot whether such entitlements can be characterised as generous, or excessive, in comparison to other industries, or in comparison to other mining operations, including those owned and operated by the Company. The point here is whether the current arrangements are appropriate to the prevailing circumstances in the context of the mine's foreseeable closure and its effect on the employees concerned. In short, the question is whether a persuasive case has been made out, such as to warrant a departure from existing standards.

218 In my opinion, this is not a case of determining whether wages employees have been, or are being discriminated against when compared to their single status counterparts. This case will be decided on the basis of my statutory duty to make an award which sets fair and reasonable rate of pay and conditions (s10). In fulfilling this obligation the Commission will do so, on the evidence which is presented, in accordance with the objects of the Act and having regard to the industrial merits of the claim.

219 The Union's principle complaint is that the Company is seeking to weaken the Union influence over the workforce and ultimately, de-unionise the site. Almost the entire cross examination of Mr Edwards focused on the Company's industrial relations philosophy and policy and, more specifically, its alleged hostile attitude to unions and union membership. The Union argued that the Company's anti union agenda was typified by its decision to introduce single status contracts in 1995.

220 Eight union members gave evidence. I accept that, as a group, they were representative of the workforce generally. Their evidence demonstrates to me that they are decent, honest and hard working employees. They are loyal to their industry, their community, their employer and their union. It seems to me that these loyalties are not necessarily incompatible or inconsistent with each other.

221 On the other hand, the Commission can well understand the sense of unhappiness and discontent felt by aggrieved employees who are entitled to redundancy benefits which are less than those available to other employees. A fortiori when the employees perform similar tasks and duties and have equivalent years of service.

222 However, the evidence is that all employees had a clear choice of accepting a single status contract, with its pluses and minuses, or remaining on existing conditions. The witnesses expressed a number of reasons as to why that choice was made. The major reasons were a desire to negotiate a collective agreement and remain a member of the Union. I shall return to this later point shortly. There were other reasons such as benefits available from the Sickness Fund. However, there can be no doubt that there were disadvantages for some employees in accepting a single status contract. These differences were well understood. Indeed, the Union made sure the disadvantages were well publicised. These contracts included a requirement for working unpaid overtime, on public holidays and, in some cases, for a lower hourly rate. The plain reality is the package of conditions and benefits was not the same.

223 If this was simply an exercise of seeking equality of benefits between wages and single status employees, I would have no hesitation in dismissing such a claim - just as Cahill J did when he said in 1992 and reaffirmed again in 1996: A similar conclusion must be made in regard to a submission by the Unions that the redundancy provisions applicable to staff employees, presumably superior to those payable to wages employees, should be applied to the latter category of employees. 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 regard to wages employees.

224 I respectfully concur with his Honour's view. Just because one group of employees enjoys benefits superior to those enjoyed by another group at the same workplace, doesn't automatically mean the benefits should be applied to all employees. Moreover, it is not appropriate for a party to selectively choose those things which it likes and discard those it doesn't, and combine the best of both. In short, you cannot have the best of both worlds.

225 There is nothing remarkable about these observations. The historic and well travelled approach to the setting of wages and conditions, particularly in an arbitration, is to examine, inter alia, the work performed, the conditions under which work is performed, the skills and training of employees and the history of the rates. It follows that such an approach must produce different outcomes.

226 On the evidence presented, the Commission can find little to justify the claim of the Union that the Company's objective is to de-unionise the site. Ms Doust referred extensively to the decision of a Full Bench of the Australian Industrial Relations Commission in the Weipa case in support of the Union's complaint of discrimination against union members vis a vis redundancy benefits. I do not find any parallel with the circumstances described in Weipa to those which are evident in this case. Moreover, the findings of the Full Bench in Weipa do not lend themselves readily to the Union's claim.

227 To my mind, if the Weipa case is authority for any relevant principle here, it is that to which I have just referred - albeit that it was expressed somewhat differently. At p192 of 63 IR 138 the Full Bench said: The Company will only be required to extend the terms and conditions available to staff to an award employee after such employee states his or her preparedness to work in accordance with all the requirements of the staff contracts. This means, for example, that such an employee will be subject to the present PER system and have to perform the same flexible working conditions required under the staff contract. Employees may elect to have their acceptance of the terms of staff contracts conveyed on their behalf to the Company by their union.

228 In alius verbis, if employees wished to enjoy the benefits of staff contracts, they had to accept all its conditions, including the downsides.

229 The Commission emphasises that this case is not about the merits of single status contracts over collective agreements. Such contracts have been within the industrial lexicon of Pasminco's Broken Hill mining operations since May 1995. It is obvious that such contracts have been a source of great angst for the Union. Such contracts have been consistently and vigorously opposed by it, and the Broken Hill union movement generally. I hasten to add, with some success.

230 Nevertheless, the evidence reveals that at the workplace, there is no animosity or ill feeling between single status and wages employees who work side by side with each other. Mr Lawrence, a wages employee, put it this way: On panel one the single status tradesmen and the daily paid tradesmen are not segregated in any way. We crib together, we work together and we do everything together except sleep together. There is no ill feeling between us. We get on very well as a group. What the other panel is like I don't know, but speaking for panel one there is no malice intended by anyone. (T.p119)

231 All of the Union witnesses gave evidence that they were under the clear impression that signing a single status contract was incompatible with union membership. Each expressed it differently; many referring to Mr Dini's famous line "you can't serve two masters". Ms Doust described the Company's view that union membership was a matter of individual choice, as a "platitude". I would refer, however, to a media report in August 1995 (Ex'C'), in which Mr Butcher is attributed as saying "of those five (employees who had signed a contract) three said they were going to stay in the Union. They want to stay members just to see what happens". I also refer to what von Doussa J said in 1998 in Manuel v Pasminco Cockle Creek Smelter , 83 IR 135 at 145: Evidence from the respondent's witnesses denied that a single status employee could not be a member of the Union. On the whole of the evidence I find that continued membership of a union was not inconsistent with being a single status contract employee, and the applicant's beliefs to the contrary are mistaken. There has been nothing put in this case which convinces me that the Union witnesses were acting on anything other than a similar mistaken belief.

232 Even so, if the Company's hidden agenda is to de-unionise the workforce, it has done precious little to pursue this aim for well over six years. It is uncontested that no new single status contracts have been offered since June 1995. A union witness, Mr Nadge, said as much (T.p135). In the absence of firm and more recent evidence, I do not find particularly persuasive, reliance on comments of management personnel six years ago. Indeed, the main offender - Mr Dini - no longer works for the Company.

233 Finally, on this point, I would add that there is nothing particularly novel or heinous in an employer devising strategies to weaken the influence of the Union in the workplace, or to compete for the affections of his/her employees over loyalty to the Union; was it not forever thus? However, it is an entirely different proposition where an employer positively and actively discriminates against an employee on the sole criterion of union membership. Despite the concerted effort of the Union to prove such motivation in this case, I am not satisfied that there is sufficient evidence to ground a finding of discrimination based on different redundancy benefits between wages and single status employees. This case will be determined on a completely different basis.

234 The history of redundancy negotiations between the parties reveals that improvements to benefits have occurred in the context of trade offs for other benefits otherwise pursued, or in exchange for trade offs in the ordinary course of negotiations for a new agreement. This is not an uncommon feature of industrial negotiations conducted for a general agreement on wages and conditions.

235 It is relevant to refer to the latest round of negotiations for a new agreement which has seen the Company proposing its third, and last offer, dated 25 October 2000:

· Introduction of twelve hour shifts; · 365 day operations; · monthly pays; · pre tax voluntary superannuation contribution; · payment of a contribution to employee superannuation in lieu of sick fund contribution; · improved redundancy package of two weeks per year of service, up to fifty-two weeks; · a relocation allowance of $1500 per family; · No pay increases.

236 Here, it will be observed that the benefits offered by the Company are skewed towards improved redundancy benefits in exchange for operational trade offs. The above package was rejected by the Union on 7 December 2000 and has since been withdrawn by the Company.

237 It is evident that the general agreement negotiations traditionally occur every three years - although recent history has seen the Agreement extended, when negotiations have not concluded so as to coincide with the expiry date of the Agreement. There was evidence from Mr Butcher that the Union believed that redundancy claims could be made outside of, and distinct to, the triennial general negotiations. The Company disagrees. However, little turns on this disagreement.

238 In the present uncertain environment and in the context of a total closure, I am not satisfied that negotiating a redundancy arrangement is best done in the concurrent negotiations for a new wages and conditions agreement. As I said in my statement of 5 June, the focus quite obviously is for employees to know what redundancy will mean for them. It seems obvious that few benefits will be achieved for either party in trading off wages and conditions, which might never be realised, for redundancy payments which almost certainly will.

239 In my view, priority should be given to this matter over a new wages and conditions award/agreement.

240 It was said that the Commission is being asked to find the 1996 judgment of Cahill J to be wrong. Indeed, this is expressively stated in the grounds and reasons of the Union's application: Cahill J in Matter No. IRC301 of 1996 was wrong in that: a. The history and conduct of industrial relations at Broken Hill fundamentally changed for reasons including: 1) The employer's unilateral introduction of single status contract and/or salaried staff employees. 2) Pasminco sought a " non-union site " at Broken Hill. b. It is a wrong statement of principle to state, " The Unions well know that it is quite inappropriate to select one 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 ".

241 Moreover, in her opening submission, Ms Doust frankly conceded that "history is against us" (T.p69).

242 However, I do not accept that my decision in this matter, or the reasons for it, are in conflict with what his Honour decided in 1996. His Honour's decision was, with respect, appropriate to the then circumstances and made in light of the evidence before him at the time.

243 In this case, I do not find it necessary to make an order, an award or a decision such as to effect changes to the Pasminco Pension Fund insofar as redundancy entitlements are concerned.

244 That is not to say that the totality of benefits available from the Pension Fund is not a relevant factor to be taken into account. It obviously is. The Fund cannot be viewed in isolation from the facts and circumstances of this case.

245 Clearly, adjustments to the pension fund will automatically effect the payments made to employees through their superannuation entitlements, irrespective of retirement or redundancy.

246 In my opinion, the Pension Fund benefits serve as an important and fundamental foundation to the total benefits paid to an employee when he/she is redundant or retired. It will be regarded as such.

247 It is relevant to note that entitlements from the Pension Fund are fixed by the trust deed. There must be some doubt as to whether I am able to make a competent and enforceable order within power to amend the trust deed. It was, of course, a means by which Cahill J made improvements to redundancy benefits in 1996. Presumably, the Fund's trust deed was amended accordingly. I note his Honour made a recommendation and not an order or award. The Commission's recommendations are traditionally accepted by the parties in Broken Hill. It seems to me that if enhanced redundancy benefits are considered to be appropriate in this case, then such an outcome can be achieved without tampering with, or making any alteration to the Pension Fund benefits. Moreover, despite a temptation to do so, there is force to Mr Buchanan's submission that it would be inappropriate to disturb the current formula or its historic rationale.

248 One curious aspect of the Fund is significant and deserving of comment. The claim for parity of redundancy benefits does not sit comfortably with the structure of benefits available under Part D of the Pension Fund and about which there is no claim for it to be altered. In this regard, I note the graduated Part D payments are flat amounts based exclusively on years of service. There are no distinctions between particular classifications, wage differentials or age. Thus a mine worker "A", aged fifty with ten years' service on $40.08 an hour receives the same Part D entitlement as a thirty year old mineworker "E" with ten years' service on $27.20 an hour.

249 This flat payment rationale applies to the notice period of thirteen weeks. It is presently an amount based on the lowest mineworker "F" rate plus lead bonus. Thus all employees, regardless of age, service and classification, receive the same $12,329 as notice. I note that there are no employees employed at the mineworker "F" rate (Ex'D'). Mr Edwards' evidence was that no one is ever employed under it. It is used for superannuation purposes.

250 On the other hand, payments under Part C are not structured in the same way. These benefits are directly linked to wage rates, contributions and age.

251 The Commission has determined this matter, on the merits of the application in the current unique and exceptional circumstances; circumstances which, in my opinion, are clearly distinguished to those of the past.

252 In so deciding, I have taken into account, inter alia, the following matters: 1) The mine's finite life has now been determined as ending in 2005-6.

2. Pasminco Pty Ltd has decided to sell the mine and all its mining interests and sale negotiations are well advanced for the Broken Hill site.

3. The consequence of such a sale is the redundancy of some, or all of the employees currently employed by Pasminco. Even if a proposed sale results in a new operator retaining some, or all of the employees, it is unlikely that their employment would be for the long term.

4. The mine's closure will effectively end the hundred and fifteen year history of mining in Broken Hill.

5. There is little opportunity for any of the employees to transfer their skills and experience as mine workers to an alternative mine operation in, or near Broken Hill.

6. There are limited alternative job opportunities. This situation will only be exacerbated by four hundred redundant employees being added to the employment pool in Broken Hill.

7. The state of the housing market in Broken Hill has slumped in recent times. This effectively locks most employees financially to remaining in Broken Hill. In this regard I note that this problem was recognised as far back as the early 1970s when, in the 1971 Broken Hill Mining Industrial Agreement, provision was made for compensation for the loss of equity in a home owned by a redundant employee (s46.7).

8. The last occasion the Commission reviewed redundancy benefits was in 1996. Cahill J in Matter IRC 301 of 1996, then decided that the changes he recommended (and which were adopted) were expected to " settle issues in respect to the Pension Fund for a reasonable period into the future " (p12 of Judgment).

In my opinion, five years on can be regarded as a reasonable period. It is now appropriate to review the current arrangements in the contemporary and unprecedented circumstances.

253 In view of my conclusions herein, I am satisfied that the applicant Union has discharged the onus of establishing a special case in these proceedings. However, the extent of the claim cannot be justified both as to its cost implications for the Company and in the public interest.

254 Nevertheless, the Commission has come to the view that it is both timely, and necessary, to make improvements to the redundancy benefits available to employees at Pasminco's Broken Hill mines. I have weighed up the options through which such improvements might be realised. Despite some reservations that I am introducing another component to an already complicated mix of redundancy benefits, I have determined that it would be appropriate for an Award to be made. I believe these reservations are outweighed by an imperative to recognise the special and unique circumstances which this case has disclosed. In addition, a discrete award has the added attraction of not interfering with the historic rationale for the structure of benefits under Part C and Part D of the Pension Fund. Further, I am satisfied that the making of an award would be in the public interest.

255 Having reviewed the evidence, I consider an appropriate award in these circumstances should reflect, inter alia, a focus on the employee's length of service and age, but subject to a cap. These ingredients are typically found in negotiated redundancy arrangements and explicitly approved of in decisions of this Commission - see Re Application for Redundancy Awards 1994 Case.

256 Accordingly, I intend to make an award which provides for: A) One week's pay for each year of service, to a maximum of twenty weeks.

B) A further 25% for employees over forty-five years of age. The total payment however, will be subject to the cap of twenty weeks. C) The calculation of a week's pay shall be the employee's ordinary time earnings plus lead bonus.

D) The above payments shall be in addition to all other redundancy benefits applying through any Act, agreement, award, trust deed or custom and practice. F) The Award shall apply to mineworkers, mill operators, tradesmen and apprentices employed at the Pasminco Broken Hill mine (excluding salaried and single status employees).

E) The Award shall take effect from Tuesday, 11 September 2001 and shall remain in force for a period of three years thereafter.

257 The Commission is conscious of the significant cost of this award for the Company. Based on the current employment profile, I estimate that it will add between $7-$8 million to the Company's existing redundancy obligations. Nevertheless, three matters are relevant in this regard: 1) The cost of the Award will be borne in the context of the sale of the Company's total mining assets.

2. The sale of the Broken Hill mine is unlikely to be effected in the short term.

3. Irrespective of the outcome of the sale negotiations, retrenchments will be on a progressive basis over a number of years,.

258 The Commission directs: 1) The parties to confer in order to draft an award reflecting the conclusions in this decision.

2. Such draft shall be filed with the Commission within twenty-one days.

259 Save for the draft award to be filed and liberty to apply in respect to any disagreements on the draft, the Commission concludes these proceedings as follows: 1) Dispute notification IRC2772/2000 and award application IRC742/2001 are concluded.

2. Dispute notification IRC6219/2000 and award application IRC743/2001 are listed for mention on Friday 28 September at 9.30 am in Sydney.

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