Notification under section 130 by the Construction, Forestry, Mining and Energy Union (New South Wales) of a dispute with the Broken Hill Chamber of Commerce and others re alleged breach of award [2003] NSWIRComm 250

Industrial Relations Commission (NSW)|1998-11-23|Before: Sams DP, Cahill J

CITATION : Notification under section 130 by the Construction, Forestry, Mining and Energy Union (New South Wales) of a dispute with the Broken Hill Chamber of Commerce and others re alleged breach of award [2003] NSWIRComm 250 APPLICANT: PARTIES : Construction, Forestry, Mining and Energy Union New South Wales Branch RESPONDENT: Broken Hill Chamber of Commerce Incorporated FILE NUMBER: 4880 of 2002 CORAM: Sams DP Industrial dispute - mining industry in Broken Hill - alleged breach of award - Commission's power under s175 of the Act - principles of award interpretation - payment of lead bonus to employees of contractors - change of mine ownership - relationship between award and mine agreement - incentive and performance bonus - previous decisions of the Commission on the same subject matter - alleged contempt of the Commission - economic circumstances - local contractors unable to compete. CATCHWORDS : Held, words in award clause not ambiguous - words given their plain, ordinary English meaning - lead bonus no longer exists - absurd and impractical result - mineworkers' conditions have no relevance or application to employees of contractors - mineworkers' performance bonus unrelated to previous lead bonus - interpretation of award clause consistent with previous Commission decisions - award clause does not include payment of lead bonus - unnecessary to consider economic arguements - no breach of the award - no contempt of the Commision. LEGISLATION CITED : Industrial Relations Act 1996 Australian Workers' Union New South Wales Branch and WJ & A Seery [2000] NSWIRComm 62 Australian Workers' Union, New South Wales Branch and Zoological Parks Board of New South Wales [2003] NSWIRComm 49 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch and Fillery Antiwear Products and Sandblasting re failure to comply with award (unreported, Bishop C, IRC98/1294, 23 November 1998) Broken Hill Chamber of Commerce Inc. and Barrier Industrial Council re Broken Hill Commerce and Industry Consent Award [2002] NSWIRComm 89 Broken Hill Commerce and Industry Consent Award (No.2) [2002] NSWIRComm 309 Broken Hill Mining Managers' Association and Barrier Industrial Council re log of claims (unreported, Cahill J, IRC84/603, 9 May 1984) Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 City of Wanneroo v Holmes (1989) 30 IR 362 Cooper Brookes (Wollongong) Pty Ltd v The Commissioner of Taxation of the Commonwealth of Australia (1980) 147 CLR 297 CIC Insurance Limited v Bankstown Football Club Ltd (1997) 187 CLR 384 Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 Fox v GIO Australia Ltd (2002) NSWIRComm 318 Hotville Pty Ltd v New South Wales Nurses' Association [2002] NSWIRComm 338 CASES CITED : Kellogg (Aust) Pty Ltd v National Union of Workers, New South Wales Branch (1998) 89 IR 391 Kingmill Australia Pty Ltd t/as Thrifty Car Rental v Federated Clerks Union of Australia, New South Wales Branch (2001) 106 IR 217 Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, and Cessnock City Council re competency payments (unreported, Sams DP, IRC99/975, November 17, 1999) National Union of Workers v Graincorp Operations Ltd (2002) 117 IR 136 New South Wales Fire Brigade Employees' Union and New South Wales Fire Brigades [2003] NSWIRComm 55 Norwest Beef Industries Limited and Anor v Australian Meat Industry Employees Union of Workers (WA Branch) (1985) 12 IR 314 Pasminco Australia Ltd (subject to Deed of Company Arrangement) and anor and Australian Workers' Union, New South Wales Branch and others re industrial action [2003] NSWIRComm 235 Re State Rail Authority Firefighters Award 2001, [2002] NSWIRComm 159

AWARDS: Broken Hill Commerce and Industry Consent Award 2001(2001) 336 IG 885 Metal, Engineering and Associated Industries (State) Award 325 IG 209 Perilya Broken Hill Mine Enterprise Agreement 2002 [2002] NSWIRComm 82 Pasminco Broken Hill Mine 1998 Agreement

HEARING DATES: 07/24/2003 DATE OF JUDGMENT: 08/13/2003

APPLICANT: Mr E Butcher, Construction, Forestry, Mining and Energy Union, New South Wales LEGAL REPRESENTATIVES: RESPONDENT: Mr P Edwards, Agent

JUDGMENT: - 20 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 13 August 2003 Matter No IRC02/4880 Notification under section 130 by the Construction, Forestry, Mining and Energy Union (New South Wales) of a dispute with the Broken Hill Chamber of Commerce Inc. and others re alleged breach of award DECISION [2003] NSWIRComm 250

1 These proceedings commenced by way of a dispute notification, pursuant to s130 the Industrial Relations Act 1996 ("the Act"), lodged on 23 August 2002 by the Construction, Forestry, Mining and Energy Union New South Wales Branch ('the Union') against the Broken Hill Chamber of Commerce Incorporated ('the Chamber'). The dispute concerned an alleged breach by the Chamber of cl 19.16 in the Metals section of the Broken Hill Commerce and Industry Consent Award 2001 (2001) 336 IG 885 ('the Award').

2 The Commission listed the dispute for a number of compulsory conferences. On 21 February 2003, a compulsory conference was convened in Broken Hill. Mr E Butcher appeared for the Union and Mrs S Hocking appeared for the Chamber. Conciliation conferences proved unsuccessful. Accordingly the Commission made a finding under s135 of the Act. The Union was directed to file the form of relief it sought from the proceedings. The parties subsequently filed submissions and affidavit evidence. A formal hearing of the matter was listed during the Commission's regular sitting in Broken Hill in July 2003.

3 By letter dated 10 March 2003, the Union sought the following relief from the dispute proceedings: 1. The relief sought is a binding interpretation of Clause 19.16 of the Broken Hill Commerce and Industry Consent Award 2001 ("the Award"). The interpretation that the CFMEU will commend to the Commission, is to the effect that Clause 19.16 of the Award preserves the payment of an allowance of equivalent value to the "lead bonus" provisions of the predecessor award for employees of contractors engaged on the mine lease. 2. The CFMEU submits that the necessary power enabling the Commission to grant the order sought is to be found in s175 of the Industrial Relations Act 1996.

4 Clause 19.16 of the Award is expressed as follows: Employees working on productive mining leases and in the mining Companies interests shall receive the mine rate or wages and all mine privileges

5 Relevant to these proceedings were the terms and conditions provided for in the Perilya Broken Hill Mine Enterprise Agreement 2002 [2002] NSWIRComm 82 ('Perilya Agreement'); in particular the bonus scheme provided for in cl 4.3. It provides as follows: Bonus Scheme 4.3.1 In addition to the above wage rates each Employee in the operational departments (mining or treatment) will receive a bonus based on Key Performance Indicators (KPIs). 4.3.2 The KPIs will relate to an Employee by the team and operational department in which they work on a shift by shift basis, and the mine operation taken as a whole. 4.3.3 The KPIs will be a measure of performance against targets set for safety, production and quality. 4.3.4 The formulation of the KPIs and any future modification or variation of them will be at the sole discretion of the Employer. 4.3.5 The Employer will give all affected Employees appropriate notice of any modification or variation of the KPIs depending on the significance of them to the affected Employees. 4.3.6 Specific information on the bonus scheme and its KPIs as they affect the individual Employee, the team and operational division to which they are assigned, and the mine operation taken as a whole will be included in each individual's letter of offer of employment and the Employer's Policy and Procedures documentation. 4.3.7 Acceptance of any offer of employment will constitute full acceptance of the bonus scheme, its KPIs and the terms and conditions of both.

6 The lead bonus was first introduced in 1925, following negotiations on a log of claims between the Unions and the mine owners in respect to improved wages and conditions at the Broken Hill mines. The bonus was based on the market price of lead in London. At the time the lead bonus was calculated at two pence per shift when the price of lead was 30 pounds to 32 pounds per ton, three pence per shift from 33 pounds to 40 pounds and four pence at 41 pounds and over. There was a guaranteed minimum bonus paid. When the London Metal Exchange closed in 1940 the calculation reverted to the Australian price of lead.

7 In 1964 the parties to the local Town Agreement (the predecessor of the Award) agreed to pay the lead bonus to certain of the contract employees working on the mine lease. This was the origin of the payment made under the Metals section of the Award.

8 In settlement of the 1984 mine agreement, Cahill, J recommended the introduction of a minimum indexed lead bonus to offset the falling price of lead. His Honour said: ……the lead bonus position seems to me to be a special or even unique matter, in which the circumstances allow for a recommendation that the lead bonus be increased from its present level and indexed in accord with the National and State Wage Case decisions. On account of the depressed price of lead on overseas markets, the lead bonus has fallen during the currency of the present agreement, from a figure of $15.50 per shift in January 1981 to a figure of $8.90 per shift in December 1983. Figures for 1984 are $9.55 (January), $8.95 (February), $8.10 (March), $9.10 (April) and $9.50 (May). I recommend that the lead bonus be set at $12 per shift (Plus 4.1 per cent indexation) and be adjusted in accordance with general indexation movements in wages. However, if the bonus figure calculation in accordance with the Agreement tabulation overtakes the figure recommended, then the Agreement figure will prevail. Broken Hill Mining Managers' Association and Barrier Industrial Council re log of claims , (unreported, Cahill J, IRC84/603, 9 May 1984)

9 The lead bonus continued to be paid to mineworkers and contractors up to the sale of the Broken Hill mine by Pasminco to Perilya in May 2002. However prior to the sale, staff employees and employees on single status contracts were not paid the bonus as it was incorporated in their annualised salaries.

10 The lead bonus is no longer paid to employees of Perilya as their terms and conditions are governed by the Perilya Agreement. There is no provision for a lead bonus under the Perilya Agreement.

11 The Union relied on the affidavit evidence of two employees, employed by Cavill Power Products Pty Ltd, a contractor on the Broken Hill mine. Mr Timothy John Boyd has worked for contractor companies for ten years. Mr Clint Terrence Remmert has been employed by Cavill for the past 4.5 years.

12 The evidence of both employees was that they had historically been paid the lead bonus while working on mining leases in Broken Hill. Mr Remmert was also paid the bonus when working on mines in Cobar. Both employees said that the decision to remove the lead bonus had financially disadvantaged them. They believed that employees should be paid extra to work in underground conditions.

13 Mr Nigel Lawrance is Managing Director of Lawrance Engineering, a company providing metal fabrication and construction services to the mining, rural and town industries in Broken Hill. The company employs four tradespersons under the terms of the Award and has done so for about four years. The Company regularly tenders for work at the Broken Hill mine.

14 Mr Lawrance gave evidence that in February 2003 he attended a meeting with Perilya to discuss tendering for work on the mine's ventilation shafts. As the scope of work was too large for one company, a number of contractors formed a "cluster" to tender for the work. Mr Lawrance submitted a tender on behalf of the "cluster" on 7 April 2003. The tender was ultimately unsuccessful - it being awarded to Allied Engineering of Adelaide. Mr Lawrance was informed that his tender was 20 per cent more expensive, due mainly to on site costs.

15 Mr Lawrance deposed that on 8 May 2003, he and other local companies were invited by Perilya to attend a meeting. Perilya's representatives informed the local companies that Perilya would not accept any tender for work that was in excess of $45.00 an hour all inclusive for labour. Mr Lawrance said he and the other local contractors could not compete at that rate, as they are required to pay the award rates, plus 4.5 per cent and the lead bonus. The local companies would lose work to interstate firms which didn't have to pay Broken Hill conditions.

16 In cross examination, Mr Lawrance agreed that some companies were paid in excess of the $45.00. However, these were companies which had a sales/warranty and service agreement which covered more than just labour.

17 During Mr Lawrance's evidence, Mr Edwards, now appearing for the Chamber, tendered a draft 12 month agreement received by Mr Lawrance only the day before from Perilya Broken Hill Ltd. A similar agreement was sent to all local contractors. It proposed at cl2.1: The Contractor to provide labour as and when requested to the Perilya Broken Hill Company Mr Lawrance said this required his company to be on call 24 hours a day. Clause 4.1 of the draft agreement was in these terms: Labour hours worked shall be invoiced at $43.00 per hour, 24 hours per day, seven days per week, 365 days per year for all hours actually worked by the Contractor personnel. The hourly rate shall not be subject to shift allowances, penalty rates, call out, bonuses or any like or other on-costs whatsoever. (Ex 7)

18 Mr Edwards also tendered an extract from the Metal, Engineering and Associated Industries (State) Award (2001) 325 IG 209 showing the current C.10 tradesman rate as $525.20 per week compared to an equivalent local Award rate of $685.66. (Ex "8")

19 After tracing the history of the lead bonus, Mr Butcher referred to the Perilya Agreement this way: "This new Agreement has a new bonus system in place and the lead bonus as we knew it, was out."

20 Mr Butcher said he wrote to the Chamber on 2 July 2002 seeking to retain the lead bonus for Award employees. In his submission, he cited recent Full Bench decisions which emphasised that parties should honour their agreements. Mr Butcher proposed as a compromise that the indexed minimum bonus be paid ($2.53 per hour) and be indexed each year by the CPI. He said the amount could be known by another name.

21 Mr Edwards similarly traced the history of the lead bonus and asserted that the lead bonus had not applied to all contractors on the mine and did not apply to all mineworkers. At the time of the sale of the mine to Perilya less that half of Pasminco employees were in receipt of the lead bonus.

22 Mr Edwards observed that the Perilya Agreement has no provision, nor any reference to a lead bonus. It was important, he said, to note that the Perilya Agreement was negotiated by the same Union which is the notifier of the current dispute.

23 Mr Edwards noted that the Award contains a 4.5 per cent loading as a result of the recommendation of Bishop, C, in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch and Fillery Antiwear Products and sandblasting re failure to comply with award (unreported, IRC98/1294, 23 November 1998) which was designed to equalise the rates of town employees and mineworkers when working on a mine lease. The comparison was no longer valid as Pasminco in the past had been prepared to absorb the various Award allowances into its contractor rates. Perilya was not prepared to do so.

24 Mr Edwards put that in Broken Hill Chamber of Commerce Inc. and Barrier Industrial Council re Broken Hill Commerce and Industry Consent Award [2002] NSWIRComm 89 ('the 2002 decision'), the Commission observed that the parties may wish to review their existing arrangements in light of the Perilya Agreement. This was precisely what the Chamber had done. At the time the Chamber had not known of the terms and conditions under the Perilya Agreement. At all times, the Chamber had complied with the recommendations of Bishop, C and the 2002 decision of the Commission as presently constituted.

25 Mr Edwards submitted that the Union conceded that, although the lead bonus no longer exists, it should simply be called something else. Such a claim had been rejected in the past and should be rejected again. It would be contrary to the Commission's Wage Fixing Principles.

26 Mr Edwards referred to the Perilya 30 per cent bonus for performance and safety. It was totally inappropriate to seek to have this bonus considered in this case. He noted that from 1974 to 1999, Pasminco had operated a similar incentive payment, but it had never been applied to Award employees of contractors (despite Union attempts for it to do so).

27 Mr Edwards dealt with the Commission's power to interpret industrial instruments and the relevant authorities that state that where the words used are clear and unambiguous, the Court must give to the words their plain, ordinary English meaning. See Norwest Beef Industries Limited and Anor v Australian Meat Industry Employees Union of Workers (WA Branch) (1985) 12 IR 314; Kellogg (Aust) Pty Ltd v National Union of Workers, New South Wales Branch (1998) 89 IR 391; Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1980) 147 CLR 297; Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, and Cessnock City Council re competency payments (unreported, Sams DP, IRC99/975, November 17, 1999)

28 Mr Edwards said there was ambiguity with the words used in cl 19.16 which meant that there could be no entitlement to a non existent payment. The lead bonus had disappeared on 19 April 2002 when the Pasminco Agreement became extinct.

29 Mr Edwards submitted that it would be contrary to the public interest to burden the Broken Hill contractors with costs that would result in them not being able to compete for existing and future work. The result would be loss of contracts and loss of jobs. Mr Lawrance's evidence confirmed that his company could not compete with interstate companies, if he was required to contract for $43.00 an hour. He said the lead bonus adds a margin of around 10 per cent and together with overtime payments makes the situation unsustainable. This is because Perilya insists that maintenance must be able to be performed on any day, at any time. While the local contractors could afford to tender on a Monday to Friday day shift basis, they could not do so when penalties apply, such as weekends.

30 Mr Edwards highlighted the public interest considerations of taking into account the community needs of Broken Hill. He referred to the declining population, high unemployment and lack of apprenticeships as indicative of the need for local industry to be competitive. The Union's claim completely ignored the economic realities in Broken Hill.

31 Mr Butcher said aspects of the Chamber's submission were irrelevant and misleading. He said it was common knowledge that Pasminco's former staff and some wages employees had been remunerated differently. He submitted that the Perilya bonus system provides that employees can receive a 30 per cent increase on the base rate - far in excess of the lead bonus.

32 Mr Butcher said cl 19.16 had already been interpreted by the Commission as incorporating the lead bonus. The Chamber was in "direct contradiction with the ruling" by instructing their members not to pay the lead bonus. The Chamber was treating the Commission with contempt.

33 As to the contract requirements of Perilya, Mr Butcher said he had contacted the Manager of Perilya who had informed him that Perilya was paying some contractors far in excess of the amount identified by the Chamber ($43.00). In any event, Mr Butcher said there could be no guarantee that Perilya would give the work to local contractors.

34 As to Broken Hill's economic situation, Mr Butcher submitted that the Chamber had painted a deliberate misinterpretation. He said there had been a rise in local housing prices and a number of apprentices continue to be employed by local companies. He noted that a Full Bench of the Commission had already ruled on an incapacity to pay argument in Broken Hill and had rejected it. See Broken Hill Commerce and Industry Consent Award (No.2) [2002] NSWIRComm 309.

CONSIDERATION Commission's power to interpret industrial instruments

35 The Commission's power to interpret the provisions of an industrial instrument - in this case an award clause - is found at s175 of the Act: The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument).

36 It is well settled within this jurisdiction as to the principles to be applied by the Commission when interpreting the words in an award clause. In a recent Full Bench decision, the Commission reaffirmed these principles. In Re State Rail Authority Firefighters Award 2001, [2002] NSWIRComm 159 the Full Bench said at para 20: The principles applying to the interpretation of awards were authoritatively stated in this jurisdiction in Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217 where the Commission emphasised the need to approach the construction of an instrument by reference to the actual words used and their plain, ordinary English meaning. The relevant sections of the agreements referred to, state in terms that the position of Senior Fire Equipment Officer is covered by the instrument in question. It can also be seen that the Senior Fire Equipment Officer classification has been consistently referred to over time and this would appear to be indicative of a consistent intention to subject the employees of the FPU to coverage by the federal instruments.

37 The Full Bench in Kingmill, examined in some detail the principles of award construction and it is appropriate to quote extensively from that judgement: The interpretation of awards are, in our view, to be approached in accordance with the principles authoritatively stated by the Full Bench of the Commission in Court Session in Bryce . Hungerford and Schmidt JJ stated there (at 452): In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning. As was said by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 at 314: "The meaning is to be ascertained primarily from a consideration of the words actually used and, while it is proper to pay regard to the surrounding circumstances and the purposes for which the provision was intended, this cannot justify a meaning being given to the words which they are not fairly capable of bearing. Particular words or expressions, having a special trade significance, however, may need to be construed in that light." Their Honours approved the approach adopted by Olney J in Norwest Beef Industries Ltd v Australasian Meat Industries Employees Union of Workers (WA Branch) (1984) 12 IR 314 at 331 as follows: If it be the case that the correct approach to the interpretation of an industrial award is to read the document itself and give to the words used their ordinary commonsense English meaning (see Jackson J in United Furniture Trades Industrial Union v Dale Manufacturing Co Pty Ltd , 30 WAIG 539, at 540) then the first task in every case will be to determine whether the words used are capable in their ordinary sense of having an unambiguous meaning. If that question is answered in the affirmative then the further consideration of the expressed or supposed intention of the award making tribunal does not fall to be considered. The majority of the Full Bench in this case took that view when they said: "It is now trite law that when the meaning of language read in its ordinary and natural sense is obtained it is not necessary or indeed permissible to look to the intention of the parties." In my opinion the majority of the Full Bench has correctly stated the basic principle to be applied in the interpretation of industrial awards. Any other conclusion would lead to industrial anarchy. If the contrary were the case every employer, union official and indeed each employee would need to have available to him the expressed views of the award making tribunal whether they be expressed before or after the making of the award in order to determine the intention of the tribunal whilst the award itself would be rendered meaningless. The principles stated in Bryce have been applied on a number of occasions by this Commission: see, for example, Kellogg (Aust.) Pty Limited v National Union of Workers, New South Wales Branch (1998) 89 IR 391 at 392 - 395; Re Hospital Employees Conditions of Employment (State) Award (1999) 96 IR 245 at 255 - 256 per Wright J, President and Schmidt J; ALHMWU v Manilla RSL & Ex-Servicemens' Club Limited [2000] NSWIRComm 122 at [40]-[42] per Boland J; Australian Workers' Union, New South Wales v New South Wales Technical and Further Education [2001] NSWIRComm 25 at [15] and [17 - 19] per Schmidt J. We consider that Hungerford J was correct in observing, in Kellogg (at 395), that the passages cited by the majority in Bryce represented a "long-standing and settled approach" to the task of award interpretation. The application of those principles, we think, should occur in conformity with general approaches to the construction of enactments and other instruments. In this respect, we note, with approval, the observations of Walton J, Vice-President, in Perisher Blue v Australian Workers' Union (1999) 91 IR 274 at 283 - 284: Speaking generally, awards should be interpreted in a similar fashion to other enactments: Geo A Bond & Co Ltd (in liq) v McKenzie [1929] 28 AR (NSW) 498 at 503 ; Short v F W Hercus Pty Limited (1993) 40 FCR 511 at 520. In the construction of the general order, and in conformity with general principles of award interpretation, the Commission should consider the wider context of the making of those provisions. Burchett J in Short v F W Hercus describes this approach to the interpretation of an award as follows: "The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is part, or to other documents with which there is an association. Context may also include, in other cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read." (at 518) (See also Western Newspapers Pty Limited & Another v Warren (1994) 56 IR 340 at 351). I note that a similar approach was adopted by the former Industrial Commission in re Butter, Cheese and Bacon Factories and Milk and Cream Condensories &c. (State) and Butter Cheese and Bacon Factories and Milk and Cream Condensories, &c. (Newcastle and Northern) Awards (1950) 49 AR (NSW) 62 at 64 where it was held that the meaning of words within an award (which are not expressed or precise) may be ascertained by "placing upon the words their ordinary meaning as applied to the subject matter with respect to which they are used". The authorities set out in Bryce considered the circumstances in which it may be appropriate to apply the award-maker's intentions to the circumstances in which the award was made and to the practical effects of a particular construction. The decision in Perisher Blue indicated the desirability of considering the terms of an award in the context in which they appeared and emerged. Those principles apply with equal force to the circumstances in which it may be appropriate to have regard to other aids of construction such as the "major and substantial" or "principal purpose" tests. Those principles apply to a clause which establishes the coverage of an award in the same way as they do to other clauses in the award. It is thus appropriate to consider the scope clause of the award in the context in which it appears and, in particular, by reference to the other provisions of the award. It should be noted that the application of aids to construction, such as the "major and substantial" or "principal purpose" tests, should be approached with caution. The automatic adoption of such an approach may, depending on the terms of the award, have the potential for awards to be interpreted inconsistently with their plain words and, therefore, unnecessarily restrictively. This potential may be greatest when the scope of the award's coverage clause is expressed in broad and inclusive terms. See also City of Wanneroo v Holmes (1989) 30 IR 362; Hotville Pty Ltd v New South Wales Nurses' Association [2002] NSWIRComm 338; National Union of Workers v Graincorp Operations Ltd (2002) 117 IR 136; New South Wales Fire Brigade Employees' Union and New South Wales Fire Brigades [2003] NSWIRComm 55; Fox v GIO Australia Ltd (2002) NSWIRComm 318; CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384; Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 and my consideration in Australian Workers' Union New South Wales and WJ & A Seery [2000] NSWIRComm 62; Australian Workers' Union, New South Wales Branch and Zoological Parks Board of New South Wales [2003] NSWIRComm 49 and Pasminco Australia Ltd (subject to Deed of Company Arrangement) and anor and Australian Workers' Union, New South Wales Branch and others re industrial action [2003] NSWIRComm 235.

38 I agree with Mr Edwards that the approach to be adopted in this case is that which I summarised in Federated and Municipal and Shire Council Employees and Cessnock City Council: The Commission's principles which are derived from a long line of authority, is that a Court or Tribunal should give, to the words used, their ordinary, natural and commonsense English meaning.

39 In my view, there is absolutely no ambiguity with the meaning of cl 19.16. Applying the plain, ordinary English meaning must result in a conclusion that if a mine privilege, ie. the lead bonus, is no longer paid to mine workers on the mine, it cannot be claimed to apply to Award employees working on the mine for contractors. This approach is entirely consistent with my interpretation of the same provision in similar circumstances in the 2002 decision. Like here, that condition (compulsory overtime) no longer applies to mine employees.

40 It is relevant to the interpretation of cl 19.16 to have regard to the terms and conditions of another industrial instrument; namely the Perilya Broken Hill Mine Enterprise Agreement. This is so because the interpretation of cl 19.16 is wholly dependant on what "mine rate or wages and all mine privileges" are being paid to mine workers at the mine. Put another way, the terms and conditions of Award employees are to be considered in the context of what now applies to employees of Perilya.

41 Another canon of award construction is to have regard to the intentions of the parties at the time the Award was made. I have already found that there is no ambiguity in the words used in cl 19.16. However, what is the practical result of what the Union proposes? Obviously, it would mean that an Award employee would receive a mineworker's benefit, which the mineworkers themselves no longer enjoy. This cannot be a fair or logical result; nor can it be what the parties intended when the provision was first introduced in the Award. Indeed, it would be an absurd and impractical outcome. It would give a meaning to the words that they are not fairly capable of bearing.

42 Mr Butcher submitted that the Commission had already interpreted cl 19.16 in the 2002 decision and determined that the lead bonus should continue to be paid to employees of contractors on the mine. He relied particularly on this passage of the judgement: The Award clause should be interpreted and operate in the following manner: A 4.5% loading is applicable to the Award rates of pay. The rates of pay in the Award comprehend all "mine privileges"; save for the lead bonus, which will continue to be paid. It follows that employees under the award shall receive shift penalties, and overtime rates according to the Hours of Work, Overtime and Shift Provisions of the Award, not according to past practice or the former mineworkers' agreement.

43 In my opinion, the Commission's decision in 2002 while relevant to the circumstances at the time, cannot be relied upon in the manner suggested by the Union in this case. This is so for the following reasons.

44 Firstly, the 2002 decision dealt with a claim by the Union that compulsory overtime, which had applied prior to the introduction of the 12 hour shift system at the mine, should continue to apply to employees of contractors. The Commission interpreted cl 19.16 against the Union's arguments. Plainly, that case had nothing to do with the lead bonus. No arguments were put, at the time, as to whether the lead bonus was to continue to be paid to employees of contractors. Moreover, there was an express understanding and agreement between the Union and the Chamber that the lead bonus would continue to be paid, reflecting presumably the fact that the then Pasminco Broken Hill Mine 1998 Agreement continued to provide for a lead bonus at cl 4. It is relevant to note that this agreement continued to operate until Pasminco sold the Broken Hill Mine to Perilya in May 2002. The Commission's comment, that the lead bonus will continue to be paid, merely reflects that agreement.

45 Secondly, the 2002 decision reaffirmed the earlier findings by Bishop, C in 1998 and 1999 that the then mineworkers' conditions of employment (particularly the move to the 12 hour shift system) and the basis for such conditions "have changed too dramatically such as to make it impossible for a comparable assessment to the rates and conditions under the Award" (see para 23). There can be little argument that the terms and conditions under the Perilya Agreement changed the mineworkers' conditions of employment still further and more dramatically. I should emphasise these changes were with the consent of the Union. In these circumstances, it is hard to imagine how a benefit no longer paid to mineworkers can have any relevance or application to employees of contractors working on the mine. Such a finding is entirely consistent with the reasoning of Bishop C in 1998 and 1999 and my reaffirmation of that reasoning in 2002. Thirdly, the Commission ratified the Perilya Agreement on 19 April 2002 - a month before the sale process to Perilya had been completed (see para 5 of the approval decision). The decision in 2002 was published on 9 May 2002. In view of this timing, it was unlikely the Chamber would have been fully aware (or at all) of the terms and conditions proposed to be applied for mineworkers at the mine - including, as it turned out, the removal of the lead bonus. It was for this reason that the Commission made the following observation at para 25 of the approval judgement: Secondly, a first enterprise agreement binding the prospective buyer of the Broken Hill Mine, Perilya Pty Ltd, and the Unions was ratified by the Commission on 19 April 2002. The parties to this dispute may well wish to review their present arrangements in light of the terms and conditions in the Perilya Broken Hill Mine Enterprise Agreement 2002. As the lead bonus no longer applies, it was not unreasonable or unexpected for the Chamber to seek to review the present arrangements in light of the significant change in mineworker conditions under the Perilya Agreement.

46 Fourthly, an examination of the bonus scheme under the Perilya Agreement discloses that it is completely unrelated to the reasons why the lead bonus had previously been paid. The Perilya bonus is related to key Performance Indicators as a measure of performance against targets set for safety, production and quality. On the other hand, the lead bonus was introduced in 1925 based on the price of lead. Indeed, the bonus moved up and down according to the price of lead as Cahill, J observed in 1984 when he set a minimum indexed figure. I note at the time, his Honour described the lead bonus as being "a special or even unique matter." In other words, the lead bonus was never intended, and never did relate to the performance of the employees or the productivity of the mine. It is to be noted from Mr Edwards' submission that Pasminco had itself operated an incentive scheme from 1974 to 1999 which was based on the performance of employees. This scheme never applied to employees of contractors, despite strong Union attempts for it to do so.

47 Fifthly, Mr Remmert's evidence was that he should be paid extra for working in underground conditions. For reasons I expressed above, the lead bonus was never intended to be, and was never paid as a de facto site allowance or disability allowance for working under mine conditions. Throughout its history, it was wholly dependant on movements in the price of lead. Whether there is justification for a claim for payment for underground work is an entirely different proposition. However, such a claim cannot be achieved by naming a payment, made for a particular purpose, something completely unrelated to its intended purpose.

48 In view of my interpretation of cl 19.16, I do not find it necessary to make findings on the submissions of the parties on the economic capacity of local employers to compete with non local contractors - suffice to observe that I did not find Mr Edwards' comparisons to the state minimum rates award to be particularly helpful. Nevertheless, I would reaffirm what I said in the 2002 decision, that it may well be appropriate for the parties to examine the practical application of the relationship between mineworkers' and Award employees' conditions of employment.

49 Finally, it follows from my conclusions in this matter that there was no breach of the Award by the Chamber of Commerce, or any of its members, as alleged by the Union in the original dispute notification. I would observe that the Chamber's newsletter (Appendix 3 Ex "3") might have been a little more prudently worded. However, I do not accept that the newsletter, or the Chamber's stance in this case, constituted contempt of the Commission, as was colourfully alleged by Mr Butcher.

50 Pursuant to s175 of the Industrial Relations Act 1996, the Commission would interpret cl 19.16 of the Broken Hill Commerce and Industry Consent Award as not including the lead bonus previously paid to mineworkers prior to May 2002.

51 The dispute proceedings are hereby determined by this interpretation of the Award.

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At a glance

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Judgment (58 paragraphs)

Cases Cited (24)

Cited By (1)