PASTORAL INDUSTRY (STATE) AWARD Application by Australian Business Industrial for a new award and another matter [2001] NSWIRComm 27

Industrial Relations Commission (NSW)|1995-04-19|Before: Walton J, Schmidt J, Grayson DP, Cahill VP, Hungerford J, Bauer J, Guidice P, McIntyre VP, Ross VP, Duncan DP, Fisher P, Sweeney J, Varnum DP

CITATION : PASTORAL INDUSTRY (STATE) AWARD Application by Australian Business Industrial for a new award and another matter [2001] NSWIRComm 27 Australian Business Industrial Employers First PARTIES : Minister for Industrial Relations The Australian Workers' Union, New South Wales Labor Council of New South Wales FILE NUMBER: 6711 of 1999 CORAM: Walton J Vice-President; Schmidt J; Grayson DP; Connor C Award - pastoral industry - application for new award - opposed by union party - counterpart award principles - award simplification process under Workplace Relations Act 1996 - interaction with Industrial Relations Act 1996 - merits of claim not made out - application dismissed CATCHWORDS : Conditions of employment - s10 Industrial Relations Act 1996 - no case established that application would lead to fair and reasonable conditions of employment - conditions concerning occupational, health and safety matters Annual Holidays Act 1944 Anti-Discrimination Act 1977 LEGISLATION CITED : Industrial Relations Act 1996 Workplace Relations Act 1996 Workplace Relations and Other Legislation Amendment Act 1996 Building Tradesmen (State) Construction Award and Other Awards (unreported, Cahill VP, Hungerford J, McKenna C, 19 April 1995) In re Agricultural Employees (State) and Other Awards (1967) 67 AR 56 In re Compositors, &c. (Country) Award (1960) 59 AR 61, In re Engineers (State) Award (1964) 64 AR 54, In re Engineers, &c (State) Award & Ors (1973) 78 AR 313 In re Musicians (State) Award (1957) 56 AR 585 In re International Home Products Pty Ltd Laboratory Staff [1980] AR 652 In re Production Planners, Technical Officers &c (State) Award (1967) 67 AR 52 New South Wales Department of Community Services Community Living and Residential (Interim) (State) Award (2000) 100 IR 447 Occupational Health Nurses' Superannuation (State) Award (unreported, Bauer J, Schmidt J and French C, 6 November 1996) Principles for Review of Awards - State Decision 1998 (1998) 85 IR 38 Re Award Simplification Decision (1997) 75 IR 272 Re Pacific Coal Pty Ltd, ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 CASES CITED : Re Pastoral Industry Award 1986 (unreported, Merriman C, 30 June 1988, Print Q3186)) Re Pastoral Industry Award 1986 (unreported, Guidice P, McIntyre VP and Raffaelli C, 12 December 2000, Print T4176)) Re Pastoral Industry Award 1998 (unreported, Guidice P, Ross VP and Foggo C, 18 September 2000 Print T0901)). Re Pastoral Industry Award 1998, (unreported, McIntyre VP, Duncan DP and Jones C, Print R9499 and Print R9225)). Re Pastoral Industry Award 1998, (unreported, Merriman C, 14 March 2000, Print S4073). Re Sawmills etc (State) Award (No 1) (unreported, Hungerford J, 27 October 1989) Re Sawmills etc (State) Award (No 2) (unreported, Hungerford J, 1 June 1990) Re State Wage August 1989, Re Minimum Rates Adjustment (1989) 35 IR 183 Safety Net Review - Wages - April 1997 (1997) 71 IR 1 State Wage Case - August 1997 (1997) 73 IR 200 State Wage Case 1999 (1999) 88 IR 363 State Wage Case 2000 (NSW) (2000) 97 IR 93 Teachers (Non-Government) (Schools) (State) Award and other Awards (unreported, Fisher P, Sweeney J, Varnum DP, 17 August 1990)

HEARING DATES: 01/30/2001; 01/31/2001; 02/01/2001 DATE OF JUDGMENT: 03/13/2001

AUSTRALIAN BUSINESS INDUSTRIAL Mr B Cross of counsel

EMPLOYERS FIRST Mr T McDonald

MINISTER FOR INDUSTRIAL RELATIONS LEGAL REPRESENTATIVES: Mr S Benson of counsel

THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES Mr R Tripodi

LABOR COUNCIL OF NEW SOUTH WALES Mr C Christadolou

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: Walton J, Vice-President Schmidt J Grayson DP Connor C

Matter Number IRC 6711 of 2000 PASTORAL INDUSTRY (STATE) AWARD Application by Australian Business Industrial for a new award and another matter JUDGMENT

1 This application for the making of a new Pastoral Industry (State) Award ('the State Award') was brought by Australian Business Industrial ('ABI') in December 1999. The application arose out of discussions concerning the review of the existing State Award pursuant to s19 of the Industrial Relations Act 1996 ('the Act'), in matter number IRC 1318 of 1999. By consent, those review proceedings were adjourned pending the hearing of this application. The application was opposed by the union party to the award, the Australian Workers' Union, New South Wales ('the AWU'). In April 2000, pursuant to s193 of the Act, the application was referred to the Full Bench as a special case by the President of the Commission, Justice Wright. 2 The award parties, ABI, the AWU and Employers First sought a reference of the proceeding as they agreed that the application raised issues of far reaching consequence for this and other awards made under the Act. That view arose out of the fact that the State Award had for many years been the counterpart of an award made by the Australian Industrial Relations Commission ('the AIRC'), the federal Pastoral Industry Award 1998 ('the Federal Award') and its predecessors. The Federal Award had been 'simplified' in accordance with the provisions of s89A of the Workplace Relations Act 1996 ('the WR Act') in 1998 by Merriman C, who gave effect to an agreement then reached by the parties to the Federal Award (Re Pastoral Industry Award 1986 (unreported, 30 June 1988, Print Q3186)) This application sought to reflect some of those and a number of other later, variations to the Federal Award. 3 In further proceedings before a Full Bench of the AIRC in September 1999, the Federal Award was varied as to a range of other agreed matters, including rates of pay (Re Pastoral Industry Award 1998 (unreported; Guidice P, Ross VP and Foggo C; 18 September 2000 Print T0901)). Wages were further increased in order to establish a 'fair safety net', having regard to the practical difficulties of shearers and their employers entering enterprise agreements by order of another Full Bench on 17 September 1999 (Re Pastoral Industry Award 1998, (unreported; McIntyre VP, Duncan DP and Jones C; Print R9499 and Print R9225)). The award was also varied, by agreement, so as to reduce hours of work by an order of Merriman C on 14 March 2000. (Re Pastoral Industry Award 1998, (unreported, 14 March 2000, Print S4073). Those variations seemingly reflected not only the requirements of s89A of the WR Act, but also other agreed matters. Not all of the variations to the Federal Award were in evidence, however, nor was there evidence as to the terms of the agreements which had led to the variations, or the basis upon which these agreements had been reached. This application seeks similar variations to the State Award as to all of these matters (although maintains, as we shall later discuss, some differences in wage rates between the State and Federal award). 4 In December 2000, there were further changes to the Federal Award determined by a Full Bench of the AIRC, as the result of a reference by the federal Minister for Industrial Relations, pursuant to s109 of the WR Act. (Re Pastoral Industry Award 1986 (unreported; Guidice P, McIntyre VP and Raffaelli C; 12 December 2000, Print T4176)) Those proceedings were initiated in 1998, after the decision of Merriman C earlier referred to, but were delayed at the request of the Minister, pending consideration of the matters later dealt with by the Full Bench in September 1999. The s109 proceedings concerned a review of the decision made by Commissioner Merriman in 1998, to give effect to the award simplification of the Federal Award required by the WR Act, in the terms which the award parties had then agreed. The Minister's application was opposed by some of the parties to the award, the AWU and the Shearing Contractors Association of Australia. One of the employer parties, the National Farmers' Federation, neither supported nor opposed the application. 5 The Minister's application, which was successful in part, was designed to achieve the variation and deletion of various provisions of the Federal Award which the parties had agreed, but which in the Minister's view were inconsistent with the requirements of s89A of the WR Act. The attitude of the ABI to this recent AIRC Full Bench decision was that it was irrelevant to the application brought in these proceedings, even though it involved a review of the 1998 decision of Commissioner Merriman on which reliance was placed. That attitude was taken even though the result of the Full Bench decision was to overturn various aspects of the Commissioner's decision. What ABI proposed was that the parties to the State award should take time to consider the terms of the order varying the Federal Award as a result of the Full Bench decision, when it became available, before making any further application to vary the State Award. 6 The inevitable consequence of the ABI's approach was that the application did not, in reality, seek to maintain the State Award in conformity with the provisions of the Federal Award, at least during the term of the award which it asked this Full Bench to make, namely for a period of two years after its making. That continued the position which has existed since June 1998, when the parties to the State Award failed to take any steps to bring the State Award into conformity with the agreed changes made to the Federal Award by order of Merriman C. Furthermore, this application still sought to maintain other existing differences between the two awards, although it was foreshadowed by Employers First it would over time seek to achieve conformity in rates of pay as between the two awards. 7 How the differences between the two awards as to rates of pay has occurred is unclear. On the evidence the agreed variation to the Federal Award in 1998 led to substantial wage increases and there were further agreed increases subsequently, but yet the State Award rates in some respects currently exceed the Federal Award rates. How this has occurred is entirely unclear upon the evidence before us. No evidence even as to the history of movements in the State Award rates was led. It appears that the award variations which led to higher rates in the State Award resulted from agreements reached between the award parties who appeared in these proceedings. What bearing the Federal Award rates had on those agreements was, however, not explained. 8 It is relevant to observe at this point that the hearing of these proceedings was adjourned on a number of occasions. Firstly, in the light of an application made by the Minister for Industrial Relations on 1 August 2000 for intervention and an adjournment of the proceedings. That application was granted. (See the interlocutory decision in these proceedings of 7 August 2000). The Labor Council of New South Wales was also granted leave to intervene in the proceedings. At the hearing, both interveners generally supported the approach to the application taken by the AWU. Employers First supported the application made by ABI. 9 The second adjournment occurred during the first day of the hearing, when ABI announced that it proposed to seek leave to amend its application in two respects. The first went to rates of pay, where it indicated that 38 of the rates contained in the award were to be amended to reflect the current rates of the Federal Award. Another 11 rates were to remain as currently provided by the State Award, because they were higher than those fixed by the Federal Award. When amended, it transpired that the application gave rise to significant wage increases, in some cases, of up to $30 per week. 10 The second alteration went to the coverage of the award. The existing State Award operates as a common rule throughout New South Wales. The effect of the new award, as originally sought by ABI, was to restrict coverage of the award to employers who were corporations. The amended application restored the 'scope' clause of the existing State Award. 11 When the hearing resumed, the position of the parties was that the amendment as to the rates sought was opposed only by the AWU. Leave to amend the claim was, nevertheless, granted. 12 The application as finally pressed gives rise to the need for detailed consideration to be given to the award making provisions of the Act and those now applying under the WR Act, particularly as they affect the exercise of the Commission's award making powers in relation to counterpart awards. 13 Counterpart awards, of course, have been a feature of industrial regulation in this State for very many years. The counterpart award principles developed by the Commission's predecessors are well known and have been oft stated and applied over the years. (See, for example, In re Musicians (State) Award (1956) 56 AR 585; In re Compositors, &c. (Country) Award (1960) 59 AR 61; Re Engineers (State) Award (1964) 64 AR 54; In re Production Planners, Technical Officers &c (State) Award (1967) 67 AR 52 at 54; In re Agricultural Employees (State) and Other Awards (1967) 67 AR 56 at 87; Re Sawmills etc (State) Award (No 1) (unreported, Hungerford J, 27 October 1989) and Re Sawmills etc (State) Award (No 2) (unreported, Hungerford J, 1 June 1990)). 14 The application of these well known principles here arises for consideration in the context of the legislative schemes under which this Commission and the AIRC now respectively operate. Those schemes have diverged in various respects in recent years, as Full Benches of this Commission have observed in a number of test case decisions. In the State Wage Case - August 1997 (1997) 73 IR 200, for instance, the State Wage Bench dealt with this matter (at pp220-21) as follows: 'Past and Future - Relationship between National and State General Wage Cases New South Wales industrial tribunals have over the years reflected in State Wage Case decisions the principles and orders made by the AIRC with careful adherence. This course has been taken although from time to time the New South Wales tribunal has doubted the soundness of the federal approach in the context of the New South Wales award system. That is not to say that there were not departures, some dictated by the requirements of legislation and others which took particular account of the views of the industrial parties in New South Wales. That close adherence to the federal decisions not only followed from the legislation under which the State tribunals acted, but also from the recognition that Australia had become one indivisible economy and that the AIRC was the pre-eminent tribunal with the authority to set wage rates and lead policy within that economy. Further, there was during the period a general coincidence of legislative purpose between the Australian and New South Wales legislation. It is possible that the two tribunals might, because of differing statute bases, have diverged to the extent that the federal and State obligations cannot be reconciled in the terms of reflected tribunal decisions. We do not consider that such a position has been reached at present.'

(See also State Wage Case 1999 (1999) 88 IR 363 at 388).

15 The differences between the two systems, particularly so far as the award making powers of the two tribunals is concerned, arises directly for consideration in these proceedings. It is trite that the application of any principles which the Commission applies to its award making powers, including those long established in relation to counterpart awards, must always be applied consistently with the legislative scheme under which the Commission operates from time to time. We thus turn to consider the award making provisions of the two Acts.

The Commission's award making power under the Act. 16 The Commission is bound by s10 of the Act when making awards to set 'fair and reasonable conditions of employment for employees.' In a case such as this, that obligation must be exercised in the context of the existing award conditions which are sought to be altered in contested proceedings. 17 In considering this application the Commission is also bound by s146(2) to have regard to the objects of the Act, which appear in s3, emphasising matters such as providing a fair and just framework for the conduct of industrial relations; promoting efficiency and productivity in the economy of the State; promoting participation in industrial relations by employers and employees at enterprise and workplace levels, as well as by representative bodies of employers and employees; facilitating regulation of employment through awards, agreements and other industrial instruments; preventing and eliminating discrimination in the workplace and ensuring equal remuneration for men and women doing work of equal or comparable value; providing for resolution of industrial disputes by conciliation and if necessary, arbitration and encouraging and facilitating co-operative workplace reform and equitable and innovative and productive workplace relations. 18 The Commission must also have regard to the state of the economy and the likely effect of its decisions on the economy (s146(2)(b)) and must have regard to the principles contained in the Anti-Discrimination Act 1977 in the exercise of its functions (s169(2)). 19 Section 10 must be understood in the context of the definition of 'conditions of employment' in the Dictionary to the Act and the definition of 'industrial matters' in s6. They provide: 'conditions of employment' includes any provisions about an industrial matter. "industrial matters" means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry. (2) Examples Examples of industrial matters are as follows: (a) the employment of persons in any industry (including the employment of minors, trainees, apprentices and other classes of employees), (b) the remuneration (including rates of pay, rates for piece-work and allowances) for employees in any industry, (c) the conditions of employment in any industry (including hours of employment, qualifications of employees, manner of work and quantity of work to be done), (d) part-time or casual employment (including part-time work agreements), (e) the termination of employment of (or the refusal to employ) any person or class of persons in any industry, (f) discrimination in employment in any industry (including in remuneration or other conditions of employment) on a ground to which the Anti-Discrimination Act 1977 applies, (g) procedures for the resolution of industrial disputes, (h) the established customs in any industry, (i) the authorised remittance by employers of membership fees of industrial organisations of employees, (j) the surveillance of employees in the workplace.

20 It follows that the Commission's jurisdiction as to the subject matters about which it may make an award are extremely wide, particularly having in mind the definition of industrial matter. The requirements of s10 of the Act must be observed whenever an award application arises for consideration.

The AIRC's award making power under the WR Act. 21 The award making power of the AIRC under the WR Act is quite different to that of the Commission under the Act. There is also a considerable difference between the objects of the WR Act and the objects of the Act. While the WR Act contains a broad definition of industrial dispute in s4, the award making power of the AIRC (see s106) is constrained by the provisions of s89A and by the definition of 'allowable award matters' in that Act. That term is defined in s4 of the WR Act which provides: "allowable award matters" means the matters covered by subsection 89A(2).

22 Section 89A provides: 89A Scope of industrial disputes Industrial dispute normally limited to allowable award matters (1) For the following purposes, an industrial dispute is taken to include only matters covered by subsections (2) and (3): (a) dealing with an industrial dispute by arbitration; (b) preventing or settling an industrial dispute by making an award or order; (c) maintaining the settlement of an industrial dispute by varying an award or order. Allowable award matters (2) For the purposes of subsection (1) the matters are as follows: (a) classifications of employees and skill-based career paths; (b) ordinary time hours of work and the times within which they are performed, rest breaks, notice periods and variations to working hours; (c) rates of pay generally (such as hourly rates and annual salaries), rates of pay for juniors, trainees or apprentices, and rates of pay for employees under the supported wage system; (d) piece rates, tallies and bonuses; (e) annual leave and leave loadings; (f) long service leave; (g) personal/carer's leave, including sick leave, family leave, bereavement leave, compassionate leave, cultural leave and other like forms of leave; (h) parental leave, including maternity and adoption leave; (i) public holidays; (j) allowances; (k) loadings for working overtime or for casual or shift work; (l) penalty rates; (m) redundancy pay; (n) notice of termination; (o) stand-down provisions; (p) dispute settling procedures; (q) jury service; (r) type of employment, such as full-time employment, casual employment, regular part-time employment and shift work; (s) superannuation; (t) pay and conditions for outworkers, but only to the extent necessary to ensure that their overall pay and conditions of employment are fair and reasonable in comparison with the pay and conditions of employment specified in a relevant award or awards for employees who perform the same kind of work at an employer's business or commercial premises.

23 The AIRC in exercising its award making power is obliged by s90 to: 90 Commission to take into account the public interest In the performance of its functions, the Commission shall take into account the public interest, and for that purpose shall have regard to: (a) the objects of this Act and, in particular, the objects of this Part; and (b) the state of the national economy and the likely effects on the national economy of any award or order that the Commission is considering, or is proposing to make, with special reference to likely effects on the level of employment and on inflation.

24 Sections 88A and 88B are also relevant to the exercise of the AIRC's award making powers. They provide: 88A Objects of Part The objects of this Part are to ensure that: (a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and (b) awards act as a safety net of fair minimum wages and conditions of employment; and (c) awards are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises; and (d) the Commission's functions and powers in relation to making and varying awards are performed and exercised in a way that: (i) encourages the making of agreements between employers and employees at the workplace or enterprise level; and (ii) uses a case-by-case approach to protect the competitive position of young people in the labour market, to promote youth employment, youth skills and community standards and to assist in reducing youth unemployment. 88B Performance of Commission's functions under this Part (1) The Commission must perform its functions under this Part in a way that furthers the objects of the Act and, in particular, the objects of this Part. (2) In performing its functions under this Part, the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following: (a) the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community; (b) economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment; (c) when adjusting the safety net, the needs of the low paid. (3) In performing its functions under this Part, the Commission must have regard to the following: (a) the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed; (b) the need to support training arrangements through appropriate trainee wage provisions; (ba) the need, using a case-by-case approach, to protect the competitive position of young people in the labour market, to promote youth employment, youth skills and community standards and to assist in reducing youth unemployment, through appropriate wage provisions, including, where appropriate, junior wage provisions; (c) the need to provide a supported wage system for people with disabilities; (d) the need to apply the principle of equal pay for work of equal value without discrimination based on sex; (e) the need to prevent and eliminate discrimination because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin. (4) For the purposes of paragraph (3)(e), junior wage provisions are not to be treated as constituting discrimination by reason of age. (5) For the purposes of paragraph (3)(e), trainee wage arrangements are not to be treated as constituting discrimination by reason of age if: (a) they apply (whether directly or otherwise) the wage criteria set out in the award providing for the national training wage or wage criteria of that kind; or (b) they contain different rates of pay for adult and non-adult employees participating in an apprenticeship, cadetship, or other similar work-based training arrangement.

25 Thus, it will be seen that the WR Act places a particular emphasis on the concept of a 'safety net' in the context of awards made by the AIRC. That term is not defined in the WR Act, but was considered by a Full Bench of the AIRC in Safety Net Review - Wages - April 1997 (1997) 71 IR 1 at 16-17. That decision was considered in the State Wage Case - August 1997 earlier referred to, the State Wage Bench there noting the consequent divergent paths which the two systems of industrial relations appeared to be following (at 208). By way of contrast, the Act does not contemplate any limitation in the making of awards to a safety net basis. 26 This divergence is also exemplified by the award simplification provisions of the Workplace Relations and Other Legislation Amendment Act 1996 ('the WROLA Act'), which allowed the AIRC to conduct an award simplification process of existing awards within eighteen months after the enactment of s89A of the WROLA Act, to bring them into conformity with the new statutory regime. In the event that this exercise was not conducted, award provisions dealing with other than allowable matters were no longer to have effect. This was dealt with in Schedule 5 to the WROLA Act, which in clauses 49 and 50 provided that: 49 Variation of awards during the interim period

(1) If one or more of the parties to an award apply to the Commission for a variation of the award under this item, the Commission may, during the interim period, vary the award so that it only deals with allowable award matters. (2) For the purposes of this item, an exceptional matters order is taken to relate wholly to allowable award matters. (3) Special consent provisions cannot be varied under this item before the termination time for those provisions. (4) The Commission may only deal with the application by arbitration if it is satisfied that the applicant or applicants have made reasonable attempts to reach agreement with the other parties to the award about how the award should be varied and the treatment of matters that are not allowable award matters. (5) If: (a) the award provides for rates of pay that, in the opinion of the Commission: (i) are not operating as minimum rates: (ii) were made on the basis that they were not intended to operate as minimum rates; and (b) the application under this item seeks to have such rates of pay varied so that they are expressed as minimum rates of pay; the Commission may vary the award so that it provides for minimum rates of pay consistent with sections 88A and 88B of the Principal Act and the limitation on the Commission's power in subsection 89A(3) of that Act. (6) If the Commission varies the award under subitem (5), it must include in the award provisions that ensure that overall entitlements to pay provided by the award are not reduced by that variation, unless the Commission considers that it would be in the public interest not to include such provisions. (7) The Commission must, if it considers it appropriate, review the award to determine whether or not it meets the following criteria: (a) it does not include matters of detail or process that are more appropriately dealt with by agreement at the workplace or enterprise level; (b) it does not prescribe work practices or procedures that restrict or hinder the efficient performance of work; (c) it does not contain provisions that have the effect of restricting or hindering productivity, having regard to fairness to employees. (8) The Commission must also review the award to determine whether or not it meets the following criteria: (a) where appropriate, it contains faciliatative provisions that allow agreement at the workplace or enterprise level, between employers and employees (including individual employees) on how the award provisions are to apply; (b) where appropriate, it contains provisions enabling the employment of regular part-time employees; (c) it is expressed in plain English and is easy to understand in both structure and content; (d) it does not contain provisions that are obsolete or that need updating; (e) where appropriate, it provides support to training arrangements through appropriate trainee wages and a supported wage system for people with disabilities; (f) it does not contain provisions that discriminate against an employee because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin. (9) If the Commission determines that the award does not meet the criteria set out in subitem (7) or (8), the Commission may take whatever steps it considers appropriate to facilitate the variation of the award so that it does meet those criteria. 50 Parts of awards cease to have effect at the end of the interim period (1) At the end of the interim period, each award ceases to have effect to the extent that it provides for matters other than allowable award matters.

(2) For the purposes of this item, an exceptional matters order is taken to relate wholly to allowable award matters.

(3) For the purposes of this item, an award is made under subsection 170MX(3) of the Principal Act or varied under item 49 of this Schedule is taken to provide wholly for allowable award matters.

(4) If the termination time for special consent provisions is after the end of the interim period, then this item and item 51 apply to the special consent provisions as if a reference to the end of the interim period were instead a reference to the termination time.

27 In accordance with the provisions of s106(1) of the WR Act, a Full Bench of the AIRC also developed principles for these award simplification exercises in Re Award Simplification Decision (1997) 75 IR 272. (The 1998 proceedings before Merriman C concerning the Federal Award were conducted pursuant to the abovementioned provisions of the WR Act, the WROLA Act and in accordance with these principles.) Again, by way of contrast, the Act does not require that such an award simplification exercise be conducted in relation to State awards (with s19 of the Act imposing distinctly different requirements in relation to the review of awards - see Principles for Review of Awards - State Decision 1998 (1998) 85 IR 38).

The differences in the two legislation schemes 28 Thus, it follows that the differences which now exist between the two legislative schemes, so far as the respective award making powers of the two tribunals are concerned and how they are exercised in practice, are stark. It is those matters which underline the nature of the controversy which arose between the parties in these proceedings. 29 The allowable matters dealt with in s89A of the WR Act all appear to fall within the definition of 'industrial matters' in s6 of the Act. Thus, it would appear that significant areas of overlap remain as to the matters about which the two tribunals may make awards. A comparison of the provisions of s88B(2) of the WR Act and s10 of the Act also suggests this. The definition of industrial matters in the Act, however, travels beyond the allowable matters provided for in s89A of the WR Act. It follows that the objectives of the two pieces of legislation in relation to award making nowadays are substantially different. The emphasis in the WR Act upon awards providing a safety net, as opposed to the requirement of the Act that awards fix fair and reasonable conditions of employment, illustrates the different approaches which the two tribunals are required to pursue under their respective legislative regimes. The upshot is that the Commission's award making powers under the Act are, at this point in time, considerably broader than those of the AIRC pursuant to the WR Act and are substantially directed to considerably different purposes. 30 It is unnecessary to analyse the differences in any greater detail. They can simply be illustrated by reference to two recent examples, flowing from the December 2000 decision of the Full Bench of the AIRC in the s109 proceedings concerning the Federal Award. The Minister there challenged the retention of various clauses in the Federal Award, which the parties had agreed should be retained and which Merriman C in 1998 had accepted as falling within the allowable matters prescribed by s89A of the WR Act. In respect of some of those clauses the Minister's case was that they dealt solely with matters of occupational health and safety, or establishing a procedure for determining whether an occupational health and safety issue existed. The Full Bench observed at paragraph 8 of its decision that such provisions are not allowable award matters under s89A of the WR Act, while concluding that the particular clauses in question should not be removed because they concerned the duties to be performed by shearers, rather than simply occupational, health and safety matters. We observe that this conclusion tends to explain why certain other provisions in the Federal Award were removed by agreement of the award parties in 1998. We will refer to some of those clauses below. 31 By way of contrast, we note that there is no restriction under the Act upon award conditions dealing with occupational health and safety matters, as the recent decision of the Full Bench in New South Wales Department of Community Services Community Living and Residential (Interim) (State) Award (2000) 100 IR 447 makes plain. The Full Bench of the Commission there awarded detailed provisions directed to ensuring the safety of employees in a particular working environment. It appears that such an award could not have been made by the AIRC under the WR Act. The Federal Award had, of course, traditionally been directed (as has the existing State Award) to significant occupational, health and safety issues. 32 Further, at paragraph 18 of the December 2000 decision, the Full Bench of the AIRC dealt with the provisions of clause 33 Absence from Work, Leaving, Discharge. It concluded that the clause did not deal with an allowable award matter, as it concerned aspects of termination of employment which did not fall within s89(2)(n) of the WR Act. Federal awards may only deal with notice of termination and not with substantial requirements of termination or matters such as repudiation of employment. The current State Award, like many other awards of this Commission, deals with those matters, which plainly fall within the definition of industrial matters in s10 of the Act. 33 It follows that as a consequence of the federal legislative scheme, the Federal Award now, or at least when the decision of the Full Bench of December 2000 is given effect, will only contain the allowable matters contemplated by s89A, as the result of the application of the award simplification process and the principles in relation thereto established by the AIRC in its Award Simplification decision. The current State Award, by way of contrast, contains many other provisions previously contained in the Federal Award, but deleted, as the result of the requirements of the WR Act and the WROLA Act, the agreements of the award parties in relation thereto, the application of the Federal Minister for Industrial Relations and the various decisions of the AIRC earlier referred to. 34 This conclusion has significant ramifications for the present application. Many of the provisions of the State Award which were sought to be removed in consequence of the award simplification process conducted in relation to the Federal Award (which concerned the occupational, health and safety of employees) are matters directly concerning the provision of 'fair and reasonable conditions of employment' for such employees; the very matters the Commission is required to consider under s10 of the Act. 35 Thus the issue in this case, as the parties identified it, was whether the State Award should be modified by this Commission in order to maintain its 'counterpart' status with the Federal Award. We observe at this point that none of the parties to these proceedings were parties to the Federal Award, nor were they involved in the discussions or negotiations concerning that award or the proceedings before the AIRC. This undoubtedly affected the evidence led in the proceedings. Nevertheless, having that evidence in mind, we have concluded that the application does not in fact seek to achieve the applicant's stated desire to maintain the counterpart nature of the State Award. This is a matter which has, in part, influenced the conclusion which we have reached. We will return to this below.

The evidence 36 Various decisions and orders of the AIRC in relation to the Federal Award were tendered as well as other documents. Evidence was called by ABI from Mr Alex Duncan Jarratt, Area Manager of North West NSW and Southern Queensland for Nationwide Rural Contracting Pty Ltd and by the AWU from Mr Darren Michael Cameron, Official Representative of The Australian Workers' Union, New South Wales.

Submissions 37 The case advanced for ABI by Mr Cross of counsel was that the application would be granted, having regard to the Commission's counterpart award principles and the industrial merits of the claim. 38 It was accepted that the counterpart award principles required the Commission to arrive at its own conclusions about the application, but it was submitted that no issue of conflict between the Act and the application arose as a result of the provisions of the Federal Award on which reliance was placed, except as to State test case standards, which the application sought to maintain and the retention of existing higher rates of pay. 39 It was submitted that in a counterpart award the normal rule was that the terms of the Federal award should be incorporated in the State award and that the party which wished to depart from that position had an onus to establish the basis for such a departure. (Per Watson J In re International Home Products Pty Ltd Laboratory Staff [1980] AR 652 at 657.) Here that onus fell on the AWU. It was not controversial that in this industry the Federal Award covered the dominant part of the field in the State. There was accordingly a strong prima facie case that the State Award should mirror the Federal Award provisions. 40 It was further submitted that the evidence demonstrated that the proposed award satisfied the requirements of the Act, in that it established fair and reasonable conditions of employment and promoted the objects of the Act. 41 It was also relevant that the changes made to the Federal Award which were relied upon went further than a mere implementation of the requirements of s89A of the WR Act, but also reflected agreements reached as to the terms and conditions which should be contained in a contemporary award. They arose out of extensive negotiations and resulted in conditions which were fair and reasonable, as the evidence of Mr Jarratt and the provisions sought to be deleted demonstrated. 42 The application did not seek the de facto adoption of the provision of the WR Act or the award simplification principles establish by the AIRC for counterpart awards in New South Wales. Rather, it was submitted, it reflected a modern operation of the longstanding counterpart award principles. Those principles should continue to operate, because they supported and complemented the Commission's award making powers and requirements of the Act. 43 Relevant to this consideration was the fact that in a number of new awards recently made by the Commission by consent of the parties, the counterpart award principles had been applied. 44 It was also submitted to be relevant that these principles had been developed without reference to, or consideration of, the Federal legislation in operation from time to time, but rather had always had regard to the State legislation within which the parties were operating. 45 The fact that the Federal Award had been varied in the manner sought provided a significant influencing factor in the Commission's consideration of whether the application should be granted. This provided a proper basis for the application to be granted, even if the provisions in question were not such as the Commission would otherwise award (Per Full Commission in Building Tradesmen (State) Construction Award and Other Awards (unreported, 19 April 1995 at 5 to 6). 46 The relevant question was whether the AWU had made out a case for exemption of the State Award from the provisions of the Federal Award. It had failed to do so, because, so it was submitted, the evidence of Mr Jarratt would be preferred to that of Mr Cameron. 47 Mr McDonald, appearing for Employers First supported the submissions put for ABI and in addition submitted that it was relevant that the AWU was seeking that the Commission cease dealing with the State Award on a counterpart basis. It followed that given that it was uncontested that the Federal Award dominated the field, that the AWU bore an onus to satisfy the Commission that the employers and employees in the State should have their conditions regulated on terms different to those fixed by the Federal Award. 48 If the AWU's position were accepted, the parties would be free to adopt a 'clean sheet' approach to award regulation of the industry in this State and all award provisions would need to be determined on their merits. This followed because the Federal Award would no longer be relevant, nor would the agreements upon which it was based. 49 It was also relevant that the result of those proceedings was that the State and Federal Award contained competing provisions, employers under one award might enjoy a competitive advantage or disadvantage and employees would also be subject to differing conditions. This was particularly relevant for those employees who worked in the industry on an itinerant basis. Such an outcome would lead to confusion and industrial disputation and would be likely to lead employers to take steps to become party to the Federal Award. 50 It followed that there were sound practical reasons for the continuation of the counterpart award principles and the retention of that status in this award. The need for comity between the State and Federal systems of industrial relations was emphasised, as recognised in the Re State Wage August 1989; Re Minimum Rates Adjustment (1989) 35 IR 183 at 1943-4. 51 The case for the AWU was put by Mr Tripodi, who submitted that while it was accepted that the State Award had in the past been a counterpart of the Federal Award, the question which arose was whether that position should continue, particularly having in mind the circumstances in which the Federal Award had come to its current terms. 52 It was particularly submitted that the changes to the Federal Award resulting from the award simplification requirements of the WR Act, should not be imposed on the State Award by the Commission, especially because it was not the intention of the State legislature that awards made under the Act should be the subject of such an exercise. In this respect the Second Reading Speech of the Minister for Industrial Relations in introducing the Act was relied upon. 53 It was further submitted that the evidence did not support the application being granted, particularly when the concessions made by Mr Jarratt in cross examination were considered. The application was opposed in its entirety and given the way the cases were advanced, must be either accepted or rejected in whole. That position was adhered to, even though the application contemplated reduced hours of work, a variety of increases in rates and the removal of various conditions which imposed burdens on employees and benefits on employers. 54 It was also submitted that the evidence of Mr Cameron as to the significant detriment which would be visited upon employees by the deletion of various current conditions would be accepted as demonstrating that the application lacked industrial merit. The attitude of the AWU was that the differences between the parties should be dealt with in the current s19 award review proceedings of the current State Award, adjourned pending the hearing of this case. 55 As to the counterpart principles, it was submitted that they had never required that strict counterpart status should be maintained as between State and Federal awards. This reflected the fact that the principles had only ever existed as part of the way in which the Commission's award making powers were exercised as a matter of discretion, rather than as the result of any statutory provision. (Per Sheldon J In re Production Planner's Award at 54 and Hungerford J in Sawmillers No 1.) 56 The Commission had never 'rubber stamped' Federal decisions and had always required to be satisfied as to the merits of what was claimed. (Per Beattie J In Re Compositors &c (Country) Award and De Baun J In re Musicians (State ) Award at 735.) 57 Here, there was no evidence which demonstrated that the removal of the current award provisions sought would lead to fair and reasonable conditions of employment in the State Award and thus the Commission had no basis upon which to be positively satisfied that it ought to flow the Federal Award conditions into the State award. To the contrary, the evidence demonstrated that many of the provisions removed had gone as the result of the coercive requirements of the WR Act, not as the result of any consideration by the AIRC as to the industrial merits of their removal. It followed that the position here was different to that traditionally encountered by the Commission before enactment of the WR Act, where contested applications had received a proper merits consideration at the Federal level. It followed that the Commission would not remove conditions from the State Award merely because the WR Act had required such changes to the Federal Award. 58 It also followed that in the current circumstances the Commission would require to be satisfied that the changes sought had merit, apart from the desirability of conformity with the Federal Award, particularly changes involving the removal of award protections for employees. 59 It was also relevant that the changes relied on to the Federal Award included changes agreed in return for the introduction of a 38 hour week and changes agreed in return for certain wage increases. This flowed, it was submitted from the increased emphasis placed in the WR Act upon conciliation, a matter alluded to by Gleeson CJ in Re Pacific Coal Pty Ltd; ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 at par 5 - 7. The High Court there also discussed the intention of the WR Act to ensure that some matters ceased to be the subject of award coverage. The observation of Gleeson CJ at par 16, that award parties would be influenced in their conduct by the understanding that at the end of the interim period contemplated by Schedule 5 to the WR Act, Federal Awards would be simplified in light of the provision of s89A, if they themselves took no steps as to award simplification beforehand, was relevant to understanding why the Federal Award had been varied by agreement by Merriman C in 1988. 60 Having these provisions in mind, as well as the award simplification principles established by the AIRC, the Commission should not accept that there was no question of the existence of a conflict as between the Act and the WR Act, which required consideration in these proceedings, as the employers had submitted. 61 Here, it was also relevant that the changes to the WR Act contemplated that matters removed from awards would become the subject of direct bargaining between employers and employees, rather than being left unregulated. Nevertheless the evidence of Mr Cameron was that in this industry, such bargaining had not occurred, with the result that there had been an overall detriment inflicted upon employees by the removal of award protections. 62 Mr Christadoulou for the Labor Council submitted that the application raised a fundamental question as to the operation of the counterpart award principles. In his submission all State awards, including counterpart awards, had to be dealt with in accordance with the provisions and objectives of the Act, rather than those of the WR Act. 63 It was relevant that in enacting the Act, Parliament had intended the State system to be distinctive from that established by the WR Act. This was made clear by the Minister's Second Reading Speech. The federal system did not purport to emulate that established in this State - where awards fixing fair and reasonable conditions of employment were required, rather than a systematic stripping of awards down to 20 allowable matters. 64 If this Commission were to adopt the WR Act award simplification system for counterpart awards, the integrity of the New South Wales system would be seriously affected. While counterpart awards had a long history in this State, they were not sacrosanct, as the authorities demonstrated. 65 It followed that in these proceedings the Commission should establish a clear set of principles regarding counterpart awards, having in mind the current objects and requirements of the Act. This was important to the system as a whole, given the potential for flow on of the decision to other counterpart awards. 66 Mr Benson of counsel submitted for the Minister that the coercive aspects of the WR Act, particularly the requirements of clause 50 of Schedule 5, were relevant to a consideration of the agreement reached by the parties to the Federal Award in 1998, upon which the applicant here relied. 67 The application raised fundamental issues of principle, which highlighted the differences between the Act and the WR Act, which has confined awards made pursuant to its terms to the 20 allowable matters contained in s89A. The provisions of the Act permit State awards to contain matters no longer contemplated by the WR Act, with the resulting consequence that the operation of State common rule awards had broadened. The schedule of respondents to the Federal Award suggested that hundreds of employers now fell into this position. It followed that while the Federal Award might still regulate the dominant part of the industry as to allowable matters, that might no longer be the case as to other provisions. 68 It was also submitted that the award simplification process required by the WR Act, complex and inflexible in its terms, did not purport to emulate the system established by s10 of the Act, of awards fixing fair and reasonable conditions of employment. The Commission could now have no confidence as to the extent of any overlap in award making powers of the two tribunals, having in mind the requirements of ss88A, 88B, 89 and 90 of the WR Act, when contrasted with the requirements of s10 of the Act. It followed that the Commission would err if for State awards it adopted, in a de facto sense, the Federal award simplification principles established to govern the operation of the WR Act. 69 It was also submitted that the various provisions sought to be altered or deleted from the current State Award in this application had their own award history and were directed to particular circumstances. Thus, the application would not be granted unless the applicant met the onus which fell upon it in special case proceedings to establish that the changes were appropriate for this industry and that they met the other requirements of the Act and the applicable principles, so as to result in an award fixing fair and reasonable conditions of employment. The evidence led in these proceedings did not satisfy that onus. 70 In this application, ABI sought to introduce the 'stripped back' provision of the Federal Award. The Commission's counterpart award principles had always required the Commission to be satisfied that changes sought were appropriate in the relevant circumstances. (Per Hungerford J in Sawmillers No 1). The principles were not rigid nor immutable (per Sheldon J In re Production Planner's Award at 54), but required examination of what was sought and the basis upon which it had been awarded (per De Baun J In re Musicians (State ) Award at 735). The evidence failed to meet those requirements.

Consideration 71 The application in this case does not raise for consideration the continuation of the traditional counterpart award principles developed over many years by this Commission and its predecessors. Rather, what arises for consideration is how those principles are to be applied in the light of current circumstances, particularly when parties to counterpart awards are disagreed as to the continuation of the counterpart nature of an award. 72 We observe that many counterpart awards continue to operate in this State, by agreement of the award parties, without real difficulty or disagreement. This decision will not to affect that position. 73 This is a special case. The onus which falls on an applicant in such proceedings is well settled. In a special case an applicant must meet the ordinary onus to make out its case on the evidence. (See Occupational Health Nurses' Superannuation (State) Award (unreported; Bauer J, Schmidt J and French C; 6 November 1996) and Teachers (Non-Government) (Schools) (State) Award and other Awards (unreported; Fisher P, Sweeney J, Varnum DP; 17 August 1990). Matters of the cost of the claim and the public interest also arise for consideration 74 While it was submitted for the applicant that it was a matter for those who opposed the application to demonstrate that the State Award should no longer have a counterpart status to the Federal Award, we do not accept that questions of onus fall to be so determined in this matter, particularly in this case where we have found that the applicant itself is not seeking to re-establish the State Award on a counterpart basis. In the ordinary way in any contested proceedings before the Commission there is an onus which falls on an applicant to make out its case. The applicant in a special case has a particular onus, as we have described. In an award application that onus must be met in the context of the requirements of s10 of the Act. 75 It follows that consideration must be given to the application brought under the Act in the ordinary way, having in mind the current provisions of the State Award; that it has in the past been a counterpart of the Federal Award; the changes which have occurred in the Federal Award; the changes sought to be made to the State Award; whether such changes would, in fact, give effect to a restoration of the counterpart status of the two awards and whether those changes would, on the evidence, lead to an award which in terms of s10 of the Act, fixes fair and reasonable conditions of employment. The view of the union party to the State Award and the interveners, that the counterpart nature of the two awards should no longer subsist and that the changes sought would not satisfy the requirements of s10 of the Act, must also of course be considered. 76 All of this means that in considering the substantial changes here sought from the current award arrangements, the Commission must be satisfied that in granting the application, it would be making an award which meets the statutory obligation in s10 to make an award 'fixing fair and reasonable conditions of employment' (and which conforms with the objects of the Act). 77 Existing award conditions are, of course, not immutable. Subject to compliance with the requirements of the Act and applicable principles, they can be varied upon the basis of the consent of the parties, or in the case of contested proceedings, if a case is made out on the evidence, upon the basis that the award conditions in question no longer provide fair and reasonable conditions of employment. In a contested case, the onus falls on the applicant to make out a case for an alteration to an award, which otherwise will remain undisturbed. 78 As earlier noted, there has been no case put in this matter that the Commission should depart from long established principles as to the making of counterpart awards. We consider that no such departure is warranted. However, this is not to say that the operation of those principles will not be affected by the present divergent legislative schemes under which the State and Federal awards in question were made or varied. Consideration must be given to the differences in the two legislative schemes, and what consequences they may have, particularly given the current requirements of the Act in relation to this Commission's award making powers, which we have earlier dealt with. This is particularly so where the differences in the respective awards in this case have emerged in direct consequence of the operation of those different legislative schemes and where the Federal scheme has proscribed the granting of certain conditions, notwithstanding the merits of the provisions or their conformity with established principles. 79 To adopt this approach is to do no more however than to repeat, in the current context, the observations of various members of the Commission and its predecessors as to the proper operation of the counterpart award principles. Beattie J said, for example, In re Compositors, &c (Country) Award (1960) 59 AR 61 at 62: '… the industrial authorities of this State had never departed from the principle of arriving at their own conclusions as to conditions of employment. Due weight should be given to decisions of the Commonwealth tribunals, but conditions of employment, which might be in conflict with the standards adopted by the tribunals under the Industrial Arbitration Act, should not be automatically incorporated in a "roping-in" award.'

80 That observation also accords entirely with the approach of Cahill J In re Engineers, &c (State) Award & Ors (1973) 78 AR 313, who observed that the counterpart nature of the State and Federal awards there in question, as well as the wishes of the parties, were overriden for many years by the requirements of the Annual Holidays Act 1944 (at pp 319-20). 81 It is relevant to observe that the principles which the Commission has long applied to counterpart awards have no statutory basis, other than as part of the way in which the Commission has traditionally exercised its award making powers as a matter of discretion. The exercise of such discretions do not permit the requirements of the Act to be ignored, nor do they permit the Commission simply to approach their application as if the award making provisions of the Act and the principles which the Commission applies in exercising these powers were identical to those of the WR Act. Plainly they are not and indeed, ABI emphasised in its submissions that it was not seeking simply to reflect the WR Act award simplification requirements through this application. 82 Here, the case for the employers was advanced both on the basis that the various award provisions should be removed or varied, because the award was a federal counterpart and because the retention of the award provisions in their current form had no industrial merit. As to the latter consideration, and as we have already noted, there was, however, but little evidence led as to the history of the various award provisions - for example, whether they had flowed from agreements between the parties or from arbitration; what circumstances they were directed to and whether such conditions still persisted or not. Nor was there evidence as to what changes, if any, had occurred at the workplaces in question and how the alterations sought would affect the employers and employees upon whom the provisions in question imposed various benefits and burdens. There was, in particular, almost no evidence as to how the changes sought might affect station hand and other award employees, the evidence in the main being directed to the position of shearers. 83 That such evidence might have been available to be called can be gleaned from the fact that the alterations to the Federal Award flowed from negotiations between the parties to that award over the course of some years which have now been in operation, in many cases, since June 1998. 84 Further, such evidence as was led by the applicant upon the merits of the application, when tested, often pointed in the opposite direction, namely, the retention of the existing provisions. We will deal with this evidence below. 85 In short, whilst the case brought in support of the application sought to rely in part upon the merit based considerations it was generally a weak reed in the case, such that it may reasonably be concluded that, in substance, the applicant brought its case upon the basis of the award simplification and the agreement making process which had occurred in relation to the Federal Award. 86 It was submitted that the Commission would have in mind that a refusal to grant the application might encourage employers to take steps to become respondents to the Federal Award, so as to avoid award coverage by the State Award. Such a step may well be available in circumstances where both State and Federal awards cover the one industry in this State. Whether such a step would now be an effective one, given the provisions of the WR Act and the WROLA Act earlier referred to, is a different question. That is something which we are, however, not called upon to determine in these proceedings. 87 The concepts underlying the counterpart award principles on which the employer parties to the award rely have a sound commonsense and policy basis. Where an industry in this State is largely regulated by a Federal award, it is desirable that the State award should reflect such provisions in the interests of comity, not for the two systems of industrial relations, but rather for those to whom the awards apply - employers and employees both. The particular importance of this in an industry where many employees are itinerant, is also obvious. 88 The only evidence as to the movement of employers from State to Federal award coverage was given by Mr Cameron. His evidence was that some employers had moved to take up membership of federally registered organisations after the 1998 simplification of the Federal Award, so as to come within its ambit, but other employers had refused to do so. Speculation about the consequences of such steps for those employers, in reality, does not assist in a proper determination of the issues which here arise for determination, and in many respects would only distract from the exercise of our statutory duties. 89 We also note that it was submitted by the Crown that as a consequence of the removal of the various provisions from the Federal Award, the coverage of the State Award is affected by the fact that some employers who are respondent to the Federal Award, have since 1998 been bound to apply the conditions of the State Award. This is because those conditions are contained in the State Award, which operates as a common rule in New South Wales. Other Federal Award respondents, namely some constitutional corporations, would not have been obliged to adhere to such requirements of the State Award. These consequences flow from the operation of s152 of the WR Act and clause 52 of Schedule 5 to the WROLA Act. They provide: 152. Awards to prevail over State laws and State awards (1) Subject to this section, if a State law or a State award is inconsistent with, or deals with a matter dealt with in, an award, the latter prevails and the former, to the extent of the inconsistency or in relation to the matter dealt with, is invalid. (1A) If a State law provides protection for an employee against harsh, unjust or unreasonable termination of employment (however described in the law), subsection (1) is not intended to affect the provisions of that law that provide that protection, so far as those provisions are able to operate concurrently with the award. (2) If: (a) but for this subsection, an award would become binding on an employer in respect of an employee at a particular time; and (b) immediately before that time, the wages and conditions of employment of the employee were regulated by a State employment agreement; then the award is not binding on any person in respect of the employee, while the wages and conditions of employment of the employee continue to be regulated by the agreement. (3) If, at a particular time, a State employment agreement that is made after the commencement of this subsection would regulate wages and conditions of employment of an employee but for the fact that an award is binding on an employer in respect of the employee, then: (a) the award does not prevent the agreement from coming into force and regulating the wages and conditions of employment of the employee; and (b) while the agreement continues to regulate those wages and conditions, the award is not binding on any person in respect of the employee. (4) In subsection (3), "award" does not include an award made under subsection 170MX(3). (5) Subsections (2) and (3) do not apply to a State employment agreement unless the agreement is one that was approved by a State industrial authority under a State Act that required the authority, before approving the agreement, to be satisfied: (a) that the employees covered by the agreement are not disadvantaged in comparison to their entitlements under the relevant award; and (b) that the agreement was genuinely made, or that the agreement was not made under duress or that the agreement was made without coercion; and (c) that the agreement covers all the employees whom it would be reasonable for the agreement to cover, having regard to matters (if any) specified in the State Act (such as the nature of the work performed under the agreement and the relationship between the employees in the part of the business covered by the agreement and the remainder of the employees in the business). 52. Corporations not bound by State awards (1) If: (a) a constitutional corporation is bound by an award in respect of an employee; and (b) the award is varied under subitem 49(1) or wholly or partly ceases to have effect because of item 50; and (c) as a result of the award being varied, or ceasing to have effect, as mentioned in paragraph (b), the corporation would (apart from this item) become bound by a State award in respect of the employee; then the corporation is not bound by the State award in relation to the employee unless it becomes bound as a result of an application by the corporation to the relevant State industrial authority. (2) Subitem (1) does not operate so that a State award, or part of a State award, prevails over an award of the Commission.

90 We express no final view as to these matters. It is unhelpful to speculate on how different employers may have been affected by this situation, because there was no evidence led about these matters, even though it was suggested that employers in this industry, even those always bound by the State Award, were generally unaware of its provisions. Observation of award requirements is, after all, not a matter of choice, but rather compulsion, in accordance with the requirements of the Act. 91 In our view, the operation of the principles governing counterpart awards and the considerations upon which they are based is affected by the reality of the two current legislative schemes. This is readily illustrated in the context of this industry. Whatever the outcome of this application, award coverage of this industry in this State will be more complicated than it was in the past, when the two awards were truly counterparts of each other. That is the inescapable consequence of the enactment of the WR Act and the WROLA Act and the fact that since 1998, the Federal Award has been simplified in accordance with their provisions. The application made here leads to a similar conclusion, given its terms. After all, the application seeks different rates from those provided by the Federal Award in a number of classifications, different test case provisions and the retention of a considerable number of conditions which the AIRC has decided must be deleted from the Federal Award, in order to give effect to s89A of the WR Act. 92 In any event, whilst the Commission, as it always has, gives due weight to the decisions of the AIRC (particularly given the counterpart nature of the existing State Award), such decisions may not be followed where they conflict with requirements of the Act and the standards adopted by this Commission. There is no warrant for importing into the existing State Award changes brought about by the AIRC to the Federal Award in consequence of the award simplification process, unless such alterations conform with the requirements of the Act, are consistent with appropriate principles and are warranted as a matter of merit. The federal award simplification process is based upon a policy reflected in the WR Act, the exclusion of industrial tribunals from dealing with a range of industrial matters, thereby excluding the AIRC from any assessment of the merits of such matters by the AIRC. That policy has no counterpart in this jurisdiction. Here, in contested proceedings, in the absence of a case being made out by the applicants as to the merits of the incorporation of changes flowing from the federal award simplification process, such changes, of themselves, will not satisfy the requirements of s10 of the Act. 93 We now turn to the evidence as to the merits of the application. ABI called Mr Jarratt, who was employed by Nationwide Rural Contracting Pty Ltd, a supplier of contract labour, including shearers. It appears that such employees were paid the Federal Award rates, where higher than the State Award rates. There is nothing remarkable about this. The State Award is, after all, fixed as a minimum rates award. 94 Mr Jarratt had worked for many years in the shearing industry, but the work his current employer is engaged in is predominantly in the supply of labour for the cotton chipping industry. While it also supplied shearing labour, he had no experience in relation to the employment of station hands, who were also covered by the State Award. 95 Mr Jarratt's affidavit evidence dealt with the deletion of various award provisions, which in his view would result in no detriment being suffered by employees. His evidence in cross examination was however, to a somewhat different effect. Mr Jarratt accepted that the State Award provided various minimum conditions of employment designed to protect such employees, that various industry practices conformed to the award provisions in question, that those matters remained relevant to the industry and that there was in his view no good reason for their deletion from the award. 96 Two examples of these concessions will suffice to demonstrate the point. Clause 4 of the State Award deals with 'Engagement and contracts of Shearers'. It requires the provision of particular information by way of a written agreement, including matters such as the date the shearer is to report; the date the shearing is to commence; the number of sheep to be shorn or crutched and whether the shearer is to be employed with keep or not. The application seeks to delete these requirements. 97 Mr Jarratt confirmed in, cross examination, that it was still common practice for such information to be provided, and that he required such information so that in his work as a shearing contractor, he knew, for example, how long the shearers were required. He agreed that the clause remained of relevance to the industry and could offer no reason for its removal. 98 Similarly with Clause 64 of the current State Award, which deals with a shearer's right to refuse to shear cancerous sheep or those suffering from other illnesses or injuries. Mr Jarratt agreed that it provided a protection for employees and could think of no reason for its removal. This clause appears to deal with a safety issue. We can only infer that it was removed by the parties to the Federal Award in 1988 in order to comply with the requirements of s89A of the WR Act. 99 As to other such provisions, on Mr Jarratt's evidence they were no longer up to date, particularly having in mind some of the requirements of current occupational health and safety legislation and should thus, in his view, be deleted. As to this evidence we observe that award provisions which conflict with other statutory requirements obviously require reconsideration. The evidence in this case was, however, not such as to permit a proper consideration of such matters. 100 The upshot of Mr Jarratt's evidence was to demonstrate that no good or sufficient evidentiary basis was established for the grant of the award application, particularly given that it was both advanced and resisted on an all or nothing basis and that there was also little evidence led as to the changes which would affect employees other than shearers. It was put, for the ABI in submissions in reply, not forcefully we might add, that the Commission had the discretion to grant the application only as to part. We are firmly of the view that this is not a case which would properly permit the adoption of such an approach, particularly given that an award with a two year term is sought. 101 The evidence given by Mr Cameron also confirmed our conclusions. It was his view that various of the current provisions sought to be deleted provided employees with protections which ought not to be removed. Again, a couple of examples suffice to illustrate the point. 102 The application seeks the deletion of the current award provision as to "Keep". Clause 61 of the current award provides: 'Where an employee is employed on the "with keep" rate as prescribed in clause 49, Rates of Pay, "keep" shall mean good and sufficient living accommodation and good and sufficient rations (including, where reasonably procurable, the goods as mentioned in the schedule hereto) of sufficient quantity, sound, well-cooked and properly served by the cook or his/her offsider, but it shall not include accommodation under a roof or cooking when circumstances render such accommodation or cooking impracticable. Schedule - Scale of Rations Bread or flour Salt (fine) Meat Mustard Vegetables: potatoes, onions, beans, Spices, herbs, pepper peas (split and blue), green vegetables Essence when reasonably procurable Pickles Oatmeal Vinegar Rice Sauce Cornflour soap and washing soda Tapioca or sago (for cleansing cooking utensils) Macaroni Carbonate of Soda Barley Butter (when reasonably procurable) Cheese Suet Jam Cream of Tartar Fruits: currants or raisins, dried Dripping apples, apricots, prunes Jelly crystals Eggs Custard powder Sugar Fish Syrup Curry Tea, coffee or cocoa Honey Milk (fresh, condensed or powdered)

103 The list of rations in the schedule is plainly not a modern one, but Mr Cameron's evidence was that the provision serves to ensure that shearers employed on a station to perform heavy manual work, in some cases hundreds of kilometres from any town, are provided with an adequate and varied diet, as a part of their conditions of employment, having regard also to such employees' religious convictions in some instances. There was no case made out on the evidence called by the applicant which would support the deletion of such an award protection. 104 That the general practice in the industry is to abide by the spirit, if not the letter of this clause, does little other than to illustrate that it needs to be updated. The existence of a general practice which accords with the spirit of this award provision, is hardly surprising, given that the practice continues to accord with the State Award. It follows that most employers would be unaffected by the retention of this clause in the State Award. On the other hand, for those who would not adopt such a practice if it were not required, the provision provides an incentive, additional to that of common decency, to ensure that a shearer receives adequate food when employed on a 'with keep' basis. It also provides a legal protection for those who might have the misfortune to be employed by such employers. The very existence of such an award provision after all suggests that some employers have not acted in accordance with this practice in the past. Again, we note that Mr Jarratt agreed in cross examination that the clause provided a minimum and definable standard as to the matters with which it deals. 105 The second example relates to rates of pay. The current State Award provides a 'shearer's formula' in schedule B and various rates of pay, including differing rates of pay for shearers who supply their own handpiece and those who do not Clause 27, Combs and Cutters of the Award provides: '(a) It shall be the responsibility of the employees to provide themselves with combs and cutters. If an employer supplies combs and cutters the employer shall post in a conspicuous place the price list thereof and shall not charge more than their cost price with carriage added. (b) Where at a particular shearing or crutching, excessive wear of combs and cutters is caused by abnormal conditions, the employer will compensate the employee for such excessive wear.'

106 The application seeks the deletion of the shearing formula, the removal of the rates of pay for shearers who do not provide their own handpiece and a new clause 24 Combs, Cutters and Handpiece, which provides: '24.1 Shearers and crutchers may use any type of suitable manufactured combs and cutters and any suitable handpiece.

24.2 It shall be the responsibility of the employee to provide themselves with combs and cutters and a suitable handpiece. If a shearer chooses to use a handpiece supplied by the employer or a contractor the employer or contractor may make a charge to the shearer for the use of the handpiece equivalent to the amount the shearer is reimbursed for the handpiece through the shearing formula.

24.3 Where combs or cutters are damaged or broken during shearing operations due to contact with tags or foreign matter, the employer shall replace or provide compensation for such combs and cutters on a fair wear and tear basis.

24.4 The employer shall not be responsible for the maintenance of the employee's shearing equipment.

107 The result is, of course, that while the proposed award continues to refer to the shearing formula in clause 24.2, the formula does not appear anywhere in the award. The application in this respect reflects the award made by Merriman C in 1998. A Full Bench of the AIRC, when considering an application for increased rates of pay in the Federal Award, (which the application here seeks to flow on), said in its 18 September 2000 decision at paragraphs 4 to 6: [4] We were told of some of the history of adjustments in the shearer's rate. As already mentioned the rate is a piece-work rate. It is expressed as a rate per hundred sheep shorn. Although the minimum rates adjustment was implemented in the award some years ago, the method of calculation of the piece-work rate for the shearer agreed at that time no longer appears in the award. In recent years the parties have used their own agreed formula in applying the Commission's safety net increase to the shearer's rate. The variation to the shearer's rate agreed by the parties in relation to the Commission's Safety Net Review Wages April 1999 decision [Print R1999] (the April 1999 decision) was approved by a Full Bench in September of last year pursuant to principle 10: Re Pastoral Industry Award 1998 (Print R9499, 30 September, 1999).

[5] We have decided to grant the application. On this occasion the parties have maintained an approach to the fixation of the shearer's rate which was implicitly approved by a Full Bench in implementing the April 1999 decision. Furthermore, it appears that any departure from the strict application of the May 2000 decision is relatively minor and affects two classifications only. We were also told that if the agreed approach was rejected by the Commission it would be many months before an alternative method of adjustment could be found and implemented. In all of the circumstances we think it would be unfair to reject the application.

[6] We should indicate, however, that there are two aspects of the matter which the parties should address before the next safety net adjustment. The first is the requirement that awards made under Part VI of the Act constitute a proper safety net. That requirement is made clear in ss.88A and 88B. The steps to be taken in order to ensure that award rates constitute properly fixed minimum rates are set out in the Paid Rates Review Decision 1998 [Print Q7661]. We acknowledge that the application of the principles in that decision to piece-work payment systems may give rise to some difficulties. But it is apparent that such difficulties can be resolved. A Full Bench of the Commission dealt with a similar issue in relation to incentive payment systems in the meat industry in the Federal Meat Industry Decision of September 1999 [Print R9075]. In the future we would expect that piece-work rates in this award for shearers and crutchers will be adjusted by a process which is set out in the award itself and which is based on proper principles.

108 Despite this observation, the application seeks in the State Award to perpetuate the difficulty created by the drafting of the Federal Award, namely, by removing from the Award the formula upon which rates of pay depend, as proposed in clause 24. Mr Cameron's evidence was that this would make aspects of the award unworkable. We agree and can see no basis for the conclusion that such an alteration to the current award would introduce fair or reasonable conditions of employment. Indeed, such a provision would, on its face, soon require modification having in mind the requirements of s19 of the Act, which is concerned to ensure in part that the meaning of State awards is clear. 109 We finally note that these difficulties are compounded, rather than cured, by the decision of the Full Bench of the AIRC in December 2000. At paragraph 12, the Full Bench there concluded that provision of equipment is not an allowable award matter under s89A of the WR Act, with the consequence that clause 24, including the requirement that a shearer pay for the use of an employer's handpiece, is to be removed from the Federal Award. 110 The evidence and submissions demonstrated that the State Award plainly requires reconsideration by the parties in a modern context, as required by s19 of the Act. The details of clause 61 of the current State Award earlier quoted amply illustrates this point. So too, do the variations agreed to the Federal Award in the context of the reduction of hours to 38 per week. Precisely what was agreed in that exercise is not clear on the evidence - matters about which the Commission would, in any event, need to be satisfied if hours in the State Award were to be reduced, having regard to the requirements of the Act and the Standard Hours principle contained in the State Wage Case 2000 (NSW) (2000) 97 IR 93 at 119. 111 That the State Award should be updated in this and other respects is obvious. We do not take the view, that such an exercise should be conducted without any regard to the provisions in the current Federal Award. Given the award coverage of this industry and the itinerant nature of employment of employees, particularly shearers, commonsense suggests that both the Federal Award provisions and the real current coverage of the State Award as the result of the provisions of the WR Act and WROLA Act earlier referred to, need to be considered by the award parties in their negotiations. However, such considerations must be undertaken in the light of the requirements of the Act, and in particular sections 10 and 19. Such matters are, however, appropriately to be considered by the parties outside these proceedings. 112 As earlier noted the only real support for this application can be found in the fact that the Federal Award no longer contains the provisions which the ABI seeks to vary or delete from the current State Award. That situation has flowed from the operation of the requirements of s89A of the WRA Act and as the result of other agreements, the details of which the applicant was unable to explain on the case led. Further, we accept that many aspects of the agreements reached between the parties at a Federal level were conditioned by the parties being faced with the operation of s89A of the WR Act and the transitional provisions of the WROLA Act. 113 As a result of the December 2000 AIRC Full Bench decision in which Commissioner Merriman's June 1998 decision was reviewed, the Federal Award is to have a significant number of further provisions deleted or amended. Those provisions are sought to be retained in the State Award by this application in the form approved by Merriman C. It follows that the application does not, in reality, seek to restore the counterpart nature of the State Award. Nor did the evidence led satisfy the onus which fell on the applicant in these proceedings to demonstrate that the award sought would provide fair and reasonable conditions of employment. 114 In our view, the fact that an award contains current conditions of employment, properly leads to the inference that, either as the result of the Commission having accepted an agreement which the award parties have reached in the past, or as the result of an arbitration, those conditions were awarded in conformity with the obligations imposed upon the Commission by s10 of the Act and its predecessors. It follows that some positive demonstration of why such a condition sought to be removed no longer provides fair or reasonable conditions of employment must be provided on the evidence, before the Commission will act to remove them, particularly over the objection of another award party or parties. In a contested case the mere fact that such provisions have been removed from a counterpart Federal award as the result of the requirements of s89A of the WR Act and Schedule 5 to the WROLA Act, does not offer a sufficient basis for such a removal. 115 Here, the necessary evidentiary burden was not met and the case failed as a matter of merit. It follows that the application must be dismissed.

Orders 116 For all of these reasons the ABI's application is dismissed. We so order.

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